Advice to help you grow your business faster

Corporation Tax – reminder HMRC contact details

HMRC can be called by phone on 0300 200 3410 for help with general Corporation Tax enquiries. You will need your 10-digit Unique Tax Reference (UTR) when calling HMRC and this reference number cannot be provided over the phone.

The UTR is the

Intrastat – trading goods with EU

Intrastat declarations were historically used to collect information on the movement of goods from the UK to other EU countries and vice versa. Any business that exceeded the exemption threshold for either arrivals or dispatches of goods were obliged

VAT – discounts and free gifts

When you issue an invoice to your customer, you must ensure that you charge the correct rate of VAT. Whilst most businesses in the UK charge VAT at the standard rate of 20% there are a number of different VAT rates and exemptions that you should be

Free company information

There is a significant amount of information about companies that can be obtained from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and storing company information and making company

UK Infrastructure Bank set-up

The UK Infrastructure Bank Bill, announced as part of the measures in the Queen’s speech, represents the final step in setting up the UK Infrastructure Bank as an operationally independent institution. The new Bank officially opened for business in

Access to cash protection increased

The new Financial Services and Markets Bill, announced as part of the Queen’s speech, will provide increased protections for those still dealing with cash. Access to cash remains vital for many people across the UK, including the more vulnerable in

Income excluded from a property business

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and

Structures and Buildings Allowances

The Structures and Buildings Allowances (SBA) allows for tax relief on qualifying capital expenditure on new non-residential structures and buildings. The relief applies to the qualifying costs of building and renovating commercial structures.

The

ISAs 2022-23

The maximum amount that can be invested in an ISA in the current (2022-23) tax year is £20,000.

ISA’s are a valuable and flexible relief and should be considered as an option for most investors.

An ISA is a tax-exempt savings account available to

When you are required to register for PAYE

There are a multitude of rules that new businesses must follow when they start employing staff for the first time. These include ensuring registering for PAYE as an employer with HMRC. This must be done before the first payday and this process must

Holiday lets occupancy check

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes.

In order to qualify as a furnished holiday letting, the following criteria need to be met:

The

Reminder to look out for tax credit renewal packs

HMRC is currently sending the annual tax credit renewal packs to some 2.1 million tax credit claimants and is encouraging recipients to renew their tax credits claim online. HMRC started writing to taxpayers at the end of April and expects all packs

IHT business asset relief

There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone who had died. One of these reliefs is known as Business Relief and is a valuable tax relief for taxpayers with business interests, offering

Exchange of joint interests

HMRC’s internal manuals consider the reliefs available where there is an exchange of joint interests in land.

The manuals state that:

The exchange of interests in land which are jointly owned by two or more persons constitutes a disposal by each

Writing off a director’s loan

An overdrawn director’s loan account is created when a director (or other close family member) ‘borrows’ money from their company. Many companies, particularly ‘close’ private companies, pay for personal expenses of directors using company funds.

Tax benefits of switching to electric cars

There are many benefits to encourage the use of electric cars including lower running costs, the environmental advantages and reduced noise pollution. There are also tax benefits to encourage the purchase of electric cars.

We have listed some of

Builders – when you may not have to charge VAT

VAT for most work on houses and flats by builders and similar trades, like plumbers, plasterers and carpenters, is charged at the standard rate of 20%. However, there are a number of exceptions where special VAT rules apply and a reduced or zero rate

Mortgage interest on rented property

Under new rules that came into effect from April 2017 the tax relief on mortgage costs for residential landlords was restricted to the basic rate of tax. The finance costs restriction was phased in over a number of years and is now fully in place

Check which EORI number is required

The Economic Operators’ Registration and Identification System (EORI) was setup as a European Union (EU) wide initiative that helps businesses communicate with customs officials when they are importing and exporting goods. The EORI allows businesses

Accountancy expenses arising out of an enquiry

HMRC’s internal manual offer some revealing insights as to the treatment of accountancy expenses arising out of an enquiry. As a matter of course, HMRC allows companies to claim a tax deduction for normal accountancy expenses incurred in preparing

PAYE settlement agreements

A PAYE Settlement Agreement (PSA) allows employers to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for their employees.

The expenses or benefits included in a PSA must

Tell HMRC if your company is dormant

If a company has stopped trading and has no other income, then the company is usually classed as dormant for Corporation Tax purposes.
A company is usually dormant for Corporation Tax if it:

has stopped trading and has no other income, for

Reclaiming VAT

For most fully taxable businesses, VAT can be reclaimed on goods and services used in the course and furtherance of their business activities. This means that businesses must consider where there is personal or private use of goods or services bought

Paying staff on jury service

If you have staff that have been called up to serve on a jury, then you must allow them the necessary time off. You can ask them to request to delay their jury service if their absence would seriously harm your business. Your employee would need to

Tax Diary May/June 2022

1 May 2022 – Due date for corporation tax due for the year ended 30 July 2021.

19 May 2022 – PAYE and NIC deductions due for month ended 5 May 2022. (If you pay your tax electronically the due date is 22 May 2022).

19 May 2022 – Filing deadline for

Demergers

There are special statutory demerger provisions that are designed to make it easier to divide and place into separate corporate ownership the trading activities of a company or group of companies. Using these provisions, an exempt demerger will be

Planning for Basis Period reform

The basis period reforms will change the way trading income is allocated to tax years. The reforms will change the basis period from a ‘current year basis’ to a ‘tax year basis’. Under the current rules there can be overlapping basis periods, which

Basic principles of domicile

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong. However, actually determining domicile status can be complex. In fact, HMRC’s guidance states that domicile cannot be defined

Tax-free mileage expenses

If you use your own vehicle for business journeys, then you may be able to claim a tax-free allowance from your employer known as a Mileage Allowance Payment or MAP. The allowance is paid when employees use their own car, van, motorcycle or bike for

Dividend tax increase from 6 April 2022

A reminder that the 1.25% increase in NIC contributions that came into effect on 6 April 2022 are reflected in a similar increase in the tax charge on dividends.

This means that the dividend tax rates for 2022-23 are as follows (all rates having

Asset disposals not subject to Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit made from selling certain assets such as property, shares or other investments. CGT is usually charged at a flat rate of 20% and applies to most chargeable gains made by individuals.

If taxpayers only

When does a partnership exist?

A partnership is a relatively simple way for two or more legal persons to set up and run a business together with a view to profit. Partnerships can take many forms. Legal persons other than individuals can also be partners in a partnership.

There

NIC relief if employing veterans

A new National Insurance Contributions (NICs) holiday for employers who hire former members of Her Majesty (HM) armed forces came into force on 6 April 2021. This allows employers to apply a zero-rate of secondary Class 1 Employer NICs on the

HMRC names avoidance scheme promoters

HMRC has used new powers introduced in the Finance Act 2022 to name tax avoidance schemes and their promoters for the first time. Under this legislation HMRC can name avoidance scheme promoters, publish details of the way they promote tax avoidance

Check your Income Tax for current year

HMRC offers taxpayers the ability to check their Income Tax for the current tax year. The online portal has been updated for the new 2022-23 tax year from 6 April 2022 to 5 April 2023. The service is not available to taxpayers who only pay Income Tax

Tax if you live abroad and sell UK home

One of the most often used and valuable of the Capital Gains Tax (CGT) exemptions covers the sale of the family home. In general, there is no CGT to pay on a property which has been used as the main family residence. An investment property which has

Business tax cuts from April 2022

A number of business tax cuts came into effect from April 2022. This includes an increase in the Employment Allowance from £4,000 to £5,000.

The allowance enables eligible employers to reduce their National Insurance liability. An employer can claim

Commuting to work

As a general rule, there is no tax relief for ordinary commuting. The term ‘ordinary commuting’ is defined to mean travel between a permanent workplace and home, or any other place that is not a workplace. Case law has also confirmed that travel

Rural pubs community funding

The Department for Levelling Up, Housing and Communities has published the list of successful bidders from the reopening of the first round of the Community Ownership Funding. This brings the total level of funding in the first round to almost £8m.

NIC Rates and Allowances for 2022-23

HMRC has published an updated version of the rates and thresholds for employers following the spring statement. The main changes relate to the increases in the National Insurance (NIC) thresholds. This will see the NIC threshold increase from £9,880

Will you need to repay child benefits?

The High Income Child Benefit charge applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge claws back the financial benefit of receiving child benefit either by reducing or removing the

Do you need to submit a Self-Assessment return for 2021-22?

There are a number of reasons why you might need to complete a Self-Assessment return. This includes if you are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or

Get help with childcare costs for Easter

As the Easter holiday approaches, HMRC is reminding parents that they may be eligible for Tax-Free Childcare (TFC) to help pay for regulated childcare, including holiday clubs and other out-of-school activities.

The TFC scheme can help parents of

When does a partnership exist?

A partnership is a relatively simple way for two or more persons to set up and run a business together with a view to making a profit. Partnerships can take many forms. Legal persons other than individuals can also be partners in a

What is a wasting asset?

A wasting asset is an asset which has a predictable life of 50 years or less. HMRC’s guidance is clear that when you dispose of an asset, you are required to estimate its predictable life based on the nature of the asset and your intended use of the

Self-employed NIC changes

In the recent Spring Statement, a significant increase in the National Insurance Threshold from £9,880 to £12,570 was announced. This increase will see the alignment of the Primary Threshold (PT) for Class 1 NICs and Lower Profits Limit (LPL) for

Resolving commercial rent debts

A new law that seeks to resolve certain remaining commercial rent debts accrued during the pandemic received Royal Assent on 24 March 2022. The new law introduces a legally binding arbitration process to resolve certain outstanding commercial rent

On your bike – cycle to work exemption

The Cycle to Work scheme was introduced over 20 years ago to help promote the use of healthy ways to commute to work using an environmentally friendly mode of transport.

The scheme allows employers to provide bicycles and cyclists’ safety equipment

Scammers target Self-Assessment taxpayers

Fraudsters are continuing to target taxpayers with scam emails, texts and calls following the deadline for submission of Self-Assessment returns for 2020-21. In fact, over the last year, HMRC received more than 570,000 reports about suspicious HMRC

Overview of Digital Services Tax (DST)

The UK’s Digital Services Tax (DST) came into operation on 1 April 2020. This tax is designed to ensure that the major social media, search engine and online retailers are subject to a 2% tax on revenues generated from the participation of UK users

Bare or simple trusts

A trust is an obligation that binds a trustee, an individual or a company to deal with the assets such as land, money and shares which form part of the trust. The person who puts assets into a trust is known as a settlor and the trust is for the

Extended loss relief carry-back

A reminder that the temporary extension to the eligible carry back period for trading losses applies for company accounting periods ending between 1 April 2020 and 31 March 2022 and for tax years 2020-21 and 2021-22 for unincorporated businesses.

