News

The latest breaking news in the industry!

20-05-2019

Less is more – MTD regulations relaxed

Starting from April 2019, most VAT-registered businesses that have a taxable turnover over £85,000 are required to keep their VAT records digitally and use Making Tax Digital (MTD) compatible software to submit their VAT return information to HMRC. There are exceptions for certain businesses that have until the first VAT Return period starting on or after 1 October 2019 to start using MTD ... read more

20-05-2019

Claim for money owed to you

If you are owed money by an individual or business, there is a procedure you can use called making a court claim. This was more commonly referred to as taking someone to a 'small claims court'. Before making a claim, you should try to contact the person or organisation to try and resolve the issue by discussion or by using a specialist mediation service. If this is unsuccessful and you ... read more

20-05-2019

Reasonable excuses for late payment or filing

There are a number of options open to taxpayers who disagree with a tax decision issued by HMRC. As a first step, it may be possible to make an appeal against a tax decision. There is normally a 30-day deadline for making a claim, 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 is ... read more

20-05-2019

VAT Margin Scheme on sales of vehicles

A Margin Scheme is an optional method of accounting which allows certain businesses to calculate VAT based on the 'value' they add to the goods they sell, rather than on the full selling price. Without the use of the Margin Scheme, businesses would have to account for VAT on the full selling price of goods within the Margin Scheme. There is a special Margin Scheme for the sale of ... read more

20-05-2019

Pre-trading expenses for a rental business

There are special rules for the pre-trading expenses of a rental business. If the expenses were in relation to a letting, then a deduction may be allowed where the following conditions are met: The expenditure is incurred within a period of seven years before the date the rental business is started, and The expenditure is not otherwise allowable as a deduction for tax purposes, and The ... read more

20-05-2019

Companies eligible for Group Relief

Corporation Tax relief may be available when a company or organisation makes a trading loss. Companies that are eligible for Group Relief can transfer losses and certain other deficits to companies within the same group by means of Group or Consortium Relief. The use of Group Relief allows losses arising in the accounting period to be surrendered to a group company for that period. In addition, ... read more

20-05-2019

Seed Enterprise Investment Scheme

The SEIS provides for extensive Income Tax and Capital Gains Tax (CGT) breaks for investors and this greatly encourages much needed seed capital in new businesses. The SEIS is most valuable for taxpayers who can fully benefit from the tax reliefs on offer. For investors the main benefits of the scheme are as follows: Income Tax relief worth 50% of the amount invested to qualifying individual ... read more

19-05-2019

The Pensions Regulator targets law-breaking employers

Employers who flout their automatic enrolment pension duties are being targeted with short-notice inspections by The Pensions Regulator (TPR). TPR is using data to pinpoint specific employers across the UK who are suspected of breaking the law, including those who fail to put staff into a pension scheme or who make no, or incorrect, pension contributions. It is mandatory for employers to take ... read more

14-05-2019

Want to pay-off your student loan in full?

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 responsible for collecting the loans of borrowers outside the UK ... read more

14-05-2019

Tax on a private pension you inherit

Private pensions can be an efficient way to pass on wealth, but it is important to consider what, if any, tax will be payable on a private pension you inherit. The person who died will usually have nominated you by telling their pension provider that you should inherit any monies left in their pension pot. If the nominated person can’t be found or has since died, the pension provider may ... read more

14-05-2019

CGT and chattels

A charge to Capital Gains Tax (CGT) usually arises after an asset is sold. However, there are special rules concerning the sale of certain personal assets that are worth considering. That is because these assets or possessions with a predictable useful life of 50 years or less are normally exempt from CGT. A chattel is a legal term that defines an article of movable personal property. Chattels ... read more

14-05-2019

Entrepreneurs’ relief minimum period increased from April 2019

Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available Capital Gains Tax (CGT) of 10% is payable in place of the standard rate. CGT on the disposal of chargeable assets is usually chargeable at 20%. There are a number of qualifying conditions that must be met in order to ... read more

14-05-2019

The scope of CGT incorporation relief

Where a taxpayer owns a business as a sole trader or in partnership, a Capital Gain will be deemed to arise if the business is converted into a company by reference to the market value of the business assets including goodwill. This could give rise to a chargeable gain based broadly on the difference between the market value of the assets and their original cost. However, in most cases the ... read more

