News

The latest breaking news in the industry!

11-12-2019

PAYE payment dates

We would like to remind employers about the electronic PAYE payment dates. The due date for electronic PAYE payments falls on the 22nd of the month and when a payment is made electronically; a payment on the day usually suffices. However, where the due date falls on a non-banking day (weekend or bank holidays) HMRC must have cleared funds by the last bank working day before the 22nd. This advice ... read more

11-12-2019

Capital Gains Tax reliefs for businesses

If you are in business as a self-employed sole trader or as part of a partnership, then you will be liable to pay Capital Gains Tax (CGT) if you make a profit selling all or part of a business asset. CGT is normally charged at a flat rate of 20%. However, there are various reliefs available that can reduce the amount of CGT you are required to pay. We have listed below the main CGT tax reliefs ... read more

11-12-2019

Basic Income Tax reliefs

As we are now almost three-quarters of the way through yet another tax year it can be useful to consider the benefits of basic Income Tax reliefs. This will help ensure that your tax liability is no higher than necessary. We have listed some of the main reliefs below: Pension contributions - Tax relief for contributions to pension schemes is given at your highest marginal rate of Income Tax. ... read more

11-12-2019

Basic Corporation Tax reliefs

There are a significant number of reliefs that can reduce the amount of Corporation Tax your company needs to pay on profits made. Your company can also claim Capital Allowances for assets such as equipment, machinery and cars bought to use in your business. The basic Corporation Tax reliefs include the following: Research and Development tax reliefs - There are two schemes for claiming relief ... read more

11-12-2019

VAT Flat Rate Scheme capital expenditure

The VAT Flat Rate scheme (FRS) has been designed to simplify the way a business accounts for VAT and accordingly, reducing the administration costs of complying with the VAT legislation. VAT is calculated under the FRS by applying a flat rate percentage to the flat rate turnover. The flat rate percentage varies from 4% to 16.5%. There are special rules that apply to expenditure on capital assets ... read more

11-12-2019

Inheritance Tax Agricultural Property Relief

There are a number of reliefs available that can reduce liability to IHT. The most relevant for farmers is the Agricultural Property Relief (APR). Relief is available at a rate of 100% or 50% depending on who farms the land and how long the land has been owned. The APR can be claimed on assets including: farming land or pasture that is used to grow crops or to rear animals ... read more

11-12-2019

When National Insurance Credits can be claimed

National Insurance credits can help qualifying applicants to fill gaps in their National Insurance record. This can assist taxpayers to build up the amount of qualifying years of National Insurance contributions and thus increase the amount of benefits a person is entitled to receive, for example, the State Pension. National Insurance credits are available in certain situations where people are ... read more

11-12-2019

X-factor Charity single

The Government will waive the VAT equivalent on the sales of this year’s X Factor Celebrity Christmas Charity single. All proceeds from the sale of the single are going to two children’s charities; Together for Short Lives and Shooting Star Children’s Hospices. Both charities provide support for the families of children with life-limiting illnesses. The donation will be the ... read more

05-12-2019

Updated calculator on calculating holiday entitlement

The Government has published a revised holiday entitlement calculator, intended as a temporary replacement while the original calculator “undergoes maintenance”, to enable workers to calculate the minimum statutory annual leave they should receive based on their time in employment. The calculator is accompanied by online guidance for employers on how to calculate statutory holiday ... read more

04-12-2019

Shared parental leave entitlements

The shared parental leave and pay rules offer working parents’ far greater choice as to how they share the care of their child and take time off work during the first year of their child’s life. The rules apply equally for children that have been adopted. There are various work and pay criteria that must be met in order to be eligible and the parents must share responsibility for the ... read more

04-12-2019

Child Benefit tax charge

The High Income Child Benefit tax charge could apply to you or your partner if either of your individual taxable earnings exceeds £50,000 and you are in receipt of child benefit. The charge effectively claws back the financial benefit of receiving child benefit either by reducing or removing the benefit entirely. If you or your partner are likely to have exceeded the £50,000 threshold ... read more