Employer company car considerations

If you are thinking about purchasing a company car through a limited company, there are many issues that need to be considered. In this short article we will point out some of the main issues to be aware of, but it is important to properly research

Inheritance Tax-free gifts reminder

We wanted to remind our readers of the Inheritance Tax (IHT) implications of making cash gifts during the current 2021-22 tax year that will end on 5 April 2022.

You can give away up to £3,000 worth of gifts each tax year. This is known as your

Spring Statement 2022

The Chancellor, Rishi Sunak, has delivered his Spring Statement to the House of Commons against a backdrop of a growing cost of living crisis. The Chancellor also stressed that, apart from the untold human suffering, the Russian invasion of Ukraine

Transferring property to unmarried couples and other joint owners

Stamp Duty Land Tax (SDLT) is a tax that is generally payable on the purchase or transfer of land and property in England and Northern Ireland. It is also payable in respect of certain lease premiums. You may also need to pay SDLT when all or part of

Exempt loans to employees

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan

Appeals process for late filing of company accounts

There are late filing penalties which are designed to encourage companies to file their accounts and reports on time. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House.

There is

Check large suppliers payment status

The government has been working for a number of years to combat the problem of large businesses abusing their position by making late payments to small businesses. There is a legal requirement (introduced in April 2017) for large businesses to report

Increased rates for second homes in Wales

The Welsh government has announced that it is increasing the maximum amount that local authorities can charge as a council tax premium on second homes and long-term empty properties from 100% to 300%. The new policy is set to come into effect from

Auto enrolment for care workers

Automatic enrolment for workplace pensions has helped many employees make provision for their retirement, with employers and government also contributing to make a larger pension pot.

The law states that employers must automatically enrol workers

Tax Diary April/May 2022

1 April 2022 – Due date for Corporation Tax due for the year ended 30 June 2021.

19 April 2022 – PAYE and NIC deductions due for month ended 5 April 2022. (If you pay your tax electronically the due date is 22 April 2022).

19 April 2022 – Filing

Revoking VAT option to tax land and buildings

There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be

Definition of VAT partial exemption

A business that incurs expenditure on taxable and exempt business activities is partially exempt for VAT purposes. This means that the business is required to make an apportionment between the activities using a ‘partial exemption method’ in order to

Limits to loss relief claims against income or capital gains

There are a number of tax reliefs available for self-employed taxpayers that make a trading loss. This includes a partners’ share of partnership trading losses.

There may also be restrictions if the claimant:

worked for less than 10 hours a week

Transferring assets during separation and divorce

When a couple separate or divorce it is unlikely that they are thinking about any tax implications. However, apart from the emotional stress, there are also tax issues that can have significant implications.

For example, when a couple are together

SDLT concerns transferring a property to a company

Stamp Duty Land Tax (SDLT) is a tax that is generally payable on the purchase or transfer of land and property in England, and Northern Ireland. Wales and Scotland set their own Stamp Duty taxes. It is also payable in respect of certain lease

Increase in National Insurance from April 2022

We would like to remind our readers that the increases in National Insurance Contributions (NIC) of 1.25% – first announced last year – will take effect from April 2022. These increases will be ring-fenced to provide funding for the NHS, health and

Examples when settlement legislation does not apply

The settlement legislation seeks to ensure that where a settlor has retained an interest in property in a settlement that the income arising is treated as the settlor’s income for tax purposes. A settlor can be said to have retained an interest if

What is plant and machinery?

Capital allowances are the deductions which allow businesses to secure tax relief for certain capital expenditure. HM Treasury has published a factsheet on the super-deduction offering companies a 130% first-year tax relief from 1 April 2021 until 31

Range of supplies affected by VAT reverse charge

The VAT domestic reverse charge accounting mechanism was put in place to help prevent criminal attacks on the UK VAT system by means of sophisticated fraud.

The domestic reverse charge procedure applies to the supply and purchase of the certain

End of SSP Rebate Scheme

The Coronavirus Statutory Sick Pay Rebate Scheme has allowed small and medium-sized businesses and employers reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The online service initially closed for new claims after 30

Claiming for business use of own car or van

If you are an employee, you may be able to claim tax relief for using your own vehicle, be it a car, van, motorcycle or bike. There is generally no tax relief for travel to and from your place of work. The rules are different for temporary workplaces

Latest on COVID restrictions in England

The government has published its latest guidance on COVID restrictions and specifically on the new phase we have entered of ‘Living with COVID-19’. This has effectively moved the country into a new phase of living with COVID and marked the end of

Gaps in NIC records

National Insurance credits can help qualifying applicants fill gaps in their National Insurance records. This can assist taxpayers to build the number of qualifying years of National Insurance contributions which can increase the amount of benefits a

MTD for VAT – digital records required

The MTD for VAT regime started in April 2019 when businesses with a turnover above the VAT threshold of £85,000 became mandated to keep their records digitally and provide their VAT return information to HMRC using MTD compatible software.

From

Tax relief for job-related expenses

If you receive no compensation from your employer for work related expenses you have paid, you can still claim tax relief for some expenses that relate to working from home. HMRC will usually allow you to claim tax relief if you use your own money

Tax relief if working from home

If you are an employee working from home, you may be able to claim tax relief for some of the bills you pay that are related to your work.

Employers can reimburse employees for the additional household expenses incurred by working at home. The

Spreading the cost of tax bills

One of the announcements by HMRC at the start of the coronavirus pandemic was the introduction of emergency measures to help those affected by COVID-19 using the existing Time to Pay service. Many businesses and self-employed people with outstanding

Hobbies and artificial trades

HMRC uses a number of different measures to help determine whether an activity is a trade irrespective of whether the activity leads to a profit or a loss. This includes looking at whether an activity is a hobby or artificial trade.

HMRC manuals

Tax Diary March/April 2022

1 March 2022 – Due date for Corporation Tax due for the year ended 31 May 2021.

2 March 2022 – Normally Self-Assessment tax for 2020-21 would need to be paid by 2 March or a 5% surcharge would be incurred. This year HMRC is giving taxpayers more

Paying tax underpayments via tax code

One of the less well-known ways of paying your Self-Assessment tax bill is to do so through your tax code.

This can only be done where all the following apply:

you owe a Self-Assessment balancing payment of less than £3,000;
you already pay tax

Car fuel benefits for employees

The car fuel benefit rules only apply to company cars that attract a car benefit tax charge. This means the rules do not apply to fuel provided for use in an employee’s own car.

However, employers can pay up to 45p per mile for company related trips

Option to tax (VAT) land and buildings

There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be

Beware online rip-offs

Source: Other Tue, 15 Feb 2022 00:00:00 +0100

Challenging your council tax band

The Valuation Office Agency (VOA) is a government body in England and Wales and an executive agency of HMRC. The Agency values properties for the purpose of Council Tax and for non-domestic rates in England and Wales. The council tax bands were set

Don’t miss out on this tax allowance

HMRC is using Valentine’s Day to issue a reminder to married couples and those in civil partnerships to sign up for the marriage allowance – if they are eligible and haven’t yet done so.

The marriage allowance applies to married couples and those in

Preparing a charity annual return

The Charity Commission requires that charities registered in England or Wales must send an annual return to report their income and expenditure. The deadline for charities with a standard 12-month accounting period ending on 31 December 2021 is 31

How to join MTD ITSA pilot

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the MTD for ITSA. Under the pilot, qualifying landlords and sole traders (or their agents) can use software to

Extending MTD for Income Tax to businesses and landlords

The introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) is now set to commence from April 2024. MTD for ITSA will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The regime will

19% fail to file on time

HMRC has confirmed that more than 10.2 million people submitted their 2020-21 Self-Assessment tax returns by the 31 January deadline. This leaves over 2.3 million taxpayers or 19% that have missed the deadline and are yet to file. Are you among those

Support with rising energy bills

The Chancellor, Rishi Sunak delivered a statement to the House of Commons on 3 February 2022 announcing a number of measures to help people cope with fast rising energy costs.

Record increases will see a 54% jump in the energy price cap from 1 April

Donations to overseas charities

Taxpayers who make donations to charities in other countries can qualify for tax relief in the UK under certain circumstances. This means that UK charitable tax reliefs are available to certain organisations which are the equivalent of UK charities

Tax codes for employees

The P9X form is used to notify employers of tax codes to use for employees. The latest version of the form has just been published and shows the tax codes to use from 6 April 2022. The forms states that the basic personal allowance for the tax year

Income Tax set-off of rental business losses

Where a property business makes a loss, the loss can usually be carried forward and set against future rental business profits. HMRC’s guidance is clear that any losses made in one rental business cannot be carried across to any other rental business

IHT – limitations on spouse or civil partner exemptions

Inheritance Tax (IHT) is a tax that is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. The rate of Inheritance Tax payable is 40% on death and 20% on lifetime gifts. There is

Employing for the first time

There are a multitude of rules and regulations that you must be aware of when you start employing staff for the first time.

HMRC’s guidance sets out important issues to be aware of when becoming an employer.

Decide how much to pay someone – you

Working for yourself

Newly self-employed taxpayers should notify HMRC as soon as practicable when they begin working for themselves. However, HMRC must be officially notified by 5 October following the end of the tax year so that a Self-Assessment return can be issued on

Charging charities at lower rates of VAT

There are special rules, under which a VAT-registered business can sell certain goods and services to charities at the zero or reduced rate of VAT. Before charging VAT at a lower rate, you must be able to show evidence that the charity is eligible.

Tax Diary February/March 2022

1 February 2022 – Due date for Corporation Tax payable for the year ended 30 April 2021.

19 February 2022 – PAYE and NIC deductions due for month ended 5 February 2022 (If you pay your tax electronically the due date is 22 February 2022).

19

VAT Flat Rate Scheme exclusions

The VAT Flat Rate scheme has been designed to simplify the way a business accounts for VAT and in so doing reduce the administration costs of complying with VAT legislation. Using the Flat Rate scheme, businesses pay VAT as a fixed percentage of

Who should register for Plastic Packaging Tax

The new Plastic Packaging Tax will come into effect from 1 April 2022. The tax will not apply to any plastic packaging which contains at least 30% recycled plastic, or any packaging which is not predominantly plastic by weight. The tax will be

How CIS off-set works in practice

The Construction Industry Scheme (CIS) is a set of special rules for tax and National Insurance for those working in the construction industry. Businesses in the construction industry are known as ‘contractors’ and ‘subcontractors’ and should be

Tax and customs duties for goods sent from abroad

There are special rules to help ensure that goods sent from abroad are taxed appropriately and to ensure that UK businesses supplying goods in the UK, for example by having to compete with VAT free imports, are not disadvantaged. This includes goods

Filing obligations for private limited companies

It is important that anyone responsible for the accounts and tax filing regime for private limited companies is aware of their obligations.

After the end of its financial year, a private limited company must prepare full annual accounts and a

Government nudges local authorities

The Secretary of State for Business, Energy & Industrial Strategy has written a letter to local authorities in England urging them to help support businesses in the hospitality and leisure sectors as efficiently as possible.

