Tax Diary March/April 2020
1 March 2020 - Due date for Corporation Tax due for the year ended 31 May 2019.
2 March 2020 – Self assessment tax for 2019/19 paid after this date will incur a 5% surcharge.
19 March 2020 - PAYE and NIC deductions due for month ended 5 March 2020. (If you pay your tax electronically the due date is 22 March 2020)
19 March 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 March 2020.
19 March 2020 - CIS tax deducted for the month ended 5 March 2020 is payable ... read more
Employer toolkit for EU Settlement Scheme published
Following Brexit, the government has published an updated toolkit for employers on how to support their employees who are EU citizens (including EEA and Swiss citizens) to apply to stay in the UK. The content includes print and digital fact sheets, leaflets and posters covering the key areas of the EU Settlement Scheme, i.e. eligibility, the application process, the wide range of support available and the deadline for applications. It also includes a template letter that employers can give to ... read more
Change to the off-payroll working rules
As part of a review into changes to the operation of the off-payroll working rules (IR35), HMRC has announced that the changes will only apply to payments made for services provided on or after 6 April 2020. Previously, the rules would have applied to any payments made on or after 6 April 2020, regardless of when the services were carried out. It means businesses will only need to determine whether the rules apply for contracts they plan to continue beyond 6 April 2020, giving businesses more ... read more
Could you claim the marriage allowance?
If you are entitled to the marriage allowance and have not yet applied, you could receive a payment of up to £1,150 from HMRC. HMRC used the occasion of Valentine’s Day to remind couples to make a claim. It is estimated that whilst 1.78 million couples have already claimed the Marriage Allowance, there are still more than 2 million eligible couples that have not made a claim.
The marriage allowance is available to qualifying married couples and those in a civil partnership where a ... read more
Budget date re-confirmed
After a tumultuous few days in politics, it has been confirmed by the new Chancellor of the Exchequer, Rishi Sunak that the Budget will take place as planned on Wednesday 11 March 2020.
There has been fevered press speculation that the new Chancellor might delay the Budget date to give him more time to prepare. Rishi Sunak was previously the chief secretary to the Treasury and has had a meteoric rise to the top echelons of government becoming Chancellor at the relatively tender age of 39.
The ... read more
Tax if you return to the UK
There are tax implications that you will need to consider if you previously left the UK to live abroad and are now returning to live and work in the UK or are considering such a move.
In most cases, if you have returned to live in the UK, you will be classed as resident in the UK and you will be required to pay UK tax on your UK income and gains, and any foreign income and gains.
Your exact liability to Income Tax will depend on whether you are resident and / or ordinarily resident and / or ... read more
Rent a room relief 2019-20
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 rents received from lodgers during the current tax year do no exceed £7,500. The tax exemption is automatic if you earn less than £7,500 and there are no specific tax reporting requirements.
The relief applies to the letting of ... read more
Student and postgraduate loans
If you have a student loan, have finished your studies and entered the workforce you must begin to make loan repayments from the April after you have finished your studies or when your income begins to exceed the annual threshold. The annual threshold amounts are currently £18,935 for plan 1 and £25,725 for plan 2. The Department for Education has confirmed that the thresholds will increase to £19,390 for plan 1 and to £26,575 for plan 2 from 6 April 2020.
The terms of ... read more
PAYE payment dates
This article is a reminder to payroll staff about the electronic PAYE payment dates. The due date for electronic PAYE payments falls on the 22nd of the month and when a payment is made electronically, a payment on the day usually suffices.
However, where the due date falls on a non-banking day (weekend or bank holidays), HMRC must have cleared funds by the last bank working day before the 22nd. This advice is particularly relevant this month i.e. for electronic payments due on 22 February 2020, ... read more
New bandings for electric vehicles
From 6 April 2020, the car and car fuel benefit calculations are changing with the introduction of 11 new bands for ultra-low emission vehicles (ULEVs) including a separate zero emissions band.
If a car has a CO2 emission figure of 1-50g/km employers will need to provide the car’s zero emission mileage. This is the maximum distance that the car can travel in miles on a single electric charge. The graduated table of company car tax bands will be based on the zero emission mileage of the ... read more
IHT tenants in common or joint tenants?
As a general rule, Inheritance Tax (IHT) is collected from a person's estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. There is normally no tax to be paid if the value of the estate is below the IHT nil rate threshold of £325,000.
The remaining amount after deducting the nil rate band, main residence nil-rate band, IHT exemptions and reliefs is liable to IHT at 40%. A reduced rate of IHT of 36% applies where 10% or more of a ... read more
A reminder – 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 / business activity or merely a money-making side-line to a hobby. Eventually, taxpayers may have to decide if their hobby has morphed into a trade - and therefore subject to tax. The badges of trade can be used at this time to help resolve this dilemma.
Both HMRC and the courts are clear that it is important to look at the whole picture rather than looking at ... read more
Breathing space to help those in debt
HM Treasury has confirmed that the new 'breathing space' scheme to help those with problem debts will become operational next year. The scheme will provide legal protections from creditor action while those affected will receive professional debt advice in order to find an appropriate solution to their debt issues.
The breathing space scheme will have a 60-day respite period during which individuals will be protected from almost all enforcement action by creditors whilst working with a ... read more
Scottish Income Tax rates announced 2020-21
Public finance minister Kate Forbes delivered her first Budget statement to the Scottish Parliament on 6 February 2020. This followed the shock resignation of finance minister, Derek Mackay.
This is the first time that Scotland has held a Budget before the rest of the UK.
It was announced as part of the Scottish Budget that there would be no change in Income Tax rates and only a small change in the lower rate Income Tax thresholds. It was also announced that the higher rate threshold would be ... read more
Still time to utilise annual tax-free allowance
We would like to remind our readers that there is still time to use the annual exemption for Capital Gains Tax (CGT). In the current 2019-20 tax year, this amounts to £12,000. This means that there is no CGT to pay on the first £12,000 of gains where you dispose of chargeable assets, such as property or stocks and shares.
If you are a married couple or civil partnership, you should ensure that each of party utilises their full annual exempt amount wherever possible. Any unused part ... read more
Checking your NIC records
HMRC offers an online service to check your National Insurance Contributions (NIC) record online. In order to use the service, you will need to have a Government Gateway account. If you don't have an account, you can apply to set one up online.
By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you haven’t already done so. The personal tax account can be used to complete a variety of tasks, for example, ... read more
Review occupancy for Holiday Lets owners
The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes.
In order to qualify as a furnished holiday letting, the following criteria need to be met:
The 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 within the ... read more
Change to off-payroll working rules
A welcome change to the implementation of the new off-payroll working rules has been announced. The Government has confirmed that the changes that come into effect April 2020 will not be retrospective. This means that the new rules will only apply to payments made for services provided on or after 6 April 2020. This change was in response to representations from many large and medium businesses with concerns about the rules that would apply and from when.
The rules for individuals providing ... read more