News

The latest breaking news in the industry!

07-08-2018

32.5% Corporation Tax on overdrawn directors’ loans

HMRC defines a director's loan as money taken from your company (by you or other close family members) that isn’t: a salary, dividend or expense repayment and money you’ve previously paid into or loaned the company An overdrawn director's loan account is created when a director effectively 'borrows' company money. A record of these loans must be kept in a director's loan account (DLA). ... read more

07-08-2018

Tax free health benefits

There is no requirement for employers to pay tax and National Insurance on certain health benefits covered by tax concessions or exemptions. For example, there is no requirement to report employees’ medical or dental treatment or insurance if they are a part of a salary sacrifice arrangement. In addition, the following health benefits can be provided tax free: A maximum of one ... read more

07-08-2018

Gifting share in home

Most gifts made during a person's life are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. The gifts or transfers achieve their potential of becoming exempt from Inheritance Tax if the taxpayer survives for more than seven years after making the gift. There is a tapered relief available if the donor dies between three and ... read more

07-08-2018

What is overpayment relief?

Overpayment relief was introduced from 1 April 2010 and replaced error or mistake relief for Income Tax, Capital Gains Tax (CGT) and Corporation Tax. Overpayment relief allows taxpayers to recover overpaid Income Tax, CGT, Class 4 NIC, Corporation Tax, overpaid bank payroll tax or to reduce an excessive assessment. According to the HMRC, the rules for overpayment relief are intended to: give ... read more

07-08-2018

VAT – goods on sale or return

There are special VAT rules that must be followed when you sell goods on a sale or return basis. Goods sold on a sale or return basis (sometimes known as 'on approval') are goods that are effectively supplied to a customer free of charge and the supplier is only paid when the product has been sold. If the product remains unsold then it can be returned to the supplier without any charge. This type ... read more

07-08-2018

Fixtures and fitting on transfer of ownership

The tax treatment of the sale of fixtures and fittings included in the sale or purchase of a commercial building changed from April 2014. From that date, the buyer of a building that contains fixtures can only claim plant and machinery allowances (PMA) if the expenditure on the fixtures is pooled before the sale. The seller and buyer must also either: formally agree a value for fixtures within ... read more

07-08-2018

Childcare voucher scheme issues

The Tax-Free Childcare Scheme (TFCS) was launched in April 2017 and opened to all remaining eligible families with children under 12 on 14 February 2018. The new scheme allows working parents to receive a government top-up on their contributions. For every 80p in the £1 contributed by parents an additional 20p or 20% will be funded by Government up to a maximum total of £10,000 per child per ... read more

07-08-2018

Emails and letters from HMRC

HMRC continues to warn taxpayers about email phishing scams. Phishing emails are used by fraudsters to access recipients’ valuable personal details, such as usernames and passwords. Whilst these messages may appear to be genuine they are very dangerous and clicking on a link from within the email can result in personal information being compromised and the possibility of computer viruses affecting ... read more

01-08-2018

Football agent scores £1.2m own goal

A former football agent, Jerome Anderson, who looked after over 200 players during his career including Thierry Henry and Dennis Bergkamp, has lost his £1.2m tax avoidance case with HMRC. The football agent's tax appeal was recently heard at the Upper Tribunal who upheld the decision of the First Tier Tribunal and disallowed the relief for losses incurred by a football academy run by the ... read more

01-08-2018

Correcting errors on your VAT return

Where an error on a past VAT return is uncovered taxpayers have a duty to correct the error as soon as possible. HMRC can also charge penalties and interest if an error is due to careless or dishonest behaviour. As a general rule, you can use a current VAT return to make any necessary adjustment. However, in order to do so, there are three important conditions that must be met: The error must ... read more

01-08-2018

Selling your UK home if you live abroad

There are special reporting requirements and the possibility of a tax bill when you sell your home in the UK and you live abroad. A Capital Gains Tax (CGT) charge on the sale of UK residential property by non-UK residents was introduced in April 2015. Only the amount of the overall gain relating to the period after 5 April 2015 is chargeable to tax. In certain circumstances private residence ... read more

01-08-2018

Capital Gains Tax: company takeovers

When a company takes over another company it may issue its own shares and/or securities in payment or part payment for the shares it’s buying. This is sometimes described as a share reorganisation. Where certain conditions are met, when the old shares are exchanged for new shares, no capital gain will occur until the new shares are sold. For Capital Gains Tax (CGT) purposes the sale or disposal ... read more

01-08-2018

What to do if you disagree with HMRC

There are a number of options open to taxpayers who disagree with a tax decision issued by HMRC. As a first step it is usually possible to make an appeal against a tax decision. There is normally a 30-day deadline for making an appeal so time is of the essence. HMRC will then carry out a review, usually by using HMRC officers that were not involved in the original decision. A response to an appeal ... read more

01-08-2018

What are the maximum weekly working hours?

