News

The latest breaking news in the industry!

23-01-2020

New guidance on sexual harassment and harassment at work

The Equality and Human Rights Commission (EHRC) has published new technical guidance on sexual harassment and harassment at work. It replaces previous guidance published in December 2017. The new guidance explains employers’ legal responsibilities and the practical steps they should take to prevent and respond to harassment and victimisation at work. It also provides advice for workers to ... read more

16-01-2020

Statutory maternity, adoption, paternity, shared parental and sick pay to rise from April 2020

According to proposals set out in a government policy paper, the revised rates for statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP), statutory shared parental pay (ShPP) and statutory sick pay (SSP) for tax year 2020/21 are to be as follows: the standard weekly rates of SMP, SAP, SPP and ShPP will increase from £148.68 to £151.20 (or 90% of ... read more

15-01-2020

Tax allowances you can claim for business cars

Capital Allowances allow your business to secure tax relief for certain capital expenditure. Qualifying expenditure on cars must usually be allocated to one of two general pools of expenditure. Which pool is appropriate depends on the car’s CO2 emissions. Expenditure on cars with CO2 emissions over 110g/km will be dealt with in the special rate pool and attract a writing down allowance ... read more

15-01-2020

On your bike – tax free cycling

There are special rules involving bicycles for work use, usually referred to as 'Cycle to Work' arrangements. The Cycle to Work scheme was introduced almost 20 years ago to help promote the use of healthy ways to commute to work using an environmentally friendly mode of transport. The scheme allows employers to provide bicycles and cyclists’ safety equipment to employees as a ... read more

15-01-2020

Public transport costs and tax

There are certain tax rules that it is important to consider if you pay for the public transport costs of your employees. The provision of public transport costs includes season tickets provided for employees, season ticket costs reimbursed to employees, loans made to employees to buy season tickets and contributions to subsidised or free public bus transport. If you are contributing to ... read more

15-01-2020

Money laundering and terrorist financing

The money laundering rules are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists. The money laundering and terrorist financing (amendment) regulations 2019 (MLRs) came into force on 10 January 2020. This updates the existing regulations to incorporate international standards set by the ... read more

15-01-2020

What qualifies for First Year Allowances?

Businesses can claim a 100% first-year allowance (FYA) on the purchase of certain qualifying Plant and Machinery (P&M). The cash-flow benefit of accelerated tax relief is designed to encourage businesses to invest in capital items which help reduce their carbon footprint by being energy and water efficient. The list of qualifying items includes expenditure on new unused electric vehicles and ... read more

15-01-2020

VAT - what is a limited cost trader?

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. The limited cost trader test, introduced in April 2017, can increase the VAT flat ... read more

15-01-2020

Close down a company by striking it off the register

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. A limited company can be closed down by using this striking-off process, but only if it: hasn't traded or sold off any stock in the last 3 months. For example, a company ... read more

08-01-2020

Did you file your tax return on Christmas Day?

A new press release by HMRC has highlighted the fact that 3,003 taxpayers took the time to file their tax return online on Christmas Day with a further 9,254 taxpayers completing their tax returns on Boxing Day. More than 11 million taxpayers are expected to complete a 2018-19 Self-Assessment tax return this year, on or before 31 January 2020. HMRC’s Director General for Customer Services, ... read more

08-01-2020

Last reminder for parents with income in excess of £50,000

Parents could be liable for the High Income Child Benefit tax charge if either partner's income 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 have exceeded the £50,000 threshold for the first time during the last ... read more

08-01-2020

Don’t forget to pay tax on or before 31 January 2020

The 31 January 2020 is not just the final date for submission of your Self-Assessment tax return for 2018-19 but is also an important date for payment of tax due. This is the final payment deadline for any remaining tax due for the 2018-19 tax year. In addition, the 31 January 2020 is the payment date for any Capital Gains Tax due in relation to the 2018-19 tax year and the due date for the first ... read more