04-12-2019

Loss of tax personal allowance

If your income is expected to exceed £100,000 for the first time, we would like to remind you of the effects this can have on your personal allowance and marginal tax rate. If you earn over £100,000 in any tax year, your personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable ... read more

04-12-2019

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

04-12-2019

Accounting periods if company has two or more trades

A tax accounting period for Corporation Tax purposes cannot exceed a 12 month period. If company accounts cover less than 12 months then the accounting period will normally end on the same day, and thus will be shorter than 12 months. This can happen if the company stops trading or shortens its company’s year-end: also known as its accounting reference date. There is an interesting anomaly ... read more

04-12-2019

Income excluded from property business

HMRC publishes a list of income streams that are excluded from a UK property businesses' taxable income. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and letting surplus trade accommodation. In most cases the income from these activities will be taxed as income of a trade and not as ... read more

04-12-2019

When Inheritance Tax applies to pensions

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. The rate of Inheritance Tax payable is 40% on death and 20% on lifetime gifts. There is a nil-rate band, currently £325,000 below which no Inheritance Tax is payable. A pension is normally free of IHT and unlike many other investments ... read more

28-11-2019

Tax Diary December 2019/January 2020

1 December 2019 - Due date for Corporation Tax payable for the year ended 28 February 2019. 19 December 2019 - PAYE and NIC deductions due for month ended 5 December 2019. (If you pay your tax electronically the due date is 22 December 2019) 19 December 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 December 2019. 19 December 2019 - CIS tax deducted for the month ... read more

27-11-2019

Affected by the recent floods?

The Government has put a number of emergency flood measures in place to help those affected by the recent devastating floods. This includes 100% council tax and business rates relief and emergency funding from the Department for Business, Energy and Industrial Strategy. Affected taxpayers should also contact the Business Payment Support Service (BPSS) if they cannot make tax payments on time. The ... read more

27-11-2019

Avoiding tax scams

Fraudsters are continuing to target taxpayers with scam emails in advance of the 31 January deadline for submission of Self-Assessment returns. In fact, over the last year, HMRC received nearly 900,000 reports about suspicious HMRC contacts. A number of these scams purport to tell taxpayers they are due a rebate / refund of tax from HMRC and ask for bank or credit card details in order to send ... read more

27-11-2019

Using your own vehicle for work?

If you are an employee and use your own money to buy things you need for your job, you 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. You may also be able to claim tax relief for using you own vehicle, be it a car, van, motorcycle or bike. As a general rule, there is no tax relief for ... read more

27-11-2019

Basic tax considerations if you come to work in the UK

If you come to live in the UK there are basic tax considerations that you will need to observe. Most importantly, you will be required to pay tax on your income (in excess of any allowances) if you come to live in the UK. Income includes; wages, benefits, your pension and savings interest. If you’re employed your employer will deduct Income Tax from your wages. Otherwise, you will likely be ... read more

27-11-2019

Gifts Hold-Over Relief

Gift Hold-Over Relief is effectively a deferral of Capital Gains Tax (CGT) when assets are given away (including certain shares) or sold for less than they’re worth to help the buyer. The relief means that any gain on the asset is 'Held-Over' until the recipient of the gift sells or disposes of them. The person gifting a qualifying asset is not subject to CGT on the gift. However, ... read more

27-11-2019

Life policies and Inheritance Tax

A life policy is a contract with an insurance company. In exchange for premium payments the insurance company provides a lump-sum payment to beneficiaries if the policy holder dies during the terms of their policy. There are various types of life policies available. The main types are 'term', typically covering a set period of time or 'whole of life', meaning that they are active ... read more

27-11-2019

VAT Standard Retail Schemes

VAT retail schemes are a special set of schemes used by retail businesses to account for VAT. The schemes are usually used by businesses that sell a significant amount of low value and/or small quantity items to the public with different VAT liabilities. The use of the scheme can save businesses a significant amount of time in calculating the amount of VAT due to HMRC on each and every sale. In ... read more

