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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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
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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 According to HMRC’s published guidance there are special rules for the taxation of post-cessation receipts and expenses. These provisions apply to professions, vocations and trades.
Tax relief may be available for post-cessation expenses of a trade, although such expenses still have to satisfy the wholly and exclusively test and be revenue in nature to qualify for relief. In order to be an ... read more HMRC has published a press release to remind qualifying couples to claim the Marriage Allowance. The Marriage Allowance allows lower earning couples to share part of their personal tax-free allowance.
The Marriage Allowance is available to married couples and those in a civil partnership where one partner doesn’t pay more than the basic 20% rate of Income Tax and the other party does not fully ... read more The deadline for the introduction of VAT filing changes is now just weeks away. For VAT returns periods starting on or after 1 April 2019, some 1 million businesses with a turnover above the VAT threshold (currently £85,000) will be required to start keeping their records digitally (for VAT purposes only) and provide their VAT return information to HMRC by using compatible software.
HMRC ... read more HMRC has issued a new briefing paper on disguised remuneration charge on loans. Disguised remuneration schemes are tax avoidance arrangements that seek to avoid Income Tax and National Insurance contributions by paying scheme users their income in the form of loans.
HMRC is clear that these loans were never intended to be repaid and are no different to normal income and are therefore taxable. ... read more If you move abroad it can often be advantageous to continue paying your UK National Insurance Contributions (NICs) in order to preserve your entitlement to the State Pension and other benefits. If you are working in the European Economic Area (EEA) the rules depend on your situation. The EEA includes all EU countries as well as Iceland, Liechtenstein and Norway. The same rules apply in ... read more 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.
There is no tax relief available if your employer pays you back in full for an item you have bought for your work. In addition, you cannot claim tax relief ... read more Many people supplement their income by selling services online. This is often described as the 'sharing economy' or the 'peer-to-peer economy' and usually involves renting out something using specialist websites or apps. This could include renting out your house (using websites such as AirBNB) or personal equipment (such as power tools).
You can also raise income from using specialist online ... read more A Company Voluntary Arrangement or CVA is a special arrangement that allows a company with debt problems or that is insolvent to reach a voluntary agreement to pay its business creditors over a fixed period of time. The arrangement is similar to the more well-known Individual Voluntary Arrangement (IVA) that can be used by a sole-trader or self-employed person who is unable to pay their debts. ... read more There are special rules in place when a limited company gives to a charity. This can include Corporation Tax relief for qualifying donations made to registered charities or community amateur sports clubs (CASC), as well as Capital Allowances for giving away equipment that has been used by a company.
However, the rules are different if the company is given something in return for making a ... read more Where an error on a VAT return is discovered, VAT registered businesses have a duty to correct the error as soon as possible.
As a general rule, you can use a current VAT return to make an adjustment to a past VAT return. However, in order to be able to do so, there are three important conditions that must be met:
The error must be below the reporting threshold.
The error must not be ... read more 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 the amount of VAT 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. There are a number of ... read more 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 The Help to Save scheme for people on low incomes was officially launched in September 2018 and since then over 80,000 people have signed up. The scheme allows those in work entitled to Working Tax Credit and in receipt of Working Tax Credits or Child Tax Credits to save up to £50 a month for two years and receive a 50% government bonus.
The scheme is also open to UK residents who are claiming ... read more 1 March 2019 - Due date for Corporation Tax due for the year ended 31 May 2018.
2 March 2019 – Self assessment tax for 2017/18 paid after this date will incur a 5% surcharge.
19 March 2019 - PAYE and NIC deductions due for month ended 5 March 2019. (If you pay your tax electronically the due date is 22 March 2019)
19 March 2019 - Filing deadline for the CIS300 monthly return for the month ended ... read more The Employment Rights (Increase of Limits) Order 2019 has been laid before Parliament and will come into force from 6 April 2019. The Order increases the limits applying to certain awards of employment tribunals and to other amounts payable under employment legislation. The main changes are:
Maximum amount of a “week’s pay” which is used for the purposes of calculating statutory redundancy ... read more HMRC has now written to over 145,000 VAT-registered businesses across the UK with a Brexit update. The letters explain changes to customs, excise and VAT in the event that the UK leaves the EU without a deal, and what businesses can do to prepare. There are a number of different versions of the letters some of which are specific to the circumstances of businesses in Northern Ireland.
