HMRC have implemented an online personal account that is available to everyone with a National Insurance Number even if you do not submit a personal tax return. This account enables you to check details on the following areas: Check your Income Tax estimate and tax code Fill in, send and view a personal tax return […]
Making Tax Digital (MTD) is HMRC’s strategy to modernise tax administration for taxpayers. Some highlights from their latest published MTD time-line include: 2016 test digital reporting of accounts by some small businesses testing using the RTI (payroll real time information) system to report back to tax payers how their personal allowances are used 2017 test […]
Sole trader and partnerships with turnover up the the VAT threshold are allowed to prepare their income and expenditure account for tax purposes on the cash basis. Cash basis excludes from accounts events and transactions that haven’t yet resulted in a money being received or paid. Cash accounting is anathema to accountants. Accountants have built […]
This being the first in the series of “grow your business” ideas – we’ll start with the most obvious business development tip of all time: To increase your sales figure you can: Increase the number of customers Increase the number of times each one does business with you Increase the average value of each transaction […]
Pension contributions made by an employer are tax free (within limits). Contrast that with medical insurance paid by the employer which is almost certainly taxable on the employee or director as a benefit in kind. Historically most life assurance that pays out to an employees family (not the employer) has been seen as a taxable […]
HMRC have updated their really good factsheet on penalties. This six page PDF gives a good overview and useful amount of detail relating to penalties for all taxes. The factsheet is available here. If you would like detailed specific advice on penalties please contact us.
You may have heard about new accounting rules which are being introduced as a result of the EU Accounting Directive, under the documents FRS102 and FRS105. Under these new accounting rules companies qualify for exemptions as follows: Small Entities are those with less than £10.2M turnover, less than £5.1m total assets, less than 50 employees. […]
Two more tax tribunal cases against penalties have gone in favour of the taxpayer this week. In Eastman (TC5276) HMRC had refused to suspend a penalty in apparently one off event. Suspending a penalty requires the taxpayer to put in place processes that would prevent the error reoccurring, which HMRC said was not possible for […]
Capital gains tax rates on sale of shares in unlisted trading companies are currently 10% for basic rate tax payers and 20% for higher rate and additional rate tax payers. If the gain is covered by Entrepreneurs Relief (ER) then the rate is 10% even for higher rate and additional tax payers. Broadly, the main […]
A telephone scam has been reported this week. It involves leaving a recorded message, purportedly from HMRC, stating that the department is bringing a lawsuit against the individual and is going to sue them. The recipient is asked to call a number and press ‘1’ to speak to the officer dealing with the case. HMRC […]
If you did not need to complete a 2015 tax return, but do need to complete one for 2016 (tax year ended 5 April 2016), now is the time to tell HMRC. Individuals are required to notify HMRC by 5 October 2016 if they are not already within Self-Assessment and receive income or gains on […]
New tax rules may result in final distribution of funds on closure of a company being taxed as dividends instead of capital gains. A capital gain is usually preferable to dividend treatment. This is because capital gains are generally taxed at a lower rate than income, possibly as low as 10% where entrepreneurs relief is […]
The Enterprise Investment Scheme (EIS) and the recently introduced Seed EIS provide generous tax breaks for investors who subscribe for shares in qualifying companies provided the correct procedures, and in particular the correct forms, are used to claim tax relief. Seed EIS provides income tax relief of 50% of the amount invested and EIS 30% […]
Furnished Holiday Lets – tax advantages There are various tax advantages to a letting being a Furnished Holiday Let (FHL) compared to any other let. A furnished holiday let is treated by HMRC as a business whereas any other let is seen as an investment. Furnished holiday lettings businesses qualify for capital allowances when equipment […]
Until 5 April 2016 landlords who were letting residential property fully furnished could claim a 10% of rents as an additional cost called “wear and tear allowance”. Wear and tear allowance can be claimed for the last time on 2016 tax returns. For the current tax year (2016/17) and onwards landlords can instead claim a […]
Two recent cases, one for VAT and one for Capital Gains Tax have highlighted the point that tribunals can sometimes allow appeals by taxpayers to be heard after the deadline for appeals. Of course this is the exception rather than the rule. However if you do have assessments for any kind of taxes from HMRC […]
Child Benefit stops on 31 August on or after your child’s 16th birthday. Full details from HMRC are here.
