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 […]
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.
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’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 […]
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 […]
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 […]
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 […]
VAT Returns and EC Sales List: commercial software suppliers is published by HMRC to assist businesses find recognised suppliers and software for filing VAT Returns online. The main VAT return can also be submitted using the HMRC free online product: Online tax return – Value Added Tax. HMRC has tested all the features of that […]
The Chancellor has announced that the 2018 Budget will be held on Monday 29 October 2018.
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 […]
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 […]
Data provided by Companies House shows that the number of private and public limited companies receiving penalties for late filing has increased significantly in four years. In 2014/15, the number of penalties issued in England and Wales stood at 165,000 with a total value of around £78m. However, in 2017/18 the number had reached 204,000 […]
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 […]
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 […]
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 […]
HMRC is urging millions of employees such as nurses, hairdressers and construction workers to go online and directly check if they can claim extra cash back for work-related expenses, amid concerns they could be missing out on their full tax relief entitlement by using agencies instead. The tax authority says some 85% of eligible taxpayers […]
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 […]
You only have until the 3 October 2018 to join the Childcare Voucher Scheme. Assuming you are in this scheme prior to this date you can keep getting vouchers as long as: you stay with the same employer and they continue to run the scheme you do not take an unpaid career break of longer […]
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. […]
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 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 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 […]
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? […]
Under Making Tax Digital (MTD) for VAT, most VAT registered businesses will have to report VAT in new way. If your turnover is above the registration threshold in the year to 31 March 2019 then from 1 April 2019 you must: Keep your bookkeeping records for VAT digitally Stop using HMRC’s portal to submit your […]
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 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 […]
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 […]
Certain traders can be made liable for the unpaid VAT of another VAT-registered business when you buy or sell specified goods. HMRC have recently updated VAT notice 726 which advises traders to carry out due diligence into their supply chain. The specified goods are any equipment made or adapted for use as a telephone and […]
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 […]
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 […]
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 […]
The Low Incomes Tax Reform Group (LITRG) has published a technical news article about opting out of a workplace pension. Low income workers who have been put into a workplace pension under the auto-enrolment programme resulting in less take-home pay may be considering opting out. The LITRG explains the longer-term consequences of opting out so […]
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 […]
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 […]
The Office of Tax Simplification (OTS) is calling for further work on the potential for a new form of trading vehicle, the sole enterprise with protected asset (SEPA), which would be simpler to administer. Research has found that one of the main reasons for forming a limited company is to obtain limited liability protection, but […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
Owners of second homes and buy-to-let (BTL) landlords face a much shorter period in which to pay any capital gains tax (CGT) due on property sales from April 2020. Where Capital Gains CGT is due, a disposal is normally reported to HMRC in a self-assessment tax return. Under self-assessment, any CGT must be paid by […]
The World Cup, which starts today, is a great opportunity for businesses around the world to capitalise from employees’ national pride. However, the tournament features many games during work hours, causing workers to have to potentially miss games, which can cause staff to feel unmotivated. It is therefore important to set clear rules for you […]
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 […]
HMRC have confirmed that no further Make Tax Digital (MTD) for business changes will be brought in before 2020 at the earliest. The Treasury set out its revised priorities for current digital transformation projects, to make room for the additional demands on its resources of work to upgrade customs systems in preparation for Brexit. For […]
The Office of Tax Simplification (OTS) have been tasked with carrying out a review of Inheritance Tax (IHT) with a view to simplifying how the tax operates. IHT is perceived to be complicated and currently yields a relatively small amount of tax compared to income tax and national insurance. There are a number of reliefs […]
In Palmer [2018] TC 06411, the First Tier Tribunal has decided that although there was no reasonable excuse for the late filing of a return, the penalties charged should be reduced by 70% because the taxpayer was a first time filer. This case is another reminder of how penalties can be mitigated even if there […]
We have recently advised on a case where a furnished holiday let cottage is being sold, from a small portfolio of such properties. A key question on such an arrangement is whether Entrepreneurs Relief (ER) applies on the sale of a single property from such a business. For ER to apply there must be an […]
In April 2016, new rules were brought in requiring companies to disclose Persons with Significant Control (PSC). PSCs are those who own at least 25% of a company’s shares, hold at least 25% of the company’s voting rights or have control over appointments to the board of directors. The PSC register is designed to reduce […]
