BBC presenter loses IR35 appeal

with No Comments

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 […]

VAT registration when changing entity type

with No Comments

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’s right to investigate

with No Comments

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 […]

How your maternity pay is calculated

with No Comments

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 […]

Micro Accounts

with No Comments

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 […]

Worker status

with No Comments

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 […]

Advantages of Furnished Holiday Lettings

with No Comments

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 […]

Increase your Pension Savings on or before 5 April 2018 to reduce payments on account

with No Comments

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 […]

Invest in EIS or Seed EIS qualifying companies

with No Comments

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 […]

Does your accounts system comply with MTD for VAT?

with No Comments

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 […]

Tax relief for energy saving technology

with No Comments

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. […]

Making regular gifts outside of surplus income

with No Comments

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 […]

Passing on the family home

with No Comments

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 […]

Pension Planning

with No Comments

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 […]

Fixed Rate Mileage for Property Businesses

with No Comments

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 […]

Training Costs

with No Comments

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 […]

What to consider when deciding which type of trading entity to use

with No Comments

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 […]

Fixed rate mileage

with No Comments

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. […]

IR35 in the Private Sector

with No Comments

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 […]

New Restriction For Those in Pension Drawdown

with No Comments

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 […]

Changes To Pension Tax Relief In The Budget?

with No Comments

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 […]

HMRC Tackles Employers Who Used EBTs Schemes

with No Comments

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 […]

Furnished Holiday Letting Business Is Not A Business For IHT Relief

with No Comments

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 […]

Many Will Not Get A Tax Return Next Year

with No Comments

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 […]

Budget News – Savings Tax

with No Comments

The starting rate for savings income will remain at £5,000 for 2018-19 and the standard ISA annual subscription limit will stay at £20,000.  Limits for junior ISAs and child trust funds will rise to £4,620. As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  […]

Budget News – Personal Allowance

with No Comments

In keeping with the government’s stated aim of increasing the personal allowance to £12,500 by 2020, this will rise to £11,850 for 2018-19, while the higher rate threshold for income tax increases to £46,350. As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If […]

Budget News – Capital Gains Tax

with No Comments

It had been announced that by 2019 capital gains tax on residential property would have to be paid within 30 days of disposal.  This has now been delayed until 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 detailed […]

Budget News – Stamp Duty Land Tax

with No Comments

First-time buyers paying £300,000 or less for a residential property will no longer pay stamp duty land tax (SDLT). For purchases up to £500,000, SDLT at 5% will be payable on the excess above £300,000. The comparable rates for non-first-time buyers are 0% up to £125,000; 2% from £125,001 to £250,000, 5% from £250,001 to […]

Budget News – VAT Threshold

with No Comments

The £85,000 VAT threshold will remain at the same level for two years pending further consultation. The Office of Tax Simplification has pointed out that this high limit (one of the highest in Europe) distorts competition and is a disincentive to business.

Reclaiming Input Tax on Director Entertainment

with No Comments

The general rule is that if the entertainment is provided only for directors (or partners) of a business the VAT incurred is not input tax. This is because the goods or services are not deemed used for a business purpose. The VAT therefore cannot be reclaimed on the VAT return. However, where directors and partners […]

Voluntary Living Wage Increase

with No Comments

On the first Monday in November each year, the voluntary living wage is increased. From 6 November 2017, the voluntary UK living wage has increased from £8.45 to £8.75 per hour. The London living wage has increased from £9.75 to £10.20 per hour. The annual November increases to the voluntary living wage do not affect […]

Christmas Trivial Benefits

with No Comments

An employer can provide a gift to it’s employees over the festive period without it being a benefit in kind provided that it meets the following criteria: the cost of providing the benefit does not exceed £50 (or the average cost per employee if a benefit is provided to a group of employees and it […]

Renting Out Your House Whilst on Holiday

with No Comments

Rent a room relief is a tax relief available to those who rent out a room within their only or main residence. The current relief allows the first £7,500 of income generated in this way to be tax free. The legislation states that allowable rental receipts must be for the use of furnished accommodation, in […]

Green Accountancy is now hiring!

with No Comments

Green Accountancy has three new vacancies.  These are for a new trainee accountant; a part qualified accountant; and a payroll and bookkeeping administrator. Full role descriptions and details on how to apply can be found here.

