News

The latest breaking news in the industry!

18-01-2018

A reminder of ways you can pay tax due

Last week we confirmed that as from 13 January 2018, HMRC will not accept personal credit cards for payment of tax or penalties. We have listed below the payment options you still have available to you: Electronic payment. HMRC’s preferred method of payment is by electronic bank transfer using Faster Payments, CHAPS or BACS. In order to make a payment electronically you will need your ... read more

18-01-2018

Buying a rental property?

The removal of the 10% wear and tear allowance that allowed landlords to reduce the tax they paid on furnished property lets (after the end of the 2015-16 tax year) was a significant loss for many landlords. The 10% deduction was available to landlords regardless of whether furnishings in their property were replaced or not. The wear and tear allowance was replaced by the Replacement of Domestic ... read more

18-01-2018

Projects that count as R & D for tax purposes

Research and Development (R&D) tax credits were introduced for small and medium sized enterprises (SMEs) in 2000 and for large companies in 2002. R&D credits are a Corporation Tax relief to encourage innovation and enterprise within the UK economy. Small and medium-sized enterprises (SME) can claim SME R&D tax deductions totalling 230% of any qualifying R&D expenditure (from 1 ... read more

18-01-2018

Salary sacrifice examples of tax consequences

The tax and NIC advantages of certain benefits provided as part of a salary sacrifice arrangement were removed from 6 April 2017. The new rules effectively remove the Income Tax and employer NIC advantages of certain benefits provided as part of salary sacrifice arrangements such as mobile phones and workplace parking. When the changes were introduced it was confirmed that all arrangements in ... read more

18-01-2018

What to consider when employing family, young people and volunteers

When a new employee is added to the payroll it is the employers’ responsibility to ensure they meet the employees’ rights and deduct the correct amount of tax from their salary. This includes any employees who are family members. HMRC’s guidance is clear that if you hire family members you must: avoid special treatment in terms of pay, promotion and working conditions make sure tax and ... read more

18-01-2018

What is the herd basis?

There are special rules which can apply to farmers and market gardeners that prepare their accounts on an accruals basis. This includes special rules for farmers’ averaging relief, dealing with losses and the treatment of compensation for compulsory slaughter. The special rules also refer to the use of the herd basis. The herd basis is a special method of working out profits or losses which may ... read more

10-01-2018

Holiday let property – reminder to check your occupancy stats

The Furnished Holiday Let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade and therefore qualify for additional tax benefits. In order to qualify as a FHL, the following criteria need to be met: The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let ... read more

10-01-2018

Who is entitled to claim statutory maternity pay?

Employees that are pregnant are eligible to take up to 26 weeks of maternity leave (known as ordinary maternity leave) plus an additional 26 weeks (known as additional maternity leave). This means that an employee can take up to a full year of maternity leave once they give their employers the correct notice. All women employees are entitled to both classes of maternity leave from day one of their ... read more

10-01-2018

The end of credit card payment surcharges?

From 13 January 2018, it will become illegal for any business to charge a fee in addition to the advertised price of a transaction to consumers (widely known as surcharging). For example, a travel company charging more to use a credit card rather than a debit card or cash. This change is being brought about by the introduction of the EU Second Payment Services Directive (PSDII) which the UK ... read more

10-01-2018

Basic monthly tasks if you run your own payroll

One of the most time-consuming admin tasks associated with the running a small business can be dealing with the payroll. Generally speaking, you can: Run your own in-house payroll, or Hire your accountant to do the work for you. If you operate your own payroll, there are a multitude of tasks that must be completed each tax month. Tax months run from the 6th of one month to the 5th of the ... read more

10-01-2018

Can we claim for marketing, entertainment and subscription costs?

The self-employed are often concerned if an expense is allowable or not for tax purposes. In this article, we will briefly look at the rules for claiming marketing, entertainment and subscription costs. Most marketing expenses are treated as allowable business expenses. This includes advertising in newspapers or directories, bulk mail advertising (mail shots), providing free samples and website ... read more

08-01-2018

Changes to approved English apprenticeships

The Apprenticeships (Miscellaneous Provisions) Regulations 2017, which only apply in relation to England, will come into force on 15 January 2018. The new Regulations: make it a requirement that off-the-job training be provided during the course of an approved English apprenticeship entered into under the Apprenticeships, Skills, Children and Learning Act 2009 stipulate that the approved ... read more

03-01-2018

Beware iTunes gift card scam

HMRC is warning members of the public of a worrying iTunes gift card scam. The fraudsters are cold calling victims purporting to work for HMRC and warning them that they owe HMRC large amounts of tax which they can only pay off using digital vouchers and gift cards, including those used for Apple’s iTunes Store. Victims are told to go to a local shop, buy these vouchers, and then read out the ... read more