14-05-2019

Employee Car Ownership Scheme (ECOS)

An Employee Car Ownership Scheme (ECOS) is a set of arrangements whereby employees acquire cars from a specified, often single source and within a specified financing framework. The use of an ECOS can be seen as a halfway measure between providing a company car and leaving an employee to make all their car arrangements privately. An ECOS gives employees similar benefits to having a company car, ... read more

14-05-2019

HMRC phishing emails warning

HMRC continues to warn of the ever-present problem of fraudulent phishing emails. The emails typically look to obtain taxpayers personal and or financial information such as passwords, credit card or bank account details. The phishing emails often include a link to a bogus website encouraging the recipient to enter their personal details. As with other fraudulent emails, these are not genuine ... read more

14-05-2019

Using the Help to Save scheme

The Help to Save scheme for people on low incomes was launched in September 2018. The scheme allows those in work entitled to Working Tax Credit and in receipt of Working Tax Credits or Child Tax Credits, to save and receive a 50% government bonus. The scheme is also open to UK residents who are claiming Universal Credit and have a household or individual income of at least £569.22 for ... read more

09-05-2019

Be Data Aware campaign

The Information Commissioner's Office (ICO) has launched a new "Be Data Aware" campaign to help people understand how organisations might be using their personal data to target them online and why, and how people can control who is targeting them. This includes, understanding how organisations use people’s data to reach them with social media adverts to market their goods or ... read more

07-05-2019

Landlords, time to consider your options?

Two changes to the way Private Residence Relief works are due to come into effect from April 2020. These changes could reduce the amount of CGT relief available on the sale of a private residence. The government has said that the measures are being introduced to better focus Private Residence Relief at owner-occupiers and the changes will mostly affect home owners who let out their home, or part ... read more

07-05-2019

Submitting P11Ds is just the start of your obligations

We would like to remind employers that the deadline for submitting the 2018-19 forms P11D, P11D(b) and P9D is 6 July 2019. 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 ... read more

07-05-2019

Last call, are you ready for revised digital filing of your VAT returns?

Most VAT registered businesses with a turnover above the VAT threshold need to be ready to keep digital records for VAT purposes, and to file their VAT returns, as required by the new Making Tax Digital (MTD) rules. What does this mean? For VAT return periods starting on or after 1 April 2019, businesses with a turnover above the VAT threshold (currently £85,000) have to: keep their ... read more

07-05-2019

Chargeable benefits from cheap loans

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan obtained elsewhere. These types of loans are referred to as beneficial loans. A taxable cheap loan is an employment-related loan: which is outstanding ... read more

07-05-2019

How to treat post-cessation items if property business ceases

There are special rules for the taxation of post-cessation receipts after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or Corporation Tax on the income. This does not have to be the same person who carried on the original trade. HMRC manuals state that: a receipt which arises ... read more

07-05-2019

What is a Close Company?

A Close Company is broadly defined as a company that is controlled by: five or fewer participators or any number of participators who are also directors or where more than half the assets would be distributed to five or fewer participators, or to participators who are directors, in the event of the winding up of the company. A participator is broadly somebody who has a share or interest in ... read more

07-05-2019

Child benefit payments

The weekly rates of child benefit for the only or eldest child in a family is currently £20.70 and the weekly rate for all other children is £13.70. These rates have remained unchanged for some time. Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child’s 16th Birthday. Under qualifying ... read more

01-05-2019

NICs and termination payments

The National Insurance Contributions (NICs) Bill was introduced into Parliament on 25 April 2019. The Bill will see the introduction of a new 13.8% Employer Class 1A NIC charge on termination payments and sporting testimonials that are already liable to Income Tax from 6 April 2020. The government announced this change at Budget 2018. This means that from next April, termination payments over ... read more

30-04-2019

What is business relief for Inheritance Tax purposes?

Inheritance Tax (IHT) is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. Currently, no tax is payable when a person’s estate is worth £325,000 or less. Certain business assets may be exempt There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone ... read more

30-04-2019

Will your gift aid donations create a tax bill?