Are state benefits taxable?

with No Comments

Note that the following benefits are taxable State Pension Jobseeker’s Allowance Carer’s Allowance Employment and Support Allowance (contribution based) Incapacity Benefit (from the 29th week you get it) Bereavement Allowance Pensions paid by the Industrial Death Benefit scheme Widowed Parent’s Allowance Widow’s pension   The following benefits are tax free: Housing Benefit Employment and Support […]

What income is exempt from tax?

with No Comments

The following income is exempt from UK tax: Income from National Savings (NS & I) Certificates (but interest on a National Savings Account is taxable) Winnings on Premium Bonds. ITTOIA 2005, s.692 Any income from betting, gaming or lotteries Scholarship awards Income from ISAs (individual savings accounts). ITTOIA 2005, s.776; SI 1998/1870 Dividends paid on […]

Good Governance Is Good For Business

with No Comments

Good governance is not about making the right decisions but about ensuring there is a good decision-making process used in the business. In a large enterprise, the management board will have a team who are charged with ensuring the firm adheres to the principles of good corporate governance as is expected of a large organisation. […]

Reclaiming Foreign VAT On Expenses

with No Comments

If your business has suffered VAT on expenses incurred in another EU country, for example overseas hotel and restaurant bills, then it is possible to reclaim the foreign VAT. The foreign VAT must not however be reclaimed on the UK VAT return but by using HMRC ‘s VAT online services system. You must claim by […]

Are Spouses Wages Fully Deductible?

with No Comments

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 […]

Business vs Non Business for VAT input tax claim

with No Comments

When an entity has both business and non-business activities input tax claims may need to be apportioned to allow for this split. A case has highlighted that other objectives or long timescales do not necessarily have any impact of how such claims should be apportioned. In this case a charity acquired land which was used […]

More penalties cancelled

with No Comments

We have reported many cases where taxpayers have had penalties overturned by the tribunals.  The latest one involved an arithmetical error of £4 resulting HMRC trying to apply a penalty of £600.  In another recent case “marriage difficulties and ill health” were found to be reasonable excuses for a late return and penalties were cancelled […]

Simple Assessment

with No Comments

Some taxpayers that have previously needed to complete a self assessment tax return will now longer have to.  HMRC will be able to calculate the tax of some employees and pensioners by use of data they already hold from third parties.  HMRC have named this system “simple assessment”. Full details published by HMRC. If you […]

What is a tax code?

with No Comments

For anyone in employment, you might have noticed a tax code on your payslip, most commonly 1150L. But what does this actually mean? Your tax code determines the allocation of your personal allowance against your income from that job. If you only have one job you will likely have 1150L tax code which means the […]

Making Tax Digital

with No Comments

Making Tax Digital will be mandatory for VAT purposes from April 2019. From then, businesses with a turnover above the VAT threshold (currently £85,000) will have to:    Keep their records digitally – for VAT purposes only    Provide their VAT return information to HMRC through MTD-compatible software. Other businesses will be able to adopt […]

Off-payroll working

with No Comments

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 […]

Business Property Relief

with No Comments

Broadly, there is favourable inheritance tax treatment to business property. A question that has been tested in various recent cases is whether a let property is business property for this purpose.  A hotel is likely to be a business property, whereas a buy to let house would be an investment and not a business property.  […]

Auto Enrolment – Not an employer

with No Comments

Auto enrolment does not apply if a company is not considered an employer by The Pension Regulator. Reasons for not being an employer include: Director only company, none of the directors have an employment contract No longer employ any staff Ceased trading, Although you will not have any auto enrolment duties you must inform The […]

Director made to pay his company’s PAYE bill

with No Comments

A director paid staff and suppliers but not HMRC.  HMRC accused the taxpayer of negligence and issued a personal liability notice for the company’s unpaid National Insurance.  The taxpayer appealed but the appeal was dismissed.  The first tier tribunal found that the director was liable to his now defunct company’s liabilities to HMRC.

