News

The rules for MTD for Income Tax

28/05/2021

Making Tax Digital (MTD) will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The regime will require businesses and individuals to register, file, pay and update their information using an online tax account. The regime started in April 2019 for VAT purposes but only for VAT registered

More...

Outdoor measures to be made permanent

20/09/2021

Temporary measures that have given a huge boost to high streets and hospitality during the pandemic could be made permanent following a public consultation launched in September 2021. From marquees being put up in pub grounds, to street markets operating all year round, permitted development rights that have allowed people to enjoy al

More...

Budget date announced

16/09/2021

The Chancellor of the Exchequer, Rishi Sunak has confirmed that the next UK Budget will take place on Wednesday, 27 October 2021. This will be the Chancellor’s third Budget and the first one to revert back to the Autumn Budget schedule that was interrupted first by Brexit related issues and then by the coronavirus pandemic. It means that

More...

Pension triple-lock abandoned for one year

16/09/2021

The government has confirmed that its triple-lock guarantee on pensions is to be abandoned for one year. The guarantee was first introduced in 2010 and has remained in place until now. This guarantee has seen the full yearly State Pension increase by over £2,050 in this period. The triple-lock is the mechanism used to calculate increases

More...

Capped social care costs from October 2023

16/09/2021

The government has announced new plans to cap social care costs in England from October 2023. This change is expected to see the introduction of a new £86,000 cap on care costs across an individual’s lifetime. There will also be the following measures of financial assistance for those without substantial assets: Anyone with less than

More...

Dental Associates tax status update

16/09/2021

HMRC has, for many years, accepted that associate dentists are generally treated as self-employed. These agreements have been approved by the British Dental Association (BDA) and the Dental Practitioners Association (DPA) and are quoted in HMRC’s manuals. HMRC’s manuals state that ‘these agreements relate to dentists practising as

More...

Class 1 NIC changes extend to Class 1A contributions

16/09/2021

It is important to bear in mind that the 1.25% increase in National Insurance contributions (NICs) for 2022-23 will apply to National Insurance Class 1 and Class 4 contributions from April 2022. This means that the increase will apply to Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs. Those above State

More...

Do tax-payers need to register for Self-Assessment

16/09/2021

There are a number of reasons why a taxpayer needs to complete a Self-Assessment return. This includes if they are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or property. Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC

More...

Using your Personal tax accounts

09/09/2021

HMRC’s Personal tax accounts (PTAs) were launched in 2015. The service works as an online resource to allow taxpayers to review and update their details in real time. For many routine requests and services using the PTA can help you avoid having to phone or write to HMRC. Every individual in the UK that pays tax has a PTA, but taxpayers

More...

Claiming a tax refund

09/09/2021

If you think that you have paid too much tax to HMRC you can usually claim back any overpaid tax. The exact method for making a claim depends on a number of factors including whether or not you complete a Self-Assessment return and the length of time that has passed since the tax was overpaid. Claims can usually be backdated for up to

More...

Child benefit when child turns 16

09/09/2021

Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August on or after a child’s 16th Birthday. Under qualifying circumstances, the child benefit can continue until a child reaches their 20th birthday. A qualifying young person is someone aged 16,17, 18 or 19 in full time

More...

Deadline for notifying an option to tax (VAT) land and buildings

09/09/2021

There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be subject to VAT at the standard rate. HMRC had temporarily changed the time limit from 30

More...

Back to school – help with childcare costs

09/09/2021

As children have returned to school, HMRC is reminding parents that they may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast and after school clubs. The TFC scheme can help parents of children aged up to 11 years old (17 for those with certain disabilities). The TFC scheme helps support working families with their

More...

National Insurance increase to fund NHS and social care

08/09/2021

The Prime Minister announced increases in National Insurance Contributions (NIC) of 1.25% from April 2022, to contribute to increases in the NHS and social care budgets. The increases will apply to: Class 1 contributions (paid by employees). This is the NIC that is deducted from your earnings by your employer. Class 4 (paid by

More...

Dividend tax increase announced

08/09/2021

The 1,25% increase in NIC contributions from April 2022 will be mirrored by a similar increase in the tax charge on dividends. From April 2022, the dividend tax increases will apply as follows: Basic rate taxpayers will see an increase from the present 7.5% to 8.75%. Higher rate taxpayers will see an increase from 32.5% to

More...

Claiming CGT Gift Hold-Over relief

02/09/2021

Gift Hold-Over Relief is effectively a deferral of Capital Gains Tax (CGT) when assets are given away (including certain shares) or sold for less than they are worth to help benefit the buyer. The relief means that any gain on the asset is 'Held-Over' until the recipient of the gift sells or disposes of them. This is done by reducing the

More...

Tax relief on charitable donations

02/09/2021

If you are a higher rate or additional rate taxpayer, you are eligible to claim relief on the difference between the basic rate and your highest rate of tax. The charity you donate to can reclaim the basic rate of tax from donations made by taxpayers. For example: If you donated £5,000 to charity, the total value of the donation to the

More...

