Whilst there is usually no tax relief for ordinary commuting - home to work - there are a number of exceptions. 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 established the principle that travelling between your home and a permanent workplace is not a travel expense related to the ... read more First Year Allowances (FYA’s) are available for expenditure on new unused electric vehicles and other cars within the threshold for low CO2 emissions. Businesses can claim FYA of 100% in the year they purchase qualifying low emissions or electrically propelled cars. These measures were put in place to help encourage the use of low emission and zero emission vehicles.
The FYA’s for ... read more For most fully taxable businesses, VAT can be reclaimed on goods and services used in the business. This means that businesses must consider where there is any personal or private use of goods or services purchased for the business as the business can only reclaim the business proportion of the VAT.
For example, VAT is recoverable on all the costs of mobile phones provided to employees where no ... read more The First-Tier Tribunal (FTT), in the case of Villar v Revenue and Customs examined whether the disposal of goodwill was capital or income in nature. The taxpayer in this case was a renowned orthopaedic surgeon specialising in hip arthroscopic procedures. The taxpayer sold his business in return for a payment of £1m, this payment was treated as capital in nature and a claim was made for ... read more The Optional Remuneration Arrangements (OpRA) legislation was introduced with effect from 6 April 2017. The legislation counters the tax and NIC advantages of benefits where an employee gives up the right to an amount of earnings in return for a benefit. This includes flexible benefit packages with a cash option, cash allowances and salary sacrifice.
The taxable value is now the higher of the ... read more Under qualifying circumstances, Corporation Tax (CT) relief is available where your company makes a trading loss. The trading loss can be used by offsetting the loss against other gains or profits of your business in the same or previous accounting period. The loss can also be set against future qualifying trading income.
However, there are restrictions on ‘loss-buying’. This ... read more It was announced as part of the Autumn Budget 2018 measures that access to the Employment Allowance was to be restricted. From 6 April 2020, the £3,000 NIC Employment Allowance will only be available to employers with employer NIC liabilities of under £100,000 in the previous tax year. Connected employers will have their contributions aggregated for this purpose.
The draft legislation ... read more The Information Commissioner's Office (ICO) has published new guidance on the use of cookies and similar technologies, as well as an associated blog.
The guidance looks at cookies and similar technologies in detail and it is relevant to any organisations operating online services such as websites or mobile apps. It covers:
What cookies and similar technologies are
What the rules are on ... read more The National Cyber Security Centre (NCSC) has published guidance to help small to medium sized organisations prepare their response to, and plan their recovery from, a cyber incident.
The “Small Business Guide: Response & Recovery” has been produced by the NCSC in response to questions raised by SMEs following the earlier publication of its “Cyber Security: Small Business ... read more You can use the Digital Disclosure Service (DDS), if you need to make a voluntary disclosure of income or other taxable events that have not previously been reported to HMRC.
Other current HMRC campaigns that facilitate disclosure by taxpayers, include the Card Transaction Programme - a disclosure opportunity for businesses that accept card payments and have not paid the right amount of tax due ... read more If your personal details change, you may be required to notify HMRC as this can affect your entitlement to certain tax breaks and or benefits.
For example, you need to tell HMRC if:
you get married or form a civil partnership
you divorce, separate or stop living with your husband, wife or partner
You can tell HMRC online if you are paid a salary or pension through PAYE. The sooner you tell ... read more If you make Self-Assessment payments on account, you will no doubt be aware that the second instalment for 2018-19 is due on 31 July 2019. The amount due for payment is usually the same as the first payment on account made on 31 January 2019.
These payments are based on 50% of your previous year’s net Income Tax liability. If your taxable profits have increased there is no requirement to ... read more There is a section of HMRC’s manuals that deals specifically with how you can view the rules for measuring profits of specific trades. The list includes over 50 different trades as diverse as actors, athletes, barristers, bookmakers, motor dealers, care providers, doctors and dentists, financial traders, marine pilots, missionaries, pawnbrokers and subcontractors. The index can be accessed ... read more The security deposit legislation was extended to both Corporation Tax and Construction Industry Scheme (CIS) deductions from April 2019. The security deposit regime allows HMRC to obtain security from high-risk businesses for the protection of revenue where there is a serious risk that taxes owed will not be paid.