The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take a taxpayer’s donation and provided all the qualifying conditions are met, can reclaim the basic rate tax allowing for an extra 25p of tax relief on every pound donated to charity. Higher rate and additional rate taxpayers are eligible to claim tax relief on the ... read more

30-04-2019

Beware Limited Cost Test if you use the VAT Flat Rate Scheme

The VAT Flat Rate Scheme (FRS) has been designed to simplify the way a business accounts for VAT and in so doing, reduce the administration costs of complying with the VAT legislation. The scheme is open to businesses that expect their annual taxable turnover in the next 12 months to be no more than £150,000. In April 2017, HMRC introduced a limited cost test that can increase the VAT flat ... read more

30-04-2019

Renewing your tax credit claim

Families and individuals that receive tax credits should ensure that they renew their tax credit claims by 31 July 2019. Claimants who do not renew on-time may have their payments stopped. HMRC has commenced 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 the end of June. A ... read more

30-04-2019

Dealing with builders retentions

It is common practise in the building industry for a final percentage of an amount due to a builder to be withheld as a retention. This payment allows the customer to retain part of the total payment due until satisfied that the builder has completed all the activities required of them under contract at an agreed level of satisfaction. Typically, this may be for a 12-month period between a ... read more

30-04-2019

Treatment of capital expenditure if using the cash basis

The cash basis scheme helps many sole traders and other unincorporated businesses to manage their financial affairs. The scheme is not open to limited companies and limited liability partnerships. Using the scheme, allows qualifying businesses to use the cash basis when recording income and expenditure. You must have a turnover of £150,000 or less to join the scheme and you can continue ... read more

30-04-2019

Search launched for new Bank of England governor

The current Governor of the Bank of England, Mark Carney, will step down from his role on 31 January 2020. Mr Carney had been due to step down earlier but agreed to stay in his role to help support a smooth exit from the European Union. Although this has not yet happened, the Chancellor has confirmed that Mr Carney will step down in January 2020 as planned, and the search for a new Governor of the ... read more

29-04-2019

Minimum wage underpayment is on the rise

A new report from the Low Pay Commission (LPC) has found that the number of workers paid less than the statutory minimum wage in the UK increased in 2018. In April 2018, 439,000 workers were paid less than the hourly minimum wage rate they were entitled to. Of these, 369,000 were workers aged 25 and over paid less than the National Living Wage (NLW). This is an increase of around 30,000 on the ... read more

26-04-2019

Tax Diary May/June 2019

1 May 2019 - Due date for Corporation Tax due for the year ended 30 July 2018. 19 May 2019 - PAYE and NIC deductions due for month ended 5 May 2019. (If you pay your tax electronically the due date is 22 May 2019) 19 May 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 May 2019. 19 May 2019 - CIS tax deducted for the month ended 5 May 2019 is payable by today. 31 May ... read more

24-04-2019

Debt Relief Orders

It is over 10 years since Debt Relief Orders (DROs) were first introduced in April 2009. We have fleshed out the details of who can claim and some of the restrictions that apply. What is a DRO? A DRO is a special way of dealing with debts available to those with minimal assets and low income. If an application for a DRO is accepted, you will make payments over a specified period (usually 12 ... read more

23-04-2019

Maternity pay explained

How much maternity leave can you take? If you work as an employee and become pregnant you are eligible to take up to 52 weeks of statutory maternity leave. This is made up of 26 weeks of ordinary maternity leave plus an extra 26 weeks of additional maternity leave. If you give the correct notice period to your employer this means you are entitled to take a full year's leave. Statutory ... read more

23-04-2019

How to register as self-employed

Are you self-employed? HMRC’s guidance says that you are probably self-employed if you: run your business for yourself and take responsibility for its success or failure; have several customers at the same time; can decide how, where and when you do your work; can hire other people at your own expense to help you or to do the work for you; provide the main items of equipment to do ... read more

23-04-2019

Dealing with property income losses

Where a property business makes a loss, the loss can usually be carried forward and set against future rental business profits. HMRC’s guidance is clear that any losses made in one rental business, cannot be carried across to any other rental business the customer carries on at the same time in a different legal capacity. There is no special claim required to carry forward the losses and ... read more

23-04-2019

VAT and transfer of business as a going concern

The transfer of a business as a going concern (TOGC) rules concern the VAT liability on 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 assets and meets certain conditions, the sale will be categorised as a TOGC. A TOGC is defined as 'neither ... read more