There are working time limits that state the legal maximum weekly working hours that a person has to work should not exceed 48 hours a week on average. The maximum hours for under 18’s is fixed at no more than 8 hours a day or 40 hours a week. The average working hours are calculated over a 17-week period and includes overtime. This means that an employee may work more than 48 hours in some weeks ... read more

25-07-2018

A round up of some non-taxable payments and benefits

Although the government is continually clamping down on non-taxable payment and benefits for employees, there remains an eclectic list of expenses that are tax exempt. Some of the non-taxable benefits include the following: Annual parties. An annual Christmas party or other annual event offered to staff generally is not taxable on those attending, provided that the average cost per head of ... read more

25-07-2018

Will I pay tax when coming to the UK?

The statutory resident test (SRT) is used to determine if someone is resident in the UK for tax purposes when coming to the UK. Historically, residence in the UK was determined by being in the UK in excess of 182 days in any tax year (6 April to 5 April) or by being resident in the UK for an average of 91 days in any tax year, taking the average of the tax year in question and the three previous ... read more

25-07-2018

How to challenge your Council Tax listing

The Valuation Office Agency (VOA) is a government body in England and Wales and an executive agency of HMRC. The Agency values properties for the purpose of Council Tax and for non-domestic rates in England and Wales. The council tax bands were set on 1 April 1991 for England, and on 1 April 2003 for Wales and range from Band A - F. If you believe that your council tax listing is incorrect, you ... read more

25-07-2018

New guidance on disguised remuneration scheme

The government's plan to tackle disguised remuneration tax avoidance schemes was first announced as part of the Autumn Statement 2016. These types of schemes (including contractor loans), are used by employers and individuals and seek to avoid paying Income Tax and National Insurance Contributions (NICs). This is usually done by utilising a loan or other payment from a third-party which is ... read more

25-07-2018

VAT – motor dealer deposit contributions

A new Revenue and Customs Brief 7/18 has been published by HMRC concerning their policy on the VAT accounting treatment of promotions, where payments are said to be made by motor dealers to finance companies on behalf of the end customer. These are usually known as dealer deposit contributions (DDC) in the motor retail trade and have been the subject of different VAT accounting treatments by motor ... read more

25-07-2018

Updated list of software suppliers that support MTD for VAT

The deadline for businesses with a turnover above the VAT threshold to keep digital records for VAT purposes when Making Tax Digital (MTD) returns, is fast approaching. From April 2019, businesses with a turnover above the VAT threshold (currently £85,000) will have to: keep their records digitally (for VAT purposes only), and provide their VAT return information to HMRC through MTD ... read more

25-07-2018

The Lifetime ISA

The Lifetime ISA has been designed to help those aged between 18 and 40 to save for a new home or for their retirement. Under the scheme, the government provides a 25% bonus on yearly savings of up to £4,000, and once you start saving before you are 40, you can continue using the scheme until you turn 50. In total, this could see young savers investing up to £128,000 (over 32 years) and receiving ... read more

23-07-2018

Tax Diary August/September 2018

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

18-07-2018

Low emission lorries to pay lower levies

The government has confirmed plans to introduce a lower rate of the HGV road user levy for lorries that meet the latest Euro VI emissions standards. This measure is intended to incentivize vehicle operators to move towards newer, cleaner vehicles and to reduce emissions from HGVs and improve air quality. Lorries which meet the Euro VI standard produce 80% less nitrogen oxide emissions than many ... read more

18-07-2018

New points-based late filing penalties

The Finance Bill 2018-19 draft legislation includes a new measure to introduce a points-based penalty system for certain regular (e.g. monthly, quarterly and annual) returns that are filed late. The introduction of a points system was first announced at Autumn Budget 2017 and will operate in conjunction with HMRC's Making Tax Digital (MTD) initiative. The changes will initially apply to regular ... read more

