Salary Sacrifice for Auto Enrolment Pensions

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Pension contributions under Auto Enrolment are by default split between employer and employee. From the 6 April 2019: Employer contributions must be at least 3% Total contributions must be at least 8% Many employers will simply treat the difference (currently 5%) as employee contributions.  The problem with this approach is that whilst all contributions are […]

Directors could face jail term for pension mis-management

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The government is to introduce a new criminal offence of ‘wilful or reckless behaviour’ in relation to pensions which would see directors facing up to seven years in jail. In its response to a consultation on protecting defined benefit contribution pension schemes, which ran from June to August last year, the government said it will […]

Minimum pension contribution rates to increase in April

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Minimum contribution rates under automatic enrolment are due to rise from 3% to 5% for employees and 2% to 3% for employers from 6 April 2019. The Department for Work and Pensions (DWP) says its research suggests saving behaviour is sticking: the first increase in minimum contributions which took place last year has not prompted […]

“No Deal” Brexit Planning: Intellectual Property & Trademarks

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If the UK leaves the EU on 29 March 2019 without a deal this could have an impact on any EU Intellectual Property or Trademarks held by a business. At this point in time it is not clear if EU trademarks would be applicable in the UK post Brexit. If you own intellectual property rights […]

“No Deal” Brexit Planning: EU Employees working in the UK

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If the UK leaves the EU on 29 March 2019 without a deal the there may be considerations needed for your current and future workforce You may need to:. 1. Review all EU employees currently working in your business and ascertain whether they are applying for “Settled status” by 31 December 2020. See the Employer […]

“No Deal” Brexit Planning: VAT

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If the UK leaves the EU on 29 March 2019 without a deal, the government’s aim will be to keep VAT procedures as close as possible to what they are now, providing continuity and certainty for businesses. However, there will be some specific changes to the VAT rules and procedures that apply to transactions between […]

Uber loses landmark case over workers rights

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Uber has lost a landmark case over worker rights, entitling UK drivers to minimum wage and sick leave. The Court of Appeal upheld a 2016 ruling, refuting the ride-hailing app’s claim that its drivers are self-employed. Earlier this week, the government said that it would look into workplace policies to help preserve gig economy jobs. […]

Iceland supermarket accused of breaching minimum wage rules

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A savings scheme to help lceland staff save for Christmas could end up costing the supermarket at least £21m, after it was accused of breaching minimum wage rules.The scheme allows low-paid staff to have a sum deducted from their weekly paypacket and placed into a separate account, to be returned on demand, usually at Christmas. HM Revenue […]

Skills to learn for the future of work according to the World Economic Forum

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Having a good memory or a strong command of maths may have once rated high on your list of professional skills. But now that devices handle those tasks, the World Economic Forum is urging workers to skill up for the future. Analytical thinking, initiative and ideation will overtake manual dexterity, time management and speaking abilities. Managers may […]

How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?

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In December 2018 HMRC published guidance on the taxation of cryptoassets. HMRC confirms that: Most investors will be subject to Capital Gains Tax on gains and losses.. It will be rare for investment in cryptoassets to be regarded as trading, although ‘mining’ is likely to indicate a trading activity. A capital loss may be claimed […]

Renewable power generation in the UK reached a record high in 2018

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A third of all energy generated in the UK last year was from renewable sources, according to climate research and news site Carbon Brief. Drawn from UK government data, the analysis found electricity generated from fossil fuels fell to a record low. The UK has cut its carbon emissions by more than 43% since 1990, but is still not […]

Getting tax relief sooner when you donate to a charity

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Claiming higher rate tax relief for charitable donations made. In your Self Assessment tax return, you normally only report things that occurred in the tax year in question.  But for charitable donations, you can also claim tax relief on donations you make in the following tax year up to the date you send your return.  […]

Christmas staff party: what can be claimed?

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A staff party or an annual function qualifies as a tax-free benefit for your employees providing that you meet the following conditions: The total cost must not exceed £150 per head, per year. £150 includes VAT together with any extra costs such as transport and accommodation. The £150 is a limit and not an allowance: if the cost is £151, the whole […]

6 things to do when employing staff

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HMRC lists 6 things you need to do when employing staff for the first time. Decide how much to pay someone – you must pay your employee at least the National Minimum Wage. Check if someone has the legal right to work in the UK. You may have to do other employment checks as well. Apply for a DBS […]

Pensions: how does tax relief work?