HMRC’s security deposit powers previously applied to VAT, PAYE and National ... read more The House of Commons summer recess has been confirmed after parliament voted 223 to 25 in favour of the move. This means that the House will rise on Thursday 25 July and return on Tuesday 3 September.
The timing of this five-week break whilst the Brexit issue continues to dominate the headlines has been criticised by many on different sides of the political divide. The next leader of the ... read more As the school holidays fast approach, many parents face having to organise extra school holiday childcare over the summer months.
HMRC is reminding parents that the Tax-Free Childcare (TFC) scheme can help if you have children aged 0-11 years old. The TFC scheme helps support working families with their childcare costs and can be used to pay for regulated holiday clubs during the school holidays. ... read more Business rates are a tax on non-domestic premises, including most commercial properties such as shops, offices, pubs, warehouses and factories. The money raised through business rates is used to help fund local services like the police, fire and rescue services.
Business rates are generally calculated by multiplying the rateable value of commercial premises by the business rates multiplier before ... read more HMRC imposes a VAT default surcharge on businesses that submit late VAT returns. VAT registered businesses are required by law to submit their return and make sure that payment of the VAT due has cleared to HMRC’s bank account by the due date. The normal deadline for submission of a VAT return and making payment is one calendar month and seven days after the end of the relevant VAT ... read more 1 July 2019 - Due date for Corporation Tax due for the year ended 30 September 2018.
6 July 2019 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.
19 July 2019 - Pay Class 1A NICs (by the 22 July 2019 if paid electronically).
19 July 2019 - PAYE and NIC deductions due for month ended 5 July 2019. (If you pay your tax electronically the due ... read more An ISA is a tax exempt savings account available to UK residents. Whilst the amount invested in an ISA does not benefit from tax relief the income and gains are free from most taxes including Income Tax and Capital Gains Tax. Eligible holdings include cash ISAs, stocks and shares ISAs and innovative finance (including peer-to-peer loans) ISAs.
There is no minimum period for which an ISA must be ... read more There are a number of reasons why a taxpayer is required to complete a self assessment return. This includes if they are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or property.
Taxpayers that need to complete a self assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC ... read more Entrepreneurs' Relief (ER) can be a 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 in place of the standard rate. CGT on the disposal of chargeable assets is usually chargeable at 20%. There are a number of qualifying conditions that must be met in order to ... read more Loans schemes also known as disguised remuneration tax avoidance schemes have been used by some employers and individuals in order to try and avoid paying Income Tax and National Insurance Contributions (NICs). This is usually done by utilising a loan or other payment from a third-party which is unlikely to be repaid. HMRC has never approved these schemes and has always said they will not be ... read more One of the Autumn Budget 2018 measures was the introduction of a new structures and buildings allowance (SBA). The SBA allows for tax relief on qualifying capital expenditure on new non-residential structures and buildings. The relief will therefore apply to the costs of building new commercial structures.
The relief was introduced with effect from 29 October 2018 and applies where all contracts ... read more HMRC’s employment status service can be used to help ascertain if a worker should be classified as employed or self-employed for tax purposes in both the private and public sector.
The service provides HMRC’s view as to whether IR35 legislation applies to a particular engagement and whether a worker should pay tax through PAYE as well as helping to determine if the off-payroll working ... read more The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. The current tax-free threshold of £7,500 per year has been in place since 6 April 2016.
The relief only applies to the letting of furnished accommodation and is used when one bedroom is rented out in a furnished house to a lodger. The relief is being applied more widely as more people ... read more The government has announced that the date of next year’s early May bank holiday is to move from Monday, 4 May to Friday, 8 May to mark the 75th anniversary of VE Day. This is only the second time ever that the early May bank holiday has been moved – the first was in 1995 to mark the 50th anniversary of VE Day. There will be commemorative events taking place across the country over the three-day ... read more The majority of gifts made during a person's life are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. These gifts or transfers achieve their potential of becoming exempt from Inheritance Tax if the taxpayer survives for more than seven years after making the gift. There is a tapered relief available if ... read more The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the various criteria outlined below there is no requirement to report anything to HMRC or pay tax and National Insurance. There will also be no taxable benefit charged to employees.
