Alcohol duty freeze confirmed
The Chancellor, Philip Hammond recently paid a visit to an independent brewery in Liverpool and confirmed that the duty rates on beers, spirits and most ciders will be frozen at the current rates for another year from 1 February 2019. These measures mean that the average price for a bottle of whisky will be £1.50 less and a pint of beer 14p less than if the rates had increased as expected based on the duty escalator.
The Chancellor hailed the duty freeze as offering much needed support to the ... read more
Will you pay tax on your inheritance?
If you inherit property, money or shares you are usually not liable to pay tax on the inheritance. This is because any Inheritance Tax (IHT) due should be paid out of the deceased’s estate before any cash or assets are distributed to the heirs.
There is normally no tax to be paid by the deceased’s estate if the value of the estate is below the IHT nil rate threshold of £325,000. There is also an IHT main residence nil-rate band (RNRB) that was introduced in April 2017. The RNRB will ultimately ... read more
Struggling to pay your January tax bill?
Have you missed the 31 January 2019 deadline for paying your tax bill? The 31 January was not just the final date for submission of your Self Assessment tax return but also an important date for payment of other tax due. This included the payment of any Capital Gains Tax due in relation to the 2017-18 tax year, and also the due date for your first payment on account for 2018-19.
If you were unable to pay some or all of the monies due to HMRC, you need to be pro-active and contact HMRC as soon ... read more
Spring Statement 2019
The Chancellor, Philip Hammond, has announced that he will deliver his Spring Statement to the House of Commons on Wednesday, 13 March 2019. The timing of the statement is interesting as the Spring Statement is due to take place just over 2 weeks before the 29 March Brexit withdrawal date.
This will be the second Spring Statement to take place following the government’s decision to switch to a new cycle with the annual Budget taking place in the autumn, and the annual Statement taking place in ... read more
MTD pilot for self-employed is available
The introduction of Making Tax Digital (MTD) will fundamentally change the way businesses, 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 in April 2019, for VAT purposes only, when some 1 million businesses with a turnover above the VAT threshold will be required to keep their records digitally and provide their VAT return ... read more
Claiming money or property from a dissolved company
Any property, cash and other asset owned by a company when it is dissolved automatically passes to the Crown as ownerless property. This process is known as 'bona vacantia' which literally means vacant goods. The bodies that deal with bona vacantia claims vary across the United Kingdom, but they all ultimately represent the Crown.
There are a number of scenarios where you may be able to claim or buy an asset belonging to a dissolved company by asking the relevant body representing the Crown. ... 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, from updating an address, managing ... read more
Maximum AIA calculations for split accounting periods
The recent, and temporary, increase in the AIA to £1m from 1 January 2019 creates computational issues if a trader's accounting period straddles this date.
The following example published by HMRC illustrates one variant that you may encounter when considering AIA relief due to clients.
Where a business has a chargeable period from 1 July 2018 to 30 June 2019, the maximum AIA for this period would be £600,000 calculated as follows:
a) the proportion of the period from 1 July 2018 to 31 ... read more
Who pays Income Tax in Scotland?
According to HMRC, individuals pay Scottish Income Tax if they live in Scotland. Care should be taken when considering the phrase "live in Scotland". In particular, you may also pay Scottish Income Tax if you:
- move to or from Scotland,- live in a home in Scotland and one elsewhere in the UK, for example for work,- don’t have a home and stay in Scotland regularly, for example you stay offshore or in hotels.
If an individual moves to or from Scotland, they will pay Scottish Income Tax if they ... read more
Charities - reducing input VAT
Charities pay VAT on all standard-rated goods and services they buy from VAT-registered businesses. They pay VAT at a reduced rate (5%) or the ‘zero rate’ on some goods and services.
Charities pays 5% VAT on fuel and power if they’re for:
residential accommodation (for example, a children’s home or care home for the elderly),
charitable non-business activities (for example, free daycare for the disabled),
small-scale use (up to 1,000 kilowatt hours of electricity a month or a delivery of ... read more
Brexit – what the UK government has advised business owners to do
The Brexit uncertainties continue. To help businesses consider their options HMRC has published more information for UK businesses that buy or sell goods from or to the EU. We have copied in below three specific actions that need to be considered and updated them for recent changes to the information available on the GOV.UK website. They are:
Complete an application and register for a UK Economic Operator Registration and Identification (EORI) number at ... read more
Sooner is better than later
Last week we passed the filing deadline (31 January 2019) for the 2017-18 self assessment tax returns. A surprising number of taxpayers are still content to deal with this annual chore at the last minute. This article sets out a few compelling reasons for preparing your tax return as soon as you can after the end of each tax year.
Until you prepare your return and calculate your liability for a tax year, you can have no certainty about the level of any tax payments that you may have to fund ... read more
What is taxable when you sell a commercial vehicle or other equipment?
When you purchase a van or other equipment that qualifies for tax relief, the cost of the asset is reduced - for tax purposes - by the amount of any capital allowance you claim.
Consequently, if you sell the asset at a later date you will need to compare the tax written down value (cost minus any capital allowances claimed) with the sales proceeds.
If the amount you receive on sale is higher than the tax written down value, then this profit will be added to your taxable income for the relevant ... read more
HMRC publishes more strange excuses
A recent press release by HMRC revealed some of the oddest excuses for submitting a late tax return. The excuses ranged from the sublime to the ridiculous and included:
My mother-in-law is a witch and put a curse on me.
I’m too short to reach the post box.
I was just too busy – my first maid left, my second maid stole from me, and my third maid was very slow to learn.
Our junior member of staff registered our client in self assessment by mistake because they were not wearing their ... read more
Avoid car-fuel benefit charge for 2018-19
The easiest way to ensure that no car-fuel benefit charge (for private journeys in a company car) is payable, is to use the advisory fuel rates published by HMRC to repay any private fuel costs to your employer. The advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly.
However, the car-fuel benefit charge will still be payable if it cannot be demonstrated to HMRC that the driver of the car has paid for all fuel used for private journeys, this includes ... read more
On your bike – Cycle to Work schemes
There are special rules involving bicycles usually referred to as 'Cycle to Work' arrangements. The Cycle to Work scheme was introduced almost 20 years ago to help promote the use of healthy ways to commute to work using an environmentally friendly mode of transport.
Employers of all sizes across the public, private and voluntary sectors are eligible to take part in the scheme with the proviso that no employees or groups of employees are excluded. Note that the Cycle to Work scheme cannot be ... read more
Lifetime transfers where estate of another individual is increased
Most gifts made during a person's life are not subject to 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 exempt if the taxpayer survives for more than seven years after making the gift. If the taxpayer dies within 3 years of making the gift, then the Inheritance Tax position is as if the gift was made on death. A tapered relief is available if death occurs between three and ... read more
Changes to lettings relief and other exemptions April 2020
Two changes to the way Private Residence Relief works are due to come into effect from April 2020. These changes could reduce the amount of CGT relief available on the sale of a private residence. The changes are:
Home owners that let all or part of their house may not benefit from the full Private Residence Relief, but can benefit from letting relief of up to £40,000 (£80,000 for a couple). The relief is not available on a ‘buy to let’ property in which a taxpayer never lived. From April ... read more