If the UK ... read more There are a number of issues that owners of more than one home should be aware of. An individual, married couple or those in a civil partnership can only benefit from CGT on one property at a time. However, it is possible to choose, by election, which property is treated as a main residence and therefore benefits from a CGT exemption when sold.
When a home owner lives in more than one property, ... read more A joint venture is a commercial enterprise undertaken by two or more parties who otherwise retain their own 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 published guidance on how a joint venture is treated for VAT is as follows. Where two or more separate ... read more After the end of its financial year, a private limited company must prepare full annual accounts and a company tax return. The deadline for filing the first set of accounts with Companies House is 21 months after the date the company was registered with Companies House. Annual accounts must be submitted 9 months after the company’s financial year ends.
There is a fixed date for the payment of ... read more Are you among the 700,000 taxpayers that missed the 31 January 2019 filing deadline for your 2017-18 self-assessment returns? If you missed the filing deadline then you will be charged a £100 fixed penalty if your return is up to 3 months late, regardless of whether you owed tax or not.
If you do not file and pay before 1 May 2019 then you will face far greater penalties. A daily penalty of £10 ... read more The Finance (No.3) Bill 2017-19 received Royal Assent (later than originally planned) on 12 February 2019 following agreement by both Houses on the text of the Bill. The Bill is now an Act of Parliament known as Finance Act 2019. The Act contains the legislation for many of the tax measures announced by the government at Autumn Budget 2017 some of which had been the subject of further ... read more The City of Edinburgh Council is seeking permission to introduce a tourist tax. After an extensive consultation, the members of Edinburgh Council have agreed to submit proposals to the Scottish Government. The City Council voted in favour of the proposal by a margin of 43 to 15. The Scottish government, that had previously been against such a tax, has agreed to further consultations on the issue. ... read more A new consultation has been launched by HM Treasury together with HMRC seeking views on the design of a new 1% Stamp Duty Land Tax (SDLT) surcharge on non-UK residents purchasing residential property in England and Northern Ireland. This move was first mooted in the Budget 2018. The consultation closes for comments on 6 May 2019.The consultation document makes it clear that the new SDLT surcharge ... read more There is an annual Inheritance Tax exemption of £3,000 for gifts. This exemption can also be carried forward to the following tax year if not used to make a maximum gift of £6,000. You can also give unlimited individual gifts of up to £250 per person during the tax year, but only if you haven’t used another exemption on the same person. There are additional, special allowances for gifts made at a ... read more The Construction Industry Scheme (CIS) is a set of special rules for tax and National Insurance for those working in the construction industry. Businesses in the construction industry are known as 'contractors' and 'subcontractors'. Under the scheme, contractors deduct money from subcontractors' payments and pass it to HMRC.
Contractors are defined as those who pay subcontractors for ... read more Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. However, if you only pay basic rate tax and make a small capital gain, you may only be subject to a reduced rate of 10%.
Once the total of your taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT. A higher rate of CGT ... read more There are two types of National Insurance Contributions (NICs) payable by most self-employed people. These are known as Class 2 NICs and Class 4 NICs. Class 2 NICs are paid by all self-employed taxpayers unless they qualify for the small earnings exception or other exemptions which remove the necessity to pay NICs. Class 2 NICs are payable at a flat weekly rate.
In addition, most self-employed ... read more Businesses can claim Capital Allowances tax relief for certain types of capital expenditure. For expenditure on plant and machinery that exceeds the Annual Investment Allowance (AIA) and does not qualify for a first year allowance, a standard 18% Writing Down Allowance (WDA) is available. This is based on the cost of the items in the year they are acquired.