An annual Christmas party or other annual event offered to staff generally, is not taxable on ... read more There are special rules concerning the payment of Capital Gains Tax (CGT) on the sale of personal possessions also known as 'chattels'. Personal possessions are generally defined as possessions with a predictable useful life of 50 years or less and are exempt from CGT up to a value of £6,000.
Personal possessions include items like jewellery, paintings, antiques and coins and ... read more The Annual Tax on Enveloped Dwellings (ATED) came into effect from 1 April 2013. The tax applies to certain Non-Natural Persons (NNPs) that own interests in dwellings valued at more than £500,000. These provisions affect most companies, partnerships with company members and collective investment schemes. There is no ATED or ATED-related Capital Gains Tax payable if an individual owns a ... read more The artificial separation of businesses is where two or more businesses are split, and each 'separate' entity operates below the VAT registration threshold (currently £85,000). This is known as disaggregation. HMRC has legal powers to direct that businesses that have been artificially separated to avoid VAT be treated as a single entity for VAT purposes.
The underlying legislation ... read more Taxpayers may find themselves in a position where they need to make a complaint to HMRC. Complaints can relate to many different issues such as unreasonable delays, mistakes and poor treatment by HMRC’s staff. Note, there is a separate procedure to be followed by taxpayers that disagree with a decision of HMRC. In such cases the review and appeals process should be followed.
HMRC operates a ... read more The TV licence fee has not been payable by those aged 75 or over since 2001. During 2015, the government reached an agreement with the BBC as part of the last charter renewal that it will take on the cost of free television licences for over-75s by 31 May 2020 as part of the fee settlement.
The BBC estimated that the change would have reduced their licence fee income by around £745m a year, a ... read more The High Income Child Benefit Charge (HICBC) was introduced in January 2013 and applies a charge 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.
HMRC has been reviewing a significant number of cases where a failure to notify ... read more Fraudsters have been blocked from using HMRC’s most used helpline numbers after the introduction of new defensive controls. These fraudsters had been able to make calls to taxpayers across the UK which appeared to be coming from HMRC by mimicking helpline numbers. These fraudsters are usually operating as part of large criminal gangs with deep pockets and cutting-edge technological to target ... read more The Cycling Minister, Michael Ellis, has announced a number of changes to the Cycle to Work scheme in an announcement that was timed to coincide with Bike week. Bike week is an annual celebration to showcase cycling across the UK and runs from 8 – 16 June.
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 ... 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 some taxpayers by email who opened a Tax-Free ... read more A surprising amount of free information about companies is available from Companies House. This is in line with the government’s commitment to free data and ensures that all publicly available digital data held on the UK register of companies is accessible free of charge. These records provide access to over 170 million digital records on companies and directors.
They include:
company ... read more In some industries, employers provide accommodation to employees because this is required by the nature of the job. There are no tax charges in respect of the provision of living accommodation where
it is necessary for the proper performance of the employee’s duties that he or she should reside in the accommodation, or
the accommodation is provided for the better performance of the ... read more Statement of Practice 4/97 sets out HMRC’s views on the correct treatment for tax purposes of commission, cashbacks and discounts. Cashbacks are taken to mean lump sums received by a customer as an inducement for entering into a transaction for the purchase of goods, investments or services and received as a direct consequence of having entered into that transaction.
In general, an ordinary ... read more A change to the VAT rules first announced at Budget 2018, will come into effect from 1 October 2019. This change will make the supply of construction services between construction or building businesses subject to the domestic reverse charge. The reverse charge will only apply to supplies of specified construction services to other businesses in the construction sector. The introduction of this ... read more There are many taxpayers who have reached the State Pension age and continue to work. In most cases they no longer need to pay any National Insurance Contributions (NICs).