23-04-2019

Corporation Tax for non-resident companies

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. If the non-resident company is deemed liable to pay Corporation Tax, then its chargeable profits are: any trading income arising directly or indirectly through or from the permanent establishment/branch or agency, any income ... read more

23-04-2019

VAT registration thresholds

HMRC’s VAT Notice 700/1: should I be registered for VAT? has recently been updated. The update reflects the fact that the taxable turnover threshold, that determines whether businesses should be registered for VAT has been frozen at £85,000 from 1 April 2019. In addition, the taxable turnover threshold that determines whether businesses can apply for deregistration remains at ... read more

23-04-2019

Making an EU VAT refund claim

The VAT paid in other EU countries is often recoverable by VAT-registered businesses in the UK, who bought goods or services for business use. The exact rules of what VAT is refundable depends on the other countries' rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never be reclaimed on a domestic UK VAT return. Claims must be made ... read more

17-04-2019

Tenth anniversary of first Debt Relief Order

Debt Relief Orders (DROs) were first introduced in April 2009. The DROs assist people who have small levels of assets and insufficient surplus income to deal with debts under £20,000. In a news release published by the Insolvency Service we are told that in the last 10 years, more than 254,000 DROs have been approved for people with debts averaging £9,400. A DRO normally runs for 12 months after ... read more

17-04-2019

Estate Agents targeted

HMRC has launched an unannounced crackdown on money laundering regulation non-compliance by estate agents. This clampdown resulted in over 50 visits by HMRC staff to estate agents across England that were suspected of trading without being registered as required under money laundering regulations. This crackdown includes targeting those who are trading without registering appropriately as well as ... read more

16-04-2019

Job related expenses you can claim against your tax

If you are an employee and use your own money to buy things that you need for your job, you may be able to claim tax relief for the associated costs. It is usually only possible to claim tax relief for the cost of items that are 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 ... read more

16-04-2019

Welsh Income Tax takes effect

The start of the 2019-20 tax year marked a fundamental change to the way Income Tax is calculated for people who live in Wales. The new Welsh rates of Income Tax (WRIT) are payable on the non-savings and non-dividend income of those defined as Welsh taxpayers. The revenue from the WRIT will go to the Welsh Government. The UK government has reduced each of the 3 rates of Income Tax – basic, ... read more

16-04-2019

Let Property Disclosure Campaign

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities, whether due to misunderstanding the tax rules or because of deliberate tax evasion. The campaign was launched in September 2013 and does not currently have an end date. Landlords, ... read more

16-04-2019

Outline of special rules for use of vouchers and credit tokens

HMRC’s Employment Income Manual is clear that there are special rules when an employee receives goods or services by reason of their employment, that the employee does not pay for in full. The first step should always be to consider whether a voucher or credit-token was used to obtain them. Any non-cash vouchers, for example gift vouchers or credit tokens from shops, or electronic cards ... read more

16-04-2019

What is domicile?

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong. However, determining domicile status can be complex. In fact, HMRC guidance states that domicile cannot be defined precisely, but the concept rests on various basic principles. Every individual must have a domicile at all times. The law ascribes a domicile to those individuals it ... read more

16-04-2019

The VAT concept of business

The VAT system is policed by HMRC and there can be heavy penalties for breaches of the legislation. There are four conditions that must be satisfied in order for an activity to be within the scope of UK VAT. These conditions are that the activity: is a supply of goods or services that the supply takes place in the UK is made by a taxable person is made in the course or furtherance of any ... read more

15-04-2019

New guidance on the impact of Brexit on workplaces

Acas has published new general guidance to assist employers and employees in understanding the impact that Brexit may have in their workplace and it gives advice regarding the steps they may want to take before the UK leaves the EU. It advises that EU membership can impact workplaces in several ways, such as: providing goods and services to other members of the EU using goods and services ... read more

11-04-2019

Right to work checks for EU nationals after Brexit

The government has published new guidance which confirms that, once the UK leaves the EU and whether this is with a deal or not, there will be no change to the way EU, EEA and Swiss citizens prove their right to work until 1 January 2021. Irish citizens will continue to have the right to work in the UK and prove their right to work as they do now, for example by using their passport. This means ... read more