03-01-2018

Staircase tax to be reversed

The Government has announced that the business rates anomaly known as the ‘staircase tax’ is to be axed. The 'staircase tax' affects businesses that operate in adjoining units or rooms, but are accessed from a communal lift, corridor or staircase. For example, a business that has offices on two floors of a building that are accessed via a communal staircase. Such businesses are unfairly treated as ... read more

03-01-2018

Relief if you let and then sell your home

One of the most often used and valuable of the capital gains tax (CGT) exemptions concerns the sale of the family home. As a general rule there is no CGT on a property which has been used as the main family residence. An investment property which has never been used will not qualify. This relief from CGT is commonly known as private residence relief. Taxpayers are usually entitled to full relief ... read more

03-01-2018

Fair payment practices for small businesses

In October 2017, Paul Uppal (a former Conservative MP and entrepreneur) was appointed to the newly-established post of Small Business Commissioner (SBC) based in Birmingham. At the time, it was estimated that the office of the SBC would be operational by the end of 2017. The SBC is an independent public body and covers the whole of the UK - England, Wales, Scotland and Northern Ireland. On 20 ... read more

03-01-2018

VAT when business transferred as a going concern

The transfer of a business as a going concern (TOGC) rules concern the possible VAT liability resulting from the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate. However, where the sale of a business includes specific assets and meets certain conditions the sale will be categorised as a TOGC. A ... read more

03-01-2018

Pre-owned assets income tax charge

The pre-owned assets (POA) income tax charge was introduced in the Finance Act 2004 and the first year in which a POA charge could arise was back in 2005-6. The POA charge is effectively a tax on individuals who have given certain types of assets away but who continue to enjoy either full or partial benefits from the assets. The charge was introduced to help combat the problem of inheritance tax ... read more

02-01-2018

Tax Diary January/February 2018

1 January 2018 - Due date for Corporation Tax due for the year ended 31 March 2017. 19 January 2018 - PAYE and NIC deductions due for month ended 5 January 2018. (If you pay your tax electronically the due date is 22 January 2018) 19 January 2018 - Filing deadline for the CIS300 monthly return for the month ended 5 January 2018. 19 January 2018 - CIS tax deducted for the month ended 5 January ... read more

20-12-2017

Benefits of letting furnished holiday property

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for some specific tax purposes. The FHL rules currently apply to individuals, partnerships, trustees and companies who let furnished holiday accommodation situated within the UK or elsewhere in the European Economic Area (EEA). The EEA includes Iceland, Liechtenstein and ... read more

20-12-2017

What are VAT special schemes?

There are three main VAT schemes available to small businesses: The flat rate scheme The annual accounting scheme The cash accounting scheme The Flat Rate Scheme The purpose of this VAT scheme is to simplify the way a business accounts for VAT and so reduce the cost of complying with their VAT obligations. With the VAT Flat Rate Scheme you pay VAT as a fixed percentage of your VAT inclusive ... read more

20-12-2017

Longer or shorter company accounting periods

Companies often have to contend with having two different company accounting periods. This is because there are different rules for Companies House filings and submissions to HMRC, for corporation tax purposes. The accounting periods can be the same but can also differ and a change may need to be made to ‘sync’ the accounting periods. As a general rule, the Companies House rules are more ... read more

20-12-2017

Simplified cash basis for unincorporated landlords

The cash basis scheme helps sole traders and other unincorporated businesses benefit from a simpler way of managing their financial affairs. The scheme was extended to landlords from April this year with many expected to benefit from the savings in administrative burdens. The scheme is not open to limited companies and limited liability partnerships. Unlike other taxpayers that need to opt-in to ... read more

20-12-2017

Salary sacrifice changes from April 2018

The tax and NIC advantages of certain benefits provided as part of a salary sacrifice arrangement were removed from 6 April 2017. The new rules effectively remove the Income Tax and employer NIC advantages of certain benefits provided as part of salary sacrifice arrangements such as mobile phones and workplace parking. When the changes were introduced it was confirmed that all arrangements in ... read more

20-12-2017

Are you paying tax at 60%?