Just before

Company reconstructions – liabilities restriction

The rules for the Corporation Tax treatment of carried forward losses changed from 1 April 2017. The changes increased flexibility to set off carried forward losses against total profits of the same company or another company in a group whilst at the

HMRC “sweetheart” deals

HMRC has issued an interesting press release stating that ‘Fact: HMRC does not do ‘sweetheart deals’. HMRC makes sure every taxpayer, no matter what their size, pays everything they owe.’

This denial could be in response to many claims that have

Global minimum Corporation Tax of 15%

A new consultation has been published by the UK government seeking views for how a worldwide 15% minimum Corporation Tax should be enforced domestically. This follows more than 130 countries signing up to a new global minimum tax framework in October

Replacement of domestic items in let property

The replacement of domestic items relief has been in place since April 2016. The relief allows landlords to claim tax relief when they replace movable furniture, furnishings, household appliances and kitchenware in a rental property. The allowance is

Tax relief for working from home

If you are an employee working from home, you may be able to claim tax relief for some of the bills you pay that are related to your work.

Employers can reimburse employees for the additional household expenses incurred through regularly working at

Leaving gifts to charity in your Will

The government introduced new rules to encourage charitable giving on death in 2012. The rule which has remained unchanged ever since means that a reduced rate of Inheritance Tax (IHT) of 36% (reduced from 40%) applies where 10% or more of a

Customs controls from 1 January 2022

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international

Omicron funding delivered to local authorities

Just before the Christmas break, the Chancellor announced a new support package for some businesses most affected by the Omicron variant.

The biggest single measure was the re-introduction of one-off grants of up to £6,000 for businesses in the

HMRC fraud squad net £1bn from criminals

HMRC’s Fraud Investigation Service (FIS) was launched in April 2016. The FIS is responsible for HMRC’s civil and criminal investigations into the most serious fraud and wrongdoing. It has been estimated that tax evasion and fraud cost the exchequer

Are you registered for Making Tax Digital for VAT?

Making Tax Digital (MTD) for VAT is to be extended to cover businesses with a turnover below the VAT threshold from April 2022. The MTD for VAT regime started in April 2019 when businesses with a turnover above the VAT threshold of £85,000 became

Delay in implementing late payment penalties

In tandem with the announcement that no late filing penalties will be issued for 2020-21 Self-Assessment returns submitted by 28 February 2022, HMRC has also confirmed a delay in implementing late payment penalties. This means that taxpayers will not

HMRC agree delay in tax return deadline

HMRC has announced that late filing penalties will be waived for taxpayers that file their 2020-21 Self-Assessment returns by 28 February 2022. The due date of 31 January 2022 remains and HMRC is still encouraging taxpayers to try and meet this

Reminder of Statutory Sick Pay pay-back scheme

The Coronavirus Statutory Sick Pay Rebate Scheme for small and medium-sized businesses and employers, enables them to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The online service closed for new claims after 30

Points to consider when valuing goodwill

Valuing goodwill is a complex process and there are many different methods which can be used and that vary from industry to industry. Goodwill is a way of placing a monetary value on the business’s reputation and customer relationships. Or as HMRC

New powers for Insolvency Service

The Insolvency Service is a government agency that provides services to those affected by financial distress or failure. The Insolvency Service operates as an executive agency of the Department of Business, Energy and Industrial Strategy (BEIS).

Will you need to pay-back Child Benefits?

The High Income Child Benefit charge applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge claws back the financial benefit of receiving child benefit either by reducing or removing the

Self-certified sick notes

The statutory sick pay rules were temporarily amended on 17 December 2021. The amendment allows employees to self-certify for a period of 28 days, in place of the normal 7 days. This measure has been put in place to help free up capacity in the NHS

Beware online sales scams

A new government press release has been issued reminding the public that online sales scams continue to be a major issue. In fact, 2021 saw a record number of cyber-attacks and online scams.

Action Fraud, the national reporting centre for fraud and

New £1bn support package announced

The Chancellor, Rishi Sunak has announced a new £1bn support package for businesses most impacted by the highly transmissible Omicron variant that is sweeping across the UK. The biggest single measure is the re-introduction of one-off grants of up to

Further changes to customs issues from 1 July 2022

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international

A reminder – HMRC’s badges of trade

The ‘badges of trade’ tests whilst not conclusive are used by HMRC to help determine whether an activity is a proper economic trade / business activity or merely a money-making by-product of a hobby.

The approach by the courts in using the badges of

BOE advises government on inflation hike to 5.1%

The current Governor of the Bank of England, Andrew Bailey, has written to the Chancellor of the Exchequer, Rishi Sunak. The letter was dated 16 December 2021 and has been uploaded to GOV.UK. The correspondence related to the recently published

Pay your tax bill by instalments

Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

An online payment plan for Self-Assessment tax bills can

Plug-in grants for electric vehicles

The government has announced significant changes to the low-emission vehicles plug-in grant scheme. The changes became effective on 15 December 2021. The changes have been introduced in response to soaring demand for electric vehicles and to help

Tax Diary January/February 2022

1 January 2022 – Due date for Corporation Tax due for the year ended 31 March 2021.

19 January 2022 – PAYE and NIC deductions due for month ended 5 January 2022. (If you pay your tax electronically the due date is 22 January 2022).

19 January 2022

BADR associated disposals

Business Asset Rollover Relief (BADR) is the renamed Entrepreneurs’ Relief. The name change does not affect the operation of the relief. BADR applies to the sale of a business, shares in a trading company or an individual’s interest in a trading

Gifts to spouse or charity

In most cases, there is no Capital Gains Tax (CGT) to be paid on the transfer of assets to a spouse or civil partner. There is, however, still a disposal that has taken place for CGT purposes effectively at no gain or loss on the date of the

The judgement in HMRC v Tooth

A recent Supreme Court decision examined in some detail HMRC’s powers in relation to issuing a discovery assessment. HMRC generally use discovery assessments where the statutory time limit for looking into a return has expired.

If certain conditions

Rent-a-room relief

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. If you are using this scheme, you should ensure that rents received from lodgers during the current tax year do no exceed £7,500. The tax

Postponed VAT accounting

Since 1 January 2021, businesses registered for VAT have been able to account for import VAT on their VAT return, often referred to as postponed VAT accounting. For most businesses, this means that they can declare and recover import VAT on the same

Changes to customs declarations 1 January 2022

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all non-EU international

VAT group registration

There are special VAT rules that allow two or more corporate bodies to be treated as a single taxable person for VAT purposes. This is known as a VAT group. Eligible persons are bodies corporate, individuals, partnerships and Scottish partnerships,

Steps to modernise UK tax system

At the Autumn Budget 2021, it was announced that there would be a dedicated day this Autumn where the government would set out further plans to continue building a modern, simple and effective tax system. This ‘day’ was on 30 November 2021, and

Government agrees OTS recommendations

The Office of Tax Simplification (OTS) was established in July 2010, to provide advice to the Chancellor of the Exchequer on simplifying the UK tax system. The Financial Secretary to the Treasury has recently written an extensive letter to the OTS

60 days is better than 30 days

The deadline for paying any Capital Gains Tax (CGT) due on the sale of a residential property is now 60 days. The previous 30-day limit was replaced as part of the Autumn Budget measures in October and the change came into effect on the day of the

Plug-in grants for electric vehicles

The low-emission vehicles plug-in grant can help you save up to £2,500 on the purchase price of new low-emission vehicles. The scheme was first launched in 2011 and is available across the UK with dealers using the grant towards the price of eligible

Claiming tax relief for working from home

Employees working from home may be able to claim tax relief for certain home-related bills they pay that are related to your work.

Employers may reimburse employees for the additional household expenses incurred through regularly working at home.

Income excluded from a property business

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and

TOGC overview

The transfer of a business as a going concern (TOGC) rules cover the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate.

Where the

VAT – driving schools who supplies services?

The VAT liability of the supply of driving lessons is an interesting issue that can be of relevance to other supply scenarios such as hairdressers and other workers in the beauty industry.

In HMRC’s internal manuals the guidance identifies three

Can you claim the Marriage Allowance?

The marriage allowance came into force in 2015 and applies to married couples and those in a civil partnership where a spouse or civil partner doesn’t pay tax or doesn’t pay tax above the basic rate threshold for Income Tax (i.e., one of the couples

Carry-back charitable donations

The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take your donation and, providing all the qualifying conditions are met, reclaim the basic rate tax. This increases the value of

Who needs to register for Self-Assessment

There are a number of reasons why you might need to complete a Self-Assessment return. This includes if you are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or

IHT and domicile

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong but actually determining domicile status can be complex. HMRC guidance states that domicile cannot be defined precisely, but the

CGT Roll-over Relief

Business Asset Roll-over Relief is a valuable relief that allows the deferral of Capital Gains Tax (CGT) on gains made when taxpayers sell or dispose of certain assets and use all or part of the proceeds to buy new business assets. The relief means

Structures and Buildings Allowance qualifying expenditure

The Structures and Buildings Allowances (SBA) facilitates tax relief for qualifying capital expenditure on new non-residential structures and buildings. The relief applies to the qualifying costs of building and renovating commercial structures.

What is a tax calculation?

A tax calculation is created by HMRC if you have not paid the right amount of tax. HMRC’s annual reconciliation of PAYE for the tax year 2020-21 is now almost complete. HMRC use salary and pension information to calculate if you have paid the correct

Teesside Freeport open for business

The first of the English Freeports, Teesside, opened operations on 19 November 2021, and is expected to be followed shortly by Thames and Humber. The Teesside Freeport will be at the forefront of local low carbon sector creating thousands of jobs in

New warnings from HMRC re tax fraudsters

Fraudsters are continuing to target taxpayers with scam emails in advance of the 31 January 2022 deadline for submission of Self-Assessment returns. In fact, over the last year, HMRC received nearly 360,000 reports about bogus tax rebate referrals.

Tax Diary December 2021/January 2022

1 December 2021 – Due date for Corporation Tax payable for the year ended 28 February 2021.

19 December 2021 – PAYE and NIC deductions due for month ended 5 December 2021. (If you pay your tax electronically the due date is 22 December 2021).

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VAT and business gifts

In general, VAT does not have to be accounted for on business gifts to the same person as long as the total cost of the gifts does not exceed £50 (before VAT) in any 12-month period. The definition of business gifts includes items from brochures,

If clients ask – trading hours for retailers

There are special rules that govern the trading hours that certain retailers must follow on a Sunday. These rules are defined in the Sunday Trading Act 1994 and apply to shops in England and Wales. The Act restricts the trading hours for retailers

Appealing to the First-tier Tribunal (Tax)

There are a number of different options open to taxpayers that disagree with a tax decision issued by HMRC. Usually, the first step is to make an appeal to HMRC against the tax decision. The case worker who made the decision will look at your case

Self-Assessment countdown

There are now less than 75 days to file your 2020-21 Self-Assessment tax return. Last year over 12.5 million taxpayers were required to complete a Self-Assessment tax return but over 1.8 million taxpayers missed the 31 January deadline.

