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What qualifies for 10% Entrepreneurs’ Relief?
10-08-2017

What qualifies for 10% Entrepreneurs’ Relief?

Entrepreneurs' Relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where Entrepreneurs' Relief is available CGT of 10% is payable rather than the normal main rate of 20%. This can significantly reduce the amount of CGT due. When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to a generous £10 million ... read more

How to roll-over capital gains
10-08-2017

How to roll-over capital gains

Business Asset Rollover Relief allows for the deferral of Capital Gains Tax (CGT) on gains when you sell or dispose of certain assets and use all or part of the proceeds to buy new assets. The relief means that the tax on the gain of the old asset is postponed. The amount of the gain is effectively rolled over into the cost of the new asset and any CGT liability is deferred until the new asset is sold. Where only part of the proceeds from the sale of the old asset is used to buy a new asset a ... read more

Holiday lets occupancy rules
10-08-2017

Holiday lets occupancy rules

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes. In order to qualify as a furnished holiday letting, the following occupancy criteria need to be met: The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify. The property must be located in the UK, or in a country ... read more

Claiming back VAT on fuel
10-08-2017

Claiming back VAT on fuel

HMRC offers a number of alternative methods for claiming back VAT on car fuel where there may be a mix of business and private mileage. They fall into a number of broad categories: Standard scale charge - HMRC operates a useful simplification measure that allows businesses to use a standardised scale charge to value fuel costs for private use. The scale charge is a fixed amount based on a vehicles CO2 rating. This saves business car users the chore of keeping detailed records of actual ... read more

VAT capital goods scheme
10-08-2017

VAT capital goods scheme

The VAT Capital Goods Scheme (CGS) adjusts the initial VAT recovery in respect of certain assets over either 5 or 10 year period. The scheme seeks to agree a fair and reasonable attribution of VAT to taxable supplies and non-taxable supplies relating to the use of an asset over its lifetime. In effect, the recovery of VAT input tax following the capital expenditure, is spread out over a number of years rather than being recovered at date of purchase. The adjustment period for land and buildings ... read more

Carry back charitable contributions
10-08-2017

Carry back charitable contributions

Donations to charities are a recognised way to benefit charities and certain tax payers. To facilitate these advantages, taxpayers must ensure they keep a proper record of all donations to back up claims on their tax return. Donations that are made through the Gift Aid scheme allow for the recipient charity to claim 25p worth of tax relief on every pound donated. Higher rate and additional rate taxpayers are eligible to claim relief on the difference between the basic rate and their highest ... read more

The end of disincorporation relief?
02-08-2017

The end of disincorporation relief?

Disincorporation involves the transfer of a business from a private limited company to a sole trader or partnership. Disincorporation relief was introduced from 1 April 2013 and is effectively a form of roll-over or deferral relief. The relief is due to end on 31 March 2018. The relief allows a company to transfer certain types of assets to its shareholders without the company incurring a Corporation Tax charge on the disposal of the assets. The shareholders then continue to operate the ... read more

Landlords, what expenses can you claim?
02-08-2017

Landlords, what expenses can you claim?

It is important that landlords are aware of the expenses that can be deducted from their rental income. As a rule, these expenses must be wholly and exclusively for the purposes of renting out the property in question. Since April 2017, tax relief on mortgage costs used to buy investment properties is being gradually restricted to the basic rate of tax. The reduction in the relief for finance costs for landlords will most affect higher rate and additional rate taxpayers with significant ... read more

VAT – what you cannot reclaim
02-08-2017

VAT – what you cannot reclaim

Most VAT registered businesses are entitled to reclaim the VAT they incur on goods and services used by the business. This is known as input VAT. Some of the common areas where VAT cannot be reclaimed include the following: Goods and services used to make exempt supplies. VAT doesn't apply to everything and there are certain supplies which are specifically not subject to VAT. These are referred to as ‘exempt’ supplies. This includes insurance, financial services, postal services, health and ... read more

Tax write downs for business cars
02-08-2017

Tax write downs for business cars

Capital allowances allow businesses to secure tax relief for certain capital expenditure. Qualifying expenditure on cars must usually be allocated to one of two general pools of expenditure. Which pool is appropriate depends on the car’s CO2 emissions. Expenditure on cars with CO2 emissions over 130g/km will be dealt with in the special rate pool and will attract a WDA of 8% p.a. Expenditure on cars with CO2 emissions from 76g/km of up to and including 130g/km driven will be dealt with in the ... read more

Company purchase of own shares
02-08-2017

Company purchase of own shares

As a general principle, when a company makes a purchase of its own shares, any payment in excess of the amount of capital originally subscribed for the shares is treated as a distribution (taxed as income not a capital gain). However, there are special provisions that enable an unquoted trading company or an unquoted holding company of a trading group to undertake a purchase of its own shares without making a distribution. In order to do this a clearance application needs to be made to HMRC. ... read more

Let property disclosure campaign
02-08-2017

Let property disclosure campaign

HMRC’s 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 the tax rules or because of deliberate tax evasion. HMRC has recently updated their online guidance Let Property Campaign, providing examples of the tax errors that landlords make and listing several examples. These examples look at scenarios ... read more

Supreme Court declares employment tribunal fees unlawful
01-08-2017

Supreme Court declares employment tribunal fees unlawful

In R (on the application of Unison) v Lord Chancellor 2017, the Supreme Court has ruled that employment tribunal and Employment Appeal Tribunal (EAT) fees are unlawful and it has quashed the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 with immediate effect. The Supreme Court held that the fees regime was unlawful under both UK and EU law as it prevents access to justice and imposes unjustified limitations on the ability to enforce EU rights; fees had been set at too ... read more

Tax Diary August/September 2017
28-07-2017

1 August 2017 - Due date for Corporation Tax due for the year ended 31 October 2016. 19 August 2017 - PAYE and NIC deductions due for month ended 5 August 2017. (If you pay your tax electronically the due date is 22 August 2017) 19 August 2017 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2017. 19 August 2017 - CIS tax deducted for the month ended 5 August 2017 is payable by today. 1 September 2017 - Due date for Corporation Tax due for the year ended 30 ... read more

European Union (Withdrawal) Bill published
27-07-2017

European Union (Withdrawal) Bill published

The government has published the European Union (Withdrawal) Bill 2017-19 and it has had its first reading in the House of Commons. The second reading is scheduled for 9 September 2017, following which it will enter Committee Stage for further debate. Explanatory Notes to the Bill have also been published. The Bill performs four main functions. It: repeals the European Communities Act 1972 on the day the UK leaves the European Union; ends the supremacy of EU law in UK law and converts EU ... read more