Advice to help you grow your business faster

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.

Capital Gains Tax exemptions

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 2020-21 is £12,300. A husband and wife each have a separate exemption.

Inheritance Tax – tax-free gifts

We wanted to remind our readers of the Inheritance Tax (IHT) implications of making cash gifts during the current tax 2020-21 tax year that ends on 5 April 2021.

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

Claiming Self-Employed Income Support Scheme grants

Under the third Self-Employed Income Support Scheme (SEISS) grant, claimants received up to 80% of average trading profits for November and December 2020, and January 2021. This meant that a maximum grant for the three months of £7,500 was made

What is overtrading?

A reminder that traders who buy and sell goods – wholesalers or retailers – need to be wary of the financial consequences if, as expected, pent up consumer activity leads to a surge in demand for your products from July 2021 or earlier if you can

Emerging from lockdown

The Prime Minister has set out the government’s objectives for easing lockdown restrictions.

If the planned opening of schools, social interactions and businesses is achieved without significant increases in infection, after 21st June 2021, there

Buying equipment for your job

Employees who need to buy substantial equipment to use as part of their employment may be able to claim tax relief. In most cases they can claim relief based on the full cost as it usually qualifies for a type of capital allowance called the Annual

Tax breaks working from home

Employees who are working from home may be able to claim tax relief for any additional costs due to home working. No tax relief will be due if employers reimburse employees for the additional household expenses incurred.

The tax relief covers

Guidance for paying deferred VAT updated

The coronavirus VAT payment holiday gave businesses the chance to defer the payment of any VAT liabilities between 20 March 2020 and 30 June 2020. The option for businesses to defer their VAT payments ended on 30 June 2020.

There are two options

Simplified export declarations

Following the end of the Brexit transition period, businesses need to make customs declarations when exporting goods to the EU as well as to the rest of the world. Businesses can make customs declarations themselves or hire a third party such as a

Added protection for pension savers

The new Pensions Scheme Act received Royal Assent on 11 February 2021. The Act covers a number of important pensions-related issues and has faced a long journey through parliament, starting in October 2019, that included delays due to both Brexit and

Marriage Allowance tax break

If you are entitled to the marriage allowance and have not yet applied, then you could receive a payment of up to £1,188 from HMRC. HMRC used the occasion of Valentine’s Day to remind couples to make a claim.

The marriage allowance is available to

Financial outcomes for your business

There are three possible financial outcomes for your business, each with their own challenges:

Make a profit
Breakeven, or
Make a loss

Making a profit

Clearly, this will be your goal. If you make profits – and taxation will never eat up all

How much do your customers owe you?

Many business owners are buoyed by turnover; if it’s sold it’s as good as money in the bank, but is it?

What are your credit terms? How many days do you allow your customers to keep your money before insisting they pay you?

30 days is probably the

Present criteria for claiming via the furlough scheme

The detailed Furlough Scheme rules were last updated 4 February 2021.

People who are unable to work can receive up to 80% of their wages. This payment is subject to a monthly maximum amount of £2,500 per employee (for hours not worked). Employers

VAT and overseas goods sold to customers in the UK

Following the end of the Brexit transition period, new rules on tax and duty now apply on goods sent to the UK from overseas. These changes are meant to ensure that goods from EU and non-EU countries are treated in the same way and that UK businesses

Bounce Back Loans scheme changes

The Bounce Back Loans scheme was launched in May 2020 to provide financial support to businesses across the UK that were losing revenue and disrupted cashflow as a result of the COVID-19 pandemic. The scheme allows qualifying small businesses to

Self-Employment Income Support Scheme

Claims for the third Self-Employed Income Support Scheme (SEISS) grant closed on 29 January 2021. Under this grant, the self-employed received up to 80% of average trading profits for November and December 2020 and January 2021. This meant that a

Accounting for import VAT on your VAT return

Following the end of the transition period, businesses registered for VAT can account for import VAT on their VAT return, often referred to as postponed VAT accounting. For most businesses, this means that they will declare and recover import VAT on

Why keeping adequate accounting records is important

A recent investigation by the Insolvency Service resulted in the sole director of a Leicester clothing manufacturer being jailed for six months after failing to provide adequate company accounting records.