08-01-2020

Carry forward unused pension tax allowance

The annual allowance for tax relief on pensions is currently set at £40,000. The annual allowance is further reduced for high earners. If your income is in excess of £150,000 you will usually have your allowance tapered. This works by reducing your annual allowance by £1 for every £2 your income exceeds £150,000 up to a maximum reduction of £30,000 if your ... read more

08-01-2020

Budget date announced

The Chancellor of the Exchequer, Sajid Javid has announced that he is planning to hold his first Budget on Wednesday, 11 March 2020. This announcement follows a turbulent period in Parliament that saw the Autumn 2019 Budget pencilled in for 6 November 2019 and then cancelled as Brexit was delayed. With Brexit now looking set for 31 January 2020 and the Government working with a comfortable ... read more

08-01-2020

Big changes following loan charge review

The Government has revealed that a number of important changes will be made to the loan charge following the independent review of the disguised remuneration loan charge policy and its implementation by Sir Amyas Morse and his team. The review examined whether the loan charge is an appropriate way of dealing with loans schemes (also known as disguised remuneration tax avoidance schemes) that have ... read more

08-01-2020

New funding for farmers announced

Over the Christmas and New Year break, the Chancellor announced that nearly £3 billion of funding is to be put in place to help support farmers once the UK leaves the EU. This cash injection will maintain the level of funding for direct payments to farmers at the same rate as 2019 and supplement the remaining EU funding that farmers will receive for development projects until 2023 at the ... read more

08-01-2020

Getting clients ready for Brexit

HMRC has published a useful list to help businesses be prepared to import goods from the EU to the UK as we count down to the 31 January 2020 Brexit date. We are then likely to see a fixed transition period until 31 December 2020 by the end of which the Government expects to have a trade deal in place with the EU. The six points of action listed are relevant if there is a no-deal Brexit but are ... read more

08-01-2020

CGT – Gift Hold-Over Relief

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

02-01-2020

Annual increases to the National Minimum Wage

The government has accepted the recommendations of the Low Pay Commission in full and has announced that it will increase the National Living Wage (NLW) and National Minimum Wage (NMW) rates from 1 April 2020 as follows: the NLW rate for workers aged 25 and over will increase from £8.21 to £8.72 per hour – this represents a pay rise of 6.2% and is the biggest increase ever to ... read more

02-01-2020

Tax Diary January/February 2020

1 January 2020 - Due date for Corporation Tax due for the year ended 31 March 2019. 19 January 2020 - PAYE and NIC deductions due for month ended 5 January 2020. (If you pay your tax electronically the due date is 22 January 2020) 19 January 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 January 2020. 19 January 2020 - CIS tax deducted for the month ended 5 January ... read more

28-12-2019

Penalties for late filing of Self-Assessment tax returns

The 31 January is not just the final date for submission of your Self-Assessment tax return but also an important date for paying tax. It is the final payment deadline for any remaining tax due for the 2018-19 tax year and any payment on account due for 2019-20. If you miss the filing deadline then you will be charged a £100 fixed penalty if your return is up to 3 months late, regardless of ... read more

28-12-2019

Take advantage of the Annual Investment Allowance

The Annual Investment Allowance (AIA) allows business owners to claim the total amount of qualifying expenditure on plant and machinery, up to certain limits. This deduction reduces profits subject to tax. The AIA 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 business. Please ... read more

28-12-2019

Top up your pension pots

You can claim tax relief for your private pension contributions. The current annual allowance for tax relief on pensions is £40,000. Remember, that there is now just 3 months left in the current tax year in which to maximise the amount of tax relief you can claim by topping up your pension pot. There is a three-year carry forward rule that allows you to carry forward previous years ... read more

28-12-2019

Exemptions from CGT

Capital Gains Tax (CGT) is a tax on the profit made on the disposal of an asset that has increased in value. Whilst most taxpayers are aware of their annual tax-free allowance (currently £12,000) and the exemption for the, qualifying, sale of the family home - there are other items that are exempt from CGT. These include: your car personal possessions worth up to £6,000 each, such ... read more