How to deal with tax appeals

02/09/2021

There are a number of options open to taxpayers who disagree with a tax decision issued by HMRC. It is important to note that not all decisions by HMRC can be appealed against. There is normally a 30-day deadline for making a claim, so time is of the essence. If you or your business have been affected by the coronavirus outbreak, the

More...

Tax treatment of incentive award schemes

02/09/2021

Companies use incentive award schemes to encourage their employees in various ways. For example, to sell more of their own goods and services. The award can be in various forms including cash, vouchers or other gifts. Where an employer meets the tax payable on a non-cash incentive award given to a direct employee by entering into a PAYE

More...

Income excluded from UK property business

02/09/2021

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in their own home, extra services to tenants and letting surplus trade accommodation. In most cases the income from these activities will be

More...

Scope and legal basis of VAT

02/09/2021

The scope and legal basis of how VAT is charged on taxable supplies is defined as follows in the VAT Act 1994: VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him. There are four conditions

More...

Tax Diary September/October 2021

26/08/2021

1 September 2021 - Due date for Corporation Tax due for the year ended 30 November 2020. 19 September 2021 - PAYE and NIC deductions due for month ended 5 September 2021. (If you pay your tax electronically the due date is 22 September 2021) 19 September 2021 - Filing deadline for the CIS300 monthly return for the month ended 5

More...

Reporting travel and subsistence benefits

26/08/2021

There is no requirement to report certain routine expenses to HMRC. The types of expenses and benefits covered are referred to as exemptions and have replaced dispensations which can no longer be applied for. The travel and subsistence benefits that do not need to be reported include reimbursed costs to employees covering business

More...

Covering pension contributions with unused allowances

26/08/2021

The annual allowance for tax relief on pensions is currently set at £40,000. The annual allowance is further reduced for high earners. This means that if your income is in excess of £240,000 you will usually begin to see your £40,000 annual allowance tapered. For every complete £2 your income exceeds £240,000 the annual allowance is

More...

Recovering VAT on car purchases

26/08/2021

There are complex VAT rules that determine how you can recover VAT on car purchases. The usual fallback rule is that if you purchase a car for your business then no VAT can be reclaimed. The main exception to this rule is if the new car is used solely for business use. To qualify for VAT recovery the car must not be available for any

More...

VAT capital goods scheme overview

26/08/2021

The VAT Capital Goods Scheme (CGS) is a means of adjusting the initial VAT recovery in respect of certain assets over either 5 or 10 years. The scheme seeks to agree a fair and reasonable attribution of VAT to taxable supplies and non-taxable supplies relating to the use of an asset over its lifetime. The adjustment period for land and

More...

Corporation Tax loss buying

26/08/2021

Under qualifying circumstances, Corporation Tax (CT) relief is available where a company makes a trading loss. The trading loss can be used to claim CT relief by offsetting the loss against other gains or profits of a business in the same or previous accounting period. The loss can also be set against future qualifying trading

More...

Rental business – post cessation transactions

26/08/2021

There are special rules for the taxation of post-cessation transactions after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or Corporation Tax on the income. This does not have to be the same person who carried on the

More...

1.8m couples benefit from extra tax relief

19/08/2021

HMRC has confirmed that almost 1.8m couples across the UK have benefitted from the marriage allowance and are saving up to £252 a year. The marriage allowance is available to qualifying married couples and those in a civil partnership where a spouse or civil partner is a non-taxpayer i.e., has an income below their personal allowance

More...

Postmasters’ bankruptcies reviewed

19/08/2021

The recent Court of Appeal and Crown Court decisions to quash the convictions of many former postmasters was widely welcomed. The Courts found that the original convictions were based on evidence from the Post Office’s Horizon IT system which has now been found to be unreliable. These cases caused an enormous miscarriage of justice

More...

The Help to Grow Management scheme

19/08/2021

The Help to Grow: Management course is a government backed programme to help business leaders develop their strategic skills, create jobs and boost their business performance. The 12-week programme is delivered by over 40 leading business schools across the UK and combines a practical curriculum with 1 to1 business mentor support

More...

Bona Vacantia – dissolved companies

19/08/2021

The final step in bringing a company to a legal end is when the company is dissolved. However, one of the important points to be aware of when doing so is that the dissolved company can no longer do or receive anything including receive a tax refund. It is the responsibility of the company directors to ensure that all of a company’s

More...

Post cessation receipts and payments

19/08/2021

There are special rules for the taxation of post-cessation receipts and expenses after a trade has ceased. These provisions also apply to professions and vocations as they apply to trades. Tax relief may be available for post-cessation expenses of a trade, although expenses still have to satisfy the wholly and exclusively test and be

More...

Construction services and reverse charge

19/08/2021

New VAT rules for building contractors and sub-contractors came into effect on 1 March 2021. The new rules make the supply of most construction services between construction or building businesses subject to the domestic reverse charge. The reverse charge only applies to supplies of specified construction services to other businesses in

More...