The deadline

Business gifts

The rules for deciding whether a gift given in the course of business is deductible are complex. The rules for business gifts generally follow those for business entertaining expenditure. This means that HMRC take the view that in general business

A reminder of trivial benefit rules

We wanted to remind readers of the trivial benefits in kind (BiK) rules. The BiK exemption applies to small non-cash benefits like a bottle of wine, a bouquet of flowers given occasionally to employees, or any other benefit in kind classed as

VAT business test

There are a number of conditions that must be satisfied in order for an activity to be within the scope of UK VAT. One of the conditions that needs to be carefully considered when deciding whether an activity is within the scope of VAT is the concept

Tax treatment of incentive scheme awards

Some companies use incentive award schemes to encourage their employees in various ways. For example, to sell more of their own goods and services. The award can include cash-based, vouchers or other gifts.

Where an employer meets the tax payable on

What can be transferred between group members?

Corporation Tax relief may be available when a company or organisation makes a trading loss. Companies that are eligible for group relief can transfer losses and certain other deficits to companies within the same group by means of Group or

Reporting COVID support scheme grants to HMRC

Most COVID support scheme grants are treated as taxable income in the same way as other taxable receipts and need to be reported to HMRC. The grants are treated as income where the business is within the scope of either Income Tax or Corporation Tax.

Vehicles eligible for a plug-in grant

The low-emission vehicles plug-in grant can help you save up to £2,500 on the purchase price of new low-emission vehicles. The scheme was first launched in 2011 and is available across the UK with dealers using the grant towards the price of eligible

Vehicles exempt from Vehicle Excise Duty

Vehicle Excise Duty (VED), also commonly referred to as vehicle tax, is an annual tax levied on owners of most cars, vans, motorcycles, and holders of motorcycle trade licences.

There are certain VED exemptions and discounts for people who suffer

Switching between film and TV reliefs

Film tax relief (FTR) can increase the amount of expenditure that is allowable as a deduction for tax purposes or, if a company makes a loss, can be surrendered for a payable tax credit. To qualify for relief, films must be intended to be shown

Discovery assessment changes

HMRC has taken action to ensure that discovery assessments relating to certain aspects of the High Income Child Benefit Charge (HICBC), Gift Aid Donations and different pension charges act as intended.

According to HMRC, this new measure does not

VAT reverse charge and the flat rate scheme

There are special VAT rules for building contractors and sub-contractors that came into effect on 1 March 2021. The new rules make the supply of most construction services between construction or building businesses subject to the domestic reverse

Vehicle benefit charges from April 2022

The vehicle benefit charges were updated following the Chancellor’s Budget speech. Where employees are provided with fuel for their own private use by their employers, the car fuel benefit charge is applicable. The fuel benefit charge is determined

More time to pay Capital Gains Tax

The Capital Gains Tax (CGT) reporting and payment date for UK residents that sell a residential property changed with effect from 6 April 2020. This change meant that any CGT due on the sale of a residential property needed to be reported and a

Self-employed basis period reforms

The government announced back in September that the introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) has been delayed by one year until April 2024. There had been widespread concerns on the speed of the MTD for ITSA

Autumn Budget 2021 – Alcohol and Tobacco Duty

As part of the Budget measures the Chancellor announced, to a big cheer, that the planned duty rates on beers, spirits, wines and ciders expected to come into effect from midnight on Budget Day will be cancelled.

The Chancellor also announced major

Autumn Budget 2021 – Creative industry tax reliefs

The sunset clause for the Museum and Galleries Exhibition Tax Relief (MGETR) was supposed to come into force on 31 March 2022. As part of the Autumn Budget measures, the Chancellor announced that the relief will be extended for another two years to

Autumn Budget 2021 – Dividend tax rates

As announced on 7 September 2021, the 1.25% increase in NIC contributions from April 2022 will be mirrored by a similar increase in the tax charge on dividends. From April 2022, the dividend tax increases will apply as follows:

Basic rate

Autumn Budget 2021 – £1 million Annual Investment Allowance

In the Spring Budget earlier this year, the government announced that the temporary Annual Investment Allowance (AIA) cap of £1 million would be extended until 31 December 2021. The Chancellor, delivering the Autumn Budget revealed that the temporary

Autumn Budget 2021 – Minimum Wage increases

The Chancellor of the Exchequer, Rishi Sunak confirmed that the government has accepted in full the proposals of the Low Pay Commission for increasing minimum wage rates from 1 April 2022. This puts the government back on track to reach their minimum

Autumn Budget 2021 – Recovery Loan Scheme

The Recovery Loan Scheme was launched on 6 April 2021. The scheme currently allows businesses of any size to access loans and other kinds of finance between £1,000 and £10 million. The scheme was originally meant to close on 31 December 2021 but the

Tax Diary November/December 2021

1 November 2021 – Due date for Corporation Tax due for the year ended 31 January 2021.

19 November 2021 – PAYE and NIC deductions due for month ended 5 November 2021. (If you pay your tax electronically the due date is 22 November 2021.)

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Autumn Budget Summary 27 October 2021

As with the Spring Budget 2021, much of the detail for the Autumn Budget had been leaked to the press prior to the official report to parliament, 27th October 2021.

But we now have all the details and, as usual, there is much to consider. The

Payments received after company is dissolved

Any assets or rights (but not liabilities) remaining in a company at the date of dissolution will pass to the Crown as ownerless property. This happens under what is known as ‘bona vacantia’ which literally means vacant goods. The bodies that deal

Haulage company charged with loan fraud

An interesting case has seen a haulage company based in the West Midlands have their operator licence revoked. This followed a public inquiry into the company by the traffic commissioner for the West Midlands.

The traffic commissioner found that

VAT Margin Scheme bad debt relief

The VAT bad debt relief rules allow businesses to claim bad debt relief and reclaim the VAT they have paid to HMRC. This can happen when an invoice has been issued to a customer and no payment has been received after an extended period (usually 6

Transport restrictions eased

The government has announced plans to introduce a temporary extension to road haulage cabotage rules to alleviate pressures with the supply chain due to lorry driver shortages and other global supply issues. The term cabotage in this context refers

Claiming tariff quotas to reduce import duties

Tariff quotas are a special mechanism for importing limited supplies of specific goods at a lower rate of customs duty than would normally apply. The quotas usually apply to imports from specific countries. Most tariff quotas operate on a first come

Self-Assessment filing deadlines

The 2020-21 tax return deadline for submitting your paper Self-Assessment returns is 31 October 2021. The tax deadline for submitting online returns is 31 January 2022. Late submission of a Self-Assessment return will become liable to a £100 late

Getting prepared to use Freeport customs sites

In the Spring Budget earlier this year, the chancellor announced that eight Freeport locations would be created in England. The Freeports will be in the East Midlands Airport, Felixstowe and Harwich, the Humber region, Liverpool City Region,

Valuing property for ATED

The Annual Tax on Enveloped Dwellings (ATED) is a tax payable by certain Non-Natural Persons (NNPs) that own interests in dwellings valued at more than £500,000. These provisions affect certain companies, partnerships with company members and

What goods are eligible for the margin scheme?

There are a few VAT margin schemes. The margin schemes work by allowing qualifying businesses to account for VAT on their profit margin i.e., on the difference between the cost of acquiring an item and its sale price rather than on the full selling

Don’t miss out on this tax allowance

If you are entitled to the marriage allowance and have not yet applied, then you could receive a payment of up to £1,220 from HMRC. The marriage allowance is available to qualifying married couples and those in a civil partnership where a spouse or

Letting agencies and the Money Laundering Regulations

HMRC is responsible for the money laundering supervision of certain businesses including letting agencies. Businesses that HMRC is responsible for supervising should be aware of the requirement to register with HMRC and the penalties for failing to

Have you claimed your Child Trust Fund cash?

Young persons who turned 18 on or after 1 September 2020 may have cash waiting in a dormant Child Trust Fund (CTF) account. This could be as much as or more than £1,000. The actual amount on deposit depends on certain factors.

Children born after 31

£500 million Plan for Jobs Expansion

The Chancellor, Rishi Sunak, has announced a £500 million expansion of the Plan for Jobs as part of his speech delivered to the party faithful at the Tory annual conference in Manchester. The money will be used to help hundreds of thousands of people

Tax and termination payments

The tax treatment of termination payments has changed significantly over recent years. The changes have aligned the rules for tax and secondary National Insurance contributions (employer (NICs)) by making an employer liable to pay NICs on termination

Reporting grants received to HMRC

Most COVID support grants are treated as taxable income in the same way as other taxable receipts and need to be reported to HMRC. The grants are treated as income where the business is within the scope of either Income Tax or Corporation Tax.

This

Raising capital using the EIS

The Enterprise Investment Scheme (EIS) has been designed to increase investment in the early development of high potential growth businesses. Companies seeking EIS investment are typically more developed than those looking for funding using the Seed

Hospitality trades temporary reduction in VAT has expired

The temporary reduced rate of 5% for hospitality, holiday accommodation and attractions that came into effect in July 2020 ended on 30 September 2021.

However, the government had previously decided that reverting to the standard rate would be too

£500m support for vulnerable households

The government has launched a new £500 million package of support for vulnerable households. The new Household Support Fund will be used to help those most in need with essentials over the coming months as the country continues its recovery from the

Completing a One Stop Shop VAT return

HMRC’s guidance on how to complete and submit a One Stop Shop (OSS) VAT Return from 1 October 2021 has been updated. The special VAT return should only be completed by businesses registered for the OSS Union scheme.

The OSS Union scheme can be used

More on possible change to tax year end date

As we mentioned in a recent post, the Office of Tax Simplification (OTS) has released a new video on a number of possible changes to the tax regime. Perhaps the most radical of these ideas relates to the exploration of changes to the tax year end

OTS releases video update

The Office of Tax Simplification (OTS) was established in July 2010, to provide advice to the Chancellor on simplifying the UK tax system. The OTS has recently published a recording of an online video update setting out its recent publications on

Make the most of tax-free trivial benefits

The trivial benefits in kind (BiK) exemption applies to small non-cash benefits, for example a bottle of wine or a bouquet of flowers, given occasionally to employees.

Although the benefit is defined as ‘trivial’, employers should remember that this

Find customs agent to help with import/export declarations

If you are moving goods to or from the UK then you need to ensure that you have all the correct procedures in place. This is a complex area, and you may need to consider the support of a customs agent to help with your import and / or export

MTD for Income Tax has been delayed by one year to April 2024

The introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) has been delayed by one year until April 2024. This change was announced in a Written Statement to Parliament. The reason for the delay was given as combination of the

Tax Diary October/November 2021

1 October 2021 – Due date for Corporation Tax due for the year ended 31 December 2020.

19 October 2021 – PAYE and NIC deductions due for month ended 5 October 2021. (If you pay your tax electronically the due date is 22 October 2021.)

19 October

Want to complain about HMRC?