18-07-2018

HMRC security deposit regime to be extended

The security deposit legislation is to be extended to both Corporation Tax and Construction Industry Scheme (CIS) deductions from April 2019. The security deposit regime allows HMRC to require security from high-risk businesses where there is a serious risk that taxes owed will not be paid. At present HMRC’s security deposit powers only apply to VAT, PAYE and National Insurance Contributions, ... read more

18-07-2018

Change to penalties for late payment of tax

Plans to introduce a new two tiered penalty system for individuals and businesses that do not pay their tax bills on time have been included in the draft Finance Bill 2018-19. The government has said that the new late payment penalty regime will help to ensure that those who pay their tax on time are not disadvantaged by those who do not and to incentivise payment on time where possible. There ... read more

18-07-2018

VAT and gift vouchers

New draft legislation has been published as part of the draft Finance Bill 2018-19 that aims to change the VAT treatment of vouchers. The legislation will focus on bringing the UK VAT treatment of vouchers in line with that published in the EU directive. Notwithstanding the Brexit negotiations, the UK continues to be a member of the EU for the time being and this legislation will help remedy a ... read more

18-07-2018

Corporation Tax relief for carried forward losses

The rules for the Corporation Tax treatment of carried forward losses changed from 1 April 2017. The changes increased flexibility to set off carried forward losses against total profits of the same company or another company in a group whilst at the same time introducing new restrictions as to the amount of profits against which carried forward losses can be set. A number of further changes to ... read more

18-07-2018

Requirement to correct tax due on overseas assets

The Requirement to Correct (RTC) legislation created a new statutory obligation for taxpayers with undeclared UK tax liabilities that involve offshore matters. The RTC applies to any person with undeclared UK Income Tax, Capital Gains Tax and/or Inheritance Tax liability concerning offshore matters or transfers relating to offshore tax non-compliance committed before 6 April 2017. Information ... read more

18-07-2018

Tax codes for employees

P9 tax code notices are used to notify employers of the tax codes to use when calculationg PAYE due from employees' wages and salaries. In a service availability update published on 17 July 2018, HMRC has confirmed that they are aware of an issue with employers failing to receive P9 files for the tax year 2018-19. HMRC has now identified the employees affected by this issue and has sent P6 ... read more

11-07-2018

Rent-a-room relief to be modified

The publication of the draft Finance Bill 2018-19 includes legislation to change the way the rent-a-room relief scheme works. Following last year's Budget, a consultation was launched by HM Treasury to examine the design of the rent-a-room scheme. When the relief was first launched it was intended to be used where one bedroom in a house was rented out to a lodger for medium to long-term lets, ... read more

11-07-2018

Beneficiaries of tax exempt pension benefits to be extended

The draft Finance Bill includes a new measure that will help modernise the tax treatment of employer paid premiums for the provision of death in service life assurance products for their employees. Currently, these premiums are only tax-exempt if the named beneficiary is a member of the employee’s family, or a member of their household. This includes the employee's spouse or civil partner, ... read more

11-07-2018

Rules for use of taxable cars and vans to be updated

The Finance Bill 2018-19 draft clauses include new measures that will address two anomalies in the Optional Remuneration Arrangements (OpRA) rules. These measures will: ensure that when a taxable car or van is provided through OpRA, the amount foregone, which is taken into account in working out the amount reportable for tax and National Insurance contributions purposes, includes costs ... read more

11-07-2018

Draft clauses for forthcoming Autumn Budget are published

The Finance Bill 2018-19 draft legislation was published on 6 July 2018. The Bill which runs to 226 pages (with a further 143 pages of explanatory notes) contains the legislation for many of the tax measures that had previously been announced by the government as well as new initiatives. The publication of the draft Finance Bill is in line with the approach to tax policy where the government ... read more

11-07-2018

Change to evidence required for employee expenses

A new measure to remove the requirement for employers to check receipts for expense claims made by employees using the HMRC benchmark scale rates or overseas scale rates is to be introduced. The benchmark scale rates can be used by employers to reimburse staff for subsistence expenses when they are travelling on business away from their normal workplace. HMRC lists maximum rates but employers ... read more

11-07-2018

Non-UK resident property companies to be charged Corporation Tax

The government is to move forward with plans to charge Corporation Tax to non-UK resident companies with property income. Currently, these companies are chargeable to Income Tax and not UK Corporation Tax. This change is part of the government's aim to ensure that all companies are subject to the same tax treatment and to limit some of the reliefs claimed by foreign companies on UK rental ... read more

11-07-2018

Technical change to Entrepreneurs’ Relief

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 in place of the standard rate. There are a number of qualifying conditions that must be met in order to qualify for the relief. One of these conditions is that an individual’s shareholding must make ... read more

09-07-2018

EU Settlement Scheme

The government’s response to the Home Affairs Select Committee’s report on the delivery of Brexit, published in May 2018, committed to providing further details about the proposed EU Settlement Scheme in the next few weeks. The scheme is the new settled status scheme for EU nationals who are resident in the UK before 31 December 2020. The government has now published a Statement of Intent setting ... read more

04-07-2018

Spousal tax reliefs for unmarried couples?