There is a lower rate known as the ... read more The Enterprise Investment Scheme (EIS) is designed to help smaller higher-risk trading companies raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
In order for investors to be able to claim EIS tax reliefs, the company which issues the shares has to meet a number of rules regarding the kind of company it is, the amount of money it can ... read more The P9X form is used to notify employers of the tax code to use for employees. The form shows the tax codes to use from 6 April 2019. 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 limit is £37,500 except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an ... read more If you inherit property, money or shares you are usually not liable to pay tax on the inheritance. This is because any Inheritance Tax (IHT) due should be paid out of the deceased’s estate before any cash or assets are distributed to the heirs.
There is normally no tax to be paid by the deceased’s estate if the value of the estate is below the IHT nil rate threshold of £325,000. There is also an ... read more The Chancellor, Philip Hammond, has announced that he will deliver his Spring Statement to the House of Commons on Wednesday, 13 March 2019. The timing of the statement is interesting as the Spring Statement is due to take place just over 2 weeks before the 29 March Brexit withdrawal date.
This will be the second Spring Statement to take place following the government’s decision to switch to a ... read more The introduction of Making Tax Digital (MTD) will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The new regime will require businesses and individuals to register, file, pay and update their information using a new online tax account.
The new regime is due to start in April 2019, for VAT purposes only, when some 1 million businesses with a turnover ... read more Any property, cash and other asset owned by a company when it is dissolved automatically passes to the Crown as ownerless property. This process is known as 'bona vacantia' which literally means vacant goods. The bodies that deal with bona vacantia claims vary across the United Kingdom, but they all ultimately represent the Crown.
There are a number of scenarios where you may be able to claim or ... read more HMRC offers an online service to check your National Insurance Contributions (NIC) record online. In order to use the service, you will need to have a Government Gateway account. If you don't have an account, you can apply to set one up online.
By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you haven’t already done so. The ... read more Have you missed the 31 January 2019 deadline for paying your tax bill? The 31 January was not just the final date for submission of your Self Assessment tax return but also an important date for payment of other tax due. This included the payment of any Capital Gains Tax due in relation to the 2017-18 tax year, and also the due date for your first payment on account for 2018-19.
If you were ... read more The Chancellor, Philip Hammond recently paid a visit to an independent brewery in Liverpool and confirmed that the duty rates on beers, spirits and most ciders will be frozen at the current rates for another year from 1 February 2019. These measures mean that the average price for a bottle of whisky will be £1.50 less and a pint of beer 14p less than if the rates had increased as expected based on ... read more The recent, and temporary, increase in the AIA to £1m from 1 January 2019 creates computational issues if a trader's accounting period straddles this date.
The following example published by HMRC illustrates one variant that you may encounter when considering AIA relief due to clients.
Where a business has a chargeable period from 1 July 2018 to 30 June 2019, the maximum AIA for this period ... read more According to HMRC, individuals pay Scottish Income Tax if they live in Scotland. Care should be taken when considering the phrase "live in Scotland". In particular, you may also pay Scottish Income Tax if you:
- move to or from Scotland,- live in a home in Scotland and one elsewhere in the UK, for example for work,- don’t have a home and stay in Scotland regularly, for example you stay offshore ... read more Charities pay VAT on all standard-rated goods and services they buy from VAT-registered businesses. They pay VAT at a reduced rate (5%) or the ‘zero rate’ on some goods and services.
Charities pays 5% VAT on fuel and power if they’re for:
residential accommodation (for example, a children’s home or care home for the elderly),
charitable non-business activities (for example, free daycare for ... read more The Brexit uncertainties continue. To help businesses consider their options HMRC has published more information for UK businesses that buy or sell goods from or to the EU. We have copied in below three specific actions that need to be considered and updated them for recent changes to the information available on the GOV.UK website. They are:
Complete an application and register for a UK ... read more Last week we passed the filing deadline (31 January 2019) for the 2017-18 self assessment tax returns. A surprising number of taxpayers are still content to deal with this annual chore at the last minute. This article sets out a few compelling reasons for preparing your tax return as soon as you can after the end of each tax year.