Taxpayers may find themselves in a position where they need to make a complaint about HMRC’s service. Complaints can relate to many different issues such as unreasonable delays, mistakes and poor treatment by HMRC’s staff. Note, there is a separate

VAT register inactivity

HMRC’s published guidance titled ‘Check genuine HMRC contact that uses more than one communication method’ has been updated. The list is intended to help taxpayers check if recent contacts purporting to be from HMRC are actually a scam.

The guidance

SEISS claims deadline in a few days

The final deadline for making a claim under the 5th Self-Employment Income Support Scheme (SEISS) is 30 September 2021. The SEIS scheme is only open to those self-employed with annual profits of less than £50,000 and who receive at least half their

Government announces winter COVID plan

The Prime Minister, Boris Johnson has set out the government’s autumn and winter plan for managing Covid.

The government is aiming to sustain the progress made and prepare the country for future challenges, while ensuring the National Health

New timetable for import controls

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period on 31 December 2020, the process for importing goods from the EU effectively mirrors the process for all other international

Student tax scam warning

HMRC is warning new students starting university that they could be targeted by scammers trying to steal their money and personal details. As new students start the academic year, they can be particularly vulnerable to tax scams. This is especially

Outdoor measures to be made permanent

Temporary measures that have given a huge boost to high streets and hospitality during the pandemic could be made permanent following a public consultation launched in September 2021.

From marquees being put up in pub grounds, to street markets

Do tax-payers need to register for Self-Assessment

There are a number of reasons why a taxpayer needs to complete a Self-Assessment return. This includes if they are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or

Class 1 NIC changes extend to Class 1A contributions

It is important to bear in mind that the 1.25% increase in National Insurance contributions (NICs) for 2022-23 will apply to National Insurance Class 1 and Class 4 contributions from April 2022. This means that the increase will apply to Class 1

Dental Associates tax status update

HMRC has, for many years, accepted that associate dentists are generally treated as self-employed. These agreements have been approved by the British Dental Association (BDA) and the Dental Practitioners Association (DPA) and are quoted in HMRC’s

Capped social care costs from October 2023

The government has announced new plans to cap social care costs in England from October 2023. This change is expected to see the introduction of a new £86,000 cap on care costs across an individual’s lifetime.

There will also be the following

Pension triple-lock abandoned for one year

The government has confirmed that its triple-lock guarantee on pensions is to be abandoned for one year. The guarantee was first introduced in 2010 and has remained in place until now. This guarantee has seen the full yearly State Pension increase by

Budget date announced

The Chancellor of the Exchequer, Rishi Sunak has confirmed that the next UK Budget will take place on Wednesday, 27 October 2021. This will be the Chancellor’s third Budget and the first one to revert back to the Autumn Budget schedule that was

Back to school – help with childcare costs

As children have returned to school, HMRC is reminding parents that they may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast and after school clubs.

The TFC scheme can help parents of children aged up to 11 years old (17 for those

Deadline for notifying an option to tax (VAT) land and buildings

There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be

Child benefit when child turns 16

Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August on or after a child’s 16th Birthday. Under qualifying circumstances, the child benefit can continue until a child reaches their 20th

Claiming a tax refund

If you think that you have paid too much tax to HMRC you can usually claim back any overpaid tax. The exact method for making a claim depends on a number of factors including whether or not you complete a Self-Assessment return and the length of time

Using your Personal tax accounts

HMRC’s Personal tax accounts (PTAs) were launched in 2015. The service works as an online resource to allow taxpayers to review and update their details in real time. For many routine requests and services using the PTA can help you avoid having to

Dividend tax increase announced

The 1,25% increase in NIC contributions from April 2022 will be mirrored by a similar increase in the tax charge on dividends. From April 2022, the dividend tax increases will apply as follows:

Basic rate taxpayers will see an increase from the

National Insurance increase to fund NHS and social care

The Prime Minister announced increases in National Insurance Contributions (NIC) of 1.25% from April 2022, to contribute to increases in the NHS and social care budgets.

The increases will apply to:

Class 1 contributions (paid by employees). This

Scope and legal basis of VAT

The scope and legal basis of how VAT is charged on taxable supplies is defined as follows in the VAT Act 1994:

VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person

Income excluded from UK property business

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in their own home, extra services to tenants and

Tax treatment of incentive award schemes

Companies use incentive award schemes to encourage their employees in various ways. For example, to sell more of their own goods and services. The award can be in various forms including cash, vouchers or other gifts.

Where an employer meets the tax

How to deal with tax appeals

There are a number of options open to taxpayers who disagree with a tax decision issued by HMRC. It is important to note that not all decisions by HMRC can be appealed against. There is normally a 30-day deadline for making a claim, so time is of the

Tax relief on charitable donations

If you are a higher rate or additional rate taxpayer, you are eligible to claim relief on the difference between the basic rate and your highest rate of tax. The charity you donate to can reclaim the basic rate of tax from donations made by

Claiming CGT Gift Hold-Over relief

Gift Hold-Over Relief is effectively a deferral of Capital Gains Tax (CGT) when assets are given away (including certain shares) or sold for less than they are worth to help benefit the buyer. The relief means that any gain on the asset is

Rental business – post cessation transactions

There are special rules for the taxation of post-cessation transactions after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or

Corporation Tax loss buying

Under qualifying circumstances, Corporation Tax (CT) relief is available where a company makes a trading loss. The trading loss can be used to claim CT relief by offsetting the loss against other gains or profits of a business in the same or previous

VAT capital goods scheme overview

The VAT Capital Goods Scheme (CGS) is a means of adjusting the initial VAT recovery in respect of certain assets over either 5 or 10 years. The scheme seeks to agree a fair and reasonable attribution of VAT to taxable supplies and non-taxable

Recovering VAT on car purchases

There are complex VAT rules that determine how you can recover VAT on car purchases. The usual fallback rule is that if you purchase a car for your business then no VAT can be reclaimed.

The main exception to this rule is if the new car is used

Covering pension contributions with unused allowances

The annual allowance for tax relief on pensions is currently set at £40,000. The annual allowance is further reduced for high earners. This means that if your income is in excess of £240,000 you will usually begin to see your £40,000 annual allowance

Reporting travel and subsistence benefits

There is no requirement to report certain routine expenses to HMRC. The types of expenses and benefits covered are referred to as exemptions and have replaced dispensations which can no longer be applied for.

The travel and subsistence benefits

Tax Diary September/October 2021

1 September 2021 – Due date for Corporation Tax due for the year ended 30 November 2020.

19 September 2021 – PAYE and NIC deductions due for month ended 5 September 2021. (If you pay your tax electronically the due date is 22 September 2021)

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Construction services and reverse charge

New VAT rules for building contractors and sub-contractors came into effect on 1 March 2021. The new rules make the supply of most construction services between construction or building businesses subject to the domestic reverse charge. The reverse

Post cessation receipts and payments

There are special rules for the taxation of post-cessation receipts and expenses after a trade has ceased. These provisions also apply to professions and vocations as they apply to trades.

Tax relief may be available for post-cessation expenses of a

Bona Vacantia – dissolved companies

The final step in bringing a company to a legal end is when the company is dissolved. However, one of the important points to be aware of when doing so is that the dissolved company can no longer do or receive anything including receive a tax refund.

The Help to Grow Management scheme

The Help to Grow: Management course is a government backed programme to help business leaders develop their strategic skills, create jobs and boost their business performance.

The 12-week programme is delivered by over 40 leading business schools

Postmasters’ bankruptcies reviewed

The recent Court of Appeal and Crown Court decisions to quash the convictions of many former postmasters was widely welcomed. The Courts found that the original convictions were based on evidence from the Post Office’s Horizon IT system which has now

1.8m couples benefit from extra tax relief

HMRC has confirmed that almost 1.8m couples across the UK have benefitted from the marriage allowance and are saving up to £252 a year. The marriage allowance is available to qualifying married couples and those in a civil partnership where a spouse

Goodwill and Corporation Tax

Goodwill is rarely mentioned in legislation. Most people would settle on a simple definition which would be based on the ‘extra’ value of a business over and above its tangible assets.

In the vast majority of cases when a business is sold a

Who can use VAT annual accounting scheme

The VAT annual accounting scheme is open to most businesses with a turnover of up to £1,350,000 per year. The main benefits of the scheme include the requirement to file only one VAT return per year. This can significantly reduce the amount of

Finding your National Insurance number

If you have lost or forgotten your National Insurance number you should try and locate the number on paperwork such as your tax return, payslip or P60. You can also login to your personal tax account to view, download, print, save or share a letter

Expenses you can and cannot claim against property rents

If you are a landlord, it is important that you are aware of expenses you can and cannot claim from your rental income. As a rule, these expenses must be wholly and exclusively for the purposes of renting out the property in question. In some

130% tax relief for companies

Are you thinking of investing in new plant or other equipment? Remember that the super-deduction offering 130% first-year tax relief is available to companies until March 2023.

The super-deduction tax break was introduced on 1 April 2021 and allows

Getting ready for Customs Declaration Service

The Customs Declaration Service (CDS) has been designed to modernise the process for completing customs declarations for businesses that import or export goods from the UK. A phased launch of the service started in August 2018 and more than one

IHT change of domicile

It is possible in certain circumstances for an individual to have two domiciles although this is unusual. There is a concept in the UK of deemed domicile, whereby any person who has been resident in the UK for more than 15 of the previous 20 years

Décor and plant and machinery allowances

Capital Allowances are the deductions which allow businesses to secure tax relief for certain capital expenditure. Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable

Further change to SEISS 5 legislation

HM Treasury has published a Correction Treasury Direction made under the Coronavirus Act 2020, section 76, which modifies and extends the effect of the Self-Employment Income Support Scheme (SEISS). The Direction mainly deals with the expansion of

When is a company dormant for tax purposes?

If a company has stopped trading and has no other income then the company is usually classed as dormant for Corporation Tax purposes.

A company is usually dormant for Corporation Tax if it:

has stopped trading and has no other income, for example

VAT inclusive and exclusive prices

When identifying the amount of VAT charged, it is important to distinguish between VAT inclusive and VAT exclusive prices. A VAT inclusive price includes VAT at the prevailing rate.

When a VAT registered business issues an invoice to their customer

Pub secures reduced tied rent and discounts

The Pubs Code Adjudicator is responsible for enforcing the statutory Pubs Code. The Pubs Code regulates the relationship between all pub companies owning 500 or more tied pubs in England and Wales and their tied tenants. Tied tenants are those that

Tax Diary August/September 2021

1 August 2021 – Due date for Corporation Tax due for the year ended 31 October 2020.

19 August 2021 – PAYE and NIC deductions due for month ended 5 August 2021. (If you pay your tax electronically the due date is 22 August 2021)

19 August 2021 –

Continuous employment defined

When a new employee is added to the payroll it is the employers’ responsibility to ensure they meet the employees’ rights. One of the issues that must be considered is the employees’ length of continuous employment. Continuous employment is

Who counts as CIS contractor or sub-contractor?