For high earning taxpayers, their Income Tax personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This creates an effective marginal rate of tax of around 60% for tax payers as the £11,500 tax-free personal allowance is gradually withdrawn. Taxpayers whose income sits within this band should consider what planning opportunities are ... read more

20-12-2017

VAT rules for retailers using online marketplaces

Under new rules that came into force last year, HMRC has the power to force overseas retailers to appoint a UK-based VAT representative or to provide a financial guarantee. These rules currently apply to overseas retailers that supply goods already in the UK at the point of sale, to UK consumers through an online marketplace (such as eBay or Amazon). If the overseas retailer fails to comply then ... read more

20-12-2017

Auto-enrolment earnings trigger again frozen at £10,000 for 2018/19

Following its annual review of the pension automatic enrolment earnings trigger and qualifying earnings band, the government has decided that the earnings trigger will again remain at £10,000 for 2018/19. The earnings trigger determines at what point an eligible person gets automatically enrolled by their employer into a workplace pension scheme. The qualifying earnings band sets minimum ... read more

20-12-2017

Changes to the basic disclosure process

From January 2018, the Disclosure and Barring Service (DBS) is making some important changes to the basic disclosure process relating to criminal record checks. From next month, individuals who need to obtain a basic disclosure check for a job in England and Wales should apply to the DBS, not to Disclosure Scotland. Up until now, individuals in England and Wales have had to apply for basic ... read more

13-12-2017

Tax is changing in Wales next year

From next April, Wales will join Scotland in becoming responsible for some of the taxes paid locally. This will begin with the introduction of the new Welsh land transaction tax (LTT) which will replace the UK stamp duty land tax (SDLT) as well as the new landfill disposals tax (LDT) which will replace landfill tax. These changes will mark the first time that the Welsh have taken control of their ... read more

13-12-2017

What is reasonable care from a tax point of view?

The tax penalty system is intended to make penalties simpler to understand and more consistent across many taxes. The penalties can range from 0% where reasonable care is taken, but nonetheless an incorrect return is submitted up to 100% of the tax where an error is deliberate, and the taxpayer attempts to conceal it. HMRC has the power to significantly reduce the amount of penalties due. The ... read more

13-12-2017

Selling your business – 10% tax may apply to sale

Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where entrepreneurs' relief is available CGT of 10% is payable rather than the normal main rate of 20%. This can significantly reduce the amount of CGT due and there is a £10 million lifetime limit. The lifetime limit means that individuals can qualify for the ... read more

13-12-2017

Coventry named UK City of Culture for 2021

In a boost for the Midlands economy, Coventry has been named UK City of Culture 2021. The announcement was made by the Minister for Arts, Heritage and Tourism, John Glen after Coventry beat four other cities that were in the running. The title of UK City of Culture is awarded every four years by an independent panel of culture experts. There have been two previous UK Cities of Culture: ... read more

13-12-2017

When you can’t claim employment allowance

The employment allowance of £3,000 per year is available to most businesses and charities and can be used to be offset against their employers Class 1 NIC bill. The allowance can be claimed as part of the normal payroll process. An employer can claim less than the maximum if this covers their total Class 1 NIC bill. Eligible employers that have not yet done so can still claim for the current ... read more

07-12-2017

Spring Statement 2018

The Chancellor, Philip Hammond has announced that he will deliver his Spring Statement to the House of Commons on Tuesday, 13 March 2018. This will be the first Spring Statement to take place following the government’s decision to switch to a new cycle with the annual Budget taking place in the autumn and the annual Statement taking place in the spring. The Spring Statement will be used to ... read more

06-12-2017

Finance Bill 2017-18 is published

The Finance Bill 2017-18 was published on 1 December 2017 and runs to relatively modest 192 pages. The Bill contains the legislation for many of the tax measures that have been announced by the Government at Autumn Budget 2017. The Finance Bill introduces a number of diverse measures including the introduction of a new permanent stamp duty land tax relief for first-time buyers, the freezing of ... read more

06-12-2017

What happens to the 5p for a plastic bag?

HM Treasury has published an interesting response to a Freedom of Information enquiry that wanted to know what happens to the money raised from the sale of 5p plastic bags by retailers. HM Treasury points out that this charge is not a tax and the money from the charge does not go to the government. Therefore, the Treasury has not received any income from this measure. The minimum charge of 5p was ... read more

06-12-2017

Tax incentives to invest in qualifying assets

The annual investment allowance (AIA) limit is a generous capital allowance that will more than cover the annual capital expenditure spend of many small and medium sized businesses. The AIA is a 100% upfront allowance that applies to qualifying expenditure up to a specified annual limit. The limit has been fixed at £200,000 since 1 January 2016. The AIA can be claimed for qualifying expenditure ... read more

06-12-2017

Reminder of current tax relief for pension contributions

Many commentators had predicted that the Chancellor would further reduce the annual amount that can be saved into a pension as part of the Budget measures. However, these fears appear to have been unfounded as no changes were announced. The annual allowance for tax relief on pensions will remain at the current level of £40,000 for 2018-19. There is also a three year carry forward rule that allows ... read more

06-12-2017

Why don’t we still pay Class 2 NIC monthly?