27-11-2019

Reporting PAYE information in real time

In December 2018, HMRC wrote to employers to advise of a temporary easement on reporting PAYE information in real time over the Christmas period. This was put in place because many employers pay their employees earlier than usual over the Christmas period. This can be for a number of reasons, for example during the Christmas period the business may close early or because in certain businesses ... read more

20-11-2019

Final reminder to sign up for Help to Buy

The Help to Buy ISA scheme will close to new savers after 30 November 2019. If you are interested in signing up to the scheme you need to do so ASAP and certainly before midnight on 30 November 2019. If you are a first-time buyer and planning to buy a property in the short to medium term, you should think about whether you (or perhaps your children) would benefit from this scheme. Under the ... read more

20-11-2019

Capital Gains Tax changes for property disposals

A number of significant changes to the way Capital Gains Tax (CGT) is reported and paid come into effect from April 2020. Currently, the usual due date for paying any CGT owed to HMRC on property disposals is the 31 January following the end of the tax year in which a capital gain was made. From 6 April 2020, any CGT due on the sale of a residential property by a UK resident will need to be ... read more

20-11-2019

Emergency flood relief measures

The Prime Minister has announced that households and businesses that have been significantly affected by the recent flooding will be eligible for immediate 100% relief on their council tax and business rates for at least the next 3 months. This is part of a number of measures that have been announced by the Government to help those affected by the devastating floods. The Department for ... read more

20-11-2019

Winter Fuel Payment and tax

The Winter Fuel Payment is a tax-free and provided by the Government to help older people keep warm during the winter. The amount of the payment depends on individual circumstances but ranges from £100 to £300. The amount you receive depends on a number of factors including your age and the age of other people living with you. The payment is made to households that include someone ... read more

20-11-2019

Christmas bonuses

Any Christmas bonuses / gifts paid in cash to employees, by employers, are almost invariably taxable as earnings. This view has been upheld by the courts on many occasions and can mean that a gift from a well-intentioned employer is worth less than the giver or the recipient initially expected. If you are an employer and looking to give a Christmas bonus to your employees, then your best option ... read more

20-11-2019

UK VAT claims by non-EU businesses

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 rules that govern the amount of VAT repayable depends on the EU countries rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never by reclaimed on a domestic UK VAT return. There are special rules for ... read more

20-11-2019

Different types of student loan

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 living costs while they are studying. There are two main types of student loan. Fixed - term repayment loans (old - style loans). These loans were available to students commencing a course of higher education up to and including ... read more

20-11-2019

Verifying CIS subcontractors

The Construction Industry Scheme (CIS) comprises a set of special rules for tax and National Insurance for those working in the construction industry. The scheme applies mainly to contractors and sub-contractors involved in construction. However, certain businesses that are not in the business of construction but have a significant amount of annual spend may also count as contractors. Before ... read more

20-11-2019

Who can be a salaried member

The salaried member legislation can apply to certain members of a Limited Liability Partnership (LLP). This can happen where HMRC consider that a member of an LLP is not a risk-taking partner and can be re-classified as a salaried member. Prior to 2014, all individual members of an LLP were taxed as if they were a self-employed partner. The salaried member legislation introduced new provisions ... read more

13-11-2019

Increase in National Living Wage?

An independent review into the evidence on minimum wage rates has been published by the government. The review concludes that increases in the National Living Wage (NLW) have little effect on employment whilst significantly increasing the earnings of low paid workers. This was found to be the case even in countries who had the most ambitious policies for increasing minimum wage rates. The report ... read more

13-11-2019

Employing staff for the first time

There is a multitude of rules and regulations that you must be aware of when you start employing staff for the first time. A full examination of the rules is beyond the scope of this article. However, we wanted to list the following points from HMRC’s guidance which sets out some important issues to be aware of when becoming an employer. Decide how much to pay someone - you must pay your ... read more