Advisory Fuel Rates from 1 September 2016 When calculating the VAT element of mileage payments, these rates apply from 1 March 2016. You can use the previous rates for up to 1 month from the date the new rates apply. Engine size Petrol – amount per mile LPG – amount per mile 1400cc or less […]
VAT on costs can only be claimed in so far as the costs are attributable to taxable supplies. A recent tax case highlighted the need to apportion input tax claims on business overheads where significant income is exempt or outside the scope of VAT. To discuss any aspect of VAT further please book a chat […]
HMRC have taken to naming and shaming those not paying the full national minimum wage. If you are a sole trader, partnership or any kind of company with shares, or operating a social enterprise with a profit motive, then you cannot avoid NMW by classifying your workers as voluntary. The latest rates (from 1.4.16) are: […]
The tax free perks we see most often used by small business owners are pensions, child care vouchers, mobile phones, bicycles and annual parties. Pension payments for directors and employees For owner managed businesses it is better to pay company pensions (employer contributions) than personal pensions (employee contributions). This is because employer contributions avoid any […]
HMRC have issued some further details on their making tax digital strategy. Partnerships, sole traders, self-employed and landlords with turnover over £10,000 will have to report quarterly. The time-scale is yet to be announced but some staging will take place starting with those with the higher turnover. Software will be needed but likely that some […]
A recent case has reminded of the need to have proper purchase invoices in order to support VAT input tax claims. In P Brookes v CRC, Upper Tribunal (Tax and Chancery Chamber), 6 April 2016 the taxpayer had claimed input tax on costs for which he had no purchase invoices. The taxpayer then belatedly obtained […]
In a recent case (Airtours Holidays Transport Ltd v CRC, Supreme Court, 11 May 2016) Airtours had paid for services provided by PwC of financial reports that would be used by financial institutions to assess lending to Airtours. Airtours paid PwC fees which included VAT, and went on to claim the VAT as input tax. HMRC […]
HMRC are consulting on the implementation of new rules that will require public sector bodies to consider whether IR35 applies to contractors providing services to it. If IR35 the public body will have to make relevant deductions from the payment to the contracting company. Up to now IR35 has always been assessed by the contractor’s […]
If an employee address changes then you should encourage them to inform HMRC of this. This can be done at www.gov.uk/tell-hmrc-change-of-details. This helps to ensure that the tax they pay is accurate.
HMRC have published further information about their Making Tax Digital strategy. The includes: Taxpayers should not have to give HMRC information that it already has, or should be able to get from elsewhere — for instance, from employers, banks, building societies and other government departments. Taxpayers will see the information that HMRC holds through their […]
For losses arising on or after 1 April 2017, when carried forward to future years the loss can be set against any income, including other trades and capital losses. Currently, and until 31 March 2017, losses carried forward to future years can only be set against profits in the same trade. Similarly, group relief (setting […]
Don’t forget that if you have made any EC sales during the quarter ended 31 March 2016 that you need to report these to HMRC on an EC Sales List (ECSL). You can submit your ECSL through HMRC Online Services here, it is possible that you may need to enrol for the service if […]
The national living wage (£7.20) applies to workers aged 25 and over from 1 April 2016. From October 2016 the new NMW rates will be : the adult hourly rate (for 21-24 year olds) will increase from £6.70 to £6.95; the rate for 18 to 20 year olds will increase from £5.30 to £5.55; the […]
The corporation tax rate for all companies is set to fall from 20% currently, to 19% from 1 April 2017. The rate was set to fall to 18% from 1 April 2020. In the Summer 2016 Budget it was announced the rate will instead reduce to 17% from 1 April 2020. The tax charge on […]
The VAT registration thresholds increase by £1000 from 1 April: Registration threshold from 1 April 2016 = £83,000 (based on past 12 months or next 30 days) De-registration threshold from 1 April 2016 = £81,000 (based on expected turnover next 12 months) All figures are in our tax rates table. David Wilsdon