The investigation found that the defendant

Protecting your capital

Business owners in vulnerable sectors: predominantly retailers, leisure and entertainment trades, will have seen their hard-won capital all but exhausted by the needs to meet fixed costs when income generation has been restricted or eliminated by

Can we supply the coming consumer bounce-back?

Will the Government’s endeavours to nail the COVID virus with the vaccine roll-out have the desired effect of opening up the UK economy, the easing of lock-down and a gradual return to “normality”?

Fingers crossed…

One thing is for

Tax codes for employees

The P9X form is used to notify employers which 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 2021. The forms states that the basic personal allowance for the tax

Claims to adjust 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 e.g., for 2020-21 the first payment on account was due on 31

Companies House to pause strike off process

Companies House has announced that they have once again temporarily paused the voluntary and compulsory strike off processes. The hiatus is set to be in place for one month from 21 January until 21 February 2021. When a company is struck off, the

New Treasury Directive re furlough scheme

An updated Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 concerning the extended Coronavirus Job Retention Scheme (CJRS) was published on 25 January 2021. The new direction formally extends the CJRS until 30 April

Scottish Budget Statement 2021-22

Scotland’s Finance Secretary, Kate Forbes delivered her second Budget statement to the Scottish parliament on 28 January 2021. The date was selected to allow the Scottish Government time to deliver their Budget and have it approved before the start

Did you miss the Self-Assessment deadline?

HMRC has announced that more than 10.7 million people submitted their 2019-20 Self-Assessment tax returns by the 31 January deadline. This leaves over 1.8 million taxpayers that have missed the deadline and are yet to file. Are you among those that

Keeping pay and tax records

Following the 31 January 2021 deadline for submission of Self-Assessment tax returns for 2019-20, it can be a useful exercise to review the rules for keeping your pay and tax records. There are no set rules for how to keep your records, but you must

Accounts and tax for companies

If you have recently setup a new limited company or are thinking of doing so then one of the areas that you need to be aware is the accounts and tax filing regime for companies.

After the end of its financial year, a private limited company must

New funding boost for young people

The government has announced a new £1,000 cash bonus to encourage employers to take on new trainees. The traineeship scheme supports young people to gain the skills and experience they need from the very start, helping them to get a job, an

Business owners – year end planning tips

A few housekeeping tips for readers with business interests; especially those with an upcoming financial year end at the end of March 2021.

Don’t forget to include any grants received to support COVID challenges in your accounts as income. These

Landlords – year end planning tips

A few housekeeping tips for readers with buy to let or holiday let properties to think about and action – if applicable – before the end of the current financial year, 5 April 2021.

Buy-to-let

Have you experienced a drop in rental income since

Tax Diary February/March 2021

1 February 2021 – Due date for Corporation Tax payable for the year ended 30 April 2020.

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

19

Carry a company trading loss back to previous years

Corporation Tax relief may be available where your company or organisation makes a trading loss. A qualifying trading loss may be used to claim relief from Corporation Tax by offsetting the loss against profits in previous years.

This could be an

Keep your business moving

An interesting press release published jointly by the Department for Business, Energy & Industrial Strategy and Business Minister, Paul Scully has highlighted some important actions that businesses should ensure they undertake now that the UK has

No late online filing penalties until 28 February 2021

HMRC has announced that fines for taxpayers that file their Self-Assessment returns late will be waived until 28 February 2021. The filing deadline for 2019-20 returns remains at 31 January 2021. HMRC is still encouraging taxpayers to try and meet

Funding to get young people into work

Employers can now apply for a £1000 cash boost to help them take on new trainees.

The new scheme will support young people to gain the skills and experience they need from the very start, helping them to get a job, an apprenticeship, or pursue

Landlords need to embrace a digital approach

HMRC are slowly rolling out their Making Tax Digital (MTD) scheme. Eventually, selected landlords submitting their rental income and outgoings via self-assessment will need to embrace this new MTD requirement.

What will it involve?

Self-employed

Tax when you sell shares

Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% when you sell shares unless they are in a CGT free wrapper such as an ISA or pension.

If you only pay basic rate tax and make a small capital gain you may only be subject to a

Online tax payment plans

New figures published by HMRC have revealed that some 25,000 taxpayers have set up an online payment plan to manage their tax liabilities spreading payments of £69 million for up to 12 monthly instalments.