13-11-2019

Basic business structures

It is important to be aware of the main basic business structures available if you are considering starting a new business. There are three commonly used forms of business structure. A sole trader – this is the simplest way of starting and running a business. However, you are personally responsible for your business’s debts. You also have accounting responsibilities. A limited ... read more

13-11-2019

HMRC’s tax app

A free HMRC tax app is available to taxpayers. The APP can be used to see: your tax code and National Insurance number an estimate of the tax you need to pay your income and benefits up to 12 future tax credits payments your Unique Taxpayer Reference (UTR) for Self-Assessment The APP can also be used to complete a number of tasks that usually require the user to be logged on to a ... read more

13-11-2019

Tax when partnership assets are distributed in kind

Partnerships are treated as transparent for Capital Gains Tax (CGT). This means that each partner is responsible for their share of any capital gains arising on the disposal of their interests in the assets of the partnership. Each partner is treated as owning a fractional interest in each of the assets of the partnership. It is important to be aware of the rules where partnership assets are ... read more

13-11-2019

Furnished holiday let qualifying tests

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

13-11-2019

Waivers of remuneration

A waiver of remuneration happens when a director or an employee gives up their right to salary or other cash remuneration and gets nothing in return. Where the employee gets a non-cash benefit in return, this is called a salary sacrifice. The treatment of a waiver of remuneration, when a director / employee gets nothing in return, is different to the scenario when this is treated as a salary ... read more

13-11-2019

Last chance to claim enhanced capital allowances

There is a special scheme known as the enhanced capital allowances (ECA) scheme for energy-saving technologies. The ECA scheme enables a business to claim accelerated tax relief 100% first year allowances (FYA) on qualifying energy efficient and environmentally beneficial technologies. The accelerated tax relief is designed to encourage businesses to invest in technologies that are energy saving, ... read more

06-11-2019

Finance Bill 2019-20 shelved

The Government’s draft finance bill has been shelved as we countdown to the general election on 12 December 2019. The consultation on the draft legislation has closed, but the prorogation controversy and Brexit issues meant there was no time for the Government to respond to any of the issues raised. The Bill contained the legislation for some of the tax measures that were announced by the ... read more

06-11-2019

What is a negligible value claim?

A negligible value claim is a claim made by a taxpayer when an asset they own has become of negligible value, i.e. it is worthless or worth next to nothing. The taxpayer effectively treats the asset as having been disposed of and then immediately reacquired at the negligible value. The asset must still be owned by the person making the claim and must have become of negligible value whilst it was ... read more

06-11-2019

Employing someone to work in your home

When you employ someone to work in your home, it is your responsibility to meet the employee's rights and deduct the correct amount of tax from their salary. This can include employees such as a nanny, housekeeper, gardener or carer. The rules are different if the person is self-employed or paid through an agency. If you employ anyone they must: have an employment contract be given ... read more

06-11-2019

Interest on children’s savings

All children in the UK have their own personal annual tax 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 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

06-11-2019

Transfer of business as a going concern

The transfer of a business as a going concern (TOGC) rules cover the VAT implications when a business is sold. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate. Where the sale of a business includes chargeable assets, and meets certain conditions, the sale will be categorised as a TOGC. A TOGC is defined as ... read more

06-11-2019

What is a joint venture?

A joint venture is a commercial enterprise undertaken by two or more parties who otherwise retain their separate identities. The parties to the joint venture usually bring together different resources and areas of expertise to help fulfil a specific project or business activity. HMRC’s manuals make the point that on close examination many of these associations prove to be partnerships, ... read more

06-11-2019

The meaning of 'goodwill' for CGT purposes

The meaning of goodwill for CGT purposes is complex. The term 'goodwill' is rarely mentioned in legislation and there is no definition of 'goodwill' for the purposes of Capital Gains legislation. In fact, most definitions of goodwill are derived from case law. At its simplest you could describe goodwill as the 'extra' value of a business over and above its tangible ... read more