28-12-2019

What is reasonable care

The inaccuracy penalty system is intended to make penalties simpler to understand and more consistent across many taxes. HMRC has the power to significantly reduce the amount of penalties due. The largest reductions are for unprompted disclosures (as against prompted disclosures). The penalties also vary depending on the taxpayers’ behaviour. HMRC has 4 levels of behaviour ranging from ... read more

28-12-2019

Basis periods and change of accounting date

HMRC’s guidance lists the following useful examples about a change of accounting date: If your accounting date in 2016 to 2017 is more than 12 months after the end of the basis period for 2015 to 2016, your basis period is the period between the end of the basis period for 2015 to 2016 and the new accounting date. For example, your basis period for 2015 to 2016 ended on 31 May 2015, and ... read more

28-12-2019

Paying wages to connected persons

The definition of a connected person for tax purposes includes certain relatives, trustees, partners and companies. A person is connected with an individual if that person is the individual’s spouse or civil partner a relative of the individual the spouse or civil partner of a relative of the individual a relative of the individual’s spouse or civil partner the spouse or civil ... read more

18-12-2019

Advice from Government when buying children's presents

As the election upheavals are now completed, the government has issued a timely news release to help people shop safely for children's presents this Christmas. The Office for Product Safety & Standards (OPSS) is a part of the Department for Business, Energy & Industrial Strategy and has partnered with Santa, Royal Society for the Prevention of Accidents, Chartered Trading Standards ... read more

18-12-2019

Government alert for charities

The Charity Commission is the non-ministerial department responsible for registering and regulating charities in England and Wales, to ensure that the public can support charities with confidence. The Commission has published an alert after receiving several reports from charities, who have been targeted by fraudsters impersonating members of staff, specifically attempting to change employees' ... read more

18-12-2019

Cash gifts this Christmas

We thought it would be useful to remind our readers of the IHT implications of making cash gifts this Christmas. You can give away up to £3,000 worth of gifts each tax year. This is known as your annual exemption. Any unused part of the annual exemption can be carried forward, but only for one year. So, if you didn’t make any cash gifts in 2018-19, you could gift up to £6,000 ... read more

18-12-2019

Could you claim a Christmas tax bonus?

If you are entitled to the marriage allowance and have not yet applied, then you could receive a well-timed Christmas bonus of up to £1,150 from HMRC. The marriage allowance is available to qualifying married couples and those in a civil partnership where a spouse or civil partner is a non-taxpayer i.e. has an income below their personal allowance (currently £12,500). The marriage ... read more

18-12-2019

Duty free limits if you are travelling abroad

Here is a reminder of your duty and tax free allowances if travelling abroad this Christmas. Travelling to an EU country Where tobacco or alcohol is brought in from another EU country, no duties or tax will be payable as long as you can demonstrate that the goods are for your own use and that you paid the relevant taxes and duties on the purchase. However, HMRC provide the following guidelines ... read more

18-12-2019

When VAT should not be charged

When a VAT registered business issues an invoice to their customer, they must seek to ensure that they 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 to be aware of. These include the reduced VAT rate of 5% and the positive zero rate (0%). There are two other categories that the ... read more

18-12-2019

Overview of foreign income taxation

Income Tax is generally payable on taxable income received by individuals including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income. The tax rules for foreign income can be very complex. However, as a general rule if you are resident in the UK you need to pay UK Income Tax on your foreign income, ... read more

18-12-2019

Giving away a home before death

The majority of gifts made during a person's life, including gifting away a home, are not subject to tax at the time of the gift. These 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 ... read more

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

Awareness of data protection fee campaign

The Information Commissioner’s Office (ICO) has launched a campaign aimed at contacting all registered UK companies to remind them of their legal responsibility to pay a data protection fee. The campaign marks the start of an extensive programme by the ICO to make sure the data protection fee is paid by all those who are required to pay it. Under the Data Protection Act 2018, organisations ... 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

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