At State Pension age, the requirement to pay Class 1 and Class 2 NICs on employed or self-employed earnings ceases. However, you will remain liable to pay any NICs that were due to be paid on earnings before you reached the ... read more If you are self-employed and running a business from your home, there are simplified arrangements available for claiming a fixed rate deduction for certain expenses where there is a mix of business and private use. The simplified expenses rules are not available to limited companies or business partnerships involving a limited company.
The use of the flat rate expenses for business work carried ... read more The Working Tax Credit (WTC) is designed to help taxpayers on low incomes by providing top-up payments and includes those who do not have children. There are extra amounts available for qualifying childcare expenses and working households in which someone has a disability. The basic amount of WTC is £1,960 a year and is always included for qualifying applicants. There are also payments that ... read more The government has announced new plans to crackdown on high pressure and bullying tactics to sell pre paid funeral plans. These tactics are often used to target those who are old and vulnerable and unaware exactly what they are buying. In some cases, the funeral plans are sold with misleading promises and to maximise the salesperson's commission.
Demand for funeral plans has grown ... read more There are distinct rules that VAT registered businesses must follow when keeping VAT records. This includes keeping proper business and accounting records, a separate VAT account as well as copies of all VAT invoices received and issued. There is no requirement to issue a VAT invoice for retail supplies to unregistered businesses unless requested by the customer.
A simplified VAT invoice can be ... read more If a permanent home (domicile) is in the UK then any foreign situated property owned at date of death will be chargeable to Inheritance Tax. The site of an asset is usually the place where the asset in question is considered to be located for legal purposes. The site of immovable property is the place or country where the property is situated.
Certain assets are excluded from the charge to ... read more Under the current rules non-resident companies with a trading business in the UK are liable to pay UK Corporation Tax on their profits made through a permanent establishment/branch or agency. This includes trading income and any income from property or rights used by, or held by or for, the permanent establishment/branch or agency (except dividends or other distributions received from companies ... 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 1 June 2019 - Due date for Corporation Tax due for the year ended 31 August 2018.
19 June 2019 - PAYE and NIC deductions due for month ended 5 June 2019. (If you pay your tax electronically the due date is 22 June 2019)
19 June 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 June 2019.
19 June 2019 - CIS tax deducted for the month ended 5 June 2019 is payable by ... read more Employees can often reimburse their employers for benefits provided in order to lessen their taxable benefits and thereby reduce or avoid a tax charge. This is referred to in the legislation as ‘making good’ and most often involves the employee making a cash payment to their employer. The payment has the effect of reducing the taxable value of the benefit in kind, often to zero. This ... read more The new National Minimum Wage (NMW) and National Living Wage (NLW) rates came into effect on 1 April 2019. The NLW first came into effect on 1 April 2016 and is the minimum hourly rate that must be paid to those aged 25 or over. The new rate for the NLW is £8.21 which is a 38p or almost 5% increase over the previous year.
The hourly rate of the NMW (for 21-24 year olds) increased to ... read more There are a number of reasons why you may need to register with HMRC to submit a tax return. This could include:
if you are self-employed and earning more than £1,000 per year from the self-employed activity,
if you are a company director,
if you have an annual income over £100,000 and / or if you have certain income from savings, investment or property.
And see HMRC's list ... read more The Company Unique Taxpayer References (UTR) is the primary identifier for the company and should be used whenever HMRC is contacted and when tax returns are filed.
When a new limited company is registered, Companies House will inform HMRC of the new company and a UTR (ten-digit number) will be issued. HMRC will then issue a letter to the company's registered address outlining important ... read more Historically, the term bed and breakfasting (sale and repurchase) of shares referred to transactions whereby someone sold shares one day and bought them back the next morning. This used to have Capital Gains Tax (CGT) benefits by crystallising a gain or a loss but is no longer tax effective over such a short period. The rules changed in 1998 when new legislation introduced special share matching ... read more The assessment of self-employed or partnerships profits is usually relatively straight-forward if the accounting date - the date to which accounts are prepared - falls between 31 March and 5 April. However, overlap profits can arise where a business year end date is not coterminous with the end of the tax year.