31-10-2019

Tax Diary November/December 2019

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

29-10-2019

Coding out debts deadline

You can have tax underpayments collected via an adjustment to your PAYE tax code, provided you are in employment or in receipt of a UK-based pension. The coding adjustment applies to certain debts such as Self-Assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions. Instead of paying off debts in a lump sum, money is collected in equal monthly instalments over a ... read more

29-10-2019

Just under 100 days to go

HMRC has published a news release to remind you that there is now less than 100 days to file your 2018-19 tax return. Last year over 11.5 million taxpayers were required to complete a Self-Assessment tax return but over 700,000 taxpayers missed the deadline. The deadline for submitting your 2018-19 Self-Assessment tax returns online is 31 January 2020. You should also be aware that payment of any ... read more

29-10-2019

What you must do when charging VAT

When you issue a VAT invoice to your customer, you must ensure that you charge the correct rate of VAT. Whilst most businesses in the UK charge VAT at the standard rate of 20% there are a number of different VAT rates and exemptions that you will need to be aware of. In the UK, there are three separate VAT rates, the standard rate of 20%, the reduced rate of 5% and the zero rate 0%. In addition, ... read more

29-10-2019

Costs you can claim against your self-employed business

If you are self-employed it is important to be aware if an expense is allowable for tax deduction purposes or not. Any allowable costs can be used to reduce your taxable profit. As a general rule you can claim for items that you would normally use for less than 2 years as allowable expenses, for example, stationery and other office sundries as well as rent, rates, power and insurance costs. HMRC ... read more

29-10-2019

Using the cash basis for property businesses

The cash basis scheme helps sole traders and other unincorporated businesses benefit from a simpler way of managing their financial affairs. The scheme was extended to landlords from April 2017. The scheme is not open to limited companies and limited liability partnerships. The entry threshold for the cash basis scheme is £150,000 and you can stay in the scheme until your business turnover ... read more

29-10-2019

Pecuniary liability treated as income

A pecuniary liability can occur when a monetary obligation is fulfilled by an employer, when by law, the liability was that of an employee. One example of this is the case of an employer paying a debt that an employee owes to a third party. The employer’s payment in this case is of direct monetary value to the employee because he or she no longer has to pay that amount of money to the third ... read more

29-10-2019

Sale of income for a capital sum

A capital sum received by an individual in respect of the sale or relinquishment of income - 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

25-10-2019

November Budget cancelled

Sajid Javid has cancelled the Budget that was due to be presented to Parliament 6th November. As the UK will not be leaving the EU at the end of this month and as Boris Johnson is proposing a general election on 12th December, both of these events have rendered a budget inappropriate at this time. As and when a new date is agreed we will publish details on this news feed. ... read more

23-10-2019

31 October paper Self-Assessment filing deadline

The 2018-19 tax return deadline for submitting your paper Self-Assessment returns is 31 October 2019. Late submission of a Self-Assessment return will trigger a £100 late filing penalty. The penalty usually applies even if there is no liability or if any tax due is paid in full by 31 January 2020. If you are still submitting paper tax returns, we would recommend that you consider the ... read more

23-10-2019

Win while you save

HM Treasury has announced the trial launch of a new PrizeSaver account with participating credit unions. The new account was launched as part of the International Credit Union Day. Eligible savers who open the new account can win up to £5,000 a month by saving as little as £1 a month. The Treasury has teamed up with 15 credit unions across the UK to launch the new accounts. Accounts ... read more

23-10-2019

What is a reasonable excuse?

There are a number of options if you find yourself in disagreement 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 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 ... read more

23-10-2019

Tax implications for construction industry

If you run a construction business and secure the services of sub-contractors, or if you are a building sub-contractor, you will need to comply with a special set of tax rules collectively known as the Construction Industry Scheme (CIS). The CIS rules determine the tax and National Insurance treatment for those working in the construction industry. Under the scheme, contractors are required to ... read more

23-10-2019

Lump sums paid in continuing employment

A lump sum payment can sometimes be made in lieu of all or part of an employee’s salary, wage, commission or other amounts to which they are entitled by virtue of their employment. Under these circumstances, the lump sum payments are taxable as earnings. The lump sums are referred to in the legislation as ‘substituted remuneration’ to mean that one form of remuneration has been ... read more