This follows an increase in the limit for

Government help for people in debt

New government proposals have been published that look at further extending debt solutions to help more people suffering from problem debts. The proposals specifically look at increasing the financial eligibility criteria for debt relief orders

Government tackles late payment to small firms

The Government has announced an overhaul of the Prompt Payment Code (PPC).

Under the new reforms, companies that have signed up to the PPC will be obliged to pay small businesses within 30 days – half the time outlined in the current Code.

Despite

Rights to regenerate

We will soon have the rights to turn derelict buildings into homes and community assets. In a recent press release the Ministry of Housing said:

The public will be able to convert vacant plots of land and derelict buildings into new homes or

Have you paid your Data Protection Fee?

The Information Commissioner’s Office (ICO) is the independent regulatory office in charge of upholding information rights in the interest of the public. Under the Data Protection Act 2018, all organisations that process personal information must

VAT Reverse charge for construction sector

A further reminder that new VAT rules for building contractors and sub-contractors will come into effect from 1 March 2021. The new rules were originally expected to commence from 1 October 2019, but an initial 12 month delay was announced. The start

CJRS guidance on who can be furloughed

HMRC’s guidance on which employees can be placed on furlough using the Coronavirus Job Retention Scheme has been updated. The scheme will continue until at least 30 April 2021.

The updated guidance includes new information about employees who are

Apply for the new Global Health Insurance Card

UK residents can now apply for the new UK Global Health Insurance Card (GHIC).

Under Britain’s new agreement with the EU, UK residents’ rights to emergency and medically necessary healthcare will continue when travelling in the EU. This includes

Testing for international arrivals

Passengers arriving from all international destinations will be required to present a negative COVID-19 test result before departing for England to help protect against new strains of coronavirus circulating internationally.

Transport Secretary

Tax returns filing deadline at the end of this month

The 31 January 2021 tax return filing deadline is not just the final date for submission of your Self-Assessment tax return but also an important date for payment of tax due to HMRC. This includes the payment of any balance of Self-Assessment

Looking for a customs agent?

The Brexit transition period has come to an end and a new customs border has been created between the UK and EU. If you are moving goods to or from the UK then you need to ensure that you have all the correct procedures in place.

One of the most

Did you file your tax return on Christmas Day?

A new press release by HMRC has highlighted that 2,700 taxpayers took the time to file their tax return online on Christmas Day with a further 8,500 taxpayers completing their tax returns on Boxing Day. In total, 31,400 Self-Assessment returns were

£4.6 billion lockdown grants announced

Following a rapid rise in COVID infections, from today 5th January 2021, England has been placed into a new lockdown. Following this the Chancellor has announced £4.6 billion of new lockdown grants to help support businesses forced to close. The

Time to revisit solvency

If you have managed to retain profits in your business this fat-on-the-bone will help to see you through loss making periods as we endeavour to emerge from COVID disruption, hopefully, later this year.

How long these reserves may last depends on how

Lock-down 3 – business considerations

It’s official. We are in lock-down 3 in England, Scotland following suit and the other regions expected to enforce similar restrictions.
It is evident that any freeing impact of the vaccine roll-outs will not have sufficient impact before February at

Internal Market Bill becomes law

The UK Internal Market Act 2020 received Royal Assent on 17 December 2020 and came into force on 1 January 2021 following the end of the Brexit transition period. The new Act ensures that businesses can continue to trade seamlessly across all four

Child Trust Fund court fees waived

Children born after 31 August 2002 and before 3 January 2011 were entitled to a Child Trust Fund (CTF) account provided they met the necessary conditions. These funds were long term saving accounts for newly born children. The first of these children

Help to Save bonuses

The Help to Save scheme was launched by the government in September 2018 to help those on low incomes to boost their savings. Under the scheme, those eligible could save between £1 and £50 every calendar month and receive a 50% government bonus. The

Happy New Year

There really hasn’t been much to feel merry about during the recent holiday period.

Lock-down and the need to socially distance has kept many of us under virtual house arrest.

Thankfully, the recent announcement that the Oxford vaccine has been

More Red-Tape

True to predictions, Boris Johnson and his team achieved a trade deal with the EU to operate from 1 January 2021, and although there are generally no tariffs to pay on the movement of goods back and forth, this is far from free movement of

New regulations to exempt payments made to employees for coronavirus antigen tests from NICs

The Social Security Contributions (Disregarded Payments) (Coronavirus) (No. 2) Regulations 2020 will come into force on 25 January 2021 to provide that payments made by employers to employees to cover or reimburse the costs of coronavirus (COVID-19)

Tax Diary January/February 2021

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

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

19 January 2021 –

Sharing costs

Independence is a cultivated concern. We all want to be self-sufficient.

