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Tax / 35 posts found

What will HMRC avoid telling you?

by mike tombs
in Tax
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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?

by mike tombs
in Tax
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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 [...]

Receiving your State Pension if you live abroad

by mike tombs
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If you are about to move abroad and are already receiving a State Pension in the UK, you might like to read this article setting out some of the issues you will need to consider.   If you live part of the year abroad You must choose which country you want your pension to be paid in. You cannot be paid in one country for part of the year and another for the rest of the year. Bank accounts your pension can be paid into Your State Pension can be paid into: a bank in the country you’re living in [...]

Taxing dividends

by mike tombs
in Tax
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To reduce National Insurance costs, shareholders of small privately owned companies, who are also working directors of the company, can presently restructure their remuneration package to reduce their salary and make up the difference as dividend payments. Unless this strategy is affected by the Budget at the end of this month, this remains one of the most useful ways for owner directors of small companies to reduce their overall tax and NIC costs. Dividends are not considered to be a business cost. They don’t reduce the amount of profit assessable to corporation tax. Rather, dividends are a distribution of profits [...]

Exclusivity and tax relief

by mike tombs
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In order to qualify as a deduction for tax purposes we have to demonstrate that the expenditure was incurred “wholly and exclusively” for the purposes of our business or employment. We will also need to consider a further criterion: where the expenditure has a duality of purpose. In a 1980’s case, a barrister claimed for the cost of business suits which she insisted were only used for business purposes. To her delight, the lower courts agreed, but HMRC were having none of it and pursued their case to the House of Lords where the taxpayer’s claim and appeal was dismissed. [...]

Boosting recycling through the tax system

by mike tombs
in news
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The government has announced that it has received record-breaking support from members of the public to counter the blight of plastic waste. Here’s what they said:   Individuals, businesses and campaign groups have expressed overwhelming support for action on tackling the impact of plastics on our environment. The backing comes as HM Treasury publishes the summary of responses to its recent call for evidence on how tax can be used to reduce plastic waste. The call attracted an unprecedented 162,000 responses, the highest in the Treasury’s history. The Chancellor, Philip Hammond, has reiterated the department’s commitment to act through the tax system [...]

Football agent scores massive own goal

by mike tombs
in Tax
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HMRC were quick to publicise their victory in a recent tax case that resulted in a well-known football agent facing a £1.2m tax bill.   According to their press release, former football agent Jerome Anderson lost his £1.2 million tax battle with HMRC during a case heard at the Upper Tribunal. This showed that Anderson and eight others failed in their attempt to avoid large amounts of tax. The scheme involved investments in the recruitment and training of young footballers at the Bafana Soccer Academy in South Africa. Anderson attempted to use this investment to claim a £3 million artificial [...]

Undeclared offshore assets

by mike tombs
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From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received.   The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. According to HMRC, over 17,000 people have already notified the department about tax due from sources of foreign income, such as their holiday homes [...]

Working from home?

by mike tombs
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We are often quizzed by clients who are contemplating working from home: what are the tax consequences? And in particular, will I have to pay capital gains tax?   Capital gains tax   Generally speaking, if your business use is limited to allocating space for a home office, then as long as there is duality of use, no capital gains tax complications should arise when you sell the property. Duality of use means that your home office: doubles as a spare bedroom, or a storage space for domestic items, or is a study or has a similar non-business as well [...]