Q. My personal company operates from a little brick building at the end of my garden, which is heated with a portable gas heater. Can the company pay me for the cost of the gas bottles used for that heater, on top of the "use of home" allowance of £4 per week? A. The company can pay you the actual additional costs for using your home for business purposes instead of the £4 per week working at home allowance. You would need to record and calculate the additional running costs you incur for using the brick shed, but we can [...]

We have previously warned about the penalties coming into effect for late filed RTI reports. The good news is that HMRC are giving employers just a little slack, and will now allow three extra days in which to submit the full payment submission (FPS) report. Normally the FPS must be submitted on or before the day the employees are paid, but there are some circumstances in which the FPS can be submitted up to 7 or 14 days later. For example, the FPS can be submitted within 7 days of the pay day if the employees' pay can't be calculated [...]

Does your company still own or lease the car you use for private journeys? You may need to rethink that arrangement in light of the tax charges due to apply in the years ahead. From 6 April 2015 all company cars will generate a tax charge for the driver and the employer, even electric cars will be taxed on 5% of their list price. The taxable benefit for other low emission vehicles (51-75g/kg) will leap up from 5% to 9% of the vehicle's list price. The taxable benefit for all other cars will also increase by two percentage points. The [...]

If you or your spouse/partner claim child benefit, and at least one of you has adjusted net income of £50,000 or more for the year, the highest earner must declare the benefit on their tax return in order to pay back part or all of the child benefit as a tax charge. HMRC is writing to taxpayers who it thinks should have paid the child benefit tax charge for 2013/14, but didn't. Unfortunately some people who have received such letters are childless, or haven't claimed child benefit for decades. If you have received one of those letters by mistake, don't [...]

When you work for your own company you can decide how much salary to pay yourself, how much to pay into your pension fund, and what proportion of the remaining profits to take as a dividend. The split is important as it will affect the tax and national insurance payable by you and your company. A salary just sufficient to be covered by your personal allowance (£10,600 for 2015/16), will be tax free, assuming you have no other income. However, if your company has more than one employee (including directors), a salary of over £10,000 (for 2015/16) will mean the [...]

This was a forward-looking Budget, with much of the content based on the assumption that the current Government will pick up where it left off, after the General Election on 7 May 2015. The sweeteners for voters include; a cut in duty on beer, cider and spirits, including whisky. The tax on road fuel is frozen, but the tax and NI charges for having the private use of a company car or van are set to increase above the levels which had already been predicted. There are two changes to entrepreneurs' relief which take effect immediately, but those should not [...]

Q. I was told that holiday pay is not a contractual right. I don't understand how that can be the case. Please explain. A. New regulations came into force from 8 January 2015 which indicates that employees can't take a claim to a civil court for breach of contract if their employer fails to pay amounts of holiday pay on the basis of an entitlement under the Working Time regulations. The new regulations indicate that the right to holiday pay is a separate statutory right not contractual right. However, if the amount of holiday pay is stipulated in the employee's [...]

Real time information (RTI) was supposed to make the reporting of PAYE easier for employers, but it has introduced more filing deadlines, and new penalties for missing those deadlines. Every employer must now send a full payment submission (FPS) report every time they pay employees, on or before the payment date. There is some relaxation for certain employers who have fewer than ten employees. If no payment has been made to employees in the tax month the employer should submit an employer payment summary (EPS) by 19th of the following tax month. Alternatively where the employees will be paid in [...]

There has been some panic whipped up in the media about employers having to pay vast amounts of back-dated holiday pay to employees who regularly get paid for overtime. In general holiday pay is calculated according to an employee's "normal pay", which for years has been judged not to include overtime payments. However, in a recent Employment Tribunal (Fulton v Bear Scotland [2014] UKEATS/0047/13), the judge decided that both guaranteed and non-guaranteed overtime should be included in the sum of "normal pay" on which holiday pay is based. The tribunal also determined that employees could make back-dated claims for unpaid [...]

HMRC are currently writing to around 7,500 furniture retailers and car repair businesses asking the owners to check the figures reported on their VAT returns. If you receive one of those letters, don't panic. HMRC do not believe your VAT return is wrong, they are just asking you to double check your sales and purchase figures. The HMRC letter asks you to work out your VAT mark-up ratio by comparing the difference between your sales and purchases (i.e. gross profit), as a percentage of the total of the purchase costs as reported on your VAT return. HMRC then asks you [...]