Owner-managed businesses / 76 posts found
Personal savings allowance update
From 6 April 2016, the personal savings allowance (PSA) will allow basic rate taxpayers to receive up to £1,000 of savings income tax-free. For higher rate taxpayers, this limit will be £500. HMRC have published guidance setting out details of what counts as savings income and how the allowance will be calculated, including some useful examples. Savings income includes account interest from: bank and building society accounts; accounts with providers like credit unions or National Savings and Investments. It also includes: interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts; income from government [...]
Practical implications of the dividend tax allowance
The new rules governing the taxation of dividends are set to take effect in relation to dividends received after 5 April 2016. The changes include: a £5,000 dividend nil rate (also known as the 'dividend tax allowance' (DTA)), which will effectively tax at the nil rate, the first £5,000 of taxable dividend income (i.e. after deducting the personal allowance, but treating dividends as the top slice of income, so the personal allowance is used last against dividends). Any dividends above the first £5,000 will be taxed as if the £5,000 used up either the basic rate band or the higher [...]
March 2016 Q&A
Q. What are the implications of selling my Scottish home? I own and live in a property in Scotland. What are the implications of me selling the house to a relative, who will buy it using a buy-to-let mortgage, and allow me to stay in it and pay rent to her as a tenant? A If the house has always been your main residence, there should be no capital gains tax implications for you. Depending on the purchase price, your relative may have to pay the Scottish land and buildings transaction tax (LBTT), which replaced the previous stamp duty land [...]
National Living Wage starts in April
The government has recently launched its campaign to promote the introduction of the new national living wage (NLW), which will take effect from 1 April 2016. From that date workers in the UK aged over 25 earning the minimum rate of £6.70 per hour will see a 50p increase in their minimum hourly rate, which is set to rise to £7.20 per hour. The NLW will be enforced by HMRC alongside the national minimum wage (NMW), which they have enforced since its introduction in 1999. The NMW is the minimum pay per hour most workers are entitled to by law. [...]
Simplification of VAT MOSS for small businesses
HMRC Brief 4/2016 entitled VAT MOSS - simplifications for businesses trading below the VAT registration threshold, outlines simplifications available to businesses trading below the UK's VAT registration threshold (currently £82,000) that make supplies of digital services (telecommunications, broadcasting or electronically supplied services) to consumers in other EU member states. Some simplifications are already in place and Brief 4/2016 announces two new areas of help for the smallest businesses. Businesses need to determine where their customer is located. There are specific rules in place for certain types of transactions (see the gov.uk website here for further details). For all other supplies [...]
Can you still clam the Employment Allowance?
The Chartered Institute of Taxation (CIOT) has recently warned that Government plans to exclude one-person businesses from claiming the national insurance Employment Allowance (EA) from April 2016 will be too easy to dodge. The Institute says that the planned curbs are easily avoided, either by appointing another director, such as a spouse, civil partner, other family member or friend, and paying that person a token wage; or by arranging payments of earnings so that the worker is not a director when at least one of the payments is made. The CIOT suggests that the legislation should include a connected persons [...]
February 2016 Q&A
Q. Did my extended leave constitute a cessation of trade? I have been the sole director of a trading limited company for many years. Last year, I decided to take a long holiday and travelled around the world with my wife - indeed, we got on so well that we stayed away for around 12 months! Whilst I was away the company continued to collect outstanding payments, but it received no other income. I have now taken on another director/shareholder (50%) and company trading has resumed. Should I have informed HMRC that I was going away and how should the [...]
Making Tax Digital: PTA’s
As part of a £1.3bn investment to transform HMRC into one of the most digitally advanced tax administrations in the world, HMRC have published a report and discussion paper setting out how new procedures for interacting with HMRC and paying tax will be implemented under the Making Tax Digital banner. It is intended that by April 2016, every individual and small business will have access to their own secure digital tax account that enables them to interact with HMRC digitally. By 2020, businesses and individual taxpayers will be able to register, file, pay and update their information at any time [...]
2016 Fuel & Van Benefit Rates
The Van Benefit and Car and Van Fuel Benefit Order 2015 (SI 2015/1979) comes into force on 31 December 2015 and takes effect for the tax year 2016-17 and subsequent tax years. The Order contains provisions for the following: the cash equivalent of the van benefit will rise from £3,150 to £3,170 for 2016-17; the van fuel benefit will increase from £594 to £598; and the cash equivalent of the benefit of fuel for a car is calculated by applying the 'appropriate percentage' (normally calculated by reference to the CO2 emissions of the car) to the figure in ITEPA 2003, [...]
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 [...]