Class 2 national Insurance contributions (NICs) are paid by self-employed taxpayers and members of partnerships if their annual profits are over £6,025. Class 2 NICs are payable at a flat weekly rate currently, £2.85. Class 2 NICs count towards payments such as the state retirement pension, the employment and support allowance, maternity allowance and bereavement benefits. The withdrawal of class ... read more

06-12-2017

Tax win for Spurs

HMRC’s appeal to the Upper Tribunal over termination payments made to two football players employed by Tottenham Hotspur has been rejected. The case related to the tax position of termination payments made to two professional footballers in connection with the early termination of their employment contracts. This case had already passed through the First-Tier Tribunal, who ruled that the payments ... read more

04-12-2017

Fit for Work referral and assessment service to be abolished

The government has confirmed that, as a result of “low referral rates”, its national Fit for Work referral and assessment service will come to an end in England and Wales on 31 March 2018 and on 31 May 2018 in Scotland. The Fit for Work service is a free government service that was launched in 2015 to help employers manage sickness absence in the workplace. There are two elements to it: (1) an ... read more

30-11-2017

Statutory pay to rise from April 2018

In a written ministerial statement, the government has announced the proposed new rates for statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP), statutory shared parental pay (ShPP) and statutory sick pay (SSP) for tax year 2018/19. The proposed revised rates are as follows: the standard weekly rates of SMP, SAP, SPP and ShPP will increase from ... read more

30-11-2017

Sexual harassment and pregnancy and maternity discrimination

Acas has published new guidance for employers and employees that outlines what kind of workplace behaviours could be considered sexual harassment and how to report and handle it. The guidance covers: what is sexual harassment? how does sexual harassment happen? sexual assault and physical threats who can it happen to? historical allegations making a complaint of sexual ... read more

29-11-2017

Company capital gains tax increase

As part of the Budget measures, the Chancellor announced that the indexation allowance for companies that make capital gains is to be scrapped. The indexation allowance currently allows companies or organisations to include the effects of inflation and claim tax relief when calculating any chargeable gains that they make. The monthly indexation allowance will continue to be published until ... read more

29-11-2017

First-time buyer bonanza

The biggest prize from the recent Budget went to first-time home buyers after the Chancellor announced changes to the stamp duty land tax (SDLT) rules. With immediate effect from Budget day, SDLT has been abolished for first-time buyers making a purchase of up to £300,000. Unlike the temporary stamp duty holiday that applied from 2010-12 this change has been made permanent. The Chancellor also ... read more

29-11-2017

Low-emission vehicles plug-in grant

The low-emission vehicles plug-in grant can help you save up to £4,500 on the purchase price of a new electric or hybrid car. The scheme was first launched in 2011 and is available across the UK and offers a grant towards the price of eligible new cars. The paperwork for the grant application is handled by the dealer you purchase your car from. HMRC publishes a list of qualifying cars, and only ... read more

29-11-2017

Born before 6 April 1935?

The married couple's allowance (MCA) is available to elderly married couples or those in a civil partnership where at least one member of the couple were born before 6 April 1935. The allowance provides for tax relief by deducting 10% of the allowance from the amount of tax due on taxable income. The MCA can reduce a tax bill to zero but cannot result in a refund of tax. For the current tax ... read more

29-11-2017

Paying National Insurance at State Pension Age?

The State Pension age has been increasing since April 2010. The changes will see the State pension age gradually rise to 65 for women between 2010 and 2018, and then to 66, 67 and 68 for both men and women by 2039. There are now many taxpayers that have reached the State Pension age and continue to work. In most cases they no longer need to pay any National Insurance Contributions (NICs). At ... read more

29-11-2017

Tax on property, money and shares you inherit

As a general rule, someone who inherits property, money or shares is not liable to pay tax on the inheritance. This is because any Inheritance Tax (IHT) due should be paid out of the deceased's estate before any cash or assets are distributed to the heirs. However, the recipient is liable to income tax on any profit earned after the inheritance, such as dividends from shares and to capital gains ... read more

29-11-2017

Advisory fuel rates for company cars

The latest advisory fuel rates became effective on 1 December 2017. Fuel rates are reviewed four times a year with changes taking effect on 1 March, 1 June, 1 September and 1 December. You can use the previous rates for up to 1 month from the date the new rates apply. The rates are as follows: Engine size Petrol – amount per mile LPG – amount per mile 1400cc or less ... read more

28-11-2017

Finance (No.2) Act 2017 receives Royal Assent

The Finance (No. 2) Act 2017 received Royal Assent on 17 November 2017. It follows the Finance Act 2017 which received Royal Assent before the June 2017 general election. Some of the provisions were dropped from the Finance Act 2017 so that it could be fast-tracked for Royal Assent and those provisions have now been revived in the Finance (No. 2) Act 2017. These include, provisions changing the ... read more

