Archives / 248 post/s found
EU consultation on ending VAT on eBooks
The future of the chargeable rate of VAT on digital publications and eBooks is under review as the European Commission (EC) has launched a two-month consultation with a view to abolishing the current full rate VAT. Member States currently have the option to tax printed books, newspapers and publications at a reduced rate (minimum 5%) and some Member States were granted the applications of VAT rates lower than 5% (super-reduced rates) including exemptions with a deductions right of VAT at the preceding stage (so called zero rates) to certain printed publications. Digital publications that are electronically supplied have to be [...]
Dividend Allowance
Legislation included in Finance Bill 2016 implements the new 0% rate for dividend income, as well as changing the rates of tax for dividend income. Once enacted, the changes will apply from 6 April 2016. Broadly, the new nil rate applies to the first £5,000 of a person's dividend income and is available annually. From 6 April 2016, UK residents pay tax on any dividends received over the £5,000 allowance at the following rates: 7.5% on dividend income within the basic rate band; 32.5% on dividend income within the higher rate band; and 38.1% on dividend income within the additional [...]
September 2016 Q&A
Q. I have recently changed jobs and need to use my car to make business journeys. Will I have to pay tax on the mileage expenses my employer reimburses me for these trips? A. Employers can pay employees a tax-free and national insurance-free amount for every mile they drive on business duties, currently: 45p per mile for the first 10,000 miles 25p per mile for each subsequent mile 24p per mile for motorcycles 20p per mile for bicycles 5p per mile extra for each passenger carried on work-related journeys If your employer reimburses your mileage at less than these rates, [...]
Spotlight on Tax Avoidance Schemes
HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017. The withdrawal of the relief was announced at the 2016 Budget, as part of the package of changes to tackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these schemes pay the correct amount of tax and National Insurance contributions. [...]
Casual Employees
Some employers will be considering taking on extra staff on a 'casual' basis to cover the summer period. There are a few issues which employers should think about when taking on people on a temporary basis. Firstly, the employment status of the worker needs to be carefully considered. The term 'casual worker' is not precisely defined in statute. It is often used to refer to individuals who are engaged on an 'as and when required' basis, and often, the intention is that the individual will not have employment status and all the legal rights which permanent employees enjoy. Although the [...]
HMRC Focus on Contractor Loan Schemes
HMRC have recently published new guidance on 'contractor loan schemes', which have been widely marketed by scheme promoters as a method of receiving non-taxable income. HMRC are adamant that such schemes do not work and they are likely to challenge anyone using them. In a contractor loans scheme, an individual is paid in the form of a loan from a trust or company, sometimes referred to as a remuneration trust. The payment is not made directly by the engaging company, and will be diverted through a chain of companies, trusts or partnerships. Scheme promoters have claimed that payments are non-taxable, [...]
August 2016 Q&A
Q. I have five employees who I recently took out for dinner to celebrate the success of the company. The total cost of the meal was £225. Do I have to report this as a benefit-in-kind to HMRC? A: Finance Bill 2016 legislates for a new tax exemption relating to trivial benefits, which broadly means that if the cost of providing the benefit does not exceed £50 per employee, you will not have to account for it to HMRC, and the employees will not have to pay tax and NICs on it. The cost of the benefit is defined in [...]
Help-to-save consultation launched
HMRC have launched a consultation on the government's proposed 'Help-to-Save' scheme, which is designed to encourage people on low incomes to build up their savings. Broadly, the scheme will be open to some 3.5 million adults in receipt of universal credit with minimum weekly household earnings equivalent to 16 hours at the National Living Wage, or those in receipt of working tax credit. It will work by providing a 50% government bonus on up to £50 of monthly savings into a Help-to-Save account. The bonus will be paid after two years with an option to save for a further two [...]
FRS 102 guidance on directors’ loans revised
HMRC have recently updated their online toolkit on directors' loan accounts to help tax advisers and agents preparing 2015/16 company tax returns. The update reflects the changes to reporting requirements under UK GAAP, as taxing debt will now be largely driven by FRS 102 requirements for financial instruments. If an entity makes loans to/from directors/employees where there is no explicit interest rate or the interest rate charged is not at a market rate, then the prescribed accounting treatment will depend on which accounting framework the entity has adopted. Where an entity applies either FRS 102: The Financial Reporting Standard applicable [...]
Trivial benefits – tax-free
You will probably be aware that various changes have been made to the reporting requirements for employee benefits and expenses from April 2016, which mean that some employers will no longer have to complete annual return forms P11D. The three main changes are: The dispensations regime has been replaced with an expenses exemption - broadly, where an employee would have been entitled to tax relief in full for a benefit or expense, the employer does not need to deduct tax or NICs, and they do not need to report it to HMRC; Employers can now account for tax on certain [...]