Class 2 National Insurance (“the stamp” in old money) stopped being collected by direct debit from 6 April 2016. It is now collected as part of the self assessment bill for sole traders and partners. The March 2016 budget announced that Class 2 National Insurance will be scrapped from 6 April 2018. In the Government’s […]
Broadly IR35 (the Intermediaries Legislation) requires personal service companies (usually single person company) to pay the director a salary of at least 95% of some types of turnover. This applies to turnover which would be employment income were it not for the personal service company sitting between the worker and the client. The March 2016 […]
From 6 April 2017 trading income or property income less than £1,000 in a tax year will no longer be taxable. There will be no need to apply for exemption or declare the income. For traders with more than £1,000 income but small amount of expenses, they can benefit by ignoring their expenses and instead […]
From April 2016 there will be 2 student loan plan types known as Plan 1 and Plan 2. Each plan will have a different threshold before loan repayments are made. For the tax year beginning 6 April 2016, the thresholds will be £17,495 for Plan 1 and £21,000 for Plan 2. HMRC […]
As announced in 2015 and 2016 budgets, Personal Allowances and the Basic Rate Band will increase from 6 April 2016 and again from 6 April 2017. From 6 April 2016 capital gains tax (CGT) rates will reduce from 18% to 10% (basic rate taxpayers) and from 28% to 20% (higher rate taxpayers) . Note that […]
The current £15,240 ISA limit is frozen for 2016/17. The Junior ISA limit remains at £4,080 for 2016/17. The Chancellor announced that the ISA allowance will increase to £20,000 from 6 April 2017 and that from the same date there will be a new “Lifetime ISA” account where investors aged between 18 and 40 who […]
Despite widespread predictions in the media and tax press, there has not been further restrictions in tax relief on pensions or the tax free lump sum. From 6 April 2016 the pension fund lifetime allowance will be reduced from £1.25million to £1million. Transitional protection for pension rights already over £1million will be introduced alongside this […]
LISAs or Lifetime Individual Savings Accounts will be available from 6 April 2017. These will allow up to £4,000 to be saved, on top of which government will give you back the basic rate tax you had paid earning the £4,000. Thus £4,000 becomes £5,000 in the LISA. Unfortunately they won’t give you back the […]
Entrepreneurs’ relief (ER) will be extended to external investors in unlisted trading companies. This new investors’ relief will apply a 10% rate of CGT to gains accruing on the disposal of ordinary shares held by individuals. These shares must be subscribed for by the claimant and acquired for new consideration on or after 17 March […]
The Gift Aid Small Donations Scheme (GASDS) allows charities to treat small donations such as those in collecting boxes as if Gift Aided. With effect from 6 April 2016 the maximum annual donation amount which can be claimed through GASDS will be increased from £5,000 to £8,000 allowing charities and Community Amateur Sports Clubs to […]
It has long been held that tax is based on monetary values. Where no money changes hand, for example in a barter transaction, tax is due on the market value of the goods or services each party supplies. There can be VAT, PAYE, NI, and business tax on the transaction. For example, if a sports […]
Changes in the taxation of interest from 6 April 2016. Basic rate tax payer – first £1,000 of interest is tax free Higher rat tax payer – first £500 of interest is tax free Additional rate tax payer – no interest is tax free David Wilsdon
As discussed in other posts, from 6 April 2016 dividends will attract an additional 7.5% tax on top of taxes previously in place. HMRC have decided to try to collect some of the additional tax due through tax codes which apply to salaries. To do this HMRC will estimate dividends for 2016/17 based on figures […]
HMRC have said that by April 2016 all individual tax payers will be able to access their personal tax accounts online. To access your personal tax account you will need to log into HMRC Online services here.
From 6 April 2016 single person companies within IR35 will no longer be able to claim tax relief for home to work travel costs. David WIlsdon
Tax relief for the replacement of furniture, including white goods, is being reinstated where the expenditure is incurred on or after 6 April 2016. This is good news for those landlords renting out properties unfurnished but providing white goods where the tax relief had been withdrawn in 2013.
