Asif, Author at PMA Accountants

Family companies – optimal salary for 2019/20

Asif2019-06-12T23:43:41+01:00June 25th, 2019|Categories: Articles & Guides, Blog, Limited Company, Taxation|Tags: Close Company, Directors Salary, Family Company, Limited Company|

Family companies – optimal salary for 2019/20 For personal and family companies it can be beneficial to extract some profits in the form of a salary. Where the individual does not have the 35 qualifying years necessary to qualify for the full single-tier state pension, paying a salary which is equal to or above the lower earnings limit for National Insurance purposes will ensure that the year is a qualifying year. New tax rates and allowances came into effect from 6 April 2019, applying for the 2019/20 tax year. These have an impact on the optimal salary calculation [...]

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June 2019 questions and answers

Asif2019-06-12T23:15:24+01:00June 24th, 2019|Categories: Questions & Answers|Tags: Corporation Tax, SDLT, Self Assessment, Staff Entertainment, Stamp Duty|

June Questions and Answers Q. If I take my staff away overnight for an off-site daytime business meeting and evening social function, will the costs be tax deductible for corporation tax purposes? A. The costs will be allowable for the company, but a benefit-in-kind will arise on the social aspect of the trip. It may be possible to obtain HMRC approval that the benefit falls within the exemption for annual parties and similar functions costing no more than £150 per attendee (if the £150 is exceeded, the whole amount is taxable as a benefit). You may wish to consider [...]

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Are you paying the minimum wage?

Asif2019-06-12T23:41:11+01:00June 23rd, 2019|Categories: Articles & Guides, Blog, PAYE|Tags: BLOG, Employers, National Living Wage, National Minimum Wage, PAYE|

Are you paying the minimum wage? The National Living Wage (NLW) and National Minimum Wage (NMW) increased from 1 April 2019. From that date, the NLW, payable to workers aged 25 and over, is set at £8.21 per hour. Workers under the age of 25 and over school leaving age must be paid the NMW appropriate for their age. From 1 April 2019, this is £7.70 per hour for workers aged 21 to 24, £6.15 per hour for workers aged 18 to 20 and £4.35 for workers above school leaving age and under 18. A separate rate of [...]

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When should a business register for VAT?

Asif2019-06-12T23:56:15+01:00June 22nd, 2019|Categories: Articles & Guides, Blog, VAT|Tags: BLOG, VAT, VAT Registration, VAT Threshold|

When should a business register for VAT? All traders – whether sole traders, partnerships, or limited companies – are obliged to register to charge and pay VAT once annual sales reach a pre-set annual threshold. This threshold remains at £85,000 for the year commencing 1 April 2019. The annual VAT threshold is determined by total sales and is not the same as total profits (which is generally sales minus expenses). A business can make a loss and still need to register for VAT! In summary, a business must register if: its taxable outputs, including zero-rates sales (but not [...]

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PAYE settlement agreements

Asif2019-06-12T23:39:02+01:00June 21st, 2019|Categories: Articles & Guides, Blog, PAYE|Tags: BLOG, Employers, PAYE, PSA|

PAYE settlement agreements A PAYE Settlement Agreement (PSA) enables the employer to pay the tax and National Insurance instead of the employee on those benefits and expenses included within the PSA. This can be useful to preserve the beneficial nature of the benefit, for example in respect of a Christmas or other function falling outside the associated exemption, or where the effort involved in reporting the benefit on individual employees’ P11Ds is disproportionate to the amount involved. What can a PSA be used for? A PSA cannot be used for all benefits – only for those which fall [...]

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Moving into partnership

Asif2019-06-12T23:09:26+01:00June 18th, 2019|Categories: Blog|Tags: BLOG, BUSINESS, Limited Liability Partnership, LLP, Partnership|

Moving into partnership A partnership may be a simple trading vehicle enabling two or more people to own and run a business, but there are few practicalities worth considering before making the move. Whilst there are no legal formalities involved in establishing a partnership, and a partnership may come into existence under an oral agreement, it is advisable that a formal partnership deed is drawn up. This is a legal document that sets out what each partner is responsible for and what he can expect from the business. Many partnerships ask a solicitor to help with the deed, [...]

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Employing family members

Asif2019-06-12T23:36:48+01:00June 17th, 2019|Categories: Articles & Guides, Blog|Tags: BLOG, Employers|

Employing family members It is permissible for a business to claim a tax deduction for the cost of a reasonable wage paid to a family member who helps in the business. Their duties could, for example, include answering the phone, going to the bank, bookkeeping and other administrative tasks. The tax legislation specifies that ‘in calculating the profits of a trade, no deduction is allowed for expenses not incurred wholly and exclusively for the purposes of the trade’, which indicates that as long as the work is undertaken, the payments are realistic and actually made, there should not [...]

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MTD for VAT: guidance updated

Asif2019-06-12T23:07:00+01:00June 16th, 2019|Categories: Blog, VAT|Tags: BLOG, HMRC, Making Tax Digital, MTD, VAT|

MTD for VAT: guidance updated HMRC have published an updated version of their guidance for businesses on Making Tax Digital for VAT. In particular, the guidance now includes information on how businesses should deal with petty cash transactions. Petty cash is traditionally a small amount of cash on hand that covers day to day expenses of a business, such as buying a pint of milk. In some businesses it can be used to describe costs that are not attributable to an individual account in their records. Requiring businesses to record each of these transactions in digital records could [...]

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Tax aspects of using a work’s van

Asif2019-06-12T23:21:02+01:00June 15th, 2019|Categories: Articles & Guides, Blog|Tags: Benefits In Kind, BLOG, Company Van|

Tax aspects of using a work’s van If an employee is able to use a work’s van for private use, which generally includes home-to-work travel, there will be a taxable benefit and a subsequent tax charge. From 6 April 2019, the flat-rate van benefit charge has risen from £3,350 to £3,430, representing a small increase in real terms to a basic rate taxpayer of £16 a year. If an employer also provides the employee with fuel for private use, then a tax charge on the provision of fuel will also arise based on an annual fixed rate. For [...]

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Making use of gift exemptions for IHT

Asif2019-06-12T23:05:16+01:00June 14th, 2019|Categories: Blog, Personal Finance, Taxation|Tags: Exemptions, Gifts, HMRC, IHT, Inheritance Tax|

Making use of gift exemptions for IHT According to a recent survey undertaken on behalf of HMRC, only 25% of people making financial gifts have a working knowledge of inheritance tax (IHT) rules surrounding such payments. The report entitled Lifetime Gifting: Reliefs, Exemptions, and Behaviours, reveals a significant lack of awareness of the gifting rules, liability for inheritance tax and the risk of making financial gifts without considering tax rules, which can apply for any gifts over £3,000 in value in a given tax year. The research also revealed that those with potentially smaller estates (below £500,000) appear to have a [...]

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