In a business environment this might manifest as having a separate Wi-Fi source even though it may be possible to share Wi-Fi with a number of business neighbours and divide

Too good to be true?

Right now, any reference to a return to 2019 trading conditions seems to echo the title of this short article, too good to be true.

Common sense tells us that we are unlikely to emerge largely, COVID-free until the end of 2021 and additionally, many

Tax-free gifts for Christmas

After a very difficult 2020, the traditional Christmas break is almost with us. If you are an employer and looking to give your employees a small token of appreciation for Christmas, then your best option is probably to give them a gift. In order to

Are you ready to make customs declarations?

HMRC has written to VAT registered businesses across the country to remind them to be prepared for new trading rules with the EU from 1 January 2021 after the Brexit transition period comes to an end. Time is running short and without having all of

Accounting for import VAT on your VAT return

From 1 January 2021, businesses will be able to account for import VAT on imports into Great Britain (England, Scotland and Wales) from EU and non-EU countries. Businesses in Northern Ireland will be able to use the postponed VAT accounting for goods

Presenting our new brand: From TaxAssist to Heighten

From the 1st October our brand has evolved. We’ve grown out of TaxAssist and have turned a new page as Heighten. Over the last few months we’ve poured our hearts into re-imagining our brand so that it’s more in line with our values and vision as a firm, and speaks to the kind of clients

Employing domestic staff

When you employ someone to work in your home it is your responsibility to meet the employee’s rights and deduct the correct amount of tax from their salary. This can include employees such as a nanny, housekeeper, gardener or carer. The rules are

SDLT change for mixed use buildings

HMRC’s published guidance on the application of the 3% higher rate of Stamp Duty Land Tax (SDLT) has been updated. The higher rates of SDLT were introduced on 1 April 2016 and apply to purchases of additional residential property such as buy to let

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

HMRC crackdown on avoidance schemes

HMRC and the Advertising Standards Authority (ASA) have come together to jointly target misleading marketing by promoters of tax avoidance schemes. HMRC and the ASA can jointly issue an Enforcement Notice to companies irresponsibly advertising tax

New Christmas grant for pubs

The Prime Minister, Boris Johnson, has announced an additional one-off £1,000 Christmas grant for wet-led pubs in tiers 2 and 3 who will miss out on much needed business during the busy Christmas period.

A wet-led pub is a bar which doesn’t serve

Could the Trader Support Service help your business?

The new Trader Support Service has been designed to help businesses moving goods under the Northern Ireland Protocol from 1 January 2021, after the Brexit transition period comes to an end. There will be changes in moving goods between Great Britain

VAT on delivery charges

The process for working out the VAT treatment of delivery charges can be quite complex.

We have listed below some of the main issues to bear in mind when deciding whether or not VAT needs to be applied.

No charge for delivery. HMRC’s guidance is

Do you owe CGT on the sale of a residential property?

HMRC has issued a press release to remind taxpayers that have sold a residential property, which was not their main home, during the 2019-20 tax year that the payment date for any Capital Gains Tax (CGT) owed is 31 January 2021.

Due to the impact of

Double entry demystified

Most business owners will know the difference between a profit statement and a balance sheet.

Both are created from a process known as double-entry bookkeeping.

If asked to consider two aspects of a £50 purchase from a stationery store, most would

Beware requests from bogus charities

It has been estimated that almost £350,000 of charitable donations last year ended up in the pockets of criminals.

Government recently issued advice to reduce this activity. They said:

The vast majority of fundraising appeals and collections are

Treasury directive re third 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 Direction mainly deals with the expansion of the

New advisory fuel rates published

Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. The rates can be used by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of

Deadlines for paying deferred VAT

The coronavirus VAT payment holiday gave businesses the chance to defer the payment of any VAT liabilities between 20 March 2020 and 30 June 2020. The option for businesses to defer their VAT payments ended on 30 June 2020.

There are two options

EU exit – did you read this letter?

The Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma has written a letter to businesses in the professional services sector. The letter (available in English and Welsh) provides tailored advice on what key actions

Confirmation of Minimum Wage increases 2021

The Chancellor used the recent Spending Review to confirm that increased National Minimum Wage and National Living Wage rates will come into effect on 1 April 2021.

From 1 April 2021, the National Living Wage will increase by 19p to £8.91. This

Pay January tax by instalments

The deadline for submitting your 2019-20 Self-Assessment tax returns online is 31 January 2021. You should also be aware that payment of any tax due should also be made by this date. This includes the payment of any balance of Self-Assessment

HMRC’s Annual Tax Summary

The Annual Tax Summary is a document provided by HMRC that provides details on the tax you pay and how this is used by government.

The Annual Tax Summary shows:

your taxable income from all sources that HMRC knew about at the time that it was

Coping with the new EU reality

It is apparent that our final exit from the EU, 1 January 2021, will disrupt the movement of goods, back and forth, while transport links and customs authorities adjust to the new reality.

Hopefully, readers that are directly affected – with

Supply chains, a predictive approach for 2021

One of the more positive aspects – perhaps the only positive aspect – of COVID disruption has been the movement away from fixed systems to more flexible systems to cope with the changing demands of lock-down.

Who would have predicted a year ago that

Spending Review 2021/22

The Chancellor, Rishi Sunak delivered the government’s spending plans for the coming year to Parliament on 25 November 2020. The Spending Review usually covers 3 to 4 years but given the many unknowns as a result of the pandemic the review will only

Beware tax deadline scammers

Fraudsters are continuing to target taxpayers with scam emails in advance of the 31 January deadline for submission of Self-Assessment returns. In fact, over the last year, HMRC received more than 846,000 reports about suspicious HMRC contact.

A

Reasonable excuses for making a late furlough claim

HMRC’s guidance on making claims through the Coronavirus Job Retention Scheme was updated on 19 November 2020. The updated guidance now includes various examples of what is meant by a ‘reasonable excuse’ for employers that submit furlough claims

Tax Diary December 2020/January 2021

1 December 2020 – Due date for Corporation Tax payable for the year ended 28 February 2020.

19 December 2020 – PAYE and NIC deductions due for month ended 5 December 2020. (If you pay your tax electronically the due date is 22 December 2020)

19

Trading with businesses in Northern Ireland?

More than 7,000 businesses have now signed up to the new Trader Support Service (TSS), which will support traders moving goods under the Northern Ireland Protocol from 1 January 2021.

Recently, registrations to the TSS have increased by around 50%,

Why compound interest is important

Many of us are building a pension fund, a portfolio of shares or deposits with our bank or building society.

Most of these investment options reward us for our participation by offering income (usually in the form of interest or dividends) or by

Bounce Back loans still available

The Bounce Back Loans scheme was launched in May 2020 to provide financial support to businesses across the UK that are losing revenue and seeing their cashflow disrupted as a result of the COVID-19 pandemic. The scheme allows small businesses to

Claiming the Self-Employed Income Support for first time?

The Government has confirmed that the Self-Employed Income Support Scheme (SEISS) grant extension will apply for 6 months from 1 November 2020. It will be possible to claim the SEISS grant extension even if no previous claim had been made under the

Email to replace Companies House postal reminders

Companies House has issued a press release to remind all companies to sign up for email reminders for annual accounts and confirmation statement. Companies House has now stopped sending reminders by post and has sent a final reminder letter to all

Those who shout loudest

Many of the business disruption grants that have become available in the last few weeks are being distributed by local authorities. They include support for:

Businesses obliged to close due to local or national lockdown and
Businesses that have

Do you need a customs agent?

If your business acquires goods or sells goods to the EU, and you have no import/export trade with non-EU countries you probably have no experience of dealing with the raft of red tape involved in clearing goods through customs and settling any

Further support for mortgage borrowers

The Financial Conduct Authority (FCA) has announced new proposals to ensure that lenders provide tailored support to mortgage borrowers who continue to face payment difficulties due to the COVID-19 crisis. This follows the additional government

Protection for landlords and tenants

The government guidance for landlords and tenants as a result of the coronavirus pandemic has been updated. The Coronavirus Act 2020 provides protection to social and private tenants by delaying when landlords can start proceedings to evict tenants.

