Blog - PMA Accountants

January 2020 Questions and Answers

Q. I am the sole director and shareholder of a limited company, which has been trading for many years. Last year, I took an extended holiday and travelled around the world with my wife. We were away for twelve months in total. Whilst I was away the company continued to collect outstanding payments, but it did not receive any other income. Now that I am back, I have 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 losses in the period of temporary non-trading [...]

Asif2020-01-03T12:01:06+00:00January 10th, 2020|Categories: Questions & Answers|Tags: Capital Gains Tax, Director, Employee Benefits, Limited Company, Shareholder|0 Comments

HMRC advisory fuel rates from 1 December 2019

HMRC have published company car advisory fuel rates for use from 1 December 2019. The rates apply when employers reimburse employees for the cost of fuel for business travel in their company cars or require employees to repay the cost of fuel used for private travel. HMRC review rates quarterly on 1 March, 1 June, 1 September and 1 December. The rates applying from 1 December 2019 are as follows: Petrol and LPG Engine size 1400cc or less: petrol 12p per mile, LPG 8p per mile 1401cc to 2000cc: petrol 14p per mile; LPG 9p per mile Over 2000cc: petrol [...]

Asif2020-01-03T11:58:05+00:00January 5th, 2020|Categories: Blog, HMRC, Taxation|Tags: Advisory Fuel Rates, BLOG, HMRC|0 Comments

What does the General election mean for tax?

Following the General election on 12 December, Prime Minister Boris Johnson has confirmed that Sajid Javid remains as Chancellor of the Exchequer and no other changes at HM Treasury have been announced. The Prime Minister has however, confirmed that a more significant cabinet reshuffle will take place after the UK leaves the EU on 31 January 2020. The Conservative manifesto set out a fairly limited number of tax pledges, with commitment to a triple lock on income tax, national insurance contributions (NICs) and VAT, which means there should be no tax hikes forthcoming in these areas. Moreover, the government has said it will [...]

Asif2020-01-03T11:50:32+00:00January 3rd, 2020|Categories: Blog, Taxation|Tags: BLOG, General Election, Tax|0 Comments

December 2019 Questions and Answers

Q. Do all assets qualify for the capital allowances Annual Investment Allowance? A. Unfortunately not all expenditure on plant and machinery will qualify for annual investment allowances (AIA). The most common examples of assets that are not eligible are cars and assets that have been used for some other purpose before being brought into the business, for example a personally owned computer. These assets should still qualify for capital allowances, but allowances will be given gradually over several years, rather than the full cost being allowed against income all at once, which is what the AIA gives. The AIA was [...]

Asif2019-12-18T23:28:32+00:00December 29th, 2019|Categories: Questions & Answers|Tags: Assets, Marraige Allowance, Payments on Account, Q&A, Self Assessment|0 Comments

Should I incorporate my business?

As things currently stand, the expected cut in the main rate of corporation tax to 17% from April 2020 is unlikely to happen, but current corporation tax rates remain pretty favourable. There are also other areas where company formation may help save tax. The costs and regulations involved with running a company are usually greater than trading as a sole trader or in partnership, and should not be overlooked. In addition, incorporation generally means an increase in administration, which some businesses may find burdensome. The starting point for dealing with companies and company directors is to remember that a limited company [...]

Asif2019-12-18T23:25:53+00:00December 27th, 2019|Categories: Blog, Business, Limited Company, Self Employment|Tags: Incorporation, Limited Company, Self Employment|0 Comments

Should I register for VAT?

In broad terms, and subject to certain exceptions, a business will be required to register to charge and pay VAT once annual sales reach a pre-set annual threshold, which is currently £85,000. This threshold is determined by total sales and is not the same as total profits (which is generally sales minus expenses). However, a business can register for VAT even if its turnover (total sales) is below the threshold and it may actually save tax by doing so, particularly if its main clients or customers are organisations that can reclaim VAT themselves. Example Bill is a non-VAT registered [...]

Asif2019-12-18T23:21:11+00:00December 21st, 2019|Categories: Blog, Business, VAT|Tags: HMRC, Registration, VAT, VAT Threshold|0 Comments

Tax-free Christmas parties

Whilst the tax legislation does not include a specific allowance for an employer providing a Christmas party for employees, HMRC do allow limited tax relief against the cost of holding a social function for employees, providing certain conditions are met. Broadly, a social event - which of course, includes the annual Christmas party - will qualify as a tax-free benefit if the following conditions are satisfied: - The total cost must not exceed £150 per head, per year; - The event must be primarily for entertaining staff; and - The event must be open to employees generally, or to those at [...]

Asif2019-12-18T23:18:20+00:00December 19th, 2019|Categories: Blog, Business|Tags: Allowance, Christmas Party, Tax Free|0 Comments

November Questions and Answers

Q. I have recently started running my own business providing training services. HMRC have advised me that VAT is not charged on the type of services I am providing. Does this mean that my services are zero-rated for VAT or actually exempt? Do I need to register for VAT? A. Although both zero-rated and exempt supplies result in no VAT being applied to the supply, the consequence is very different between them and it is important to get it right. Zero-rating is a rate of VAT, albeit at zero per cent. The goods and/or services to which it applies are [...]

Asif2019-11-01T21:18:11+00:00November 11th, 2019|Categories: Questions & Answers|Tags: Employees, Medical Treatment, Property, Q&A, VAT|0 Comments

Salary or bonus?

As 31 December approaches, many companies will be getting ready to tie up tax matters for their financial year-end and giving consideration to salaries, bonuses and dividends. Given current tax rates, paying a dividend rather than a salary will often be a more cost-effective way of withdrawing profits from a company. However, if the company is loss-making and has no retained profits, it will not be possible to declare a dividend, and an alternative will need to be considered. This often involves an increased salary or a one-off bonus payment. From a tax perspective, the position will be the same [...]

Asif2019-11-01T21:15:38+00:00November 9th, 2019|Categories: Blog, PAYE|Tags: BLOG, Bonus, Dividends, Salary|0 Comments

Losses in the first years of trade

If a new business makes losses in its first few years of trading, there may be scope to carry back those losses and set them off against other income received in the years prior to commencement of the trade. This is commonly referred to as 'early trade losses relief' and it applies to losses sustained in the tax year in which a trade is first carried on, or in any of the next three years. The provisions may be particularly useful to new businesses as they may be used to generate a cash boost in the form of a [...]

Asif2019-11-01T21:10:34+00:00November 6th, 2019|Categories: Business|Tags: BLOG, Losses, Start-Ups|0 Comments

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