28-11-2017

The ICO publishes Guide to the General Data Protection Regulation

The Information Commissioner's Office (ICO) has replaced its Overview of the General Data Protection Regulation with a 58-page “Guide to the General Data Protection Regulation (GDPR)”. The Guide contains very similar content to the Overview, but it now includes expanded sections on “Consent” and on “Contracts” on the basis of the guidance on these topics which it has previously published for ... read more

27-11-2017

Tax Diary December 2017/January 2018

1 December 2017 - Due date for corporation tax due for the year ended 28 February 2017. 19 December 2017 - PAYE and NIC deductions due for month ended 5 December 2017. (If you pay your tax electronically the due date is 22 December 2017) 19 December 2017 - Filing deadline for the CIS300 monthly return for the month ended 5 December 2017. 19 December 2017 - CIS tax deducted for the month ended ... read more

23-11-2017

Autumn Budget 2017 – SDLT for first-time buyers

As the Chancellor, Philip Hammond alluded to in his Budget speech there had been much speculation in the press that he would do something to alleviate the Stamp Duty Land Tax (SDLT) burden for first time buyers. However, he went a step further by introducing a temporary freeze in SDLT. SDLT for all first-time buyers making a purchase of up to £300,000 will pay no stamp duty under the new ... read more

23-11-2017

Autumn Budget 2017 - VAT registration and deregistration thresholds

The taxable turnover threshold, that determines whether businesses should be registered for VAT, will be frozen at £85,000 for 2 years from 1 April 2018. The taxable turnover threshold that determines whether businesses can apply for deregistration will also be frozen at the current rate of £83,000 for the same time period. Businesses are required to register for VAT if they meet either of the ... read more

23-11-2017

Autumn Budget 2017 – Income Tax Rates & Allowances

The Chancellor has confirmed that from 2018-19 the personal allowance will increase to £11,850 (an increase from the current £11,500) and the basic rate limit to £34,500. As a result, the higher rate threshold will increase to £46,350 from April 2018. These increases are part of the government’s commitment to increase the basic personal allowance to £12,500 and the higher rate threshold to £50,000 ... read more

23-11-2017

Autumn Budget 2017 - Minimum wage increases

The Chancellor used his Budget speech to confirm that increased National Minimum Wage (NMW) and National Living Wage (NLW) rates are due to come into effect on 1 April 2018, subject to Parliamentary approval. The NLW first came into effect on 1 April 2016 and is the minimum hourly rate that must be paid to those aged 25 or over. From 1 April 2018, the NLW will increase by 33p to £7.83. This ... read more

23-11-2017

Autumn Budget 2017 - Alcohol and Tobacco Duty

As part of the Budget measures the Chancellor announced that the duty rates on beers, ciders, spirits and wine will be frozen at the current rates. These measures will mean that a bottle of whisky will be £1.15 less than if the rates had increased as expected and a pint of beer 12p less. As the Chancellor said in his speech ‘Merry Christmas!’. However, the Chancellor did announce that he will ... read more

23-11-2017

Autumn Budget 2017 – EIS and VCT scheme changes

As part of the Budget measures, several changes were announced to both the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) scheme. These schemes are designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies. The EIS offers generous tax reliefs including 30% income tax ... read more

23-11-2017

Autumn Budget 2017 – Research and Development (R&D)

R&D tax credits were introduced for Small and Medium Sized Enterprises (SMEs) in 2000 and for large companies in 2002. R&D credits are a Corporation Tax relief used to encourage innovation and enterprise within the UK economy. Large companies can currently claim an 11% Research and Development Expenditure Credit (RDEC) also known as an 'above the line tax credit' for qualifying ... read more

23-11-2017

Autumn Budget 2017 - Air Passenger Duty

Air passenger duty (APD) is a departure tax levied on most air travel. Each geographical band has two rates of air passenger duty, one for standard class and the second for 'other' higher classes of travel (usually premium economy / business / first class). Currently, band A (short-haul) ranges from £13 for a standard class journey and £26 for an 'other' class of travel. The Band B (long-haul) ... read more

22-11-2017

Employment tribunal fees refund scheme is now open

Following the successful completion of the first phase of its refund scheme for employment tribunal fees, following the Supreme Court's judgment in July 2017 in R (on the application of Unison) v Lord Chancellor 2017 that the fees regime was unlawful, the government has now fully opened the scheme to anyone who thinks that they may be eligible for a refund. The refund scheme can be used by all ... read more