Coding out debts deadline

The coding threshold entitles tax payers to have tax underpayments collected via a tax code, provided they are in employment or in receipt of a UK-based pension. The coding applies to certain debts such as Self-Assessment liabilities, tax credit

Getting the most out of digital data

One of the great benefits of data stored in an electronic format is that it can be sorted in an endless array of reports. This offers business owners who have invested in accounts software a range of options.

Once you have input basic accounts

Barter your way through COVID disruption

While we wait for the magic-bullets that promise to reduce the impact of COVID – vaccines etc – should we be exploring ways to exchange goods and services with our suppliers and customers?
Barter is defined as: the exchange of goods and services

Options for Christmas bash

It is unlikely that hospitality venues will be open to all-comers for the festive season, which closes down our options to celebrate Christmas and New Year with family, friends and work colleagues. If the present lock-down is effective, from 5 November to 2 December, perhaps there will be sufficient elbow room for limited access to

Online sales platform

If you sell goods or material that can be sold from the internet, have you considered this form of sales platform for your business?

Providing access for your goods on the internet is a sensible strategy. If we have learnt anything from COVID it is

Uncertainty

While politicians and scientists try and figure out the best way to control COVID, we are left to pick up the pieces and try and salvage what we can of our businesses.

Our economy is built on various, level playing field assumptions:

Same legal

Filing deadlines for company confirmation statement

As well as filing accounts with Companies House, there is an important requirement to check that the information Companies House has about your company is correct. This is facilitated by the filing of an annual company confirmation statement. The

Registration of partnerships with HMRC

A Partnership is a relatively simple way for two or more persons (or legal entities) 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

Sale of income in exchange for capital amount

A capital sum received by an individual in respect of the sale or relinquishment of income derived from their personal activities can sometimes be treated as earned income and chargeable to Income Tax. If this is the case, the amount charged to

Contributions towards capital expenditure

A wide variety of grants or subsidies are available to businesses and can be received in addition to their ordinary business income. It is important to identify these contributions and to establish whether they are capital or revenue in

Tax-free perk for Christmas

If you are an employer and looking to give a small Christmas bonus to your employees, then your best option is probably to give them a gift. In order to ensure that this is not a taxable gift, it is important to ensure that the trivial benefits in

Responding to a court judgement

In today’s precarious business environment many companies are unable to pay their debts. If this happens, your creditors can ultimately apply to the court to get their debts paid. This can be done either by getting a court judgement or making an

Taxable business gains

If you are in business as a self-employed sole trader or as part of a partnership, there may be occasions when you are required to pay Capital Gains Tax (CGT). CGT is normally charged at a flat rate of 20% on the amount of ‘profit’ or ‘gain’.

You

Less than 100 days to file your tax return

HMRC has published a news release to remind taxpayers that there is now less than 100 days to file their 2019-20, Self-Assessment tax return. Last year over 11 million taxpayers were required to complete a tax return, but over 958,000 taxpayers

New national lockdown and changes to business support measures

The Prime Minister, Boris Johnson speaking at a press conference on Saturday night, 31 October 2020, confirmed widespread expectations of a second national lockdown in England to help stem the growing resurgence of the coronavirus. The Government was

Article 3

You can’t keep getting advice from your mate down the pub anymore and know you need proven advice for businesses at your growth.

Article 2

You’ve outgrown your existing accountant, you have hired more staff, your payroll is increasing and overseeing accounting is taking over your day.

Article 1

You have goals, but you aren’t sure how to get there. You need someone and track your an grow in both your personal and business life.

Carry back charitable donations

If you pay Income Tax at the basic rate no additional relief is due on your charitable donations. However, if you are a higher rate or additional rate taxpayer then you can claim tax relief on the difference between the basic rate and your highest

Venues required to enforce rule of six

Since 18 September 2020, many designated venues in England have been required to enforce the rule of 6. The ‘rule of 6’ bans any social gathering of more than 6 people, except under limited circumstances such as if a single household or support

Job Support Scheme for closed businesses

The CJRS or furlough scheme ended on 31 October 2020 and has been replaced by the Job Support Scheme (JSS). This JSS has been designed to help businesses and employees deal with a fresh spike of the virus and a winter of uncertainty.

The JSS is now

Temporary extension to the Help to Buy scheme

The Help to Buy equity loans scheme is open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000. The Help to Buy equity loans provide a low-interest loan towards the deposit. The loan is