Until you prepare your return and calculate your liability for a ... read more
Tenth anniversary of first Debt Relief Order
Estate Agents targeted
Job related expenses you can claim against your tax
Welsh Income Tax takes effect
Let Property Disclosure Campaign
Outline of special rules for use of vouchers and credit tokens
What is domicile?
The VAT concept of business
New guidance on the impact of Brexit on workplaces
Right to work checks for EU nationals after Brexit
Capital expenditure for property businesses
Corporation Tax loss relief for losses carried forward
The meaning of trade for tax purposes
VAT Fuel Scale Charges
Dormant assets scheme expanded
Latest advice from government if we leave the EU
Child Benefit Tax Charge
Late filing penalty notices delayed
Getting tax relief sooner for charitable donations
Early birds get time to pay
When do you have to register to submit a tax return?
Minimum wage increases come into effect
Air Passenger Duty changes
Carry forward of unused pensions allowance
CGT – transfer of partnership to an LLP
How is ordinary commuting defined for travel costs
Dormant bank accounts
Employment law changes taking effect in April 2019
Making Tax Digital for VAT
Repay your employer for private fuel
Do you employ an au pair?
Is HMRC’s message real or fake?
Income excluded from UK property business
Person liable to pay tax on post-cessation receipts
What is a post-cessation expense?
VAT grouping
Tax Diary March/April 2019
Holiday pay campaign
Changes to VAT IT systems if no-deal Brexit
What is a finance lease?
Removing your home address from the public register
Cash basis and capital expenditure
Keep abreast of Brexit news
Present tax-free company benefits
Business record keeping for the self-employed
Full EU Settlement Scheme roll-out
2019 Spring Statement: employment implications
Topping up your self-employed NIC contributions
Lost your Unique Tax Reference number?
Treatment of deposits for VAT purposes
What are the badges of trade?
Sale of income by an individual
Employee tax codes 2019-20
Spring Statement - 13 March 2019
Expenditure on building that qualifies as plant
Companies House – Late Filing Penalties
Utilising unused losses for CGT
Incentive award schemes and tax
Post cessation receipts and expenses
Are you claiming the Marriage Allowance?
Last chance to get ready for VAT filing changes 1 April 2019
Have you received income in the form of loans?
National Insurance if you go abroad
Job related expenses you may be able to claim
Tax if selling online
What is a Company Voluntary Arrangement?
Company tax deductions for charitable donations
Correcting errors on VAT returns
Claim EU VAT refunds before Brexit
New advisory fuel rates published
Help to Save scheme
Tax Diary March/April 2019
New compensation limits announced
Did you get your Brexit update letter from HMRC?
Election to treat property as main residence
Joint ventures and VAT
Filing deadlines for company accounts
Did you miss the self-assessment deadline?
Finance Bill receives Royal Assent
Edinburgh makes a case for UK’s first tourist tax
New Stamp Duty surcharge announced
Gifts out of disposable income
What work is covered by the CIS scheme?
When do you pay Capital Gains Tax?
Class 4 NICs who is liable?
Reduction in special Writing Down Allowance
EIS Income Tax relief restriction for connected parties
Tax codes for employees
Will you pay tax on your inheritance?
Spring Statement 2019
MTD pilot for self-employed is available
Claiming money or property from a dissolved company
Checking your NIC records
Struggling to pay your January tax bill?
Alcohol duty freeze confirmed
Maximum AIA calculations for split accounting periods
Who pays Income Tax in Scotland?
Charities - reducing input VAT
Brexit – what the UK government has advised business owners to do
Sooner is better than later
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