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An individual makes their pension contributions out of their taxed and NIC’d income. Most individual pension contributions are made “net of tax”.  The pension scheme will then gross up the payment by claiming 20% tax relief from the government.  So for £80 contributed by the individual, the scheme also gets £20 from government, giving a […]

Southern Western Railway has backtracked on its decision to not allow passengers to use reusable cups

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The company faced backlash after it emerged that passengers wanting to fill their own reusable cups with hot drinks bought on board were being denied. A spokesperson for the rail operator has confirmed the change in policy, which they say reflects their “ongoing commitment to manage our environmental impact”. Around 2.5 billion disposable cups are […]

How you treat your employees will determine the fate of your company

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Business magnate Richard Branson, founder of the Virgin Group, believes that employers should put their employees before their clients. “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients. Most businesses put customers first while employees are just secondary. Employees are the branches […]

Post-employment notice pay (PENP)

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Post-employment notice pay (PENP) is a concept that was introduced in legislation from 6 April 2018.  This effects whether payments at the end of an employment fall within the £30,000 tax free amount.  Prior to these new rule payments in lieu of notice (PILONs) could be tax free if non contractual.  Now, any element that […]

Is there such a thing as too much teamwork?

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Open plan offices and the use of messaging apps have encouraged always-on, constant collaboration at work. But research from Harvard’s Ethan Bernstein suggests that we develop more, and better, solutions to problems when we take occasional breaks from the group so we can ponder on our own. Such intermittent collaboration strikes an ideal balance between […]

Cost of rubbish

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Retailers could be forced to pay up to £1bn for recycling under the government’s new waste initiative.  Supermarkets, retailers and major drinks brands currently pay just 10% of the cost of collecting and sorting the 11 million tonnes of packaging waste produced in the UK. The government strategy, expected to be published this month, will […]

Record keeping & tax: what, how and until when?

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Good record keeping is vital, not just to ensure timely and accurate filing of tax returns but also in the event of any challenge by HMRC. Penalties can also be levied if your records are incomplete or inaccurate. Generally, you need to keep sufficient records to support any income or expenses included in a tax […]

The new sugar tax

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The new sugar tax on soft drinks has raised £153.8m since it was introduced.  While initial forecasts estimated the sugar tax would raise around £520m a year, manufacturers have reduced the amount of sugar they use to avoid the levy – one of the government’s intended goals. The new tax is applied to soft drinks […]

Recreational benefits

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An employer can provide sporting or recreational benefits tax-free to: Its employees. Any member of their family and household. Main conditions: Benefit to be available to all staff. Benefit not generally available to the public. Benefit cannot include vehicles, holidays or take place in domestic premises. Unfortunately the exemption excludes membership to public gyms and sports […]

The Circular Economy Model: Reuse, Remanufacture or Recycle

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With August 1 marking Earth Overshoot Day, the point during the year that we will have consumed the ecological resources and services that Earth can regenerate in one year, it is clear that something has to change. The circular economy requires a significant shift in mindset, starting with the design process, which must ensure that […]

Class 2 NICs to continue for self-employed

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In 2016 the government consulted on a proposed abolition of Class 2 National Insurance contributions (NICs) for the self-employed. This flat rate contribution, currently £2.95 a week is payable by the self-employed in addition to Class 4 contributions based on the level of profits. The flat rate contributions were due to cease on 5 April […]

Is it time to sell your property?

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Budget 2018 changes to capital gains tax could trigger a higher capital gains tax bill for properties sold on or after 1 April 2020. From 1 April 2020, the final 18 months deemed occupation period reduces to nine months. Some details are yet to be published by government but generally speaking if you are selling […]

Corporation tax rates

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For some years the corporation tax rate for small companies was 20%. The corporation tax rate was reduced to 19% from 1 April 2017. The corporation tax rate is set to reduce to 17% from 1 April 2020.