In a unanimous decision, the Supreme Court has decided that the law preventing opposite sex couples from entering into a civil partnership breaches the European Convention on Human Rights (ECHR). The appellants in this long running case are an opposite sex couple with a conscientious objection to marriage. The crux of this case centred on the issue that when the law was changed in 2013 to allow ... read more

04-07-2018

What is Business Asset Rollover Relief?

Business Asset Rollover Relief allows taxpayers to delay paying Capital Gains Tax (CGT) on gains when they sell or dispose of certain assets and use all or part of the proceeds to buy new assets. The relief means that the CGT due on the gain of the old asset is postponed. The amount of the gain is effectively rolled over into the cost of the new asset and any CGT liability is deferred until the ... read more

04-07-2018

1 million couples can still claim £900 tax refund

The marriage allowance allows couples to share part of their personal tax-free allowance in certain circumstances. The marriage allowance is available to married couples and those in a civil partnership where one partner has an unused personal allowance and their spouse/partner only pays Income Tax at the basic rate. HMRC has published a press release to remind eligible taxpayers to apply for the ... read more

04-07-2018

Investing in new equipment for your business?

The Annual Investment Allowance (AIA) provides 100% first year tax relief for qualifying expenditure on plant and machinery. It can be claimed by an individual, partnership or company carrying on a trade, profession or vocation, a UK non-residential property business or a furnished holiday let. Partnerships or trusts with individuals and companies in the business structure do not qualify for the ... read more

04-07-2018

Selling digital services to EU based customers

There are a number of VAT issues to consider if you are selling digital services from the UK to consumers based in other EU countries. Since 1 January 2015, the place of supply rules for these types of service is determined by the location of the customer who receives the service rather than the location of the supplier. Digital services include things like radio and television broadcasting, ... read more

04-07-2018

Bereavement payments

The Bereavement Allowance was a weekly benefit that was payable to certain widows, widowers, or surviving civil partners whose spouse or civil partner died before 6 April 2017. Prior to that date, it was also possible for qualifying applicants to claim the Widowed Parent’s Allowance and Bereavement Payment. The new Bereavement Support Payment was launched on 6 April 2017. The Bereavement Support ... read more

04-07-2018

Claiming Income Tax if you have stopped work

HMRC issues guidance that covers what you need to do if you stopped work. The guidance covers the main reasons that you might have stopped work, for example, being made redundant or leaving your job. If you have been made redundant then you may have overpaid tax as a result of your redundancy payment. HMRC may in some cases refund you any overpaid tax before the end of the appropriate tax year. A ... read more

02-07-2018

Acas publishes guidance for employers on overtime

Acas has published new guidance for employers on overtime. The guidance highlights the importance of setting out overtime terms in employment contracts or staff handbooks and urges employers to keep detailed records of the amount of overtime worked and how much time off in lieu has been taken. The guidance covers: The different types of overtime, i.e. voluntary, compulsory guaranteed and ... read more

28-06-2018

Tax Diary July/August 2018

1 July 2018 - Due date for corporation tax due for the year ended 30 September 2017. 6 July 2018 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs. 19 July 2018 - Pay Class 1A NICs (by the 22 July 2018 if paid electronically). 19 July 2018 - PAYE and NIC deductions due for month ended 5 July 2018. (If you pay your tax electronically the due ... read more

27-06-2018

Interpreting your 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 and help employer’s work out how much tax to deduct from an employee’s pay packet. The basic personal allowance for the tax year starting 6 April 2018 is £11,850 and the tax code for an employee entitled to the standard tax-free Personal ... read more

27-06-2018

Employee expenses covered by exemption

There is no longer a requirement to report certain routine expenses to HMRC. The types of expenses and benefits covered are referred to as exemptions and have replaced dispensations which can no longer be applied for. The business expenses and benefits that no longer need to be reported (since April 2016) include reimbursed costs to employees covering business travel, phone bills, business ... read more

27-06-2018

Importing goods from non-EU countries?