11-04-2019

Capital expenditure for property businesses

There are different rules which apply to different types of capital expenditure for a property business. One of the main areas to consider in deciding whether a repair is a deductible expense is whether it is revenue or capital. Capital expenditure cannot be deducted in computing the profits of a property business, however there are separate reliefs for some capital expenditure. The cost of land ... read more

10-04-2019

Corporation Tax loss relief for losses carried forward

Corporation Tax relief may be available where your company or organisation makes a trading loss. The loss may be used to claim relief from Corporation Tax by offsetting the loss against other gains or profits of the business in the same or previous accounting period. The loss can also be set against future qualifying trading income. Any claim for trading losses forms part of the Company Tax ... read more

10-04-2019

The meaning of trade for tax purposes

Interestingly, there is no statutory definition of ‘trade’. The only statutory reference to the term states that ‘trade’ includes a ‘venture in the nature of trade’. This absence of statutory clarity has left definition - is a certain activity a trade or not - to the courts, and they have set some established guidance. This effectively suggests that the term ‘trade’ can be taken to refer to ... read more

10-04-2019

VAT Fuel Scale Charges

The new VAT road fuel scale charges have been published. The changes amend the VAT scale charges for taxing private use of road fuel to reflect changes in fuel prices. The new fuel scale charges must be used by companies from the start of their next prescribed accounting period beginning on or after 1 May 2019. The fuel scale rates continue to encourage the use of cars with low CO2 emissions. ... read more

10-04-2019

Dormant assets scheme expanded

Under the current scheme, banks and building societies transfer the money held in dormant accounts to a central reclaim fund. The reclaim fund is responsible for managing dormant account money, meeting reclaims and passing on surplus money to various charities for reinvestment in the community. The original account holder retains the rights to repayment upon providing satisfactory proof that the ... read more

10-04-2019

Latest advice from government if we leave the EU

Although the EU have now extended the deadline to agree the withdrawal agreement - to 31 October 2019 - there is still a chance we will exit with a no-deal outcome. In a pamphlet recently published by the government we are provided with some important areas to consider if we leave the EU without a deal. For example, any UK business that imports or exports goods will be responsible for making ... read more

10-04-2019

Child Benefit Tax Charge

The High Income Child Benefit charge applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of Child Benefit. The charge claws back the financial benefit of receiving Child Benefit either by reducing or removing the benefit entirely. If you or your partner have exceeded the £50,000 threshold for the first time during the last tax year (2018-19) then you must take ... read more

10-04-2019

Late filing penalty notices delayed

In an agent update published earlier this year HMRC wrote that as part of EU Exit contingency planning, a change would be made to the timings for sending notification of Self Assessment penalties. The £100 penalty notices are normally issued in February but HMRC suggested that they might be delayed as late as the end of April. It has now been confirmed that HMRC began issuing penalty notices ... read more

03-04-2019

Getting tax relief sooner for charitable donations

If you are a higher rate or additional rate taxpayer, you are eligible to claim relief on the difference between the basic rate and your highest rate of tax. The charity you donate to can reclaim the basic rate of tax from donations made by taxpayers. For example: If you donated £5,000 to charity, the total value of the donation to the charity is £6,250. You can claim back additional tax back ... read more

03-04-2019

Early birds get time to pay

The 2018-19 tax year ended on 5 April 2019 and the new 2019-20 tax year started on 6 April 2019. Many taxpayers will be tempted to delay dealing with their 2018-19 tax returns until late this year or January 2020. The 31 January 2020 is not just the final date for submission of the 2018-19 Self Assessment tax return, but also an important date for payment of tax due. This is the final payment ... read more

03-04-2019

When do you have to register to submit a tax return?

