Small businesses / 217 posts found
Disguised Remuneration& Self Employed
Following the announcement in the Autumn Statement, HMRC have published the details of a measure designed to tackle the future use of avoidance schemes currently being used by some self-employed people to avoid paying income tax and NICs on their income. The measure will also tackle the existing use of schemes involving loans with a new charge (a 'loan charge') on outstanding loans taken out as part of avoidance arrangements. This charge will apply if tax is not paid on the loan and the loan is not repaid by 5 April 2019. Various 'disguised remuneration' avoidance schemes currently exist, but [...]
Abolition of Class 2 NIC’s
Originally announced at Budget 2016, the 2016 Autumn Statement confirmed that Class 2 National Insurance Contributions (NICs) will be abolished from April 2018, hopefully achieving the desired effect of simplifying National Insurance for the self-employed and making the system fairer for employed and self-employed individuals. At the same time as the abolition of Class 2 NICs, the system for Class 4 NICs will also be reformed to include a new threshold - to be called the 'small profits limit' (SPL). The amount of the SPL for 2018/19 is yet to be confirmed but is likely to be around £6,025. Payment [...]
Changes to the VAT Flat Rate Scheme
In a surprise announcement in the 2016 Autumn Statement, the Chancellor announced that changes are to be made to the existing flat rate scheme for VAT (FRS) in order to tackle perceived 'aggressive abuse'. The changes, which will take effect from 1 April 2017, are designed to 'reduce the incentive for firms and agencies to move employees to self-employment to exploit VAT simplification aimed at small businesses'. The subsequent HMRC policy paper published on 5 December sets out the details of the changes, which will affect any users, or prospective users, of the FRS. The FRS is a simplified VAT [...]
January 2017 Q&A
Q. I am thinking of renting out a small outbuilding that I own to a friend so that he can store his work equipment in it when he's not using it. The rent is likely to be less than £1,000 a year. Will I have to declare this income to HMRC on a self-assessment return? My tax affairs are quite straight-forward - I am employed and currently I don't need to send in a tax return. A. Two new annual tax allowances of £1,000 each are being introduced from April 2017. One allowance is for trading income and the other [...]
HMRC clarify pre-registration of VAT policy
HMRC have recently published Brief 16 (2016), entitled Treatment of VAT incurred on assets that are used by the business prior to VAT registration. Broadly, the brief aims to clarify when, and to what extent, VAT is deductible and what to do if the correct treatment has not been applied. A business registering for VAT may recover tax incurred on goods and services before their effective date of registration(EDR). This allows the recovery of VAT against goods and services as long as they are used by the taxable person to make taxable supplies once registered. Services must have been received [...]
Caps on income tax relief
In general terms, providing a business is undertaken on a commercial basis with a view to making a profit, tax relief should be available for trading losses incurred. It is usually possible to offset the loss against other taxable income from the same year, or the previous year. Other taxable income may include for example, a former employment (where tax was deducted under PAYE) or a pension. This relief may be particularly beneficial for someone who is self-employed on a part-time basis. For example, where an individual earns £30,000 a year from employment, and makes a £2,000 loss from his [...]
The Autumn Statement 2016
This is aimed at those who didn't receive our client newsletter - that is still available at http://eepurl.com/cqcb0b. If you do read them both, let me know which version you prefer:-) Summary Chancellor Philip Hammond has delivered his Autumn Statement 2016, which is the first major review of government finances since the EU Referendum, and Mr Hammond's first major statement since taking responsibility for the work of the Treasury in July 2016. As previously speculated, this will be Mr Hammond's only Autumn Statement as it was confirmed that the government is to move to a single major fiscal event each [...]
December 2016 Q&A
Q. My wife doesn't work. Can she transfer her unused personal tax allowance to me? A. Since April 2015, it has been possible for a spouse or civil partner who is not liable to income tax or not liable above the basic rate for a tax year, to transfer part of their personal allowance to their spouse or civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. The transferor's personal allowance will be reduced by the same amount. For 2015/16 the amount that could be transferred was £1,060, rising to [...]
Self-assessment and disclosure
Finance Act 2016, which became law on 15 September 2016, contains provisions designed to help clarify the time allowed for making a self-assessment. The time limit is four years from the end of the tax year to which the self-assessment relates. This is the same time limit as for assessments by HMRC. The provisions will have effect on and after 5 April 2017, although there are transitional arrangements for years previous to this, as follows: for tax years prior to 2012/13, taxpayers have until 5 April 2017 to submit a self- assessment; for 2013/14, the deadline is 5 April 2018; [...]
Help-to-Save
The Savings (Government Contributions) Bill is currently making its way through Parliament, having had its second reading in the House of Commons on 17 October 2016. Broadly, if enacted, the Bill will introduce two new schemes - the lifetime ISA and Help-to-Save - both of which are designed to support more people as they try to save for the future. Help-to-Save will target working families on the lowest incomes to help them build up their savings. 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 [...]