Overlap profits can happen in the first 2 or 3 years of the business or in any year in ... read more Where a freeholder (or landlord) of a property grants a new lease to a new tenant there are sometimes upfront payments due, usually known as a lease premium. The payments of these premiums are increasingly popular, and the tax implications can be complicated depending on the length of the lease.
For leases of 50 years or less a proportion of the premium is taxed as income. The proportion to be ... read more Starting from April 2019, most VAT-registered businesses that have a taxable turnover over £85,000 are required to keep their VAT records digitally and use Making Tax Digital (MTD) compatible software to submit their VAT return information to HMRC.
There are exceptions for certain businesses that have until the first VAT Return period starting on or after 1 October 2019 to start using MTD ... read more If you are owed money by an individual or business, there is a procedure you can use called making a court claim. This was more commonly referred to as taking someone to a 'small claims court'.
Before making a claim, you should try to contact the person or organisation to try and resolve the issue by discussion or by using a specialist mediation service.
If this is unsuccessful and you ... read more There are a number of options open to taxpayers who disagree with a tax decision issued by HMRC. As a first step, it may be possible to make an appeal against a tax decision. There is normally a 30-day deadline for making a claim, so time is of the essence. HMRC will then carry out a review, usually by using HMRC officers that were not involved in the original decision. A response to an appeal is ... read more A Margin Scheme is an optional method of accounting which allows certain businesses to calculate VAT based on the 'value' they add to the goods they sell, rather than on the full selling price. Without the use of the Margin Scheme, businesses would have to account for VAT on the full selling price of goods within the Margin Scheme.
There is a special Margin Scheme for the sale of ... read more There are special rules for the pre-trading expenses of a rental business. If the expenses were in relation to a letting, then a deduction may be allowed where the following conditions are met:
The expenditure is incurred within a period of seven years before the date the rental business is started, and
The expenditure is not otherwise allowable as a deduction for tax purposes, and
The ... read more Corporation Tax relief may be available when a company or organisation makes a trading loss. Companies that are eligible for Group Relief can transfer losses and certain other deficits to companies within the same group by means of Group or Consortium Relief. The use of Group Relief allows losses arising in the accounting period to be surrendered to a group company for that period. In addition, ... read more The SEIS provides for extensive Income Tax and Capital Gains Tax (CGT) breaks for investors and this greatly encourages much needed seed capital in new businesses. The SEIS is most valuable for taxpayers who can fully benefit from the tax reliefs on offer.
For investors the main benefits of the scheme are as follows:
Income Tax relief worth 50% of the amount invested to qualifying individual ... read more Employers who flout their automatic enrolment pension duties are being targeted with short-notice inspections by The Pensions Regulator (TPR). TPR is using data to pinpoint specific employers across the UK who are suspected of breaking the law, including those who fail to put staff into a pension scheme or who make no, or incorrect, pension contributions.
It is mandatory for employers to take ... read more Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK. The Student Loans Company (SLC) is responsible for collecting the loans of borrowers outside the UK ... read more Private pensions can be an efficient way to pass on wealth, but it is important to consider what, if any, tax will be payable on a private pension you inherit. The person who died will usually have nominated you by telling their pension provider that you should inherit any monies left in their pension pot. If the nominated person can’t be found or has since died, the pension provider may ... read more A charge to Capital Gains Tax (CGT) usually arises after an asset is sold. However, there are special rules concerning the sale of certain personal assets that are worth considering. That is because these assets or possessions with a predictable useful life of 50 years or less are normally exempt from CGT. A chattel is a legal term that defines an article of movable personal property. Chattels ... read more Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available Capital Gains Tax (CGT) of 10% is payable in place of the standard rate. CGT on the disposal of chargeable assets is usually chargeable at 20%. There are a number of qualifying conditions that must be met in order to ... read more Where a taxpayer owns a business as a sole trader or in partnership, a Capital Gain will be deemed to arise if the business is converted into a company by reference to the market value of the business assets including goodwill. This could give rise to a chargeable gain based broadly on the difference between the market value of the assets and their original cost.