23-10-2019

Tax deducted from payments by companies

Under certain circumstances, companies (including non-resident companies trading from a branch or agency in the UK and local authorities) can have a duty to deduct tax in connection with certain payments. In effect the company accounts for all or part of the tax liability on behalf of the recipient of the payment. For example, from: payments of yearly interest annual payments patent ... read more

23-10-2019

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 of which 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 ... read more

23-10-2019

Making Tax Digital (MTD)

Since April 2019, VAT registered businesses with a turnover above the VAT threshold need to keep digital records for VAT purposes using the Making Tax Digital (MTD) protocols. This means that businesses must keep their records digitally (for VAT purposes only) and provide their VAT return information to HMRC through MTD compatible software. Businesses with a turnover under the VAT registration ... read more

23-10-2019

Compensation limits for bank deposits

What happens if your bank becomes insolvent and you stand to lose any funds deposited? The bank deposit guarantee limit is the amount of money that is guaranteed, for savers in UK banks and building societies, should the institution become insolvent. The Financial Services Compensation Scheme (FSCS) guaranteed amount is currently £85,000 per person, per authorised bank or building ... read more

16-10-2019

New £20 note unveiled

The Governor of the Bank of England, Mark Carney, has unveiled the design of the new £20 note featuring the artist JMW Turner. The new note will be launched on 20 February 2020 and will join the current £5 and £10 notes in being printed on polymer, a thin flexible plastic. The new plastic £20 note will include a number of new security features including two windows and a ... read more

16-10-2019

National Living/Minimum Wage entitlement

A reminder that the current National Minimum Wage (NMW) and National Living Wage (NLW) rates came into effect on 1 April 2019. The NLW is the minimum hourly rate that must be paid to those aged 25 or over. The current rate for the NLW is £8.21. The hourly rate of the NMW (for 21-24 year olds) is £7.70. The rates for 18-20 year olds are £6.15 and the rate for workers above the ... read more

16-10-2019

Who is eligible for 10% tax on business sale?

Entrepreneurs' Relief (ER) can be valuable relief when selling your business, your shares in a trading company or your interest in a trading partnership. Where ER is available, Capital Gains Tax (CGT) of 10% is payable. This rate applies to qualifying lifetime gains of up to £10 million. However, it is important to remember that there are qualifying conditions that must be met to ensure ... read more

16-10-2019

Tax if you return to the UK

There used to be a form that had to be completed advising HMRC if you were returning to live in the UK from another country. Whilst this form was abolished some time ago, there are still various actions that you may need to take if you are returning to live and work in the UK. In most cases, if you return to live in the UK you will be classed as resident in the UK and you will be required to pay ... read more

16-10-2019

Provisional date announced for Autumn Budget 2019

The Chancellor of the Exchequer, Sajid Javid, has announced that he is planning to hold his first Autumn Budget 2019 on Wednesday, 6 November 2019. However, this date is based on the UK leaving the EU with a deal on 31 October 2019. At the time of going to press, this was certainly not a foregone conclusion. The Chancellor did confirm that if the UK leaves the EU without a deal then the ... read more

16-10-2019

Gifts in anticipation of marriage

There is a special exemption from Inheritance Tax for cash gifts made on or shortly before the date that the relevant wedding or civil partnership ceremony takes place. The amount of tax relief varies depending on the relationship between the donor and the recipient. Each parent (including step-parents) can gift up to £5,000 tax free Grandparents and Great grandparents can each gift up ... read more

16-10-2019

Definition of a Welsh taxpayer

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) is payable on the non-savings and non-dividend income of those defined as Welsh taxpayers. The definition of a Welsh taxpayer is generally decided on the question of where the taxpayer lives. It should be noted that in order to be ... read more

