HMRC / 27 posts found
How the increased minimum wage will affect your business costs
Business costs are on the rise as we near the second quarter of 2022. Supply chain costs are increasing, energy prices are rising and labour costs are getting more expensive. These soaring costs mean higher expenditure and lower margins on your products and/or services. If left unchecked, that could mean a dip in your predicted profits for the quarter. The good news is that by acting now to manage these increases you can stay on top of these costs. And with a proper financial plan, you can keep your business turning a profit. A rise in the National Living Wage [...]
The reduced rate of VAT has gone up – are you ready?
The 5% reduced rate of value-added tax (VAT) has been in place since 8 July 2020. The reduced rate has been extended on numerous occasions to factor in changes to the affected sectors over the course of the pandemic – and has been a lifeline for many affected companies. But, from 1 October 2021, the 5% rate jumped to a new reduced rate of 12.5%, a change that could have significant cashflow implications if you’re one of the affected businesses. Why was the reduced rate of VAT needed? The hospitality, hotel and holiday accommodation sectors have been particularly badly hit by the impact [...]
Capital Gains Tax liabilities
Capital Gains Tax (CGT) is defined by the Government as: "Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive." So, you will pay CGT on an item such as a painting, but not on your house, provided that it is your primary residence. You are liable to pay CGT at certain times of the year. If you personally disposed of an asset that is subject to a CGT charge, at any time during [...]
Child benefit tax trap
This post is a reminder that a family claiming the weekly Child Benefit (currently, £20.70 a week for eldest or only child and £13.70 a week for additional children) may get an unwelcome tax bill if either parents’ income exceeds £50,000 during a tax year. If either parent had income over £50,000 for the tax year 2018-19, and: either partner received Child Benefit, or someone else received Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep. Then part or all of the Child Benefit received may [...]
What will HMRC avoid telling you?
There are three things that you can count on that HMRC will do: Calculate the amount of tax you owe based on the information they have gathered. Chase you for payment of this tax if not recovered by PAYE. Pursue you if they believe you have under-declared your taxable income or made excessive claims to reduce your tax. What they will not do is advise you to maximise the benefit of reliefs and allowances to which you are entitled to claim. HMRC rely to some extent on the age-old principal that ignorance of the law is not, [...]
Are home to work travel costs ever allowed?
Ordinary commuting between home and work incurs costs: either shoe leather, if you walk, or the cost of transport. For most employees these costs are considered to be personal costs and are not deductible for tax purposes. This is so even if your employer requests that you attend out of hours, say the weekend. According the HMRC: If an employee is sometimes required by his employer to attend their permanent workplace outside normal working hours, often at the weekend. This may mean that they incur extra costs on bus fares, meals eaten at their desk and sometimes even [...]
Don’t look back!
One of the many quotes bandied around by people is: “don’t look back, you’re not going that way…” Like many clichés, this one contains a grain of truth, and never more so than when understanding the difference between financial and management accountancy. Financial accountancy is a simple record-keeping exercise that shows you a summary of what has happened in the previous year. It is used mainly by accountants to work out how much tax is due to HMRC. This process, filing your tax return and statutory accounts, and making any necessary payments, are a legal responsibility. Financial accounting is viewed [...]
Have you received your tax statement?
HMRC normally send out a tax statement this time of the year to all self-assessment taxpayers that have submitted a tax return for 2017-18. As we reported last week, this will list any balance of tax due for 2017-18 and the amount of any payment on account required for 2018-19 (if any is due). Both amounts will need to be settled on or before 31 January 2019 to avoid interest and possible late payment penalties. If you don’t receive a statement, but you know how much you need to pay, simply organise an online bank payment to: HMRC Cumbernauld – [...]
Turkey dinner and tax returns
Completing your tax return may not have been top of your priorities on Christmas Day, but that didn’t stop 2,616 taxpayers from filing their Self-Assessment returns on 25 December 2018. For some taxpayers completing their return on Christmas Day is as traditional as spending time with family and friends or waiting for the Boxing Day sales to start. The peak filing time, according to HMRC, was between 1pm and 2pm, when more than 230 customers filed. Angela MacDonald, HMRC’s Director General for Customer Services, said: This year, more than 2,600 taxpayers chose to file their returns on Christmas Day. Whether [...]
Brexit may be in limbo, but Making Tax Digital is not
As we have highlighted in many posts to this blog, from 1 April 2019, ALL VAT registered businesses with turnover above the £85,000 VAT registration threshold will have to submit their VAT returns from within software that can link with HMRC’s networks. In techno- speak, your data will need to be transferred using a designated API (HMRC’s application programming interface). The fact that you have always prepared your VAT returns electronically, for example, by using a spreadsheet to record transactions and create the data for your VAT returns, will not be enough. Your spreadsheet will not have the functionality [...]