The Construction Industry Scheme (CIS) is a set of special rules that affect tax and National Insurance for those working in the construction industry. Businesses in the construction industry are known as ‘contractors’ and ‘subcontractors’ and will

Turnover defined for 5th SEISS grant

HMRC has published new guidance to help the self-employed calculate their turnover for making a claim under the 5th Self-Employment Income Support Scheme (SEISS) grant. The final date for making a claim for the 5th grant will be 30 September 2021.

Who pays Inheritance Tax?

Inheritance Tax (IHT) is commonly collected on a person’s estate when they die but can also be payable during a person’s lifetime on certain trusts and gifts. The rate of IHT currently payable is 40% on death and 20% on lifetime gifts. IHT is

Tax-free gains on gifts to spouse or charity

In most cases, there is no Capital Gains Tax (CGT) to be paid on the transfer of assets to a spouse or civil partner. There is, however, still a disposal that has taken place for CGT purposes effectively at no gain or loss on the date of the

SEISS – more red tape

Government support to the self-employed through the Self-Employment Income Support Scheme (SEISS) is due to end on 30 September 2021. A fifth and final grant covering the period May 2021 to September 2021 will be opened to claims from late July for

Rent-a-room: letting as office accommodation

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. The current tax-free threshold of £7,500 per year has been in place since 6 April 2016. Homeowners using this scheme should ensure that rents

Income excluded from a property business

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and

Inheritance Tax Business Relief

There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone who has died. One of these reliefs is known as Business Relief and is a valuable tax relief for taxpayers with business interests, offering

Taxis: what is liable to VAT

HMRC sets out specific guidance regarding the application of VAT if you are in the taxi and private hire car trade. VAT Notice 700/25 – How VAT applies to taxis and private hire cars – applies.

Private hire cars include mini-cabs. The notice is

Tax if you divorce or separate

If you are a couple that is getting separated or divorced, apart from the emotional stress, there are also tax issues that can have significant implications. Whilst this is unlikely to be uppermost in your mind it is important that the tax

National Minimum Wage reminder for summer staff

We would like to remind any students and seasonal staff that work part time, for example in a summer job, to ensure they are being paid the National Minimum Wage (NMW). All workers are legally entitled to be paid the NMW. This includes temporary

Card security update

VISA have issued information regarding changes to card processing security from September 2021. The idea is to reduce online fraud.

The changes will apply across Europe. A key part of the new security arrangements is the requirement for Strong

IHT – settled and excluded property

A trust is an obligation that binds a trustee, an individual or a company, to deal with the assets such as land, money and shares which form part of the trust. The person who places assets into a trust is known as a settlor and the trust is for the

Associated company rules

As announced in the Budget earlier this year there will be two rates of Corporation Tax from 1 April 2023. When the new rules take effect, taxable profits up £50,000 will continue to be taxed at 19% under the new Small Business Profits Rate. Taxable

OTS – making better use of third party data

The Office of Tax Simplification (OTS) was established in July 2010, to provide advice to the Chancellor on simplifying the UK tax system. The OTS has recently published a new report titled ‘Making better use of third-party data: a vision for the

Current Capital Gains Tax rates

Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain, they may only be subject to a reduced rate of

VAT – what you can and cannot reclaim

For most fully taxable businesses, VAT can be reclaimed on goods and services used in the business. This means that businesses must consider where there is personal or private use of goods or services bought for the business and can usually only

Stage 4 COVID roadmap implemented 19th July

The Prime Minister, Boris Johnson, spoke to the nation and confirmed that the vaccines have significantly weakened the link between coronavirus cases and hospitalisations and deaths. This has allowed the government to confirm that many COVID

CGT on second property sales – 30 day rule

The Capital Gains Tax (CGT) reporting and payment date for UK residents that sell a residential property changed with effect from 6 April 2020. This change means that any CGT due on the sale of a residential property now needs to be reported and a

Reporting foreign income for UK tax purposes

Income Tax is generally payable on taxable income received by individuals including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income. The tax rules for

VAT – which supplies does reverse charge apply to

The VAT domestic reverse charge accounting mechanism was put in place to help prevent criminal attacks on the UK VAT system by means of sophisticated fraud.

The domestic reverse charge procedure applies to the supply and purchase of the certain

New EU VAT Import One Stop Shop (IOSS) rules

There have been significant changes to the EU VAT rules for the sale of goods for businesses selling goods to consumers (B2C) located in the EU from 1 July 2021. The changes mean that EU VAT must be applied on all goods that are sold online in the EU

Changes to furlough scheme from 1 July 2021

The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme is open to all UK employers to access support to continue paying part of their employees’ salary for employees that would otherwise have been laid off during this

Tax credits renewal deadline reminder

The 31 July 2021 is the reporting deadline for families and individuals that receive tax credits. By this date they will need to tell HMRC about any changes to their circumstances or income and to renew their tax credit application. As in previous

Resilience

One of the lessons we should take away from the COVID experience – in a business context – is the ability to recover quickly from unexpected challenges.

Firms in the hospitality and entertainment sectors are excused as they have had no power to act

Taxable benefit charge – returning office equipment

A taxable benefit charge can apply when employees return office equipment they used to work from home. There was a significant rise in the provision of office equipment to employees working from home due to the COVID-19 pandemic. Qualifying home

Off-payroll working rules best practice

The rules for individuals providing services to certain private sector organisations via an intermediary such as a personal service company (PSC) changed from 6 April 2021. The new rules mean that medium and large-sized clients are now responsible

Stamping documents goes digital

HMRC has confirmed that the 300-year-old process used to manually stamp documents to show the duty has been paid will officially come to an end on 19 July 2021.

A new electronic process was introduced during the pandemic as traditional physical

UK Infrastructure Bank opens for business

The new UK Infrastructure Bank has officially opened for business. The new bank, which is headquartered in Leeds, will be tasked with accelerating investment into ambitious infrastructure projects, cutting emissions and levelling up every part of the

Reminder for reporting expenses and benefits for 2020-21

The deadline for submitting the 2020-21 forms P11D, P11D(b) and P9D is 6 July 2021. Employees must also be provided with a copy of the information relating to them on these forms by the same date.

P11D forms are used to provide information to HMRC

Deadline for EU Settlement scheme

EU workers already living in the UK before 31 December 2020 have been required to apply for the EU Settlement scheme. Settled or pre-settled status gives the holder the right to work in the UK as well as other important rights including access to the

Tax Diary July/August 2021

1 July 2021 – Due date for Corporation Tax due for the year ended 30 September 2020.

6 July 2021 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2021 – Pay Class 1A NICs (by the 22 July

Exempt beneficial employee loans

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan

What is net income for pension relief purposes?

The lifetime allowance is the maximum amount of pension and/or lump sum that benefits from tax relief. The lifetime allowance is currently set at £1,073,100. The annual allowance for tax relief on pensions is currently £40,000 and there is a three

VAT – what is partial exemption?

A business that incurs expenditure on taxable and exempt business activities is partially exempt for VAT purposes. This can happen where a business makes or intends to make both taxable and exempt supplies and incurs input tax that relates to both

Replacement of domestic items relief

The replacement of domestic items relief has been in place since April 2016. The relief allows landlords to claim tax relief when they replace movable furniture, furnishings, appliances and kitchenware in a rental property. The allowance is available

Boost to UK tourism

In a boost to UK tourism, the government has launched a new Tourism Recovery Plan to help the sector bounce back from the pandemic. The plan is to recover domestic tourism to pre-pandemic levels by the end of 2022 and international visitor numbers

Childcare top-up to cover summer activities

As the school holidays fast approach, many parents face having to organise extra school holiday childcare over the summer months.

HMRC is reminding working families that the Tax-Free Childcare (TFC) scheme can help if you have children aged up to

Agent Dedicated Line relaunched

HMRC has confirmed that the Agent Dedicated Line (ADL) that offers priority access to HMRC staff has been relaunched on a trial basis from 14 June 2021.

HMRC has also made it clear that the ADL is not expected to be used to handle certain types of

Self-employed NIC charges

There are two types of National Insurance contributions (NICs) payable by the self-employed. These are known as Class 2 NICs and Class 4 NICs.

Class 2 NICs are paid by all self-employed taxpayers unless they earn under the Small Profits Threshold

Building a new home and VAT

The VAT DIY Housebuilders scheme is a special scheme that enables someone building their own home to benefit from special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. The scheme

Are you a landlord that owes tax to HMRC?

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding

How are dividends taxed?

The dividend tax allowance was first introduced back in 2016 and replaced the old dividend tax credit with an annual £5,000 dividend allowance with tax payable on dividends received over this amount. The tax-free dividend allowance was reduced to

Are you taking advantage of trivial benefits?

The trivial benefits in kind (BiK) exemption applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given occasionally to employees. By taking advantage of the exemption employers can simplify the treatment of BiKs whilst at

Who can use the VAT retail schemes?

VAT retail schemes are a special set of schemes used by retail businesses to account for VAT. The schemes are used by businesses that sell a significant amount of low value and/or small quantity items to the public with different VAT

Apportionment and duality

When deciding whether an expense is allowed or disallowed it is important to consider that the expenditure must be incurred wholly and exclusively for the purposes of your trade or employment.

Under the legislation any expenditure not incurred

Bed and breakfast – the same day rule

Historically, the term bed and breakfasting (sale and repurchase) of shares referred to transactions where shares were sold and then bought back the next morning. This used to have Capital Gains Tax (CGT) benefits by crystallising a gain or a loss

Changing a company accounting date

Source: Companies House Wed, 09 Jun 2021 00:00:00 +0100

Private residence relief

There is usually no Capital Gains Tax (CGT) to be paid when you sell your main family residence (referred to by HMRC as private residence relief) that has been used as your only or main residence.

However, there are important points to consider

Tax when you sell a business property

There are various methods at your disposal to reduce or delay the amount of Capital Gains Tax (CGT) when you sell a property that has been used for business purposes.

For example, Business Asset Rollover Relief allows for deferral of CGT on gains

Pre-trading expenditure

There are special tax reliefs for pre-trading expenses that are incurred before a business starts trading. These could include expenses that are required to help a business prepare for trading such as buying stock and equipment, renting premises,

Cash basis for landlords

The cash basis scheme helps sole traders and other unincorporated businesses benefit from a simpler way of managing their financial affairs. Landlords can use the cash basis when recording income and expenditure i.e., recording the flow of money from

What is distance selling for VAT purposes?

Distance selling is the term used to describe supplies of delivered goods from one EU Member State to a customer in another member state who is not registered for VAT.

The recipients of most distance sales will be private individuals, but they can

Tax when you sell an asset

There are special rules that must be followed when you sell an asset on which capital allowances have been claimed. Capital allowances is the term used to describe the tax relief businesses can claim on certain capital expenditure and thereby reduce

The 7-year rule

Most gifts made during a person’s lifetime are not subject to Inheritance Tax at the time of the gift. These lifetime transfers are known as ‘potentially exempt transfers’ or ‘PETs’. These gifts or transfers achieve their potential of becoming

Temporary trade credit insurance scheme to end

Trade credit insurance is a contract bought by suppliers to make sure they get paid even if their customers default and cannot pay the bills. This gives businesses the confidence to trade with one another.