A recent case reminds us that personal representatives must pay HMRC Inheritance Tax. In the case “G Harris as personal representative of HM (deceased)” the personal representative had distributed all funds to a beneficiary who promised to pay the inheritance tax. The beneficiary (a brother of the deceased) moved abroad and cannot be located. HMRC […]
The subject of classifying food and drink expenditure is a tricky area, not helped by HMRC’s vague guidance on the matter. There are VAT and corporation tax consequences depending on what classification you use so it is important to get it right. Generally, food and drink expenses incurred by a business can be categorised into […]
If related businesses are trading in parallel there is the possibility that HMRC could argue the turnover of each business should contribute to the same VAT registration threshold (£85,000 until at least April 2020) rather than each business separately. This is known as “business aggregation for VAT purposes”. Put simply rules prevent businesses artificially staying […]
The process for administering and agreeing PSA has changed to reduce the burden for employers. From 6 April 2018, a PSA will be agreed between the employer and HMRC and will remain in place for subsequent tax years unless changed or cancelled by the employer or HMRC. This means that employers will no longer have […]
During February 2018, nine out of thirteen cases for personal tax late filing penalties taken to the First Tier Tribunal were found in favour of the tax payer. The majority of these verdicts were given on the basis that the penalties were generated automatically and not by a “flesh and blood” person and therefore did […]
With effect from 6 April 2017, individuals with foreign pension income will be taxed on 100% of the income in the tax year regardless of when they started to receive the pension payments. The 10% foreign pension allowance no longer exists. Further information can be found in HMRC’s Employment Income Manual As with all of […]
With the school summer holidays approaching, many businesses will look to employ young workers to help meet seasonal demands and to provide valuable work experience. Young workers have additional rights which must be followed strictly: Children below age 13 cannot work. Children aged 13 to 15 can only work part time. Children aged 16 or […]
Update 29.5.2018: It has been reported that the European Commission has approved the state aid implicit in UK Enterprise Management Incentives. Post as at 9.5.2018: The EMI share option scheme introduced in 2000 was the most tax efficient scheme to attract and retain key staff, providing employees in receipt of qualifying options with significant tax […]
With summer approaching, it is important to consider the affect of hot weather on the working conditions of your employees. Whilst there is no legal upper limit to temperature in the workplace, it must remain ‘reasonable’. What is considered reasonable must be judged against your particular work environment. The risks of high temperature must be […]
Despite popular belief, UK employees are not legally entitled to bank holidays off work. The decision on the matter ultimately depends on the contract of employment. It is possible however, for a contractual term to be implied. For example, if an employee has regularly allowed the employees to have the bank holiday off, then it […]
The tax treatment of termination payments changed from 6 April 2018 and further changes will come into effect in 2019. Pay In Lieu of Notice Employers now need to pay Income Tax and Class 1 National Insurance Contributions (NICs) on an element of all termination payments from 6 April 2018, whether or not they are […]
The General Data Protection Regulation (GDPR) comes into force on the 25 May 2018. It’s a single set of rules that is designed to protect the privacy of individuals in their private, professional or public life. The regulation will change the way personal data can be collected, used and transferred. Businesses will need to know […]
HMRC emails have long been used by scammers to try and entice you with “tax refunds” or other rebates into entering personal details, including bank account information, into fake websites. First and foremost, HMRC will never ask you for your bank details by email, and whilst they send the majority of communications by post, they […]
HMRC has won the first in a series of appeals concerning the application of employment intermediaries legislation to BBC television presenters, after a first tier tribunal decided that IR35 applied to the arrangements under which the BBC contracted a presenter of the regional news programme, Look North. The appeal concerned the BBC engaging presenters through […]
When a business changes entity, e.g. from a sole trader or partnership into a limited company, to what extent does the VAT status of the original entity affect the new one? The important point is whether the original entity was a taxable entity, this means that they were either already VAT registered or liable to […]
HMRC have the right to investigate any taxpayer. An investigation can occur at any time and the cost of dealing with their enquiry can be expensive. HMRC use software to look for anomalies within taxpayer records and follow a complex and lengthy procedure requiring specific evidence and in depth answers. Evidence and answers that are […]
If you are planning to go on maternity leave from your employment, it is important to be aware of the dates which affect how much statutory maternity pay you will receive. The basic rules of pay are 90% of you average weekly earnings for the first 6 weeks and then the statutory figure of £145.18 […]
Accounting Standard – Accounting periods beginning on or after 1 January 2016 can no longer be prepared using the Financial Reporting Standard for Smaller Entities (FRSSE). Accounts for most companies with turnover up to £632,000 will be prepared under the Micro Entities Regime (FRS105). Micro accounts lack detail and so we also prepare detailed accounts […]
Employment law has developed to acknowledge that some individuals are not self-employed or employed, but are “workers” with some limited employment rights. In tax law there are still only two statuses: employed or self-employed. If an individual is a worker for employment law they are likely, but not necessarily, they will be self-employed for tax […]
The most successful entrepreneurs focus on their mental and physical fitness. The two are inextricably linked. Most IronMan triathletes are senior business people and successful entrepreneurs. A good workout helps to clear your mind and prepares you to face the daily challenges of your business.