Getting ready for Customs Declaration Service

12/08/2021

The Customs Declaration Service (CDS) has been designed to modernise the process for completing customs declarations for businesses that import or export goods from the UK. A phased launch of the service started in August 2018 and more than one million declarations have been made since then. The CDS system is currently used for Northern

More...

130% tax relief for companies

12/08/2021

Are you thinking of investing in new plant or other equipment? Remember that the super-deduction offering 130% first-year tax relief is available to companies until March 2023. The super-deduction tax break was introduced on 1 April 2021 and allows companies to deduct 130% of the cost of any qualifying investment on most new plant and

More...

Expenses you can and cannot claim against property rents

12/08/2021

If you are a landlord, it is important that you are aware of expenses you can and cannot claim from your rental income. As a rule, these expenses must be wholly and exclusively for the purposes of renting out the property in question. In some circumstances part expenses can be claimed where a proportion of expenses incurred relate to your

More...

Finding your National Insurance number

12/08/2021

If you have lost or forgotten your National Insurance number you should try and locate the number on paperwork such as your tax return, payslip or P60. You can also login to your personal tax account to view, download, print, save or share a letter with your National Insurance number. If you do not already have a National Insurance

More...

Who can use VAT annual accounting scheme

12/08/2021

The VAT annual accounting scheme is open to most businesses with a turnover of up to £1,350,000 per year. The main benefits of the scheme include the requirement to file only one VAT return per year. This can significantly reduce the amount of administration time and the associated cost of preparing and submitting quarterly VAT

More...

Goodwill and Corporation Tax

12/08/2021

Goodwill is rarely mentioned in legislation. Most people would settle on a simple definition which would be based on the ‘extra’ value of a business over and above its tangible assets. In the vast majority of cases when a business is sold a significant proportion of the sale price will be for the intangible assets or goodwill of the

More...

Pub secures reduced tied rent and discounts

05/08/2021

The Pubs Code Adjudicator is responsible for enforcing the statutory Pubs Code. The Pubs Code regulates the relationship between all pub companies owning 500 or more tied pubs in England and Wales and their tied tenants. Tied tenants are those that are obliged to purchase beer and/or other products or services from their landlord. An

More...

VAT inclusive and exclusive prices

05/08/2021

When identifying the amount of VAT charged, it is important to distinguish between VAT inclusive and VAT exclusive prices. A VAT inclusive price includes VAT at the prevailing rate. When a VAT registered business issues an invoice to their customer they must ensure that they charge the correct rate of VAT. Whilst most businesses in the

More...

When is a company dormant for tax purposes?

05/08/2021

If a company has stopped trading and has no other income then the company is usually classed as dormant for Corporation Tax purposes. A company is usually dormant for Corporation Tax if it: has stopped trading and has no other income, for example investments is a new limited company that hasn’t started trading is an unincorporated

More...

Further change to SEISS 5 legislation

05/08/2021

HM Treasury has published a Correction Treasury Direction made under the Coronavirus Act 2020, section 76, which modifies and extends the effect of the Self-Employment Income Support Scheme (SEISS). The Direction mainly deals with the expansion of the SEISS from 1 May 2021 to 30 September 2021, officially referred to as the SEISS Grant

More...

Décor and plant and machinery allowances

05/08/2021

Capital Allowances are the deductions which allow businesses to secure tax relief for certain capital expenditure. Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable to Corporation Tax. The Capital Allowance legislation does not specifically define plant

More...

IHT change of domicile

05/08/2021

It is possible in certain circumstances for an individual to have two domiciles although this is unusual. There is a concept in the UK of deemed domicile, whereby any person who has been resident in the UK for more than 15 of the previous 20 years will be deemed to be domiciled in the UK for tax purposes. Before 6 April 2017, a person

More...

Tax Diary August/September 2021

29/07/2021

1 August 2021 - Due date for Corporation Tax due for the year ended 31 October 2020. 19 August 2021 - PAYE and NIC deductions due for month ended 5 August 2021. (If you pay your tax electronically the due date is 22 August 2021) 19 August 2021 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2021. 19 August

More...

SEISS – more red tape

29/07/2021

Government support to the self-employed through the Self-Employment Income Support Scheme (SEISS) is due to end on 30 September 2021. A fifth and final grant covering the period May 2021 to September 2021 will be opened to claims from late July for those who have suffered a significant reduction in trading profits. To qualify for the

More...

Tax-free gains on gifts to spouse or charity

29/07/2021

In most cases, there is no Capital Gains Tax (CGT) to be paid on the transfer of assets to a spouse or civil partner. There is, however, 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 based on

More...

Who pays Inheritance Tax?

29/07/2021

Inheritance Tax (IHT) is commonly collected on a person’s estate when they die but can also be payable during a person’s lifetime on certain trusts and gifts. The rate of IHT currently payable is 40% on death and 20% on lifetime gifts. IHT is payable at a reduced rate on some assets if 10% or more of the 'net value' of their estate is

More...
News