If your lucky enough to find your income may be more than £100,000 in the current tax year (2015/16) then read on. For every £2 that your adjusted net income exceeds £100,000, the £10,600 personal allowance is reduced by £1. If you’re in or just above the £100,000 to £120,000 income band, Pension contributions and […]
At Green Accountancy we are not independent financial advisers and cannot give advice on whether to invest or not, or what to invest in. We can advise on the tax consequences of investments. Investments into ISAs do not attract tax relief. However the income generated within the ISA will be tax free. The maximum investment […]
When signing to say gift aid can be claimed by a charity you donate to, it is important to remember you must be at least a basic rate tax payer. If you sign a gift aid form and later find your total income falls below the personal allowance (£10,600 for 2015/16) then the basic rate […]
If you have realisable assets such as shares it may be possible to reduce your overall capital gains tax bill by taking actions on or before 5 April 2016. For example, it may be beneficial to realise capital gains up to £11,100 (the annual exemption), or to realise any capital losses. Utilising husband and wife […]
A reminder that the way dividends are taxed is changing from 6 April 2016. For more information see our Dividends Tax fact sheet. For some it may be advantageous to increase dividends prior to the changes. For example if dividend levels are projected to be similar in 2015/16 and 2016/17 it may be beneficial to […]
New rules come into force from 6 April 2016 which may increase tax on closure of a limited company after that date. Broadly speaking, many company closures that would currently trigger a capital gains tax charge will from 6 April 2016 instead trigger a much higher income tax charge. If you are thinking of closing […]
Here at Green Accountancy we are not independent financial advisers, and cannot recommend anyone should or should not make a pension contribution. We can advise on the tax consequences of pension contributions. It is widely being speculated in the tax press that this year’s budget may reduce the scope or extent of tax relief on […]
Aside from opinions on the rights and wrongs of the Big Company Tax situations, we thought a few facts may be of interest. Government revenue in 2014/15 was made up of Income tax 32%; National Insurance 21%; VAT 22%; Duties 11%; and Corporation Tax 8%. Green Taxes, Capital Gains Tax, Stamp taxes and other receipts […]
A reminder that the employment allowance will be £3000 this coming year (2016/17) up from £2000. However for the first time, single person employers will not be eligible for the employment allowance this year. David Wilsdon
A basic tax tip in everyone’s book is to take advantage of the sources of income exempt from tax. Unfortunately, though perhaps predictably, such income is fairly limited. The following are generally exempt from income tax: Income from ISAs Most dividends from Venture Capital Trusts Income from National Savings Certificates (NS&I) (not National Saving Accounts) […]
It is widely known that most business equipment attracts full tax relief in the year of purchase these days. This is under the relatively generous annual investment allowance (AIA) that gives full relief for most equipment purchases. The AIA is broadly up to £200,000 per year per business. However if your company has tax losses […]
From 6 April 2016 PAYE legislation is changing. If you intend or already payroll benefits and expenses you must register them with HMRC using the online Payrolling Benefits in Kind (PBIK) service. If you use this service and payroll benefits and expenses you won’t have to report them on a P11D. If you do not […]
The Auto Enrolment staging dates for many businesses is approaching. Below summarises the key points you should be aware of. Key points Your staging date is when the Automatic Enrolment duties come into force for your business. You’ll need to identify what your duties are for each member of staff on your staging date or […]
HMRC have issued the following note about bogus emails Most of us think we would know how to recognise genuine contact from HMRC, and be able to tell if it’s a phishing or bogus email. Whether it’s for tax credits or PAYE notices and reminders HMRC will never ask you, or your clients, to disclose personal or […]
Under RTI the end of year form P35 was replaced by the Final Full Payment (FPS) submission. Send your final FPS on or before your employees’ last payday of the tax year (5 April) instead of the old 19 April deadline. Remember to put ‘Yes’ in the ‘Final submission for year’ field in your payroll […]
The Government announced at Autumn Statement 2015 that the current two year temporary reporting relaxation will end as planned on 5 April 2016. The relaxation permitted employers who at 5 April 2014 employed no more than 9 employees, to report their PAYE information for the tax month ‘on or before’ the last payday in the […]
The Government has confirmed that from 6 April 2017, tax restrictions for people looking to sell annuities will be removed, giving those with existing annuity, and anyone who purchases an annuity in the future, the freedom to sell their right to future income streams for an upfront cash sum. Currently, people wishing to sell their […]