There are a number of reasons why you may need to register with HMRC to submit a tax return. This includes if you: are self-employed and earning more than £1,000, are a company director, have an annual income over £100,000 and / or if you have certain income from savings, investment or property. If you need to complete a tax return for the first time, you should inform HMRC as soon as ... read more

03-04-2019

Minimum wage increases come into effect

The new National Minimum Wage (NMW) and National Living Wage (NLW) rates came into effect on 1 April 2019. The NLW was introduced on 1 April 2016 and is the minimum hourly rate that must be paid to those aged 25 or over. The NLW increase is the biggest single increase since the rate was introduced. The new rate is £8.21 which is a 38p or almost 5% increase. This means that some 1.8 million ... read more

03-04-2019

Air Passenger Duty changes

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). The band A (short-haul) rate ranges from £13 for a standard class journey and £26 for an 'other' class of travel, remain unchanged from 1 ... read more

03-04-2019

Carry forward of unused pensions allowance

The annual allowance for tax relief on pensions has been fixed at the current level of £40,000 since 6 April 2014. Since April 2016, the annual allowance has been further reduced for high earners. Those with income in excess of £150,000 will usually have their allowance tapered. For every £2 their income exceeds £150,000 the annual allowance is reduced by £1, up to a maximum reduction of £30,000 ... read more

03-04-2019

CGT – transfer of partnership to an LLP

Limited Liability Partnerships (LLPs) retain the flexibility of a partnership with the added advantage that a partners personal liability is limited. At least two members must be 'designated members' and the law places extra responsibilities on them. For Capital Gains Tax purposes, the transfer of a business from a partnership to a LLP will not constitute a disposal by the partners of their ... read more

03-04-2019

How is ordinary commuting defined for travel costs

As a general rule, there is no tax relief for ordinary commuting. The term 'ordinary commuting' is defined to mean travel between a permanent workplace and home, or any other place that is not a workplace. Case law has also confirmed that travel between home and a permanent workplace is ordinary commuting even where home is also a workplace. In practical terms this means that there is no ... read more

03-04-2019

Dormant bank accounts

There is a free tracing service called 'mylostaccount' to find lost bank accounts. The service brings together the three tracing schemes of the British Bankers' Association (BBA), the Building Societies Association (BSA) and National Savings and Investments (NS&I) into a single website (www.mylostaccount.org.uk) and is free of charge. The service offers a way for savers to search for their ... read more

02-04-2019

Employment law changes taking effect in April 2019

The National Minimum Wage (NMW) and National Living Wage (NLW) rates will increase from 1 April 2019. The NLW for workers aged 25 or over will increase to £8.21 per hour, the NMW standard rate for workers aged 21 to 24 will increase to £7.70 per hour, the NMW development rate for workers aged 18 to 20 will increase to £6.15 per hour, the NMW young workers rate for those aged 16 and 17 will ... read more

27-03-2019

Making Tax Digital for VAT

The deadline for businesses with a turnover above the VAT threshold to keep digital records for VAT purposes using Making Tax Digital (MTD), is here. For VAT returns periods starting on or after 1 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 ... read more

26-03-2019

Repay your employer for private fuel

Where an employee with a company car is provided with fuel for their own private use by their employers, the default position is that the employee is required to pay the car fuel benefit charge. The charge is determined by reference to the CO2 rating of the car, applied to a fixed amount, currently £23,400. For example, a vehicle with a CO2 rating of 150g/km would create a taxable benefit of ... read more

26-03-2019

Do you employ an au pair?

There are special rules that need to be taken into account if you employ an au pair in your home. This is because au pairs are not usually considered as workers or employees and are not entitled to the National Minimum Wage or paid holidays. An au pair is effectively treated as a member of the family they live with and receive 'pocket money' instead of salary. The au pair may be liable to ... read more

26-03-2019

Is HMRC’s message real or fake?

HMRC has issued an updated version of their online guidance on Genuine HMRC contact and recognising phishing emails and texts. The guidance provides a current list of genuine messages from HMRC. This includes email messages, text messages and telephone contacts from HMRC. The latest updates on the list includes confirmation that HMRC is contacting selected taxpayers by phone in relation to ... read more

26-03-2019

Income excluded from UK property business

Most of our readers will be aware of the £1,000 property income allowance that came into effect on 6 April 2017. This allowance applies to income from property (including foreign property). If your annual gross property income is £1,000 or less, the amount is exempt from tax and doesn’t need to be reported on your tax return. In practice, the use of this allowance is limited, but ... read more

26-03-2019

Person liable to pay tax on post-cessation receipts

There are special rules for the taxation of post-cessation receipts, those received after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or Corporation Tax on the income. This does not have to be the same person who carried on the original trade. The only test to consider when ... read more

26-03-2019

What is a post-cessation expense?