Businesses that are importing goods need to be aware of the many 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 goods imported from outside the EU or within the EU. Intra-EU movements of goods that ... read more

27-06-2018

Could you qualify for NIC Carer’s credits?

Carer’s credit is a National Insurance credit that can help carers to fill gaps in their National Insurance record. Carers who don’t qualify for Carer’s allowance, may qualify for Carer’s credit. This can help increase the amount of state pension a carer receives when they reach the state retirement age. The Carer’s credit is available to qualifying applicants caring for one or more people for at ... read more

27-06-2018

Equipment you buy for your job

Employees who use their own money to buy things they need for their job can sometimes claim tax relief for the associated costs. It is usually only possible to claim tax relief for the cost of items used solely for your work. There is no tax relief available if your employer pays you back in full for an item you have bought for work. In addition, you cannot claim tax relief if your employer has ... read more

27-06-2018

Check if company is in liquidation

There are a number of ways you can check if a company is in liquidation. This can include looking on the Companies House register. Companies House is responsible for maintaining a register of company information such as annual returns and annual accounts. This information also includes insolvency details, although this can take some time to be updated and made available to the public. When a ... read more

27-06-2018

Final reminder to submit P11D forms

Employers are reminded that the deadline for submitting the 2017-18 forms P11D, P11D(b) and P9D, is 6 July 2018. P11D forms are used to provide information to HMRC on all Benefits in Kind (BiKs), including those under the Optional Remuneration Arrangements (OpRAs) unless the employer has registered to payroll benefits. This is known as payrolling and removes the requirement to complete a P11D for ... read more

27-06-2018

Tax-Free childcare in the school holidays

The results of a new YouGov poll published by HMRC has revealed that some 30% of parents polled are worried about balancing their job and school holiday childcare, and 54% of parents admitted they look forward to their children returning to school in September HMRC is reminding parents that the Tax-Free Childcare (TFC) scheme can help. The TFC scheme helps support working families with their ... read more

21-06-2018

Tax gap lowered according to HMRC

HMRC has published figures that show the tax gap for the 2016-17 tax year was 5.7%. The tax gap is basically the difference between the amount of tax due and the amount of tax collected by the Exchequer. The gap includes tax that has been avoided in the UK’s black economy, criminal activities and by the use of tax avoidance and evasion schemes. The 5.7% figure is the same as was recorded for ... read more

21-06-2018

M&S lose expensive VAT case

The First-Tier Tribunal recently heard an appeal that considered the correct VAT treatment of a promotional offer by the retailer, Marks and Spencer (M&S). The issue concerned a frequently run promotion referred to as 'Dine In for £10 with Free Wine'. Using this offer, customers could buy 3 items of food (comprising a main course, side dish and dessert) from a specific selection for £10 and ... read more

21-06-2018

Self-assessment second instalment due end of July

Taxpayers that make payments on account should be aware that the second payment on account for 2017-18 is due on or before 31 July 2018. The amount due for payment is usually the same as the first payment on account made on 31 January 2018 in relation to the 2017-18 tax year. These payments are based on 50% of your previous year’s net Income Tax liability. However, if your estimated liability for ... read more

21-06-2018

Is the email really from HMRC?

HMRC continues to warn taxpayers to be aware of email phishing scams. Phishing emails are used by fraudsters to access recipients’ valuable personal details, such as usernames and passwords. Whilst these messages may appear to be genuine they are very dangerous and clicking on a link within the email can result in personal information being compromised and the possibility of computer viruses being ... read more

21-06-2018

Are you on track to qualify for a full State Pension?

Anyone aged 16 or over and at least 30 days from their State Pension age can request a State Pension statement from the Department for Work & Pensions (DWP). The statement provides an estimate of how much State Pension they can expect to receive when they reach State Pension age. The estimate is based on the applicant's National Insurance Contribution record as it stands on the date the ... read more

21-06-2018

Payment deadlines for VAT Annual Accounting Scheme

The VAT annual accounting scheme is open to most businesses with a turnover of up to £1.35m per year. Businesses that use the scheme are only required to file one VAT return at the end of each year. This can significantly reduce the amount of administration time and the associated cost of preparing and submitting quarterly VAT returns. The scheme has the benefit of allowing a business to make ... read more