21-11-2017

Uber loses appeal on worker status but Deliveroo riders held not to be workers

Back in October 2016, in Aslam and others v Uber BV and others 2016, an employment tribunal was held that Uber drivers were “workers” for the purposes of the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998. This potentially gave them an entitlement to various basic employment rights, including paid holiday and the national minimum or national ... read more

15-11-2017

How to appeal against a tax decision

It is not unusual for taxpayers to find themselves in a position where they disagree with a tax decision made by HMRC. There are a number of different options open to taxpayers seeking to use the review and appeals process. Note, there is a separate procedure to be followed by taxpayers to make a complaint about HMRC for issues such as unreasonable delays, mistakes and poor treatment by HMRC’s ... read more

15-11-2017

Claiming an “unclaimed” estate

There are special rules that govern how assets are divided if a person dies without making a will. If this happens your assets are passed on to family members in accordance with a set legal formula. This can result in a distribution of assets that would not be in keeping with your final wishes, and can be especially problematic for cohabitees (a couple who live together but are not married and ... read more

15-11-2017

How to import goods for the first time

Businesses that are starting to import goods for the first time need to be aware of a myriad of special rules that apply. Whilst most smaller businesses importing goods will use a courier or freight forwarder, it is still important to be aware of the duties and VAT implications. Businesses importing goods must be able to distinguish between importing goods from outside the EU or within the EU. ... read more

15-11-2017

Disguised remuneration settlement opportunity

A new measure to tackle disguised remuneration tax avoidance schemes was announced as part of the Autumn Statement 2016. The new measure will introduce a loan charge on disguised remuneration avoidance schemes that remain unpaid on 5 April 2019. These types of schemes (including contractor loans) are used by employers and individuals and seek to avoid paying income tax and NICs. This is usually ... read more

15-11-2017

How much statutory redundancy pay should you receive?

If you have been in the same job for two years or more and are made redundant you will usually be entitled to a redundancy payment. The legal minimum that you are entitled to receive is known as ‘statutory redundancy pay’. There are exceptions where you are not entitled to statutory redundancy pay, such as if your employer offers to keep you on or offers you suitable alternative work which you ... read more

15-11-2017

Changing a will after death

This may come as a surprising fact to many of our readers, but a will can be changed after death. This can be done by using what is known as a Deed of Variation. Any changes to the will must be done within two years from the date of death. However, beneficiaries who would be left worse off by the change must give their agreement before any changes can be made. This is most often done ... read more

15-11-2017

Are you caught by the High Income Child Benefit tax charge?

The High Income Child Benefit Charge (HICBC) applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge either reduces or removes the financial benefit of receiving child benefit. Where both partners have an income that exceeds £50,000, HICBC is payable by the partner with the highest income. The HICBC is charged at the rate of 1% of the ... read more

08-11-2017

OTS publishes new report on the VAT system

The Office of Tax Simplification (OTS) provides advice to the Chancellor on simplifying the UK tax system, with the objective of reducing compliance burdens on both businesses and individual taxpayers and will draw together expertise from across the tax and legal professions, the business community and other interested parties. It was announced as part of the Autumn Statement 2016, that the OTS ... read more

08-11-2017

Delay in withdrawal of self-employed NIC contributions

In a surprising move, the Government has announced that the planned abolition of Class 2 National Insurance Contributions (NICs) is to be delayed for a year. The withdrawal of Class 2 NICs was due to take place from April 2018 but will now take place one year later from April 2019. The enabling legislation for this change, NICs Bill will now be introduced in 2018 and will take effect in April ... read more

08-11-2017

HMRC win Littlewoods’ tax case

HMRC has won a landmark case after the Supreme Court overturned an earlier decision of the Court of Appeal. The issue at hand concerned historic overpayments of VAT by Littlewoods (a catalogue sales business) between 1973 and 2004. In 2004, HMRC accepted that the VAT had been overpaid and repaid £205m plus a further £268m interest calculated using the simple interest basis. Littlewoods argued ... read more

08-11-2017

Are your bank deposits protected?