Early in the pandemic, the government

Tax Diary June/July 2021

1 June 2021 – Due date for Corporation Tax due for the year ended 31 August 2020.

19 June 2021 – PAYE and NIC deductions due for month ended 5 June 2021. (If you pay your tax electronically the due date is 22 June 2021)

19 June 2021 – Filing

Tariff suspension on certain imports

The UK government has announced plans to introduce a new tariff suspension scheme. This new scheme will help UK firms become globally competitive.

This will be done by allowing companies to request that duties be partially or wholly reduced for a

Tax on sale of cryptoassets

Most individuals hold cryptoassets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases.

HMRC is clear that these holdings will usually be subject to Capital Gains Tax (CGT) when:

Employment Status Tool

HMRC’s employment status service can be used to help ascertain if a worker should be classified as employed or self-employed for tax purposes in both the private and public sector. The service has recently been updated to reflect off-payroll working

Check if you can claim working from home expenses

If you are an employee who is working from home, you may be able to claim tax relief for some of the bills you pay that are related to your work.

Note that if an employee is working at home voluntarily, they cannot claim tax relief. However, these

One month left to join VAT Deferral Payment Scheme

Businesses that deferred VAT payments last year have until 21 June 2021 to join the new online payment scheme. This would allow them to spread the cost of repayment over a number of months. The VAT deferral scheme is open to businesses that took the

How to claim tax relief on employment expenses

If you are an employee that needs to buy substantial equipment to use as part of your employment you may be able to claim tax relief. In most cases you can claim tax relief on the full cost of this type of equipment. Tax relief is reduced if your

No time for head in the sand tactics

Companies that are still claiming the Coronavirus Job Retention Scheme grants, now known as the furlough scheme, will have hard choices to make come the end of September when the present scheme ends.

Unless business activity picks up between now and

NICs after reaching State Pension Age

If you have reached the State Pension age and continue to work, in most cases you no longer need to pay employees National Insurance Contributions (NICs).

At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you

Income Tax if you move to or from Scotland

The Scottish rate of Income Tax (SRIT) is payable on the non-savings and non-dividend income of those defined as Scottish taxpayers.

The definition of a Scottish taxpayer is based on whether the taxpayer has a ‘close connection’ with Scotland or

Claiming Business Asset Disposal Relief

BADR used to be known as Entrepreneurs’ Relief before 6 April 2020. The name change does not affect the operation of the relief. BADR applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership.

When not to charge VAT

When a VAT registered business issues an invoice to their customer, they must ensure that they charge the correct rate of VAT. Whilst most businesses in the UK charge VAT at the standard rate of 20% there are a number of different VAT rates and

Company information on signs and stationery

There are a number of requirements that must be taken care of when running a limited company. One of the lesser-known requirements concerns the use of signs, stationery and promotional material.

A company is required to display a sign showing the

Record keeping for limited companies

Limited companies are required to hold a wide range of company and accounting records. This includes details of directors, shareholders, company secretaries and the results of any shareholder votes and resolutions.

The company must also keep a

Protecting your personal data

The next time you receive a request, by phone, text, or email, that requires you to take an action or verbally disclose information about yourself or your finances, alarm bells need to ring.

Criminals now use every means at their disposal to obtain

Importing goods into the UK

There are special procedures for importing goods into the UK. Following the end of the Brexit transition period, the process for importing goods from the EU effectively mirrors the process for all other international destinations.

Businesses,

Charging VAT on discounts and free gifts

When VAT registered traders issue an invoice to a customer, they must seek to ensure that the correct rate of VAT is charged. Whilst most businesses in the UK charge VAT at the standard rate of 20% there are a number of different VAT rates and

IHT immediately chargeable transfers

There are special rules concerning the liability to IHT on a transfer made during a person’s lifetime. Most gifts made during this period are not subject to tax at the time of the gift.

These lifetime transfers are known as ‘potentially exempt

Taking money out of a limited company

There are a number of ways a director can extract money from their limited company.

The money can usually be withdrawn in one or more of the following ways. For most directors, the optimum way to minimise personal tax liabilities will be using a

Jobseeker’s Allowance

The Jobseeker’s Allowance (JSA) is a benefit for those usually aged over 18 who are either not working or who are currently working less than 16 hours per week. Applicants must be capable of working and actively looking for work. There are three

Current passport fees

Travel options for going abroad are slowly starting to reopen. From 17 May 2021, international leisure travel from England will no longer be illegal but strict border control measures remain in place. There are 3 different levels of restrictions for

Taxing your car

The instructions to tax your car on the GOV.UK website is reproduced below:

To tax your car, motorcycle or other vehicle you will need to use a reference number from:

a recent reminder (V11) or ‘last chance’ warning letter from DVLA
your vehicle

Holiday update

As lockdown is being eased and opportunity to holiday opens, we felt it might be useful to set out bank holiday dates for the UK regions for the rest of this year.

England and Wales – 2021

Date
Day
Holiday

31

Cryptoassets for individuals – taxes that apply

In most cases, individuals hold cryptoassets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases. They will be liable to pay Capital Gains Tax when they dispose of their cryptoassets.

This

Impact of residence and domicile

HMRC’s online guidance note for residence, domicile and the remittance basis: RDR1 is intended for UK residents and non-residents and covers the residence, domicile and remittance basis rules from 6 April 2013 and onwards.

For most taxpayers, it

CIS – types of work and businesses affected

The Construction Industry Scheme (CIS) is a set of special rules for tax and National Insurance for those working in the construction industry.

The CIS covers all construction work carried out in the UK, including jobs such as:

site

COVID support grants that are taxable

We would like to remind readers that existing legislation is in place to ensure that COVID support grants are treated as taxable income in the same way as other taxable receipts. The grants are treated as income where the business is within the scope

Mobile phone exempt costs

When an employee incurs costs for the provision of mobile phones to employees it is important to understand the correct tax treatment of these expenses. This includes costs for phones provided to employees and reimbursement of employee’s own phone

Reminder to look out for tax credit renewal packs

HMRC has begun sending the annual tax credit renewal packs to some 2.5 million tax credit claimants and is encouraging recipients to renew their tax credits claim online. The packs are being sent out over the next 6 weeks and should be with

Debt respite scheme launched

A new scheme, aptly named Breathing Space, was launched 4 May 2021.

Breathing Space will give those facing financial difficulties space to receive debt advice, or mental health crisis treatment, without pressure from creditors or mounting

Changing the terms of a salary sacrifice arrangement

A salary sacrifice arrangement is effectively an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit. This can include items such as company cars, childcare vouchers and additional employer pension

Restarting a dormant or non-trading company

HMRC must be informed when a non-trading or dormant company starts trading again and becomes active for Corporation Tax. Companies can use HMRC Online Services to supply the relevant information.

When a company has previously traded and then stops,

VAT – transfer as a going concern

The transfer of a business as a going concern (TOGC) rules concern the VAT liability of the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate.

Where

Tax-free capital gains

As with Income Tax personal allowances, taxpayers have an annual exempt amount for Capital Gains Tax (CGT) which is forfeited if not used. The annual exemption for individuals in 2021-22 is £12,300.

Whilst most taxpayers are aware of their annual

Tax on savings interest

If you have taxable income of less than £17,570 in 2021-22 you will have no tax to pay on interest received. This figure is calculated by adding the £5,000 starting rate limit for savings (where 0% of the interest is taxable) to the current £12,570

New self-build initiative

In a surprise weekend announcement, the Housing Secretary Robert Jenrick has revealed new plans for £150 million of funding to make it easier and more affordable for people to build their own homes.

The new “Help to Build” low deposit

Tax Diary May/June 2021

1 May 2021 – Due date for Corporation Tax due for the year ended 30 July 2020.

19 May 2021 – PAYE and NIC deductions due for month ended 5 May 2021. (If you pay your tax electronically the due date is 22 May 2021).

19 May 2021 – Filing deadline for

Small trading tax exemption for charities

The tax treatment of charities can be complex. Many charities trade either as part of their charitable interests or to raise funds. As a first step, any charity hoping to benefit from any beneficial tax treatment needs to be recognised as a charity

Correcting errors on VAT returns

Where an error on a past VAT return is uncovered, businesses have a duty to correct the error as soon as possible. As a general rule, any necessary adjustment can be made on a current VAT return. However, in order to be able to do so, there are three

Treasury directive re fourth SEISS grant

HM Treasury has published a further Treasury Direction made under the Coronavirus Act 2020, ss. 71 and 76, which modifies and extends the effect of the Self-Employment Income Support Scheme (SEISS). The new Direction mainly deals with the expansion

Keeping self-employed tax records

If you are self-employed as a sole trader or as a partner in a business partnership, then you must keep suitable business records as well as separate personal records of your income.

For tax purposes, the business records must be held for at least

Recovery Loan Scheme

The new Recovery Loan Scheme was launched on 6 April 2021. The new scheme allows businesses of any size to access loans and other kinds of finance between £25,000 and £10 million. The scheme will remain open until 31 December 2021 (subject to

The Mortgage Guarantee Scheme

One of the measures announced at the Budget was the introduction of a new Mortgage Guarantee Scheme to help home buyers purchase property. The scheme was officially made available from Monday, 19 April 2021. The new scheme is designed for prospective

A reminder that not all costs are costs…

Costs are defined as something that has to be paid or spent to acquire something. Costs include the acquisition of:

An object, say material required to convert into saleable goods.
A service, for example, sub-contact labour or
A right, the

Vaccine for your business

There is a poignant similarity between the effects of COVID on us personally and our businesses.

Thankfully, the possible dire consequences of catching the Coronavirus bug are being countered by a variety of vaccines. Fingers crossed that these will

Website development costs

One of the main areas to consider in deciding how to treat a deductible expense is whether the cost is revenue or capital in nature. There is no single, simple test that can be applied to decide which items are capital expenditure and which are

Lockdown changes 12 April 2021

Even the unseasonably cold weather does not seem to have stopped people in England getting their first taste of normality for many months as many restrictions were lifted on 12th April 2021.

The full list of changes that came into effect in England

Repaying overclaimed SEISS grants

Self-employed individuals (including partnerships) who have overclaimed the Self Employed Income Support Scheme (SEISS) must pay back the overpayment to HMRC. The rules for repaying HMRC state that you must tell HMRC if you were not eligible to have

Property repossessions from 1 April 2021

There have been a significant number of measures introduced to help those experiencing financial difficulties because of coronavirus. Throughout the course of the pandemic, the Financial Conduct Authority (FCA) has sought to ensure that lenders

One-off £500 payment for working households receiving tax-credits

As part of the March 2021 Budget, the Chancellor announced that the temporary £20 weekly uplift in Universal Credits would continue for a further six months, until the end of September 2021. It was also confirmed that Working Tax Credit claimants

HMRC’s new penalty regime

HMRC’s new points-based penalty regime for late submission and payment will start from 1 April 2022. The changes will apply in the first instance to the submission of VAT returns for VAT return periods beginning on or after 1 April 2022.