VAT has to be right

with No Comments

A recent case reminds us of the importance of getting VAT right.  The taxpayer concluded that his eBay sales of adult motorbike protective clothing were mostly exempt from VAT as protective equipment.  Supplies that are exempt from VAT doesn’t count towards the VAT threshold so the tax payer didn’t register for VAT.  HMRC checked the […]

Late filing penalties – another tax payer win

with No Comments

In a recent tax case the taxpayer failed to file a tax return on time.  The tax payer tried to file on time but failed to obtain an electronic user ID and password from HMRC in time. Instead they filed a paper tax return which was more than six months late by then.  HMRC charged […]

Auto Enrolment – New Employers

with No Comments

From the 1 October 2017 all new employers will immediately have legal duties due to Auto Enrolment. These duties will apply from the first day an employee starts working for you. Please visit The Pension Regulator website to find out about your duties as a new employer. If you fail to comply with these duties then […]

Grow your business – Part 13 – RESOLVE COMPLAINTS

with No Comments

If your customers have complaints that are appropriately resolved, they can become better customers than those who haven’t complained. Authorise your people to fix problems without any “run around”, just as they do at Ritz Carlton Hotels. Give your people the authority to send a customer a bottle of wine, flowers or whatever is appropriate […]

Reclaiming input tax

with No Comments

A recent tax case highlighted the requirement that purchases must be actually paid for in order to secure tax relief.  This is true in income tax, corporate tax and VAT. For VAT purposes, if a purchase invoice remains unpaid for more than six months after the due date and VAT input tax has been reclaimed […]

Childcare compensation

with No Comments

HMRC have admitted that some people have not been able to set up tax-free childcare through their childcare account.  Contact us if this could affect you.  Details published by HMRC are here:  https://www.gov.uk/government/publications/childcare-service-compensation David Wilsdon

New SA302 process

with No Comments

HMRC has been working with the Council of Mortgage Lenders and has made changes so that lenders will accept self-served copies of the tax calculation (SA302). It has also liaised with software companies to ensure their packages offer a print facility. As a result, agents will be able to print the tax calculation and HMRC […]

HMRC 2 Step Verification

with No Comments

Businesses that need to access online HMRC tax accounts should prepare for an additional layer of security that becomes compulsory later this month. It will be mandatory for businesses to use HMRC’s 2-step verification (2SV). The procedure combines the taxpayer login details with a mobile or landline. After the initial login, a security code is […]

Grow your business – Part 12 – SURVEY YOUR CUSTOMERS

with No Comments

Undertaking a survey of your customers should go beyond the issue of customer satisfaction. You want to enhance your understanding of your customers’ needs and wants, recognise your weaknesses and identify new opportunities to expand your business. Some customers may be reluctant to give you their real, unbiased opinions if you conduct your own survey, […]

When is a van not a van?

with No Comments

Most people know there is a tax charge (benefit in kind) if your company or employer provide you with a vehicle which you can use for private use.  The amount of tax is a lot less for vans than for cars.  A van is a vehicle where its primary construction is for the conveyance of […]

Making Tax Digital for business delayed

with No Comments

The Government has responded to pressure from accountants and other interested parties and announced the delay of Making Tax Digital for Business to 2020 at the earliest. Quarterly VAT reporting using the new system will be mandatory from 2019. In a further U-turn, three million small businesses and buy to let landlords below the VAT […]

Grow your business – Part 11 – OUTSOURCING

with No Comments

More and more businesses are outsourcing various functions in order to focus on their main areas of expertise. Ask yourself these questions: What are we doing that is not one of our core proficiencies? What do we do that we don’t do well? What could we potentially outsource? As an example, many companies have outsourced […]

