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 […]
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 […]
You risk a hefty fine if you’re not in line with National Minimum Wage laws. From 1st April 2019, the following rates will apply: Workers aged 25 and over: £8.21 per hour Workers aged 21-24: £7.70 per hour Workers aged 18-20: £6.15 per hour Workers over compulsory school age, but not yet 18: £4.35 per […]
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 […]
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 […]
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 […]
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 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. […]
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 […]
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 […]
HMRC’s guidance now states that where all of a director’s income is taxed at source and there is no further tax to pay, they do not have to register for and file a self-assessment return. As many company directors are taxed under PAYE they will not need to give notice of liability to tax. If […]
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 […]
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 […]
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. […]
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 […]
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 […]
Although not particularly generous at £3,000 per donor per annum, if this annual IHT exemption is not used by 5 April it is lost, although it is possible to carry the allowance forward one year if unused. This means that if the annual allowance for 2017/18 was not used an individual may make gifts of […]
From April 2016 rules were introduced to allow employers to provide their directors and employees with certain “trivial” benefits in kind tax free.The rules were brought in as a simplification measure so that certain benefits in kind do not now need to be reported to HMRC as well as being tax free for the employee. […]
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 […]
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 […]
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 […]
The Charity Commission has published guidance on the circumstances and procedures for charities wishing to change their financial year, which vary according to whether or not the charity is incorporated as a company. In either case, it is not possible to change a charity’s financial year or period if the latest annual return and accounts […]
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 […]
When a company is dissolved by striking off, any assets that remain in the company at the date of dissolution (including share capital) become Bona Vacantia or ownerless goods. Ownerless goods become Crown property. It is very expensive to reinstate a company to the Register in order to recover your assets. How to avoid Bona […]
The High Income Child Benefit Charge (HICBC) is a tax charge which claws back up to 100% of any child benefit received by a higher earner or their partner. Even though the charge is not assessed as income, it is reportable and collected under Self Assessment (SA). Taxpayers who must declare the HICBC are required […]
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 […]
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 […]
The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers that meant more tax to pay on those dividends on 31 January 2018. The same will also apply on 31 January 2019. […]
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 […]
Personal allowance This is the amount of income you can receive that you don’t have to pay tax on. In 2017/18 this is £11,500. The allowance is lost at a rate of £1 for every £2 of income where your adjusted net income is over £100,000, until the allowance is totally extinguished. This creates an […]
Charitable donations Gift aid donations to charity also give tax relief at your highest marginal tax rate. Any donations made before 31 January of the following tax year, or the date of the submission of your tax return if earlier, can be carried back to the previous tax year. Cash donations made before both 31 […]
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 […]
Use your annual pension allowance Pension contributions are still a tax-efficient way of saving for retirement, with tax relief given at your highest marginal rate of income tax. Tax relief is restricted to the lower of the annual allowance, which is £40,000 for most people, or your net relevant earnings. It may also be possible […]
Use the Budget calculator developed by Deloitte, to find out how your pocket may be affected by the Chancellor’s latest measures. Bear in mind, some changes will not be seen until future financial years, and are not included in this calculator.
The Help to Buy equity loan scheme, which offers a 20 per cent government loan (40 per cent in London) to buyers of new-build properties, has been extended a further two years, from April 2021 to 2023. The upper price cap for a property to be eligible for the scheme will also increase. They will […]
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 […]
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 […]
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 […]
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 […]
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? […]
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 […]
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 […]
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 […]
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 […]
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 […]
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”.
HMRC have recently won a tax tribunal case where they were seeking to challenge the deduction for a wife’s wages in arriving at the profits of her husband’s business. The judge agreed with HMRC that the amount allowed as a deduction should be limited based on the hours spent and appropriate rate for the work […]
HMRC has updated its guidance the intermediaries legislation (IR35) to clarify that the IR35 rules may apply if an agency, umbrella company or similar third-party supplies a worker by engaging their company rather than the individual directly. The new guidance can be found here. As with all of our tax tips and web pages this […]
A recent tax case has highlighted the need to ensure company affairs and personal affairs are clearly separated. In the case a locum was working for the NHS. He thought he was operating through a limited company, and prepared company accounts and tax returns accordingly. He ensured the corporation tax was paid and paid his […]
For owner managers of dividend paying companies there is a marginal tax saving of 1% by making a company (employer) pension contribution compared to a personal pension contribution. For example if your company could pay £12500 into a pension scheme there is no tax charge on you. There is simply £12500 going into your pension […]
Philip Hammond has announced that the planned national insurance rise for the self employed has been scrapped at least for the current parliament. He has said he will announce how extra funds will be raised in the autumn statement. Meanwhile Theresa May has said the government await the Taylor report on the future of employment. […]
The chancellor also announced that the new tax-free childcare scheme is due to start in 2017. The scheme will provide up to £2,000 a year in childcare support for each child under 12 where the parents save in a special account. If they save £8,000 the government will top up the account with 20% to […]
The Chancellor announced that the Government is committed to continue to have the lowest corporate tax rate of the G20 major trading nations. As already announced the corporation tax rate reduces to 19% from 1 April 2017 and then to 17% from 1 April 2020. The Government is also keen to continue to encourage […]
The Chancellor has announced measures to limit the rise in tax-driven incorporation. The £5,000 tax free dividend allowance will be reduced to just £2,000 from 6 April 2018. Mr Currently, once the dividend allowance has been used the remaining dividends are taxed at 7.5%, 32.5% and then 38.1% depending upon whether the dividends fall into […]
The main national insurance rates for small business for the current tax year (up to 5 April 2017) are summarised as follows: A sole trader pays 9% national insurance on profits above £8,060 (reducing to 2% on profits above £43,000) Partners in any partnership, including limited liability partnerships (LLP) also 9% national insurance on profits […]
These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 December 2016. Where there has been a change the previous rate is shown in brackets. Engine Size Petrol Diesel LPG 1400cc or less 11p 7p 1600cc or less 9p 1401cc to 2000cc 14p (13p) 9p […]
New tax-free childcare accounts were announced in 2014 to replace the employer-provided childcare voucher scheme. Introduction has been delayed by legal disputes with organisations involved in administering the existing scheme, but the new accounts will at last be introduced on a trial basis in early 2017. The new scheme will then be rolled out across […]
PAYE and NI deducted from salaries has to be paid by the employer to HMRC. This is the normal system of payroll, payslips, net pay, tax deductions, and the money ending up in the hands of HMRC. What happens if the employer can’t pay the PAYE? For example if the company ceases trading or is […]