However, in most cases the ... read more An Employee Car Ownership Scheme (ECOS) is a set of arrangements whereby employees acquire cars from a specified, often single source and within a specified financing framework. The use of an ECOS can be seen as a halfway measure between providing a company car and leaving an employee to make all their car arrangements privately.
An ECOS gives employees similar benefits to having a company car, ... read more HMRC continues to warn of the ever-present problem of fraudulent phishing emails. The emails typically look to obtain taxpayers personal and or financial information such as passwords, credit card or bank account details. The phishing emails often include a link to a bogus website encouraging the recipient to enter their personal details.
As with other fraudulent emails, these are not genuine ... read more The Help to Save scheme for people on low incomes was launched in September 2018. The scheme allows those in work entitled to Working Tax Credit and in receipt of Working Tax Credits or Child Tax Credits, to save and receive a 50% government bonus.
The scheme is also open to UK residents who are claiming Universal Credit and have a household or individual income of at least £569.22 for ... read more The Information Commissioner's Office (ICO) has launched a new "Be Data Aware" campaign to help people understand how organisations might be using their personal data to target them online and why, and how people can control who is targeting them. This includes, understanding how organisations use people’s data to reach them with social media adverts to market their goods or ... read more Two changes to the way Private Residence Relief works are due to come into effect from April 2020. These changes could reduce the amount of CGT relief available on the sale of a private residence. The government has said that the measures are being introduced to better focus Private Residence Relief at owner-occupiers and the changes will mostly affect home owners who let out their home, or part ... read more We would like to remind employers that the deadline for submitting the 2018-19 forms P11D, P11D(b) and P9D is 6 July 2019. P11D forms are used to provide information to HMRC on all Benefits in Kind (BiKs), including those under the Optional Remuneration Arrangements (OpRAs) unless the employer has registered to payroll benefits.
This is known as payrolling and removes the requirement to complete ... read more Most VAT registered businesses with a turnover above the VAT threshold need to be ready to keep digital records for VAT purposes, and to file their VAT returns, as required by the new Making Tax Digital (MTD) rules.
What does this mean?
For VAT return periods starting on or after 1 April 2019, businesses with a turnover above the VAT threshold (currently £85,000) have to:
keep their ... read more An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan obtained elsewhere. These types of loans are referred to as beneficial loans.
A taxable cheap loan is an employment-related loan:
which is outstanding ... read more There are special rules for the taxation of post-cessation receipts after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or Corporation Tax on the income. This does not have to be the same person who carried on the original trade.
HMRC manuals state that: a receipt which arises ... read more A Close Company is broadly defined as a company that is controlled by:
five or fewer participators or
any number of participators who are also directors or
where more than half the assets would be distributed to five or fewer participators, or to participators who are directors, in the event of the winding up of the company.
A participator is broadly somebody who has a share or interest in ... read more The weekly rates of child benefit for the only or eldest child in a family is currently £20.70 and the weekly rate for all other children is £13.70. These rates have remained unchanged for some time. Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child’s 16th Birthday. Under qualifying ... read more The National Insurance Contributions (NICs) Bill was introduced into Parliament on 25 April 2019. The Bill will see the introduction of a new 13.8% Employer Class 1A NIC charge on termination payments and sporting testimonials that are already liable to Income Tax from 6 April 2020. The government announced this change at Budget 2018.
This means that from next April, termination payments over ... read more Inheritance Tax (IHT) is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. Currently, no tax is payable when a person’s estate is worth £325,000 or less.
Certain business assets may be exempt
There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone ... read more The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take a taxpayer’s donation and provided all the qualifying conditions are met, can reclaim the basic rate tax allowing for an extra 25p of tax relief on every pound donated to charity.