21-06-2018

Plumber wins landmark gig economy case

The Supreme Court has upheld the Court of Appeal's decision and confirmed that a plumber who was classed as self-employed was actually a 'worker'. The Supreme Court dismissed the appeal by Pimlico Plumbers and agreed that the employment status of the person in question was that of a worker which conferred basic employment rights including entitlement to the minimum wage, holiday pay and protection ... read more

18-06-2018

Impact on pensions of maternity leave

The Pensions Advisory Service (TPAS) has published a “Maternity Leave Spotlight” outlining the impact on pensions of maternity leave. It also covers what happens when the employee returns to work and the impact of having a baby on the state pension. Although aimed at employees rather than employers, the Spotlight is a useful summary for employers of the law in this area. The Spotlight confirms ... read more

13-06-2018

Dormant assets scheme to be expanded

The government has announced that the dormant asset scheme is to be expanded to include to a wider set of financial assets including stocks, shares, pensions or bonds. The government has appointed four 'industry champions' to expand the dormant assets scheme across these four important financial sectors. The Independent Dormant Assets Commission was set up in March 2016 and was tasked with ... read more

13-06-2018

VAT reverse charge may be coming to the construction sector

HMRC has launched a new consultation inviting comments from interested parties regarding the introduction of new VAT reverse charge legislation for certain construction services. The new legislation will make the supply of construction services between construction or building businesses subject to the domestic reverse charge. This move is part of the government’s measures to combat what is ... read more

13-06-2018

The maternity allowance

The maternity allowance is a financial benefit for pregnant women who are self-employed, who are working but do not qualify for statutory maternity pay (SMP) or who have recently stopped working. The maternity allowance is paid directly by the Department for Work and Pensions for up to 39 weeks for qualifying applicants. An application must be made for the maternity allowance using the Department ... read more

13-06-2018

Claim back pre-registration VAT

There are special rules that determine the recoverability of VAT incurred before a business registers for VAT. This type of VAT is known as pre-registration input VAT. There are different rules for the supply of goods and services and VAT can only be reclaimed if the pre-registration expenses relate to the supply of taxable goods or services by the newly VAT registered business. The time limit ... read more

13-06-2018

When do charities pay or not pay tax?

The tax treatment of charities is complex. Many charities trade either as part of their charitable interests or to raise funds. As a first step, any charity hoping to claim from beneficial tax treatment needs to be recognised as a charity for UK tax purposes by HMRC as well as meeting other criteria. A recognised charity may qualify for a number of tax exemptions and reliefs on income and gains, ... read more

13-06-2018

Companies and capital gains

Capital Gains Tax (CGT) is not payable by limited companies or unincorporated associations when they sell an asset and make a gain. Instead, the gain (proceeds less any allowable costs and reliefs) is subject to Corporation Tax at the applicable rate, currently 19%. There are various allowances and reliefs available that can reduce the amount of Corporation Tax payable. Until 31 December 2017, ... read more

13-06-2018

Don’t forget to renew your tax credit claims

Families and individuals that receive tax credits should ensure that they renew their tax credit claims by 31 July 2018. Claimants who do not renew on-time may have their payments stopped. HMRC has begun sending tax credits renewal packs to tax credit claimants and is encouraging recipients to renew their tax credits claim online. All packs should be with recipients by 26 June 2018. If you ... read more

11-06-2018

World Cup 2018 – Acas guidance

The World Cup 2018 will take place in Russia between Thursday, 14 June and Sunday, 15 July 2018, with 32 national football teams taking part, including England. Football match times in the UK will vary between 1pm and 8pm. Acas has now published new guidance explaining how employers worried about staff productivity should start planning now to reduce the impact the World Cup could have on their ... read more

11-06-2018

Religion and belief discrimination

Acas has published new guidance on religion and belief discrimination in the workplace. The 26-page guidance booklet, entitled “Religion or belief discrimination: key points for the workplace”, primarily offers employers, managers, HR professionals, employees and job applicants a grounding in how to reduce the chance of religion or belief discrimination happening in the workplace, how it might ... read more

06-06-2018

Gifts with strings attached

Most gifts made during a person's lifetime are not subject to tax at the time of the gift. The lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. These gifts or transfers achieve their potential of becoming exempt from Inheritance Tax if the taxpayer survives for more than seven years after making the gift. There is a tapered relief available if the donor dies between three ... read more

06-06-2018

Don’t leave assets in a company you dissolve

The final step in bringing a company to a legal end is when the company is dissolved. However, one if the important points to be aware of when doing so is that the dissolved company can no longer trade or otherwise deal with its assets. For example, receive a tax refund. It is the responsibility of the company directors to ensure that all of a company’s assets and liabilities are dealt with before ... read more

06-06-2018

Liability of non-resident companies

Under the current rules non-resident companies with a trading business in the UK are liable to pay UK Corporation Tax on their profits made through a permanent establishment/branch or agency. There are some differences in the taxation of non-resident companies as opposed to resident companies. For example, a non-resident company: is not liable to account for ACT on distributions made before ... read more

06-06-2018

What is the Repayment of Teachers Loan Scheme?

Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK. The Student Loans Company (SLC) is directly responsible for collecting the loans of borrowers outside the UK ... read more

06-06-2018

Pensions paid to non-residents

The HMRC Double Taxation Relief Manual sets out the overall principles to be applied in respect of pension income. It states: 'Pensions, other than Government pensions, paid in consideration of past employment to a resident of a country with which the United Kingdom has a double taxation agreement, are normally taxable only in the country of which the pensioner is a resident, but there are ... read more

06-06-2018

VAT Agricultural Flat Rate Scheme

Businesses that use the flat rate scheme pay VAT as a fixed percentage of their VAT inclusive turnover. The VAT agricultural flat rate scheme is a variant of the flat rate scheme specifically designed for farmers and other activities relating to agricultural production (such as horticulture). Farmers cannot join this scheme if the value of their non-farming activities is above the VAT ... read more

04-06-2018

New Time Off for Public Duties Order 2018 due in force from 1 October 2018

The Time Off for Public Duties Order 2018 has been laid before Parliament and will come into force on 1 October 2018. The Order amends section 50 of the Employment Rights Act 1996 so as to grant unpaid time off work to four groups of volunteers in the criminal justice system, who all monitor conditions of those in custody. Currently, employers are not obliged to grant time off work to these ... read more

30-05-2018

Payments in lieu of notice - an update

Since 6 April 2018, employers have been required to pay Income Tax and Class 1 National Insurance Contributions (NICs) on certain parts of termination payments made to employees whether or not these payments are contractual. The element that is liable to taxation is the amount of the termination payment that represents a payment in lieu of notice commonly referred to as 'PILON'. The measure means ... read more

30-05-2018

Claiming tax relief on pension contributions

The annual allowance for tax relief on pensions is £40,000 for the current tax year. There is also a three year carry forward rule that allows taxpayers to carry forward unused annual allowance from the last three tax years if they have made pension savings in those years. Qualifying taxpayers can get tax relief on private pension contributions worth up to 100% of their annual earnings (subject to ... read more

30-05-2018

Is professional gambling a trade?

A thought-provoking question that has been asked by one of our readers is whether professional gambling is a trade or not. The answer to this question might surprise you. According to HMRC and reinforced by a number of court cases the answer is that gambling is not a taxable trade. This answer holds even for a professional gambler who spends a significant amount of time building up their expertise ... read more

30-05-2018

Trustees responsibilities

A trust is an obligation that binds a trustee, an individual or a company, to deal with the assets such as land, money and shares which form part of the trust. The person who puts assets into a trust is known as a settlor and the trust is for the benefit of one or more 'beneficiaries'. The trustees make decisions about how the assets in the trust are to be managed, transferred or held back for ... read more

30-05-2018

Children’s savings and tax

All children in the UK have their own personal annual allowance. However, anti-avoidance laws prevent this allowance being utilised by parents of children aged under 18 with some minimal exceptions. If older children are employed by a parent, then they can receive income paid as wages subject to the usual rules. There are special rules if a parent gifts significant amounts of money to their ... read more

30-05-2018

Holiday entitlement

Almost all full-time workers in the UK are legally entitled to 5.6 weeks' (or 28 days) paid holiday per year. This is known as their statutory leave entitlement or annual leave. Legally, employers can include bank holidays in this total although not all employers do this. Employers are also free to provide additional non statutory holiday entitlement. An employee's actual statutory entitlement ... read more

30-05-2018

Off-payroll working

The rules for individuals providing services to the public sector via an intermediary such as a personal service company (PSC) changed from April 2017. The new rules shift the responsibility for deciding whether the intermediaries’ legislation applies, known as IR35, from the intermediary itself to the public sector receiving the service. The public sector organisation receiving the services is ... read more

29-05-2018

GDPR and Data Protection Act 2018 now in force

The EU General Data Protection Regulation (GDPR) came into force on 25 May 2018, along with most of the provisions in a new Data Protection Act 2018 (including those provisions relevant to processing in the employment relationship). The previous Data Protection Act 1998 has now been repealed. The new data protection laws give people more control about how their personal data is used, shared and ... read more

23-05-2018

Beware sting in VAT annual accounting scheme

The VAT annual accounting scheme is open to most businesses with a turnover of up to £1.35m per year. The main benefits of the scheme include the requirement to file one VAT return per year. This can significantly reduce the amount of administration time and the associated cost of preparing and submitting quarterly VAT returns. A recent First-Tier Tribunal case highlighted an unusual quirk in ... read more

23-05-2018

Give now pay later – what are the settlement rules?

