Are we seeing the end of tax-free benefits?
There have been changes to the tax rules for certain Benefits in Kind which are provided as part of salary sacrifice schemes. These changes, which started coming into effect in April of this year, are beginning to have an impact on certain tax-free benefits provided to employees. The new rules effectively remove any Income Tax and employer NIC advantages and treat continued use of the benefits provided as if they were part of salary.
There are transitional rules, they are:
arrangements ... read more
Gifts to a charity or your spouse
There is usually no Capital Gains Tax (CGT) to be paid on the gift of assets between married couples and civil partners. However, there is still a disposal that has taken place for CGT purposes, effectively, at no gain or loss on the date of the transfer. When the asset ultimately comes to be sold, the gain or loss will be calculated using the base cost when the asset was first owned by the spouse or civil partner making the gift.
There are a few exceptions that couples should be aware of ... read more
How will your business be affected by Making Tax Digital?
The introduction of Making Tax Digital (MTD) will fundamentally change the way companies, the self-employed and landlords interact with HMRC. The new regime will require businesses and individuals to register, file, pay and update their information using a new online tax account.
The new regime is due to start next April when the self-employed (including property landlords), with turnover in excess of the VAT registration limit - currently £85,000 - will need to upload quarterly data to HMRC. ... read more
Using your own car for business purposes
Employees who use their own car at work for business purposes can, under certain circumstances, be paid a tax-free allowance by their employers. This includes the use of their own van, motorcycle or bike. It is important to note that this tax-free allowance does not include journeys to and from work but for other business related mileage.
Employers usually make payments based on a set rate per mile depending on the mode of transport used. There are approved mileage rates published by HMRC. ... read more
Should you be using the VAT Cash Accounting Scheme?
The VAT Cash Accounting Scheme (CAS) can offer important benefits to certain small businesses. Under the standard VAT accounting scheme, VAT is payable on sales whether or not the customer has paid and can lead to claims for Bad Debt Relief. With the CAS no VAT needs to be paid over to HMRC until the customer has paid for his goods / services. Using the CAS will help protect your cash flow if the amounts owed to your business by customers consistently exceeds the amounts owed to your ... read more
Are you claiming the NIC employment allowance?
For some time now, employers have been able to reduce their Class 1 NI contributions that relate to their employment of staff. The relevant relief, the employment allowance, is worth up to £3,000 per year and is available to most businesses and charities to be offset against their employer's Class 1 NIC bill.
Claiming the allowance is fairly straight forward, all that is required is a tick in the relevant box in your payroll software.
Eligible employers that have not yet done so can still ... read more
DVLA car scam
The Driver & Vehicle Licensing Agency (DVLA) is warning the public of what appears to be a number of widespread scams targeting members of the public using emails, texts and telephone calls. These communications are supposedly sent from the DVLA and in some cases, include links to a lookalike DVLA online website.
The BBC’s Watchdog programme has also tweeted a link to a fake email which looked like it was from the DVLA.
The email states:
'We would like to notify you that you have an ... read more
Using the trivial benefits exemption
The trivial benefits in kind (BiK) regime came into effect in April 2016. This statutory exemption applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given occasionally to employees or any other benefit in kind classed as 'trivial' that falls within the exemption.
Although the benefit is defined as ‘trivial’, employers should remember that this offers a great opportunity to give small rewards to employees. To qualify, gifts must not be given as a reward for ... read more
The recent election result has certainly thrown the cat amongst the pigeons.
There are already indications that the Queen’s speech and the start of Brexit negotiations may be delayed, this mainly due to extended negotiations to agree support for the Conservatives with minority groups, at present the DUP.
Manifesto pledges that may be removed from the Queen's speech includes:
cancelling plans to remove the triple lock on pensions
the means testing of winter fuel payments
the introduction ... read more
Benefits filing deadline approaching
Employers are reminded that the deadline for submitting the 2016-17 forms P11D, P11D(b) and P9D is 6 July 2017. P11D forms are used to provide information to HMRC on certain benefits and expenses that employees and directors receive during the tax year: such as company cars, loans and private medical insurance.
Employers making online submissions will need to correct any problems with the forms before filing electronically. Employers who submit paper forms with errors will have to re-submit ... read more
VAT Flat Rate Scheme – limited cost traders
The VAT Flat Rate Scheme (FRS) was introduced to ease the process of calculating and submitting VAT returns for smaller businesses - the FRS is only available to businesses that expect their annual taxable turnover in the next 12 months to be no more than £150,000 (exc VAT). VAT due for each quarter is calculated as the VAT inclusive turnover multiplied by a relevant percentage rate.
Prior to April 2017, registration to use the FRS resulted in a reduction in VAT payments for certain traders. ... read more
Main Residence Nil Rate Band
The impact of Inheritance Tax has been reduced recently for families that own their own home. HMRC has introduced a new relief, the Inheritance Tax main residence nil-rate band (RNRB), which came into effect on 6 April 2017.
The RNRB is a transferable allowance, that is available to the estates of both parties in a marriage or civil partnership, when their main residence is passed down to a direct descendent: for example, their children or grandchildren. The RNRB is available in addition to the ... read more
Marginal rate of Income Tax
For high earning taxpayers the personal allowance is gradually reduced by £1 for every £2 of income over £100,000 irrespective of age. This creates an effective marginal rate of tax of around 60% for tax payers with annual income between £100,000 and £123,000 as the £11,500 tax-free personal allowance is gradually withdrawn.
Taxpayers whose income sits within this band should consider what financial planning opportunities are available to avoid this personal allowance trap. This can include ... read more
EU Fourth Money Laundering Directive
The EU Fourth Money Laundering Directive which makes sweeping changes to combatting money laundering and terrorist financing across the EU will be implemented into UK law on 26 June 2017.
As a result, Companies House has made changes to the current requirements about people with significant control (PSC) filings. Since the PSC rules were introduced in April 2016, the necessary information needed to be filed with Companies House on incorporation and updated on the confirmation statement (CS01). ... read more
Welsh land transaction tax
The new land transaction tax (LTT) which will replace the UK stamp duty land tax (SDLT) in Wales will be launched on 1 April 2018. The LTT legislation received Royal Assent on 24 May and is the first Act of this Assembly term.
The LTT marks the first new Welsh tax in almost 800 years. The legislation is broadly based on the existing SDLT legislation, however the final announcements on tax rates and bands will not be made until 1 October 2017 and the regulations will be laid after the UK Autumn ... read more