Making sure your people feel valued is vitally important. People who feel valued tend to be more committed to their employers and also tend to go the extra mile, when necessary. One of the most important duties of any manager is to ensure that their team members feel that their work is appreciated. To ensure […]
Many of the recent changes in the taxation of buy to let rental businesses do not apply to property businesses that qualify as furnished holiday lettings (FHL). In particular the restriction on deductibility of finance costs that started to apply from 2016/17 does not apply to furnished holiday lettings. It may be worth considering investing […]
Investing more in your pension on or before 5 April 2018 that payment can be taken into consideration in computing your 2017/18 liability and hence you might be able to claim to reduce your payments on account, if you make them. The maximum pension contribution is generally £40,000 each tax year, although this depends on […]
Set time aside to read about your industry, related industries, current affairs, pop culture and what is trending around the world. Bookmark or tag articles that you come across throughout the day and come back to read them during your dedicated “reading time”.
Before 6 April 2018, individuals may invest in companies that qualify under the Enterprise Investment Scheme (EIS) and treat that investment as having been made in 2016/17. The tax relief is 30% of the amount invested. So a £20,000 investment can reduce the 2016/17 tax liability by £6,000. Investing in a Seed EIS qualifying company […]
Making Tax Digital (MTD) for VAT is scheduled to start in April 2019 which means that your VAT information needs to be submitted to HMRC digitally. On 18 December 2017, HMRC published draft legislation together with examples of how the business account records might link with the HMRC computer in order to comply with MTD […]
Much of the focus in the Autumn Budget on Stamp Duty Land Tax (SDLT) concerned the abolition of the duty for first time buyers of property up to £300,000. There was also welcome news for those involved in other property transfers where the 3% supplementary SDLT charge potentially applies when an interest in a second […]
Indexation allowance was introduced in the 1970s to provide relief from paying tax on inflationary gains based on increases in RPI. The relief was abolished in 1998 for individuals and trusts, and replaced with taper relief. However, it was retained for companies. The Autumn Budget announced that indexation for corporation tax would cease for disposals […]
For a number of years there has been a generous 100% tax break for businesses that install energy saving technology in their premises. This is in addition to the £200,000 annual investment allowance for plant and machinery. The technology that qualifies for this 100% tax break includes energy efficient boilers and energy saving lighting systems. […]
Whilst on the subject of inheritance tax planning, why not consider setting up a standing order to family members? Such regular gifts can be outside of the scope of inheritance tax provided they are made out of surplus income and not out of capital. It would be necessary to demonstrate that you are left with […]
New inheritance tax rules for passing on the family home started on 6 April 2017. This new relief should be taken into consideration when drafting your Will to make sure it is tax efficient. From 6 April 2017 an additional nil rate band of £100,000 is now available on death where your residence is left […]
For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer. Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the […]
Now is a good time to start planning your tax affairs before the end of the tax year on 5th April. An obvious tax planning point would be to maximise your ISA allowances for the 2017/18 tax year (currently £20,000 each). You might also want to consider increasing your pension savings before 5 April 2018 […]
From 6 April 2018, unincorporated property businesses can now use a fixed rate mileage rate for business journeys by car, motor vehicle or goods vehicle as an alternative to claiming capital allowances and actual expenses. This information is courtesy of 2020 As with all of our tax tips and web pages this information is necessarily […]
Reforms to NICs will now take effect from April 2019 including abolition of Class 2. This had been previously announced to be from April 2018. This information is courtesy of 2020 As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like […]
It is long established that training costs learning new skills is not tax deductible for self-employed. This is because costs of learning new skills is deemed by HMRC to be capital not revenue expense. The government are now consulting on extending the scope of tax relief currently available for work-related training costs. As with all […]