Higher rate and additional rate taxpayers are eligible to claim tax relief on the ... read more The VAT Flat Rate Scheme (FRS) has been designed to simplify the way a business accounts for VAT and in so doing, reduce the administration costs of complying with the VAT legislation. The scheme is open to businesses that expect their annual taxable turnover in the next 12 months to be no more than £150,000.
In April 2017, HMRC introduced a limited cost test that can increase the VAT flat ... read more Families and individuals that receive tax credits should ensure that they renew their tax credit claims by 31 July 2019. Claimants who do not renew on-time may have their payments stopped.
HMRC has commenced sending tax credits renewal packs to tax credit claimants and is encouraging recipients to renew their tax credits claim online. All packs should be with recipients by the end of June. A ... read more It is common practise in the building industry for a final percentage of an amount due to a builder to be withheld as a retention. This payment allows the customer to retain part of the total payment due until satisfied that the builder has completed all the activities required of them under contract at an agreed level of satisfaction.
Typically, this may be for a 12-month period between a ... read more The cash basis scheme helps many sole traders and other unincorporated businesses to manage their financial affairs. The scheme is not open to limited companies and limited liability partnerships. Using the scheme, allows qualifying businesses to use the cash basis when recording income and expenditure.
You must have a turnover of £150,000 or less to join the scheme and you can continue ... read more The current Governor of the Bank of England, Mark Carney, will step down from his role on 31 January 2020. Mr Carney had been due to step down earlier but agreed to stay in his role to help support a smooth exit from the European Union. Although this has not yet happened, the Chancellor has confirmed that Mr Carney will step down in January 2020 as planned, and the search for a new Governor of the ... read more A new report from the Low Pay Commission (LPC) has found that the number of workers paid less than the statutory minimum wage in the UK increased in 2018. In April 2018, 439,000 workers were paid less than the hourly minimum wage rate they were entitled to. Of these, 369,000 were workers aged 25 and over paid less than the National Living Wage (NLW). This is an increase of around 30,000 on the ... read more 1 May 2019 - Due date for Corporation Tax due for the year ended 30 July 2018.
19 May 2019 - PAYE and NIC deductions due for month ended 5 May 2019. (If you pay your tax electronically the due date is 22 May 2019)
19 May 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 May 2019.
19 May 2019 - CIS tax deducted for the month ended 5 May 2019 is payable by today.
31 May ... read more It is over 10 years since Debt Relief Orders (DROs) were first introduced in April 2009. We have fleshed out the details of who can claim and some of the restrictions that apply.
What is a DRO?
A DRO is a special way of dealing with debts available to those with minimal assets and low income. If an application for a DRO is accepted, you will make payments over a specified period (usually 12 ... read more How much maternity leave can you take?
If you work as an employee and become pregnant you are eligible to take up to 52 weeks of statutory maternity leave. This is made up of 26 weeks of ordinary maternity leave plus an extra 26 weeks of additional maternity leave. If you give the correct notice period to your employer this means you are entitled to take a full year's leave.
Statutory ... read more Are you self-employed?
HMRC’s guidance says that you are probably self-employed if you:
run your business for yourself and take responsibility for its success or failure;
have several customers at the same time;
can decide how, where and when you do your work;
can hire other people at your own expense to help you or to do the work for you;
provide the main items of equipment to do ... read more Where a property business makes a loss, the loss can usually be carried forward and set against future rental business profits.
HMRC’s guidance is clear that any losses made in one rental business, cannot be carried across to any other rental business the customer carries on at the same time in a different legal capacity.
There is no special claim required to carry forward the losses and ... read more The transfer of a business as a going concern (TOGC) rules concern the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate.
However, where the sale of a business includes assets and meets certain conditions, the sale will be categorised as a TOGC. A TOGC is defined as 'neither ... read more Non-resident companies with a trading business in the UK are liable to pay UK Corporation Tax on their profits made through a permanent establishment/branch or agency.
