Tax codes for employees
The P9X form is used to notify employers of tax codes to use for employees. The latest version of the form has just been published and shows the tax codes to use from 6 April 2022. The forms states that the basic personal allowance for the tax year starting 6 April 2022 will, as expected, be £12,570 (£12,570 2021-22) and this means that the tax code for emergency use will remain at 1257L.
The basic rate limit will be £37,700 (£37,700 2021-22) except for those defined as Scottish taxpayers who
Income Tax set-off of rental business losses
Where a property business makes a loss, the loss can usually be carried forward and set against future rental business profits. HMRC’s guidance is clear that any losses made in one rental business cannot be carried across to any other rental business the customer carries on at the same time in a different legal capacity.
Under limited circumstances property losses can be set against general income of the same year or the following year. However, where a property business claims loss relief
IHT – limitations on spouse or civil partner exemptions
Inheritance Tax (IHT) is a tax that is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. The rate of Inheritance Tax payable is 40% on death and 20% on lifetime gifts. There is a nil-rate band, currently £325,000 below which no IHT is payable.
Transfers between married couples and civil partners are not usually subject to IHT, meaning that when the first partner of a couple dies leaving their estate to the other no IHT
Employing for the first time
There are a multitude of rules and regulations that you must be aware of when you start employing staff for the first time.
HMRC’s guidance sets out important issues to be aware of when becoming an employer.
Decide how much to pay someone – you must pay your employee at least the National Minimum Wage.
Check if someone has the legal right to work in the UK. You may have to do other employment checks as well.
Check if you need to apply for a DBS check (formerly known as a CRB check) if you
Working for yourself
Newly self-employed taxpayers should notify HMRC as soon as practicable when they begin working for themselves. However, HMRC must be officially notified by 5 October following the end of the tax year so that a Self-Assessment return can be issued on time and to avoid any unnecessary penalties.
HMRC’s guidance says that you are probably self-employed if you:
run your business for yourself and take responsibility for its success or failure;
have several customers at the same time;
can
Charging charities at lower rates of VAT
There are special rules, under which a VAT-registered business can sell certain goods and services to charities at the zero or reduced rate of VAT. Before charging VAT at a lower rate, you must be able to show evidence that the charity is eligible. This is usually done by obtaining suitable evidence of the charity’s status and a written declaration or ‘certificate’ confirming they meet the conditions for a particular VAT relief.
Charities are legally required to provide an eligibility