Disincorporation relief will not be extend beyond the current 31 March 2018 expiry date. HMRC
Should I be trading as a sole trader, partnership, limited liability partnership (LLP), company limited by shares, company limited by guarantee or a Community Interest Company (CIC)? There are a series of issues that need to be considered when deciding which type of trading entity to use: What is the expected profit of the business […]
Business losses for a sole trader or partnership may be utilised in various ways. Firstly losses can be set against other income arising in the year of loss or the previous year. A loss in incurred in the year in which the trade commences or any of the next three years may set against total […]
In a recent tax case HMRC proved that a trader claiming to operate through a limited company was actually trading as a sole trader. In order to “trade through a limited company” more is needed than simply creating a company at Companies House. It is also necessary to actually operate through the company: All […]
The following rates can used for fixed rate mileage: Car or van First 10,000 business miles 45p Additional business miles 25p (remains 45p for national insurance purposes only) Motorcycles 24p Bicycles 20p Passenger payments 5p (all per mile) Note that these rates cover fuel, insurance, services, repairs, MOT, road tax, and car depreciation. […]
The rules for salary sacrifice arrangements changed with effect from 6 April 2017 and HMRC have updated their guidance for employers. Apart from 5 exceptions the amount assessed as employment income for new salary sacrifice arrangements is now the greater of the salary foregone and the taxable benefit as set out in the tax legislation. […]
The government are undertaking a consultation on shifting the burden in IR35 cases to private sector employers in the same way as has already been done for employers in the public sector. Please see our previous blog about shifting IR35 to public sector bodies here. As with all of our tax tips and web pages […]
One of the measures affecting pensions announced in the Spring 2017 Budget, that was not included in the first Finance Act, concerns a new £4,000 pension input limit for those who are drawing income from their money purchase pension fund. The new flexible drawdown rules introduced from 6 April 2015 has allowed those with money […]
Despite speculation about further restrictions to tax relief on pensions in the Chancellor’s Autumn Budget, there were in fact no changes in this area. It has been reported that this was a symptom of the narrow “majority” the government currently hold. Individuals can generally obtain tax relief at their marginal tax rate on up to […]
As we have previously mentioned here, auto-enrolment of staff in workplace pension schemes now applies to even the smallest of employers, although there are exclusions. The current minimum contributions are 2%, with at least 1% from the employer. These are scheduled to increase to 5%, at least 2% from the employer, from 6 April 2018. […]
With tax planning schemes as with many things in life, what looks too good to be true generally turns out to be so. This seems to be true for tax avoidance schemes using Employee Benefit Trusts (EBTs). During the summer HMRC won a landmark case at the Supreme Court against Glasgow Rangers Football Club concerning the […]
A furnished holiday letting business is treated as a trade for most tax purposes. For example, capital allowances are available on furniture, and CGT entrepreneurs’ relief is available on disposal of the business. However, a recent tax case has determined that a holiday letting business in Cornwall did not qualify for inheritance tax business property […]
The government are gradually phasing out the self-assessment tax return and replacing it with an individual tax account pre-populated with data supplied by employers, pension companies and State Pension figures from DWP. With effect from April 2017, HMRC will have the power to assess income tax or CGT liabilities using information they already hold. This […]
From April 2018 there will be no benefit-in-kind liability if you are charge your electric cars at your employer’s premises. As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.
Remember, it is important to be different to your competitors. Use the information you’re gathering from your customers to establish: (a) what they value (b) what they don’t value Here’s how you do it. List all the key attributes of your products and services, such as: 1. Speed of delivery 2. Pricing policies 3. Range […]