If the non-resident company is deemed liable to pay Corporation Tax, then its chargeable profits are:
any trading income arising directly or indirectly through or from the permanent establishment/branch or agency,
any income ... read more HMRC’s VAT Notice 700/1: should I be registered for VAT? has recently been updated. The update reflects the fact that the taxable turnover threshold, that determines whether businesses should be registered for VAT has been frozen at £85,000 from 1 April 2019. In addition, the taxable turnover threshold that determines whether businesses can apply for deregistration remains at ... read more The VAT paid in other EU countries is often recoverable by VAT-registered businesses in the UK, who bought goods or services for business use. The exact rules of what VAT is refundable depends on the other countries' rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never be reclaimed on a domestic UK VAT return.
Claims must be made ... read more
Home to work travel that may be allowed
Its still possible to claim 100% tax allowance for electric vehicles
When you can’t reclaim VAT
Disposal of goodwill – capital or income
OpRA’s defined
Loss buying restrictions
Changes to the Employment Allowance
New guidance on cookies published
New cyber security guidance published
Reducing penalties for late disclosure of income
Advising HMRC of changes in your personal details
Tax payment time again
How HMRC measure the profits of different trades
HMRC security deposits
House of Commons summer recess
Tax-Free childcare in the school holidays
Checking business rates relief entitlement
VAT default surcharge appeal dismissed
Tax Diary July/August 2019
How ISAs work
Who should register for self assessment?
Claiming Entrepreneurs’ Relief when selling your business
Disguised remuneration schemes
Update on Structures and Buildings Allowance
HMRC employment status service
Rent-a-room scheme
2020 May bank holiday will be moved to mark 75th anniversary of VE Day
Gifts with strings attached
The tax consequences of social events
Selling the family heirlooms
When does ATED apply?
VAT and disaggregation
HMRC’s complaint handling process
Free television licences scrapped for over-75s
HMRC cancels penalties charged to 6,000 families
HMRC blocks phone fraudsters
On your e-bike
Genuine HMRC messages
Free information about companies
Employer owned property and sub-letting
Cashback schemes and tax
VAT reverse charge construction industry
Working past retirement age
Working from home allowance
Working tax credits you could claim
New crackdown on funeral plans
What records must a VAT trader keep?
IHT and foreign property
Non-resident company liability to Corporation Tax
New advisory fuel rates published
Tax Diary June/July 2019
Deadline to reduce taxable benefits
Have you adopted the new minimum wage rates?
Not sure if you need to submit a tax return?
Company Unique Taxpayer References
Reminder of “bed and breakfasting” rules
What is overlap relief?
Tax and lease premiums
Less is more – MTD regulations relaxed
Claim for money owed to you
Reasonable excuses for late payment or filing
VAT Margin Scheme on sales of vehicles
Pre-trading expenses for a rental business
Companies eligible for Group Relief
Seed Enterprise Investment Scheme
The Pensions Regulator targets law-breaking employers
Want to pay-off your student loan in full?
Tax on a private pension you inherit
CGT and chattels
Entrepreneurs’ relief minimum period increased from April 2019
The scope of CGT incorporation relief
Employee Car Ownership Scheme (ECOS)
HMRC phishing emails warning
Using the Help to Save scheme
Be Data Aware campaign
Landlords, time to consider your options?
Submitting P11Ds is just the start of your obligations
Last call, are you ready for revised digital filing of your VAT returns?
Chargeable benefits from cheap loans
How to treat post-cessation items if property business ceases
What is a Close Company?
Child benefit payments
NICs and termination payments
What is business relief for Inheritance Tax purposes?
Will your gift aid donations create a tax bill?
Beware Limited Cost Test if you use the VAT Flat Rate Scheme
Renewing your tax credit claim
Dealing with builders retentions
Treatment of capital expenditure if using the cash basis
Search launched for new Bank of England governor
Minimum wage underpayment is on the rise
Tax Diary May/June 2019
Debt Relief Orders
Maternity pay explained
How to register as self-employed
Dealing with property income losses
VAT and transfer of business as a going concern
Corporation Tax for non-resident companies
VAT registration thresholds
Making an EU VAT refund claim
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