The bank deposit guarantee limit is the amount of money that is guaranteed for savers in UK banks and building societies should the institution become insolvent. The Financial Services Compensation Scheme (FSCS) guarantee amount is currently £85,000 per person, per authorised bank or building society. There is additional protection available to savers with certain types of temporary high ... read more

08-11-2017

Interest rates start to rise

In a widely expected move, the Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-2 to increase the Bank Rate from 0.25% to 0.5%. This is the first increase in interest rates since July 2007 when the rate increased to 5.75%. The interest rate has been fixed at 0.5% since the crash of 2009 and was further reduced to 0.25% in August 2016 following worries of economic ... read more

08-11-2017

UK Living Wage rates rise

The current National Minimum Wage (NMW) hourly rate for adults between 21-24 years old is £7.05, and the national living wage is £7.50 for those aged 25 and over. The Living Wage Foundation (an initiative of Citizens UK), recently announced living wage rates for London and the UK at £10.20 an hour and £8.75 an hour respectively. The Living Wage rates are not statutorily binding but represent an ... read more

06-11-2017

New Acas guidance on dealing with stress in the workplace

Following the publication of its guidance for employers on managing staff who are experiencing mental health issues, Acas has now published new guidance for employers on how to support employees who are suffering from work-related stress. The guidance highlights five indicators of stress that managers should be aware of. These are: changes in the employee’s behaviour, mood or how they ... read more

02-11-2017

Change to tax relief on re-mortgaged buy-to-let property?

HMRC’s guidance on paying income tax when you rent out a property has been updated to reflect the new restriction on tax relief for finance charges incurred since April 2017. The tax relief on finance costs (such as mortgage interest) used to buy investment properties, is being gradually restricted to the basic rate of tax. The finance costs restriction is being phased in over four years and will ... read more

02-11-2017

Are your earnings approaching £100,000?

For high earning taxpayers the personal income tax allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. Adjusted net income is total taxable income before any personal allowances, less certain tax reliefs such as trading losses and certain charitable donations and pension contributions. Adjusted net income between £100,000 and £123,000 ... read more

02-11-2017

CGT payable on sale of personal possessions

There are special rules concerning the payment of capital gains tax (CGT) on the sale of personal possessions also known as 'chattels'. Personal possessions are generally defined as possessions with a predictable useful life of 50 years or less and are exempt from CGT up to a disposal value of £6,000. Personal possessions include items like jewellery, paintings, antiques, coins and stamps. ... read more

02-11-2017

Unpaid director’s salary taxable or not?

A recent First-Tier Tribunal case examined whether amounts credited to a director’s loan account were subject to PAYE and NIC deductions. The appellant company buys and sells boats. One of the directors, who is also the chairman of the company, had made a substantial loan to the company at some point prior to April 2010. It was later agreed that an annual fee of £16,000 would be credited to his ... read more

02-11-2017

Adjustments if you leave the VAT Flat Rate Scheme

Any business that has been adversely affected by the new 'limited cost trader' test that was introduced on 1 April 2017, should consider whether it will be more beneficial to leave the VAT Flat Rate Scheme (FRS) and revert to using traditional VAT accounting. Businesses can leave the FRS at any time by notifying HMRC. To save any additional complications, this is usually done at the end of their ... read more

02-11-2017

More than one source of self-employment

Any self-employed person who has more than one source of self-employment is required to pay Class 4 NICs on their total taxable profits. Class 4 NICs are paid by the self-employed as a percentage of annual taxable profits. Class 4 NICs currently apply on assessable profits from £8,164. Between £8,164 and £45,000, NICs are payable at 9%. Any income above the Upper Profits Limit is liable to NICs ... read more

31-10-2017

Workers unaware of pension contribution increases

The current total minimum contribution to a defined contribution workplace pension scheme under the automatic enrolment provisions is 2% of qualifying earnings, with a minimum of 1% coming from the employer. The remaining 1% would then ordinarily come from the worker. However, the employer may pay in more than the 1% minimum and, in that circumstance, the worker can then pay in less, or pay in ... read more

25-10-2017

Gazumping may become a thing of the past

The Communities Secretary Sajid Javid has announced plans to make the process for buying a home 'cheaper, faster and less stressful'. This includes looking at new measures to tackle gazumping where a seller accepts a higher offer from a new buyer after already accepting an offer for less money. The government will also examine ways of increasing confidence in the housing chain and look to ... read more

25-10-2017

Fine wine investment scam

A recent investigation by the Insolvency Service has seen two directors of a company selling fine wines disqualified for a total of 20 years. Crimson Fine Wines Limited cold-called customers and offered them the opportunity to take part in fine wine investment scheme offering high returns over periods varying from 12 months to five years. However, the investment scheme was no more than a scam as ... read more

25-10-2017

Buying an electric or low emission car

Businesses can claim a 100% first-year allowance (FYA) on the purchase of certain qualifying Plant and Machinery (P&M). In certain circumstances they can also claim FYA’s on the purchase of low CO2 and electric vehicles. The generous Annual Investment Allowance (AIA) does not apply to cars. There are FYAs available for purchasing a new electric car, or a new, unused car within the threshold ... read more

25-10-2017

What are integral features?