16-10-2019

Definition of a Scottish taxpayer

The Scottish rate of Income Tax (SRIT) commenced on 6 April 2016 and is administered by HMRC on behalf of the Scottish Government. The SRIT is payable on the non-savings and non-dividend income of those defined as Scottish taxpayers. This means that Scottish taxpayers who also have savings and dividend income, need to consider the UK rates as well as the Scottish rates when calculating their ... read more

16-10-2019

Simplified import procedures

HMRC has automatically registered many businesses to use simplified import procedures should the UK leave the EU without a deal on 31 October 2019. The scheme, called the Transitional Simplified Procedures (TSP) will make importing from the EU bloc much easier, especially for businesses completing customs processes for the first time. The TSP will allow most businesses to transport goods from the ... read more

08-10-2019

Changing your company’s year end

There are special rules in place which limit your options to change your company’s year-end date. A company’s year-end date is also known as its ‘accounting reference date’ and is historically set by reference to the date the company was incorporated. Under certain circumstances it is possible to make a change to the year-end. As a general rule, you can only change the ... read more

08-10-2019

What is the Inheritance Tax residence nil rate band?

The Inheritance Tax residence nil-rate band (RNRB) came into effect on 6 April 2017. The RNRB is a transferable allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent such as children or grandchildren after their death. The RNRB effectively increases your existing £325,000 inheritance tax nil-rate band. The RNRB is being ... read more

08-10-2019

What is Capital Gains Tax incorporation relief?

If you own a business as a sole trader or in partnership, a Capital Gain will arise if your business is transferred into a company structure. The gain will be assessed by reference to the market value of the business assets, including goodwill, at the date of transfer. This could give rise to a chargeable gain based broadly on the difference between the market value of the assets and their ... read more

08-10-2019

Overdrawn directors’ loans

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

08-10-2019

When overseas companies need to register at Companies House

An overseas company must register with Companies House if they want to set up a place of business or branch in the UK. Generally, this would be if the overseas company had a physical presence in the UK through which it carries on business. If an overseas company does not have a physical presence in the UK, they are not usually required to register with Companies House. For example, an independent ... read more

08-10-2019

Objecting to a limited company being struck off

There are a limited range of circumstances when a company can request to be removed from the register (known as being struck off). For example, a voluntary strike off can be requested by a dormant or non-trading company. You can object to a limited company’s application to be struck off the companies register if you’re a shareholder or other interested party, such as a creditor, and ... read more

02-10-2019

Post Brexit funding announced

The Chancellor is set to announce a new package of measures to help the UK prepare for a post-Brexit future. We are told that these measures will also help to support the next generation and promote economic growth. It has also been confirmed that British organisations that are receiving certain EU funding, will continue to do so even after a no-deal Brexit. If the EU cease to fund UK ... read more

02-10-2019

Residential landlords’ tax changes complete April 2020

The tax relief on finance costs used to buy investment properties is being gradually restricted to the basic rate of tax. The full finance costs restriction will be in place from 6 April 2020. This means that from next April, all finance costs will be disallowed as expenses and any relief will be restricted to a basic rate tax credit. Finance costs include interest on: mortgages, loans - ... read more

02-10-2019

Making a loss when you sell your home?

One of the most often used and valuable of the Capital Gains Tax (CGT) exemptions is Private Residence Relief, which usually exempts any profit made on the sale of a family home. Consequently, there is no CGT on a property disposal that has been used solely as the main family residence. An investment property, which has never been used as a family residence, will not qualify for PRR. However, an ... read more

02-10-2019

Changes to off-payroll working from April 2020

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 shifted the responsibility for deciding whether the intermediaries’ legislation applies, known as IR35, from the intermediary to the public sector receiving the service. In the 2017 Autumn Budget, the Government announced ... read more

02-10-2019

Gifts to spouse or charity

There is usually no Capital Gains Tax (CGT) to be paid on the transfer of assets to a spouse or civil partner. There is, however, still a disposal that has taken place for CGT purposes effectively at no gain or loss on the date of the transfer. When the asset ultimately comes to be sold, the gain or loss will be calculated from when the asset was first owned by the original spouse or civil ... read more