ISAs

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ISAs The 2018/19 overall limit for ISAs is £20,000. This can be invested in cash or stocks and shares. Any income or gains arising on the investments will be tax free. As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like […]

Transfer income-producing assets to your spouse or civil partner

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Transfer income-producing assets to your spouse or civil partner Transferring assets such as property or quoted investments to a spouse or civil partner is accepted by HMRC provided there is an outright gift with no conditions attached to it. Save income tax on share dividends:  Following the change in how dividends are taxed, it can […]

Tax rises anyone?….do turkeys vote for Christmas?

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We’ve long argued that better public services require better funding, which in turn requires more income for public bodies to spend….i.e. more tax of some description. Good to see mainstream media raising this issue:  https://www.theguardian.com/commentisfree/2018/nov/06/raise-tax-british-political-disease-public-services One way to address this would be to allow Government to continue to set all tax laws, reliefs, calculations, but […]

New tax on global digital businesses

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To try and ensure that digital businesses pay tax that reflects the value they derive from UK users, the government has announced that it will introduce a Digital Services Tax (DST) which will raise £1.5bn over four years from April 2020. The DST applies a 2% tax on the revenues of specific digital business models […]

Changes to Stamp Duty

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Chancellor Philip Hammond has announced plans to abolished Stamp Duty for all first-time buyers of shared ownership properties up to £500,000. This will also be implemented retrospectively for any shared-ownership buyers since the first-time buyer exemption was introduced in November 2017. As with all of our tax tips and web pages this information is necessarily […]

Budget News – the deficit is huge and is set to get worse

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Government finances are getting worse.  Despite the skewed headlines, the budget figures tell us the deficit is set to continue to INCREASE. Somehow the media are headlining “deficit cuts” despite the Budget 2018 predicting increases in UK debt (i.e. further deficits) of £20 billion to £25 billion per year for the foreseeable future with no […]

Office of Tax Simplification – Survey

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The Office of Tax Simplification is asking owners of small businesses to complete a ten minute survey: https://www.gov.uk/government/consultations/ots-business-lifecycle-review-call-for-evidence-and-survey If you complete this, please let us know your feedback.

Charities’ annual return deadline 31 October 2018

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The cut-off date for submitting the 2017 annual return is 31 October 2018, if a charity has a 12-month accounting period (ends in December). While thousands of charities have already filed, the regulator cautions that those who have left it late risk trying to file nearer to the deadline, potentially without the correct information or […]

Student loan repayment threshold rises by 2.9%

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The government has increased the loan repayment thresholds (the amount graduates can earn before making repayments) for student loans by 2.9% and confirmed the introduction of a postgraduate loan system deductible from PAYE effective 6 April 2019. The Department for Education (DfE) has confirmed that from 6 April 2019 the thresholds will increase for tax […]

Call for action over £20bn lost pension pots

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As much as £20bn of savings could be sitting in over a million so-called ‘lost pension pots’ where savers have lost touch with their providers according to analysis from the Association of British Insurers (ABI), which says this underlines the need for the government’s proposed pensions dashboard. Most people have moved jobs or houses at […]

UK financial security

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In a recent report Norway ranked as the most secure nation with a war chest built on its publicly held oil wealth.  This is in contrast to the UK which is one of the least financially secure, which allowed private sector companies to extract North Sea oil reserves and has spent the tax revenues.

EU adopts proposal to cut VAT on e-books

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The Professional Publishers Association (PPA) has welcomed an EU decision to reduce VAT on online publications, including electronic books, newspapers and periodicals. At present, electronically supplied services such as digital publications are taxed at the standard VAT rate, which in the UK is 20%. This contrasts with traditional media, which is zero-rated. The directive, which […]

HMRC update guidance on salary sacrifice for employers

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HMRC’s salary sacrifice guidance has been updated to provide information about the effect of employees changing from childcare vouchers to the new tax-free childcare scheme. Salary sacrifice for employers explains how to set up a salary sacrifice arrangement and calculate tax and National Insurance contributions. The guidance has been updated to add more information about […]

Brexit: Risks for UK and EU companies

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With less than six months until the exit, the main risks areas businesses may face are as follows: 1. Cyber-attacks: future cooperation between the UK and EU on this issue remains uncertain. No deal will have a knock-on effect on security. Businesses are concerned that the future involvement of the UK in organisations such as the […]

