Final reminder to sign up for Help to Buy
The Help to Buy ISA scheme will close to new savers after 30 November 2019. If you are interested in signing up to the scheme you need to do so ASAP and certainly before midnight on 30 November 2019. If you are a first-time buyer and planning to buy a property in the short to medium term, you should think about whether you (or perhaps your children) would benefit from this scheme.
Under the scheme you can claim a Government bonus of 25% on monthly savings of up to £200 towards a first ... read more
Capital Gains Tax changes for property disposals
A number of significant changes to the way Capital Gains Tax (CGT) is reported and paid come into effect from April 2020. Currently, the usual due date for paying any CGT owed to HMRC on property disposals is the 31 January following the end of the tax year in which a capital gain was made. From 6 April 2020, any CGT due on the sale of a residential property by a UK resident will need to be reported and paid within 30 days of the completion of the sale transaction.
This change will apply to ... read more
Emergency flood relief measures
The Prime Minister has announced that households and businesses that have been significantly affected by the recent flooding will be eligible for immediate 100% relief on their council tax and business rates for at least the next 3 months. This is part of a number of measures that have been announced by the Government to help those affected by the devastating floods.
The Department for Environment, Food and Rural Affairs has confirmed it will extend its Farming Recovery Fund to support farmers ... read more
Winter Fuel Payment and tax
The Winter Fuel Payment is a tax-free and provided by the Government to help older people keep warm during the winter. The amount of the payment depends on individual circumstances but ranges from £100 to £300. The amount you receive depends on a number of factors including your age and the age of other people living with you.
The payment is made to households that include someone born on or before 5 April 1954, and who lived in the UK for at least one day during the week of 16 to ... read more
Any Christmas bonuses / gifts paid in cash to employees, by employers, are almost invariably taxable as earnings. This view has been upheld by the courts on many occasions and can mean that a gift from a well-intentioned employer is worth less than the giver or the recipient initially expected.
If you are an employer and looking to give a Christmas bonus to your employees, then your best option is probably to give them a gift. To ensure that this is not a taxable gift, it is important to ... read more
UK VAT claims by non-EU businesses
The VAT paid in other EU countries is often recoverable by VAT-registered businesses in the UK, who bought goods or services for business use. The rules that govern the amount of VAT repayable depends on the EU countries rules for claiming input tax. It is important to note that VAT incurred in foreign countries can never by reclaimed on a domestic UK VAT return.
There are special rules for businesses established outside the EU submitting a claim for VAT incurred in the UK. The deadline for the ... read more
Different types of student loan
Student Loans are part of the Government’s financial support package for students in higher education in the UK. They are available to help students meet their living costs while they are studying.
There are two main types of student loan.
Fixed - term repayment loans (old - style loans). These loans were available to students commencing a course of higher education up to and including the academic year 1997-98 and are often known as ‘fixed - term repayment’ or ... read more
Verifying CIS subcontractors
The Construction Industry Scheme (CIS) comprises a set of special rules for tax and National Insurance for those working in the construction industry. The scheme applies mainly to contractors and sub-contractors involved in construction. However, certain businesses that are not in the business of construction but have a significant amount of annual spend may also count as contractors.
Before making a first payment to a subcontractor the contractor must confirm that the subcontractor is known to ... read more
Who can be a salaried member
The salaried member legislation can apply to certain members of a Limited Liability Partnership (LLP). This can happen where HMRC consider that a member of an LLP is not a risk-taking partner and can be re-classified as a salaried member.
Prior to 2014, all individual members of an LLP were taxed as if they were a self-employed partner. The salaried member legislation introduced new provisions that require certain individual members of an LLP be effectively treated as employees for tax ... read more
Increase in National Living Wage?
An independent review into the evidence on minimum wage rates has been published by the government. The review concludes that increases in the National Living Wage (NLW) have little effect on employment whilst significantly increasing the earnings of low paid workers. This was found to be the case even in countries who had the most ambitious policies for increasing minimum wage rates. The report also concluded that there was room for the UK to explore a more ambitious National Living Wage (NLW) ... read more
Employing staff for the first time
There is a multitude of rules and regulations that you must be aware of when you start employing staff for the first time. A full examination of the rules is beyond the scope of this article. However, we wanted to list the following points from HMRC’s guidance which sets out some 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 ... read more
Basic business structures
It is important to be aware of the main basic business structures available if you are considering starting a new business. There are three commonly used forms of business structure.
A sole trader – this is the simplest way of starting and running a business. However, you are personally responsible for your business’s debts. You also have accounting responsibilities.
A limited company – the business is quite separate to you as a person, but there are more reporting and ... read more
HMRC’s tax app
A free HMRC tax app is available to taxpayers.
The APP can be used to see:
your tax code and National Insurance number
an estimate of the tax you need to pay
your income and benefits
up to 12 future tax credits payments
your Unique Taxpayer Reference (UTR) for Self-Assessment
The APP can also be used to complete a number of tasks that usually require the user to be logged on to a computer.
renew your tax credits
access your Help to Save account
using HMRC’s ... read more
Tax when partnership assets are distributed in kind
Partnerships are treated as transparent for Capital Gains Tax (CGT). This means that each partner is responsible for their share of any capital gains arising on the disposal of their interests in the assets of the partnership. Each partner is treated as owning a fractional interest in each of the assets of the partnership.
It is important to be aware of the rules where partnership assets are distributed in kind to one or more partners. This type of distribution can occur, for example, by a ... read more
Furnished holiday let qualifying tests
The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for certain 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 ... read more
Waivers of remuneration
A waiver of remuneration happens when a director or an employee gives up their right to salary or other cash remuneration and gets nothing in return. Where the employee gets a non-cash benefit in return, this is called a salary sacrifice.
The treatment of a waiver of remuneration, when a director / employee gets nothing in return, is different to the scenario when this is treated as a salary sacrifice.
The effect of a waiver for Income Tax purposes depends on its timing.
If the remuneration ... read more
Last chance to claim enhanced capital allowances
There is a special scheme known as the enhanced capital allowances (ECA) scheme for energy-saving technologies. The ECA scheme enables a business to claim accelerated tax relief 100% first year allowances (FYA) on qualifying energy efficient and environmentally beneficial technologies.
The accelerated tax relief is designed to encourage businesses to invest in technologies that are energy saving, reduce water use and improve water quality. The ECA schemes are particularly beneficial for those ... read more
Finance Bill 2019-20 shelved
The Government’s draft finance bill has been shelved as we countdown to the general election on 12 December 2019. The consultation on the draft legislation has closed, but the prorogation controversy and Brexit issues meant there was no time for the Government to respond to any of the issues raised.
The Bill contained the legislation for some of the tax measures that were announced by the Government at Autumn Budget 2018. Many of these measures have been the subject of further ... read more