There are special rules for the taxation of post-cessation receipts and post-cessation expenses. This article explains how, or if, post cessation expenses can be claimed. In order to be an allowable post-cessation expense, the trade must have ceased, and the expense must have been considered deductible in calculating trading profits. This means that the expense still has to meet the wholly and ... read more

26-03-2019

VAT grouping

There are special VAT rules that allow two or more corporate bodies to be treated as a single taxable person for VAT purposes known as a VAT group. Advantages of group registration The representative member accounts for any tax due on supplies made by the group to third parties outside the group. This is particularly helpful if your accounting is centralised. As the group is treated as a ... read more

25-03-2019

Tax Diary March/April 2019

1 April 2019 - Due date for Corporation Tax due for the year ended 30 June 2018. 19 April 2019 - PAYE and NIC deductions due for month ended 5 April 2019. (If you pay your tax electronically the due date is 22 April 2019) 19 April 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 April 2019. 19 April 2019 - CIS tax deducted for the month ended 5 April 2019 is payable ... read more

25-03-2019

Holiday pay campaign

The government has launched its first holiday pay advertising campaign aimed at encouraging workers to understand their rights and employers to understand their legal obligations in relation to holiday pay. It estimates that, in the UK, 1.8 million workers are not receiving the holiday pay they are entitled to, resulting in them missing out on an estimated £1.8 billion each year. The campaign, ... read more

20-03-2019

Changes to VAT IT systems if no-deal Brexit

In a letter being sent to businesses across the country, HMRC has published the following information on the effect a no-deal Brexit would have on changes to VAT IT systems. We have reproduced below a summary from the letter of the main announcements made by HMRC on this issue. Changes to VAT IT systems If the UK leaves the EU without a deal you will no longer be able to use certain EU VAT IT ... read more

20-03-2019

What is a finance lease?

The definition of a finance lease can be difficult to pin down. In legal form a finance lease is just another lease - the legal ownership of the asset lies with the lessor and the lessee only has the right to use the asset. However, in commercial terms a finance lease is often considered to be an alternative form of 'purchase' with a loan of money and with the asset as security. In substance the ... read more

20-03-2019

Removing your home address from the public register

Since April 2018 company directors and other eligible people such as company secretaries, people with significant control (PSC) and LLP members can apply to remove their personal addresses from the UK’s official company register on Companies House. Prior to the introduction of this law it was only possible for a director to ask for their personal address to be hidden from personal view if they ... read more

19-03-2019

Cash basis and capital expenditure

The cash basis scheme helps many sole traders and other unincorporated businesses benefit from a simpler way of managing their financial affairs. The scheme is not open to limited companies and limited liability partnerships. The scheme allows qualifying businesses to use the cash basis when recording income and expenditure. You must have a turnover of £150,000 or less to join the scheme ... read more

19-03-2019

Keep abreast of Brexit news

As the Brexit date fast approaches, it seems the only thing we can say with any certainty is that uncertainty continues to plague the issue of our leaving the EU. The negotiations on the terms of the UK’s exit from the EU are unresolved and there are three possible outcomes: a delayed Brexit by extending Article 50, a no-deal Brexit or a modified Brexit. HMRC has published a letter to help ... read more

19-03-2019

Present tax-free company benefits

The list of company benefits that can be provided tax-free to employees is quite short. However, some of the benefits that can be provided include the following: Meals: Free or subsidised meals in a staff canteen where meals are provided for all employees on a reasonable (not overly extravagant) scale. The exemption does not apply where free or subsidised meals are provided as part of salary ... read more

19-03-2019

Business record keeping for the self-employed

If you are self-employed as a sole trader or as a partner in a business partnership, then you must keep suitable business records as well as separate personal records of your income. For tax purposes, the business records must be held for at least 5 years after the 31 January submission deadline for the relevant tax year. For example, for the 2017-18 tax year, when online filing was due by 31 ... read more

19-03-2019

Full EU Settlement Scheme roll-out

The government has laid a Statement of Changes to the Immigration Rules implementing the full opening of the EU Settlement Scheme from 30 March 2019. The scheme will apply regardless of whether there is a Brexit deal or not. The scheme will allow EEA/Swiss citizens living in the UK by 31 December 2020 (or by 29 March 2019 if the UK leaves the EU without a deal) and their family members to apply ... read more

