Owner-managed businesses / 76 posts found
MTD VAT regulations to be available by April 2018
The government has confirmed plans to publish and consult on draft VAT regulations for Making Tax Digital (MTD), with the aim to have the regulations in place by April 2018 to give businesses and software developers at least twelve months to prepare. In July 2017 the Government announced that MTD is being delayed. MTD will be not be mandatory until April 2019, and then only for VAT. From that date, businesses with a turnover above the VAT threshold (currently £85,000) will be required to keep digital records for VAT purposes. The VAT regulations will specify the information a business needs [...]
October 2017 Q&A
Q. My mother gave my daughter £5,000 on 1 May 2013. She had not made any other gifts in previous years. Unfortunately my mother passed away on 1 September 2017. How much of the gift she gave to her granddaughter is chargeable to inheritance tax? A. Since your mother did not make any other gifts, the gift she made to your daughter will be covered by inheritance tax annual exemptions - £3,000 for 2013/14 plus her unused exemption brought forward from 2012/13 (£3,000 available). Q. I am a self-employed builder. I carried out a job for a customer and invoiced him for £750. [...]
Making Tax Digital for Business: update
In July, the Government confirmed that the Summer Finance Bill would be published in September, with the measures dropped from the pre-election Finance Bill being reintroduced in more or less the same form, from the initially planned commencement dates. Clauses dropped from the pre-election bill and expected to be brought back include those on Making Tax Digital (MTD), although the implementation date for income tax is being postponed. There is widespread agreement that Making Tax Digital for Business is the right approach for the future. However a number of concerns about the pace and scale of change have been raised. As a [...]
Double glazing salesmen was self-employed
Employment status tax cases often make the headlines in the professional press and the June 2017 case of Tomlinson was no exception. In this case, the First-tier Tribunal found that a double glazing salesman (Mr Malcolm Tomlinson) was self-employed and not an employee as he had claimed. As with most employment status cases, this case focused on the details of the terms on which Mr Tomlinson was engaged with the company. Many facts of the case pointed towards a self-employed status, including the fact that there was no written contract in place and Mr Tomlinson was not required to give notice of [...]
Paying Class 2 NICs
Whether or not Class 2 National Insurance Contributions (NICs) can be paid depends on whether an individual falls within the definition of a 'self-employed earner' for NIC purposes, and if so, whether profits are in excess of the existing small profits threshold (£6,025 for 2017/18). The definition of a self-employed earner is defined as someone 'who is gainfully employed in Great Britain otherwise than in employed earner's employment (whether or not he is also employed in such employment)' (SSCBA 1992, s 2(1)(b)). A person who is regarded as self-employed for income tax purposes, and who is taxed on the profits [...]
September 2017 Q&A
Q. I have two small businesses which are treated as a group for VAT purposes, so we only submit a single VAT return covering both entities. Are we eligible to use the Flat Rate Scheme? A. Unfortunately not. If you are part of a VAT group, or are eligible to join an existing VAT group, then you cannot use the Flat Rate Scheme (FRS). There is also a rule which stops 'associated' businesses joining the FRS. A business is 'associated' with another business if: one business is under the dominant influence of another; two businesses are closely bound by financial, economic and [...]
Paying voluntary NICs
There are various reasons as to why gaps may arise in an individual's national insurance contributions (NIC) record, for example, because that person has been on low earnings for several years, they have been living abroad, or because they have been unemployed and have not been claiming benefits. In certain circumstances therefore, it may be possible, and beneficial, to pay voluntary Class 3 National Insurance Contributions (NICs) as this can safeguard entitlement to a future state retirement pension and certain other state benefits. Broadly, voluntary contributions may be paid for any tax year in which the individual is aged over [...]
Mileage rates for electric and hybrid cars
Some confusion has been reported over how businesses should calculate mileage expenses rates for electric and hybrid company cars. This confusion has arisen largely because HMRC's advisory fuel rates, or approved mileage allowance payments, only cover petrol and diesel cars. There are no separate 'approved' rates for electric or hybrid vehicles. Currently, whilst HMRC do recognise that employees should be reimbursed for costs incurred for business travel, they do not currently recognise electric charging costs as a 'fuel' expense and do not therefore, currently publish separate rates. HMRC's advisory fuel rates can be used to work out mileage costs in certain [...]
VAT: zero-rating of adapted motor vehicles
Finance Act 2017 introduced legislation designed to end perceived abuse of the VAT relief on substantially and permanently adapted motor vehicles for disabled wheelchair users. The amended rules, which took effect from 1 April 2017, now specify a limit on the number of vehicles within a specified period of time that an individual can purchase under this relief. An eligible individual will be able to purchase one vehicle every three years. There are some instances when this limit can be exceeded, so if an individual's car is written off or stolen or if the vehicle has ceased to be suitable for the [...]
Working from home
Over recent years, it has become increasingly popular for employers to allow their employees to work from home, and in doing so, pay an amount to cover any additional household costs incurred. What are the tax implications of such expenses for the employee? Broadly, no tax liability will arise where an employer makes a payment to an employee for reasonable additional household expenses, which the employee incurs in carrying out duties of the employment at home under 'homeworking arrangements'. 'Homeworking arrangements' are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties [...]