The settlement rules are intended to prevent an individual from gaining a tax advantage by making arrangements that divert his or her income to another person who may be liable at a lower rate of tax or is not liable to Income Tax. Where a settlor has retained an interest in a property in a settlement the income arising is treated as the settlor’s income for all tax purposes. A settlor can be ... read more

23-05-2018

Company van use – the tax consequences

There are a number of tax consequences to be aware when employees are provided with company vans and fuel. A company van can be defined as a van made available to an employee by reason of their employment. There is usually nothing to report to HMRC if the van is used solely for business journeys, as a pool van or for vans provided as part of a salary sacrifice arrangement. If the van is not exempt ... read more

23-05-2018

CGT base cost uplift on death

Special rules apply to assets when they are passed to a beneficiary after the death of the benefactor. In some cases Inheritance Tax may be due on the transfer. However, there can also be a hidden benefit known as a Capital Gains Tax (CGT) uplift on death (see details of the benefits below). The CGT uplift mostly benefits a surviving spouse or civil partner. In this case, the transfer will be ... read more

23-05-2018

Tax exempt gifts paid out of income

Many taxpayers are aware that there is an annual Inheritance Tax exemption of £3,000 for gifts and this can be carried forward to the following tax year if not used to make a maximum gift of £6,000. You can also give as many gifts of up to £250 per person as you want during the tax year but only if you haven’t used another exemption on the same person. There are also special allowances for gifts ... read more

23-05-2018

Can’t afford to pay your tax bill?

HMRC understands that taxpayers will sometimes experience difficulties with paying their tax bill and stress that taxpayers should make contact with them as soon as they realise that there is a problem. This is good advice as burying your head in the sand will only make matters worse. Taxpayers should contact the Business Payment Support Service (BPSS) for practical advice and guidance. The BPSS ... read more

23-05-2018

New advisory fuel rates published

Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. The rates can be used by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel. HMRC accepts there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where ... read more

17-05-2018

Tax Diary June/July 2018

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

16-05-2018

Responding to a County Court claim

It is important that any correspondence received from the County Court is dealt with promptly. This should include taking proper legal advice when appropriate. Usually, a creditor asks the County Court to make a county court judgment (CCJ) against a person who is refusing to pay their bill. The CCJ rules apply to court orders in England and Wales. There are different court system process in ... read more

16-05-2018

When might you be due a tax refund?

HMRC has issued helpful guidance that explains when you might be due a tax refund and how to make a claim. According to HMRC you may be able to claim a refund if you: are employed and had too much tax taken from your pay; have stopped work; sent a tax return and paid too much tax; have paid too much tax on pension payments; bought a life annuity. You may also qualify for tax rebates if ... read more

16-05-2018

NMW and LW enforcement measures

A new press release has revealed that in 2017-18, HMRC investigators identified £15.6 million in back pay that is owed to over 200,000 of the UK’s lowest paid workers. This was an increase from £10.9 million for over 98,000 workers in the previous year. The launch of an online complaints service in January 2017 is thought to have been partially responsible for the increase as HMRC encourages ... read more

16-05-2018

More warnings to beware of bogus tax refund scams

Fraudsters are taking advantage of taxpayers who may be due a tax refund following the end of the 2017-18 tax year. HMRC is currently processing tax refunds, but the fraudsters are trying to get one step ahead. They do this by sending out scam emails and SMS-messages claiming to be from HMRC. Usually the messages include a click-through link to a replica of the HMRC website where the fraudsters ... read more

16-05-2018

Pay and expenses for volunteers

There are many rewarding opportunities for volunteering available across the UK. It is a popular misconception that only young people volunteer, however, people of all ages volunteer for numerous roles in a wide range of charitable and other sectors. There is no official minimum or maximum age for volunteering. However, the following points should be taken into account: Certain organisations’ ... read more

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