Frack Off

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If the IPCC is even close to being right about its timeline, speeding up the transition from fossil fuels to renewables is vital if we are to prevent passing the “tipping point” unleashing climate chaos. Can that be done? One of the winners of this year’s Nobel prize for economics – William Nordhaus – says […]

Bizarre excuses given for late Companies House filings

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An erupting volcano and a paper-eating goat are just two of the unusual explanations provided by directors for their inability to file their company accounts on time, according to this year’s analysis by Companies House of the most unusual excuses it received. Other reasons given for not meeting the deadline included the filer finding his […]

EU countries lost almost €150bn (£134bn) in VAT revenues in 2016

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European Commission analysis shows EU countries lost almost €150bn (£134bn) in VAT revenues in 2016, with the UK and Ireland among six member states reporting an increase in the ‘VAT gap’ between expected revenue and the amount actually collected. Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs said: ‘Member states have been […]

Small charities failing to provide accurate financial data

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According to a Charity Commission survey, not enough small charities are providing correct information in their annual returns because too many are relying on someone with insufficient knowledge of their organisation’s accounts, leading to errors. In a review of a sample of charities, 38% of charities with incomes below £25,000 per annum were found to […]

Register for 2017-18 self assessment by 5 October

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The deadline for registering for self assessment is 5 October 2018 for the 2017-18 tax year.  If you have registered in the past then no action is needed, the deadline is for new self assessment cases. Anyone submitting a self assessment return for the first time – including higher income child benefit charge (HICBC) taxpayers […]

Childcare vouchers deadline 4 October 2018

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The Government will withdraw the tax and National Insurance relief associated with childcare vouchers for brand new applicants from 4 October 2018, with Tax-Free Childcare (TFC) providing help with childcare costs instead. For anyone who has not claimed childcare vouchers yet, it means they need to join in time for their employer to action their […]

Government announces Class 2 NIC will not be abolished during this Parliament

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The Government has announced that it will not proceed with the abolition of Class 2 National Insurance contributions (NICs) during this Parliament. The announcement was made on 6 September 2018. The abolition of Class 2 NIC was originally intended to simplify the tax system for the self-employed, however, implementation of the policy was delayed in […]

Brexit uncertainty hits future planning at businesses

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Lack of clarity around the Brexit process is hitting preparations for business after the UK leaves the EU, with only a third of finance professionals in large businesses reporting their organisation has started scenario planning and just 20% of those in small organisations, according to a poll. Around eight out of 10 of the respondents […]

Registering for Self Assessment – 5 October deadline

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The deadline for registering for Self Assessment is 5 October following the end of the tax year, You must tell HMRC that you need to prepare a tax return if you have any of the following: Self employed income (sole trader, freelancer, partner etc) Made a capital gain. Have employment income not taxed under PAYE. […]

HMRC targets inheritance tax returns

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Rising house prices and increases in other assets have seen HMRC launch more investigations to ensure individuals are paying the correct amount of inheritance tax (IHT), with the number of tax probes up by 5% this year. If an investigation finds that IHT has been underpaid, the estate may have to pay all of the […]

HMRC outlines ‘no deal’ preparations for EU-only UK traders

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HMRC has written to 145,000 VAT-registered businesses across the UK, including Northern Ireland, which only trade with the EU, explaining changes to customs, excise and VAT in the event of a ‘no deal’ Brexit, which would require them to complete customs declarations for the first time. While HMRC stresses that it is ‘unlikely’ the UK […]

UK employees less ethical than European counterparts

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UK employees seem to take a more lenient approach than the average European employee to questionable workplace practices, according to a survey by the Institute of Business Ethics which found that 38% believe petty fiddling is inevitable in a modern organisation compared to 30% of their European counterparts. The survey sought to establish whether employees […]

How to tax gains made on cryptocurrencies

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Many people will have heard of Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, perhaps Stellar, Tether or Eos and there are thousands of new forms of cryptoasset which are less currency like and can have other attributes which can make them essentially a form of tokens tradable on different platforms worldwide. How do you tax Bitcoin? […]

Students – claiming a tax refund

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The Low Incomes Tax Reform Group (LITRG) is reminding students who have been working over the summer to make sure they have not overpaid tax and, if they have, to claim a refund from HMRC. Students are more likely to overpay tax as they usually only work – or earn more – at certain times […]

