Blog - PMA Accountants

Working from home – claim tax relief for your expenses

An increasing number of employees work from home some or all of the time. Where they do so, they may be able to claim tax relief for the costs that they incur from working at home, regardless of whether their employer meets those costs. Nature of expenses Where an employee works from home, they can claim tax relief for the extra costs that are incurred as a result of working from home. This may include the cost of phone calls from the landline, the costs of electricity and gas to heat and light the workspace, power the computer, and [...]

Asif2019-08-23T16:00:18+01:00August 23rd, 2019|Categories: Blog, Self Employment, Taxation|Tags: BLOG, Tax Relief, Use of Home as Office|0 Comments

The importance of keeping good business records

To ensure that you pay the correct amount of tax and file correct tax returns with HMRC, it is vital that you keep complete and accurate records. This applies regardless of whether you are running a business as a sole trader or in partnership or operating a limited company. Business records for the self-employed The self-employed need to complete records of their business income and expenses. Where the business is operated in partnership, the responsibility of keeping records falls on the nominated partner. It is important to keep records of: all sales and income all business expenses VAT records [...]

Asif2019-08-23T16:22:22+01:00August 20th, 2019|Categories: Blog|Tags: BLOG, Bookkeeping, Business Records|0 Comments

Case study: Common mistakes that landlords make

The following case study explores some mistakes that landlords may make when working out their tax liability. Harry and Sally are married. They live in a Devon village. For many years, Harry worked in Cardiff during the week, travelling home at weekends. The couple owned a flat in Cardiff which Harry lived in during the week. In early 2017, Harry took redundancy and set up a consultancy business working from home. The Cardiff flat was let out from 1 May 2017. The property is jointly owned. Sally is a freelance hairdresser earning around £15,000 a year. Harry’s consultancy business [...]

Asif2019-08-23T16:22:28+01:00August 11th, 2019|Categories: Articles & Guides, Blog|Tags: Landlords, Self Assessment|0 Comments

Employment allowance

The employment allowance (EA) was introduced from April 2014, potentially cutting every employer’s NIC payments by allowing businesses and charities to offset up to a pre-set annual threshold (£3,000 from April 2016, previously £2,000) against their employer PAYE NIC liabilities. Employers may generally claim the EA if they are a business (including a Community Amateur Sports Club) that pays employer Class 1 NICs on employees’ or directors’ earnings and is not funded by central government or a charity. To keep the process as simple as possible for employers, the EA is delivered through standard payroll software and HMRC’s real [...]

Asif2019-08-23T16:22:32+01:00August 9th, 2019|Categories: Blog, PAYE|Tags: BLOG, Employers, Employment Allowance, PAYE|0 Comments

Spare time earnings may be tax-free

The new trading tax allowance for individuals of £1,000 was introduced from 6 April 2017 and applies for the 2017/18 tax year onwards. In broad terms, the allowance means that individuals with trading income below the annual threshold may not need to report it to HMRC and may not need to pay tax on it. This allowance may be particularly useful to individuals with casual or small part time earnings from self-employment, for example, people working in the ‘gig economy’ (Deliveroo workers and such like), or small-scale self-employment such as online selling (maybe via eBay or similar). It means [...]

Asif2019-08-23T16:22:36+01:00August 7th, 2019|Categories: Blog, Self Employment|Tags: BLOG, Self Employment, Trading Allowance|0 Comments

August questions and answers

Q. A few years ago I bought an antique chair for £3,500. I have recently been offered £8,000 for it. Will I have to pay capital gains tax if I accept the offer? A. A useful capital gains tax exemption exists for tangible moveable property (a chattel) which is not a wasting asset (broadly, an asset with a predictable life not exceeding 50 years). A gain on disposal of a chattel is exempt if the disposal consideration is £6,000 or less. Where disposal proceeds exceed the exemption limit, the gain is limited using the following formula: 5/3 x (disposal consideration [...]

Asif2019-08-23T16:22:41+01:00August 6th, 2019|Categories: Questions & Answers|Tags: Capital Gains, Mobile Phone Bills, VAT|0 Comments

Changes in accounting for VAT after prices are altered

HMRC have published Brief 6 (2019), which explains changes to the rules on accounting for VAT, where the amount paid changes after the VAT has been accounted for to HMRC from 1 September 2019. The prices businesses charge for goods and services can be reduced after VAT has been accounted for on a supply, for example when a business delivers goods, some of which are faulty, and it agrees with its customer that the price should be reduced. When this occurs a business normally sends its customer a credit note and gives a refund. The VAT rules specify that, [...]

Asif2019-08-23T16:22:48+01:00August 5th, 2019|Categories: Blog, VAT|Tags: BLOG, VAT|0 Comments

The correct way with directors’ NICs

In certain situations the non-cumulative nature for calculating employee Class 1 National Insurance Contributions (NICs) makes it possible to manipulate earnings to reduce the overall amount payable by taking advantage of the lower rate of primary Class 1 contributions payable once the upper earnings limit has been reached. This means that that an employee who is paid £2,000 each month of the year will pay considerably more in primary contributions than someone who is paid £600 for 11 months and £23,400 for one month, even though their total earnings for the year are the same. Company directors often have [...]

Asif2019-08-23T16:22:52+01:00August 4th, 2019|Categories: Blog, PAYE|Tags: BLOG, Directors, NIC, PAYE|0 Comments

HMRC consultation on Partial Exemption and Capital Goods Scheme

At Spring Statement 2019, the government announced that it would launch a call for evidence exploring ways to improve the operation of Partial Exemption (PE) and the Capital Goods Scheme (CGS), following the findings of the 2017 Office of Tax Simplification (OTS) VAT review. HMRC have now published the consultation document covering both subjects. These are two areas of VAT which can involve a significant amount of administration for businesses, with complex calculations often being required for some businesses to determine the amount of input tax that they are entitled to recover. The call for evidence is split into three sections: [...]

Asif2019-08-23T16:22:56+01:00August 2nd, 2019|Categories: Blog, HMRC|Tags: BLOG|0 Comments

Dividend Allowance

Many family-owned companies allocate dividends towards the end of their financial year and/or the tax year, which means that the impact of the reduction in the dividend allowance from £5,000 to £2,000 from 6 April 2018 is only now starting to come to light. Many other taxpayers may not become aware of the change until they complete their 2018/19 tax return, which in most cases, will be due for submission to HMRC by 31 January 2020. The amount of tax payable on a dividend will primarily depend on which tax band the first £2,000 falls in. The tax rates on dividend [...]

Asif2019-08-23T16:23:01+01:00July 31st, 2019|Categories: Blog, Limited Company, Personal Finance, Taxation|Tags: BLOG, Dividends, Limited Companies|0 Comments

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