The

Annual party benefits

The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the various criteria outlined below then there is no requirement to report anything to HMRC or pay tax and National Insurance.

Claims to reduce payments on account

Self-Assessment taxpayers are usually required to pay their Income Tax liabilities in three instalments each year. The first two payments are due on 31 January during the tax year and 31 July following the tax year.

These payments on account are

Exempt beneficial loans

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan

Companies can claim super-deduction from 1 April

The new super-deduction tax break, that will allow companies to deduct 130% of the cost of any qualifying investment from their taxable profits, is available on most new plant and machinery investments that ordinarily qualify for 18% main rate

National Minimum and Living Wage increases 1 April 2021

The new National Minimum Wage (NMW) and National Living Wage (NLW) rates came into effect on 1 April 2021. The new rate for the NLW is £8.91 which is a 19p increase over last year. The NLW is the minimum hourly rate that must be paid to those aged 23

Archiving international trade documents

There are important rules that all businesses must follow to keep business and accounting records accessible if requested by HMRC. The exact documentation that must be held and the time limits for doing so can vary significantly. For example, most

Updating Self-Assessment tax returns

There are special rules to follow if you have submitted a Self-Assessment return and subsequently realise you need to change it. This can happen if for example you made a mistake like entering a number incorrectly or missing information from the

Film and TV restart scheme

The government’s £500 million scheme to kickstart film and television production entitled the Film and TV Production Restart Scheme, helps UK film and TV productions struggling to secure insurance for COVID-19 related costs.

The Scheme allows TV and

OTS recommended changes to IHT

The Financial Secretary to the Treasury has written to the Office of Tax Simplification (OTS) to confirm that HM Treasury strongly supports some key recommendations on changes to Inheritance Tax.

The government announced on 23 March 2021 that it

£1.5bn boost for rates relief

A new Business Rates relief fund will provide a £1.5 billion tranche of support to businesses outside the retail, hospitality, and leisure sectors affected by COVID-19.

Retail, hospitality and leisure businesses have not been paying rates during the

New support for High Streets and sea-side towns

As lockdown measures begin to be eased, a new package of support measures to help high streets and coastal areas across England has been announced by the Communities Secretary Robert Jenrick. The support will be delivered via a new £56 million

5% late penalties apply from 1 April 2021

Self-Assessment taxpayers that failed to pay their outstanding tax liabilities or set up a payment plan by midnight on 1 April 2021 will be charged a 5% late payment penalty charge.

Under the normal rules a 5% late payment penalty would have been

Tax Diary March/April 2021

1 April 2021 – Due date for Corporation Tax due for the year ended 30 June 2020.

19 April 2021 – PAYE and NIC deductions due for month ended 5 April 2021. (If you pay your tax electronically the due date is 22 April 2021)

19 April 2021 – Filing

Flat Rate Scheme limited cost trader check

The VAT Flat Rate Scheme has been designed to simplify the way a business accounts for VAT and in so doing reduce the administration costs of complying with the VAT legislation. The scheme is open to businesses that expect their annual taxable

Incorporation relief

When a taxpayer owns a business as a sole trader or in partnership, a capital gain will be deemed to arise if the business is converted into a company by reference to the market value of the business assets including goodwill. This could give rise to

Calculating Minimum Wage if paid annual salary

New National Minimum Wage and National Living Wage rates will come into effect on 1 April 2021. These changes will see the National Living Wage increase by 19p to an hourly rate of £8.91 and the National Minimum Wage will increase to £8.36 (a rise of

Consider signing up to PROOF scheme

One of the services offered by Companies House helps combat fraud and protect your company from unauthorised changes to records. The free service is known as the protected online filing (PROOF) scheme and means that any forms covered by PROOF can

Have you claimed too much from furlough scheme?

HMRC’s guidance makes it clear that any business that makes an error in making a Coronavirus Job Retention Scheme (CJRS) claim must pay back any amount overclaimed. Any claims based on inaccurate information can be recovered by HMRC.

If you’ve

Disposing of garden or grounds

In general, there is no Capital Gains Tax (CGT) on a property which has been used as a main family residence. This relief from CGT is commonly known as private residence relief.

However, there are some grey areas which might result in CGT being due

What would a business vaccine aim to prevent?

Now we are getting used to the idea that the various vaccines will provide some defence against COVID outbreaks, what would a vaccine for our businesses attempt to prevent?

We have listed below a few strategies that you might like to consider that

Reminder of eight-step export routine

Following the end of the Brexit transition period, the process for exporting goods to the EU mirrors the process for all other international destinations.

Businesses, especially those that only trade with EU should by now be aware of the rules and

Changing accounting date

There are special rules in place which limit the ability to change a company’s year end date. A company’s year-end date is also known as its ‘accounting reference date’ and is historically set by reference to the date the company was incorporated.

Expenditure disallowed

When deciding whether an expense is allowed or disallowed for tax purposes it is important to bear in mind that the expenditure must be incurred wholly and exclusively for the purposes of your trade or employment.

Under the legislation any

Tax-free mileage expenses

If you use your own vehicle for business journeys, then you may be able to claim a tax-free allowance from your employer known as a Mileage Allowance Payment or MAP. The allowance is available if employees use their own car, van, motorcycle or bike

Tax-free property and trading income

Two separate £1,000 tax allowances for property and trading income were introduced in April 2017. If you have both or either type of income highlighted below then you can claim a £1,000 allowance for each.

The £1,000 exemptions from tax apply

Rent-a-room relief

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. The current tax-free threshold of £7,500 per year has been in place since 6 April 2016. If you are using this scheme you should ensure that

COVID – beating the bug

Although it cannot be understated, that COVID has resulted in widespread personal tragedies and business hardships, there are stories circulating of businesses that have managed to buck the downward trend.

Very often this is due to being in the

Passports – expensive items

Many families will be organising UK holidays this year and so passports may be left in draws for 2021.

But when the market for overseas holidays opens up, better check that your passports still meet that important “6 months before they

Reminder, what are badges of trade

The ‘badges of trade’ tests whilst not conclusive are used by HMRC to help determine whether an activity is a proper economic trade / business activity or merely a money-making by-product of a hobby.

They are useful when careful consideration needs

Off-payroll working rules from 6 April 2021

The rules for individuals providing services to the public sector via an intermediary such as a personal service company (PSC) changed from April 2017. The new rules shifted the responsibility for deciding whether the intermediaries’ legislation

VAT deferral scheme open for business

Businesses that took the option to defer the payment of their VAT liabilities between 20 March 2020 and 30 June 2020 need to decide what course of action they will take.

There are two options available for repaying this VAT. The first option is to

Reminder of year end payroll chores

It is not long until the current 2020-21 tax year comes to an end and there are a number of year end payroll chores that must be completed. This includes sending a final PAYE submission for the tax year. The last Full Payment Submission (FPS) needs

Temporary carry back of losses

A new temporary extension to the eligible carry back period for trading losses has been announced. This will allow trading losses to be carried back for three years (rather than one). The extension to the relief applies to both incorporated

New mortgage guarantee scheme

One of the measures announced as part of the March 2021 Budget was the introduction of a new mortgage guarantee scheme to help home buyers purchase a property. The new scheme is designed for prospective home buyers who only have a small deposit and

Breaking even – a moveable feast

In our previous newsfeeds we have described how you can calculate the level of turnover you need to create in order to meet all your costs whether they be fixed costs (rent, rates etc.,) or variable costs (goods you need to buy to convert into goods

Lending to fund losses

One of the Chancellors key announcements in the Budget last week was to replace the government guaranteed Bounce Back and Business Interruption loans – due to end for new applications from 31 March 2021 – with a new Recovery Loan Scheme (RLS).

The

Spring Budget 2021 – VAT

It has been confirmed, by the Chancellor, that the taxable turnover threshold that determines whether businesses should be registered for VAT will be frozen at £85,000 until 31 March 2024. The taxable turnover threshold that determines whether

Spring Budget 2021 – Capital allowances

Designed to help offset the increased Corporation Tax main rate and promote investment, the Chancellor announced the introduction of a new ground breaking super-deduction tax relief. The new temporary tax relief applies on qualifying capital asset

Spring Budget 2021 – Government backed loan schemes

The deadline for applications for all the government-backed loan schemes including the Bounce Back Loan scheme, Coronavirus Business Interruption Loans and the Future Fund ends on 31 March 2021.

The Chancellor did not announce any further extension

Spring Budget 2021 – CJRS and SEISS schemes extended

The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme will be extended until the 30 September 2021. The Chancellor confirmed that employees will receive up to 80% of their salary for hours not worked subject to a monthly

Spring Budget 2021 – Corporation Tax

The Chancellor confirmed that the Corporation Tax main rate will remain at 19% from 1 April 2021 for the next 2 years. The main rate had been expected to increase to help pay the massive costs of the coronavirus pandemic to the public purse.

Spring Budget 2021 – Income Tax Rates & Allowances

It has been confirmed as part of the Budget announcements that the 2021-22 personal allowance will increase to £12,570 (2020-21: £12,500) and the basic rate limit to £37,700 (2020-21: £37,500). As a result, the higher rate threshold will increase to

Budget Summary – March 2021

More has been disclosed, leaked, of this year’s Budget announcements than in previous years. But we now have the details and there is a lot to consider. The following Budget summary is split into four sections:

COVID-19 related support measures

What is pensions credit?

Pension Credit is an income-related benefit made up of 2 parts – Guarantee Credit and Savings Credit.

Guarantee Credit tops up your weekly income if it’s below £173.75 (for single people) or £265.20 (for couples). You may still be eligible if you

Capital or debt?

What is the difference between capital and debt, and why is the distinction important?

One important distinction is that capital represents the amount of funds introduced by shareholders, partners or sole traders plus any retained profits that the

Outcome of the Uber case

The Supreme Court has handed down a landmark judgement in the Uber case. The Supreme Court unanimously upheld the decisions of earlier courts and has found that Uber drivers are ‘workers’ and not self-employed as Uber has tried to argue.

The

VAT Agricultural Flat Rate Scheme

Businesses that use the flat rate scheme pay VAT as a fixed percentage of their VAT inclusive turnover. The VAT Agricultural Flat Rate Scheme is a variant of the flat rate scheme specifically designed for farmers and other activities relating to

Government to publish range of tax consultations

In a recent HM Treasury press release it has been confirmed that the government will publish a number of tax-related consultations and calls for evidence at the end of March. These consultations would usually be published on Budget day but instead

Tax Diary March/April 2021

1 March 2021 – Due date for Corporation Tax due for the year ended 31 May 2020.

2 March 2021 – Self-assessment tax for 2019/20 paid after this date will incur a 5% surcharge.

19 March 2021 – PAYE and NIC deductions due for month ended 5 March 2021.