The term capital allowances is used to describe the allowances available to businesses to secure tax relief for certain capital expenditure. The rules that govern the purchase of capital equipment such as computer equipment, vehicles and machinery by businesses are different to those for day to day business expenses claims. A Writing Down Allowance (WDA) is available for plant and machinery ... read more

25-10-2017

Could you claim a £662 tax refund?

The marriage allowance (MA) allows couples, where one partner does not fully utilise their personal tax allowance, to share a limited amount of the unutilised portion with their spouse. The MA is only available to married couples and those in a civil partnership. The MA allows the lower earning partner to transfer up to £1,150 (2016-17: £1,100) of their unutilised personal tax-free allowance to a ... read more

25-10-2017

Options to set off property rental losses

There are different categories of property rental business such as UK property businesses, overseas property businesses, UK furnished holiday businesses and EEA furnished holiday lettings businesses. As a general rule, landlords renting out more than one property will automatically receive any relief for losses as they are set against profits made on other properties in the same property rental ... read more

24-10-2017

Employment tribunal fees refund scheme launched

The government has launched the first phase of its refund scheme for employment tribunal fees, following the Supreme Court's judgment in July 2017 in R (on the application of Unison) v Lord Chancellor 2017 that the fees regime was unlawful. The first phase will last for about four weeks, thereafter full details of the scheme, including details of how it can be accessed, will be made available once ... read more

23-10-2017

Tax Diary November/December 2017

1 November 2017 - Due date for corporation tax due for the year ended 31 January 2017. 19 November 2017 - PAYE and NIC deductions due for month ended 5 November 2017. (If you pay your tax electronically the due date is 22 November 2017.) 19 November 2017 - Filing deadline for the CIS300 monthly return for the month ended 5 November 2017. 19 November 2017 - CIS tax deducted for the month ended ... read more

19-10-2017

Bereavement leave for parents who lose a child

The Parental Bereavement (Leave and Pay) Bill has been published by the government. Although the Bill is a Private Members’ Bill, it has the full support of the government and therefore the Bill and its explanatory notes have been prepared by the government with the consent of the relevant MP. It is due to have its second reading in the House of Commons on 20 October 2017. The Bill provides a ... read more

18-10-2017

Overdrawn director’s loan account

An overdrawn director's loan account is created when a director (or other close family members) ‘borrows’ money from their company. Many companies, particularly 'close' private companies, pay for personal expenses of directors using company funds. Where these payments do not form part of a director’s remuneration they are usually posted to the director’s loan account (DLA). The DLA can represent ... read more

18-10-2017

Managing staff experiencing mental ill health

Acas has launched new guidance to help employers manage staff who are experiencing mental health issues. The new guidance aims to help managers develop the right skills to support employees as well as to create a culture of well-being in the workplace. It includes advice on: spotting the signs of mental ill health talking to a team member that may be experiencing mental ill health supporting ... read more

18-10-2017

Is it a car or a van?

The First-Tier Tribunal recently heard three appeals that examined whether vehicles supplied to employees were vans or cars. The main appellant in this case was Coca-Cola European Partners GB Ltd (Coca-Cola) who supplied vehicles to a number of their employees. Until 1997, Coca-Cola’s technicians had used estate cars but the amount of equipment that the employees needed would no longer fit in an ... read more

18-10-2017

Non-residents selling UK home

A capital gains tax (CGT) charge on the sale of UK residential property by non-UK residents was introduced in April 2015. A UK non-resident that sells UK residential property needs to deliver a non-resident capital gains tax (NRCGT) return within 30 days of selling a relevant property. When such a sale is made a NRCGT return must be submitted to HMRC within 30 days of the conveyance of the ... read more

18-10-2017

HMRC to stop accepting personal credit cards

HMRC has confirmed that they will no longer accept payments with a personal credit card from 13 January 2018. This includes payments for income tax, PAYE, VAT and many other taxes. This is due to the implementation of the EU second Payment Services Directive (PSDII). This legislation makes a number of reforms to the way payments by debit and credit cards, direct debit, credit transfers, standing ... read more

18-10-2017

Inactive companies and Corporation Tax

There are a number of scenarios where HMRC would consider a company or organisation to be inactive for Corporation Tax (CT) purposes. This is a different categorisation to a 'dormant' company and usually happens when a company has not commenced trading. A company, whilst not yet active for CT purposes, can still carry out activities (known as ‘pre-trading activities’) or incur costs (known as ... read more

18-10-2017

What is a 'K' tax code?

The letters in an employee’s tax code signify their entitlement (or not) to the annual tax free personal allowance. The tax codes are updated annually, or when an employee's circumstances change, and help employers work out how much tax to deduct from an employee’s pay packet. The basic personal allowance for the tax year starting 6 April 2017 is £11,500 and the tax code for an employee ... read more

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