If your company is located in one of the 30 or so enterprise zones, there are significant Government incentives to encourage investment. Enterprise zones include Didcot Growth Accelerator, Science Vale at Chalgrove, Enterprise M3 at Farnborough and Royal Docks City of London. HMRC have added to their online guidance, showing sites within enterprise zones that […]
The European Court have ruled that the UK blanket reduced VAT rate for energy saving materials is unlawful. The UK government are likely to make restrictions to the reduced VAT rate rules in Finance Act 2016. We don’t have further details yet. Clearly if you are thinking of buying (or if you currently sell) reduced […]
A reminder that from April 2016, the national living wage will be £7.20 an hour for workers aged 25 and older. The minimum wage will still apply for workers aged 24 and under. For full details of all national minimum wage (NMW) rates check https://www.gov.uk/national-minimum-wage-rates Note that all workers including interns generally have to be […]
Following on from my post regarding directors potentially be liable for company debts, particularly to HMRC. HMRC now have a new power to collect debts due from individuals, businesses and companies directly from their bank accounts. To use these powers, all of these conditions must be met: Condition A – the total debt must be […]
For the past two tax years (2014-15 and 2015-16) most employers have been able to reduce their employers national insurance bill by £2000. We have applied this to all clients that we prepare payroll for. For the next tax year (2016-17) the employment allowance increases to £3000. However there will be a restriction which prevents […]
This is a reminder of an older new story. This applies to self employed (sole traders and partners) not to directors of companies. The old direct debits for class 2 national insurance (£2.80 per week) have ended. The class 2 national insurance for the current tax year (2015-16) will be payable as part of self […]
It has historically been quite unusual for directors to be found liable for any of their company’s debts. New rules will allow unpaid creditors more scope, lower costs, and more benefit in suing directors. For example, if a company becomes insolvent and ceases to trade, and owes HMRC money (PAYE, VAT, Corporation tax) it is […]
HMRC have recently highlighted that charities can only claim gift aid on cash donations. If your charity receives goods there is no gift aid available at that point. However, HMRC make clear that when the goods are sold, the donor can be offered the cash generated, and if the donor chooses to allow the charity […]
The government intend to legislate that trivial benefits in kind, where the cost to the employer is no more than £50, will not need to be reported in future and will be exempt from tax. HM Revenue and Customs raised concerns that some directors of family companies might abuse the new rules and have insisted […]
One of the anti-avoidance measures announced in the Autumn Statement on 25 November was to potentially end the 10% capital gains tax rate (with the benefit of entrepreneurs’ relief) on distribution of capital from a company. This is a much lower rate than the rate of income tax on dividend payments, particularly when the new […]
The minimum pension contributions under Auto Enrolment were set to increase in October 2017 and October 2018. These dates have been pushed back to April 2018 and April 2019. Full details are: Until 5 April 2018 – 2% total of which at least 1% from the employer From 6 April 2018 – 5% total of […]
Did you know…in ShareFile you can view files without the need to download them. Just click on the magnifying glass as below:
If you have undisclosed offshore holdings or investments, for example: offshore bank accounts overseas assets like property, eg a holiday let shares or other interests in an offshore company or trust inherited money from overseas You have until 31st December 2015 to disclose these. After that date a penalty could be charged up to 200% […]
From November 2015 HMRC introduced Advance Assurance for companies that claim Research and Development (R&D) tax relief. If your company carries out R&D for itself or other companies, it could qualify for Advance Assurance. This means that for the first 3 accounting periods of claiming for R&D tax relief, HMRC will allow the claim without […]
From the 6 April 2016 the Scottish rate of income tax will come into effect. This will mean that some of the Income Tax collected under the Scottish rate will fund the Scottish government and the rest will fund the UK government. This will affect all individuals living in Scotland, and all employers with employees […]
There can be no late filing penalty for corporation tax returns if the return is filed with HMRC by the date on which the accounts are due at Companies House. There have been cases where HMRC have incorrectly raised a penalties based on tax return due dates being earlier than Companies House accounts due dates. […]
The Office for Tax Simplification has issued a survey will take no longer than 15 minutes to complete and you can complete this anonymously or leave your contact details if you are willing to discuss any of your comments further. They will be gathering views via the survey until 1st January 2016. Further details here.