New government childcare schemes

with No Comments

Working parents can start applying for two new Government childcare schemes that are now launched. This new scheme is designed for working families, including the self-employed, in the UK. For every £8 you pay in, the government will add an extra £2, up to £2,000 per child, or £4,000 per year for disabled children under […]

Is your company carrying out research and development?

with No Comments

Many companies are still missing out on valuable tax breaks for expenditure on research and development (R&D).  HMRC have recently updated their guidance on claiming R&D tax credit relief and have reminded companies that it is possible to obtain advance assurance that the R&D activities are eligible to make a claim. For small businesses the […]

Trivial benefits

with No Comments

This is a reminder that from 6 April 2016, benefits are exempt from tax and NICs if all the following conditions are satisfied: · the cost of providing the benefit   does not exceed £50; · the benefit is not cash or a cash voucher; · the employee is not entitled to the benefit as part […]

Grow your business – Part 10 – APPLY THE LATEST TECHNOLOGY

with No Comments

Technology is a major driver of business profits. Here is a list of innovations you may want to implement in your business: 1. Document management systems (going paperless) 2. Electronic workflow 3. Multiple monitors 4. Portals 5. “Cloud” computing 6. Customer relationship management (CRM) software There are significant benefits to going paperless: Increase in productivity […]

PAYE tax codes

with No Comments

From 6 April 2017 HMRC will be updating tax codes on a much more regular basis.  For some employees this could mean a new tax code every month.  The aim of this change is to ensure employees pay the correct tax, or benefit from tax relief and refunds, during the tax year. If we prepare […]

Working in the “GIG” economy

with No Comments

The House of Commons Work and Pensions Committee has recently published a report calling on the Government to close the loopholes that allow “bogus” self-employment practices, which burden the welfare state but reduce the tax contributions needed to sustain it. This follows the Matthew Taylor inquiry which took evidence during February and March 2017 from […]

Thinking of winding up your company?

with No Comments

Up until 6 April last year, the distribution of cash to shareholders on the winding up of a trading company by a liquidator, was usually taxed as a capital gain, potentially taxed at just 10% with the benefit of entrepreneurs’ relief. However, last year’s Finance Act introduced a targeted anti-avoidance rule that may tax such […]

Reporting expenses and benefits provided to employees

with No Comments

HMRC have recently updated their toolkit dealing with the reporting of expenses and benefits provided to employees and directors in the light of significant recent changes in this area. HMRC toolkits are designed to help minimise the risk of errors in returns and computations and their use, although voluntary, will be taken into consideration in […]

HMRC beats Glasgow Rangers in Supreme Court

with No Comments

A scheme using Employee Benefit Trusts (EBTs) as a means of remunerating directors and staff whilst avoiding tax has been defeated by HMRC in a recent Supreme Court case. Such schemes had been used by many employers to avoid PAYE and national insurance contributions (NICs) and involved complicated trust structures and “loans” to the employees. […]

The Apprenticeship Levy

with No Comments

From 5 April 2017 HMRC has introduced an apprenticeship levy. The levy is charged at 0.5% of the businesses total payroll cost and applies to all businesses operating payroll.   Each business receives a £15,000 allowance each tax year which means that they do not have to pay the levy until 0.5% of their payroll […]

Auto Enrolment Rates Increase

with No Comments

The current minimum pension contributions for employees inside Auto Enrolment are 2%, with the employer being required to contribute at least 1%.   From 6 April 2018 the minimum contributions will increase to 5%, with the employer required to contribute at least 2%.   This will increase further to 8% from 6 April 2019 onwards, […]

Staying under the VAT threshold with multiple businesses

with No Comments

A business is either registered for VAT or not registered for VAT.  A business cannot have some activities registered and some not. Similarly, the VAT threshold (2017-18 £85,000) cannot be avoided by artificially splitting a business into separate parts and arguing each part is under the threshold. However it can be possible for two people […]

1 2 3 4 5 6

Tell us about your business and projects...