HMRC warns taxpayers to declare offshore income and assets

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HMRC is urging UK taxpayers to come forward and declare any foreign income or profits on offshore assets before 30 September to avoid higher tax penalties. New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax. Some […]

Checking your pensions savings annual allowance

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HMRC have updated their guidance on the rules for carrying forward the unused pension savings annual allowance, together with a calculator on their website. For most taxpayers the maximum amount of pension savings that qualifies for tax relief each tax year is £40,000. It is possible to increase this amount by utilising unused relief brought […]

HMRC update guidance on paying the Apprenticeship Levy

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HMRC have updated guidance on how to allocate the apprenticeship levy allowance across multiple PAYE schemes and/or connected companies and charities. Pay Apprenticeship Levy explains when the apprenticeship levy needs to be paid and how to report payments. The guidance has been updated at the section about ‘how to allocate your allowance’. The apprenticeship levy […]

United Nations initiative issues sustainability guide

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The United Nations Global Compact and the Global Reporting Initiative (GRI) have released a practical guide for companies to use when measuring their environmental impact. Integrating the SDGs into Corporate Reporting: A Practical Guide, developed with support from PwC and Shift, makes plain the steps needed to set business objectives and both measure and report […]

Government outlines VAT implications if no Brexit deal

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The Government has set out the VAT implications for businesses in the event of a “no-deal” Brexit. For most UK businesses there will be no change to the VAT rules.There will, however, need to be some specific changes to VAT rules and procedures applying to transactions between the UK and EU member states. The key […]

HMRC late payment interest rates revised

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On 2 August 2018, the Bank of England Monetary Policy Committee voted unanimously to increase the Bank of England base rate to 0.75%. HMRC interest rates are linked to the Bank of England base rate and, as a consequence of the change, HMRC interest rates for late payment have also increased.  These changes came into […]

Plans for vaping ‘sin tax’ under challenge

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Suggestions that the government is planning a new ‘sin tax’ on vaping, in order to raise an additional £40m in tax revenue to help fund its commitment to a £20bn boost in NHS funding, have been strongly opposed by the UK Vaping Industry Association (UKVIA) on the grounds the move risks damaging public health. A […]

HMRC publish guidance on pension savings annual allowances

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If pension savings are more than the annual allowance, unused annual allowances from previous years can be brought forward. The annual allowance is the limit on the amount of pension savings that can be made to all pension schemes in a tax year before tax has to be paid on them. Pension savings over the […]

Restrictions on “rent-a-room” relief from April 2019

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Currently rent-a-room relief gives relief from income tax for up to £7,500 of gross rental income to individuals who let furnished accommodation in their only or main residence. HMRC propose to restrict the availability of “rent a room” relief to situations where the taxpayer is living in the let property for at least some of […]

Ask Alexa to contact HMRC for help

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HMRC has launched new and innovative technology to help more than 3 million customers renew their tax credits. HMRC has developed a customer-focused service through Amazon Alexa specifically for those seeking help with their tax credits renewals. Customers with Amazon Alexa-enabled devices can ask Alexa to ‘open HMRC’ and ask for help and information with […]

First software providers for Making Tax Digital VAT announced

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From April 2019, any VAT registered business with taxable turnover above the registration threshold will be required to submit digital VAT records and make digital returns as part of HMRC’s Making Tax Digital format. Voluntary VAT registered businesses with turnover below the VAT registration threshold will not be required to take this new approach until […]

Valuing an unlisted business

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If you are looking to sell your business, you will need to know what it is worth. There are various valuation methods however when valuing a business for sale to continue trading, typically a value model is something like this: Expected future annual profit before tax (HMRC require this to be provable by reference to […]

Extra NHS funding will see taxes increase

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The government’s announcement that the NHS is to receive increased funding of £20.5bn per year by the end of five years, has signaled future tax increases.  The funding will be front-loaded with increases of 3.6% in the first two years, which means £4.1bn extra next year. May said this long-term funding commitment means the NHS […]

Ebay and Amazon pledge to assist with VAT compliance

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The growth in online e-commerce is an important part of the UK economy but has also created opportunities for abuse of the VAT system. HMRC have asked for the assistance of online market place companies to help them identify online trader who may not be complying with the requirement to register for VAT. Ebay and […]

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