These rates only apply to employees using a company car. These rates apply from 1 December 2015. You can use the previous rates for up to 1 month from the date the new rates apply. Engine size LPG – amount per mile 1400cc or less 7 pence 1401cc to 2000cc 9 pence Over 2000cc […]
You can ask HMRC Clearances Team to confirm the tax and NICs implications of a salary sacrifice arrangement once it is in place. However, this is not a requirement. HMRC would want to see: evidence of the variation of terms and conditions (if there is a written contract) payslips before and after the variation […]
The government have announced that by 2020 sole traders will be reporting quarterly to HMRC instead of annually. No details are yet released. It may be that this is not onerous, potentially being as simple as total money in and out for the quarter.
Single person companies will not be able to claim the employment allowance from April 2016. The employment allowance is a reduction of employers national insurance of up to £3,000. It is not yet clear whether taking on a new employee, perhaps part time or short term, will be sufficient to reinstate the allowance.
If you make an error on a VAT return then you simply adjust for it on the next VAT return, providing the error does not exceed £10,000. However, if HMRC were undertake a VAT investigation and found the error was caused due to not taking ‘reasonable care’ then they could still charge a penalty. […]
If an employee or director uses their own vehicle for allowable business journeys the company can pay them a tax free allowance to compensate them for this. Reclaiming VAT If the company is VAT registered then they may be able to reclaim some input tax (VAT on purchases) in relation to this payment. VAT is […]
We routinely get a dispensation in place for our payroll clients. This is a notice from HMRC that removes the requirement for the employer to report certain expenses at the end of the tax year on forms P11D or P9D. In order to have the dispensation in place HMRC require that your company has systems […]
Legislation to require employers to report Benefits in Kind in real time as opposed to the end of year form P11D was included in the first Finance Act of 2015. However, there are concerns amongst accountants that this should not be mandatory until 2017/18 at the earliest, as many employers are only just getting to […]
The Government is concerned that many small businesses are not taking advantage of the generous tax breaks for undertaking R&D. For this reason they have introduced a new “Advance Assurance” process to check whether the company’s activities qualify for relief. Feel free to contact us if you wish to discuss this further.
The Enterprise Investment Scheme allows unconnected investors to obtain a 30% set off against their income tax liability up to £1,000,000 investment each tax year. So a £10,000 investment reduces the investor’s income tax liability by £3,000. In addition, provided those shares are held for at least 3 years, the gain on disposal of those […]
Not too much affecting our clients significantly in today’s Autumn Statement. Some points of interest: The much heralded U turn on tax credits has been broadcast far and wide. Most media seem to then ignore the Chancellors next sentence “Tax credits are being phased out anyway as we introduce universal credit”. From April 2019 capital […]
The adult National Minimum Wage (NMW) rate is currently £6.70. From 1 April 2016 a new National Living Wage (NLW) for workers aged 25 and above will come into force which will initially be set at £7.20. For employee aged 21 to 24 the NMW will still apply.
There are many reasons why you may need to complete a self assessment tax return. The most common reasons we see are: Being self-employed. Being a company director. Having rental income. Made a Capital Gain. For example disposing of shares. Having dividend income. Having foreign income. Having income over £50,000 and you or your partner […]
ALL HMRC POST IS URGENT. If you receive anything from HMRC, on any tax, please be in touch with us immediately. Appeals are normally needed within 30 days of an assessment or decision by HMRC. Late appeals are not normally accepted.
A recent First-tier tribunal has upheld HMRC’s position that a trader cannot ask to be de-registered from VAT from an earlier date. If you find you may be better off de-registering from VAT (usually because some or all of your customers cannot reclaim VAT) and you are below the VAT de-registration threshold (currently £80,000) then […]
A recent tax case reminds us that a bankrupt has no right to make a tax appeal.
HMRC have issued a reminder that from 5 April 2015 there is now Capital Gains Tax on UK property for non-UK residents.