Archives / 248 post/s found
Company cars : April 2016 increases
The financial benefits of driving a company car have continued to erode over recent years, but this benefit remains one of the most popular and potent perks of a job. In general terms, less tax will be payable on 'greener' cars, but the tax charges on lower emissions vehicles are set to rise significantly in real terms over the next few years. Two new appropriate percentage bands apply from 2015-16 for cars emitting between zero and 50gkm CO2, and between 51and 75gkm CO2, with the appropriate percentages set at 5% and 9% respectively. For cars emitting 76-94gkm CO2 the appropriate [...]
HMRC continue with so-called modernisation strategy
The recent formal announcement that HMRC will be replacing local offices with thirteen large regional centres has served to alert the general public to what tax professionals and accountants have known for some time - that to meet government cost and performance targets, HMRC must cut back on frontline staff and take forward digital interactions with taxpayers and their advisers. The announcement comes at a time when HMRC are also facing criticism over customer service issues. In its report on HMRC's performance in 2014-15, the House of Commons Public Accounts Committee (PAC) recently found that 'HMRC is still failing to [...]
Dividend allowance
The government announced at the summer 2015 Budget, that a new dividend allowance of £5,000 will be introduced from 6 April 2016. Broadly, from that date, it is expected that the existing dividend tax credit will be abolished, a new annual dividend tax allowance of £5,000 will be introduced, and the rates of tax on dividend income will change. The legislation introducing the dividend tax changes has not yet been published and the rules outlined below are therefore still subject to possible change. From April 2016, the 10% non-refundable dividend tax credit that currently attaches to dividends will be abolished, [...]
December 2015 Q&A
Q. Can I claim for the time I spend repairing my rental property? I own three rental properties and spend a considerable amount of time each year undertaking various necessary repairs. Can I pay myself say, an hourly rate, for the time I spend on the properties and claim a corresponding deduction in my accounts? A Any amounts taken from the property rental business will simply be viewed as a withdrawal of profits from the business and taxed accordingly. The HMRC Property Income Manual states 'A landlord can't deduct anything for the time they spend themselves working in their own [...]
Update on Intermediaries Review
The government estimates that around £420m a year is lost in tax and NICs by taxpayers ignoring or manipulating the intermediaries' legislation (IR35). The September edition of this newsletter (see The future for intermediaries) contained details of the government's consultation on proposals to improve the effectiveness of the rules. The consultation document set out proposals that could see the onus to verify the employment status of an individual being put on the shoulders of the 'engager'. The option for aligning the IR35 test with that used for temporary workers in the agency rules, which is based on supervision, direction or [...]
Flatrate Homeworking Expenses
Many small businesses can choose to be taxed on the basis of the cash that passes through their books, rather than being asked to spend their time doing calculations designed for big businesses ('cash basis'). Where the cash basis is used, it is also possible for the business to use certain simplified arrangements for claiming expenditure in working out taxable profits for income tax purposes. Flat rate expenses can be claimed for business costs for vehicles, working from home, and living at your business premises. Where a trader runs his business from his home, he will be able to claim [...]
Follower Notices and Accelerated Payment Notices
When a court or the tribunal issue a ruling that potentially resolves a large number of cases, many 'followers' (i.e. taxpayers with similar circumstances) agree to settle their affairs with HMRC, but some do not. They argue that small differences in the arrangements mean that the decision does not apply to them. HMRC will issue a follower notice to such taxpayers requesting them to settle the liability they believe is due. Alongside the 'follower' rules are the accelerated payment rules. HMRC may issue an accelerated payment notice (APN) requesting the recipient to pay the disputed tax and/or NICs. This means [...]
Business Record Checks scrapped by HMRC
HMRC have announced that they have scrapped their compliance procedure known as 'business record checks' (BRCs) with immediate effect. However, businesses should be warned that keeping good records is still essential to enable them to produce accurate accounts and tax returns. Broadly, BRCs were introduced in 2011 and used by HMRC to confirm that a business was keeping sufficient information on its income and expenses to produce an accurate tax return. The checks have, however, consistently been criticised for being ineffective and poorly targeted. HMRC have acknowledged that the initiative has not proved a cost-effective way of achieving the desired [...]
November 2015 Q&A
Q. I am a director and employee of a trading limited company (A Ltd), of which I also own 100% of the shares. I am about to set up a holding company in the European Union, which will own 100% of the shares in A Ltd. I will own 100% of the new EU company. Will there be any capital gains tax or stamp duty payable on the transfer of shares? A The 'share for share' rules should apply to the transfer, so there should be no capital gains tax or stamp duty payable on the transaction. Further information on [...]
Flat-rate VAT Scheme
The flat rate VAT scheme for small businesses is designed to reduce administration hassle for the businesses that use it, not to reduce the amount of VAT the business pays over to HMRC, but that is often a side effect of using the scheme. You can use the flat rate VAT scheme if you have an annual turnover up to £150,000 (net of VAT). Once registered to use the scheme, you must apply VAT to your sales at the rates required for the particular product or service (20%, 5% or zero). However, when completing the quarterly VAT returns you ignore [...]