02-10-2019

When NIC credits can be claimed

National Insurance credits can help qualifying applicants to fill gaps in their National Insurance record. This can assist taxpayers to build the amount of qualifying years of National Insurance contributions, which can increase the amount of benefits a person is entitled to, such as the State Pension. National Insurance credits are available in certain situations when people are not working and, ... read more

25-09-2019

NIC after State Pension Age

If you have reached the State Pension age and continue to work in most cases, you no longer need to pay National Insurance Contributions (NICs). At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you will remain liable to pay any NICs due to be paid to you before reaching the State Pension age. If you continue working, you need to provide your employer with ... read more

25-09-2019

To-do list if selling your business

If you are selling your business, there are some important actions you must take in order to properly finalise your affairs. We have summarised below some of the main steps you need to take if closing your business. Please note that this is not an exhaustive list and it is important to check what else may be required. Self-employed sole trader Notify any staff about when and why you are ... read more

25-09-2019

Tax for provision of parking spaces

There are some important rules to be aware of if you provide parking spaces to your employees. If the parking places you provide are at, or near your employee’s workplace, then you are entitled to an exemption. This means there is no requirement to report anything to HMRC and you would not be required to pay any additional tax or National Insurance for these parking spaces. These rules ... read more

25-09-2019

Brexit and 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 that govern 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 by reclaimed on a domestic UK VAT return. Claims must be made ... read more

25-09-2019

Brexit and VAT Mini One Stop Shop

HMRC has confirmed that after Brexit, you will not be able to use the UK’s VAT Mini One Stop Shop (MOSS) to declare and pay VAT. The final return period for the UK’s VAT MOSS system will be the period ending 31 December 2019. However, on this final return you should only include sales made before Brexit. HMRC has confirmed that after Brexit, you will be able to use the UK’s VAT ... read more

25-09-2019

Basis periods – the general rules

A basis period is the time period for which the self-employed or partnerships pay tax in each tax year. The general rule is that the profits for a tax year are those arising in the period of 12 months ending with the accounting date in that year. The use of basis periods ensure that taxable profits are allocated to the correct accounting period. The general rule will always apply to a continuing ... read more

25-09-2019

Setting off trading losses against other income

Where an individual makes a loss in a trade or incurs a loss as a partner in a partnership trade, the tax rules allow the loss to be set against general income. Certain trade losses may be offset against general income. It may also be possible to carry trade losses back to earlier years or forward to subsequent years. However, partial claims are not allowed. This means that a loss set against ... read more

25-09-2019

Patents, general considerations

A UK patent is granted under the laws of the UK, usually, by the UK Intellectual Property Office. Obtaining a patent can be a difficult and expensive endeavour. A patent only protects an invention in the country where the patent is registered, and so multiple patents may be required across different jurisdictions. To be granted a patent, an invention must be all of the following: something ... read more

24-09-2019

Tax Diary October/November 2019

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

18-09-2019

Shared parental leave and pay

The shared parental leave and pay rules offer working parents far greater choice as to how they share the care of their child and take time off work during the first year of their child’s life. The rules apply equally for children that have been adopted. There are various work and pay criteria that must be met in order to be eligible and the parents must share responsibility for the ... read more

18-09-2019

Reporting changes that affect Child Benefits

You must notify HMRC of certain changes to family life. For example, a change in your child’s or your family’s circumstances. This is to ensure that the correct amount of Child Benefit is paid in respect of your children. You must tell HMRC if your child: starts paid work for 24 hours a week or more will live away from you for either 8 weeks in a row or more than 56 days in a ... read more

18-09-2019

Tax relief for private pension contributions

You can claim tax relief for your private pension contributions. The annual allowance for tax relief on pensions is £40,000 for the current tax year. There is also a facility to carry forward any unused amount of your annual allowance from the last three tax years if you have made pension savings in those years. There is also a lifetime limit for tax relief on pension contributions. The ... read more

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