19-03-2019

2019 Spring Statement: employment implications

In the Spring Statement 2019, the Chancellor of the Exchequer has announced that the apprenticeship reforms set out in the Autumn Budget 2018 will now be introduced a year early. From 1 April 2019, the co-investment rate for non-levy employers will be cut by a half from 10% to 5%. In addition, from the same date, levy-paying employers will be able to share a greater portion of their levy funds ... read more

14-03-2019

Topping up your self-employed NIC contributions

In many circumstances it can be beneficial to make voluntary Class 2 National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension if you are self-employed. You might want to consider making voluntary NICs because: you’re close to State Pension age and do not have enough qualifying years to get the full State Pension you know you ... read more

14-03-2019

Lost your Unique Tax Reference number?

Your Unique Taxpayer Reference (UTR) identifies your tax records at HMRC. The number is also known as your taxpayer number or tax reference number and should be used whenever you contact HMRC, or when you file your tax returns. The UTR is a unique 10 digit code. You are automatically given a UTR when you set yourself up to file Self Assessment tax returns or form a limited company. If you have ... read more

14-03-2019

Treatment of deposits for VAT purposes

As a general rule, most deposits made by customers serve as advance payments and create a VAT tax point when the deposit is received. It is important that businesses ensure that the VAT element of any deposits received is accounted for correctly. Usually this will mean that VAT is due on a deposit when it is received and not when the supply is actually made. VAT does not apply to some types of ... read more

14-03-2019

What are the badges of trade?

The 'badges of trade' tests, whilst not conclusive, are used by HMRC to help determine whether an activity is a proper economic / business activity or merely a money-making side line to a hobby. Careful consideration needs to be given when deciding if a hobby has become a taxable activity. It is clear from the significant amount of case law on this subject that a decision on whether there is a ... read more

14-03-2019

Sale of income by an individual

A capital sum received by an individual in respect of the sale or relinquishment of income to be derived from his or her personal activities, can sometimes be treated as earned income and chargeable to Income Tax. If this is the case, the amount charged to Income Tax is not also charged to Capital Gains Tax. The following conditions must all be present before the sale of income legislation can ... read more

13-03-2019

Employee tax codes 2019-20

The P9X form is used to notify employers of the tax codes to use for employees. The basic Personal Allowance for the tax year starting 6 April 2019 will be £12,500 and the tax code for emergency will be 1250L. The basic rate band is between £12,501 to £50,000 except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate. As a ... read more

13-03-2019

Spring Statement - 13 March 2019

The following comments were written on the 13th March 2019 immediately following Philip Hammond’s presentation of the 2019 Spring Statement to Parliament. In theory, the government uses the Spring Statement to respond to the most recent forecasts made by the Office of Budget Responsibility (OBR). In a nut-shell, the OBR forecast that: the UK economy will continue to grow, and government ... read more

12-03-2019

Expenditure on building that qualifies as plant

Capital Allowances are the deductions which allow businesses to secure tax relief for certain capital expenditure. Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable to Corporation Tax. Interestingly, the Capital Allowance legislation does not specifically define plant and machinery (P&M). However, there is ... read more

06-03-2019

Companies House – Late Filing Penalties

There are Late Filing Penalties which are designed to encourage companies to file their accounts and reports on time. The penalties were first introduced in 1992 and were significantly increased from February 2009. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. The late filing penalties guide has recently been updated although ... read more

06-03-2019

Utilising unused losses for CGT

Sometimes tax-payers may sell an asset at a loss. If acceptable as capital losses, they can be deducted from Capital Gains made in the same or future years. As a general rule, if the asset would have been liable to CGT had a gain taken place then the loss should be an allowable deduction. These allowable losses are deducted automatically. It is not necessary to make a claim for set-off of ... read more

06-03-2019

Incentive award schemes and tax

Companies can use incentive award schemes to encourage their employees in various ways, for example, to sell more of their own goods and services. The award can take various forms including cash, vouchers or other gifts. Where an employer meets the tax payable on a non-cash incentive award given to a direct employee by entering into a PAYE settlement agreement (PSA), the award is not chargeable ... read more

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