VAT Reverse Charge for Construction Services

2019-08-25T00:21:04+01:00September 1st, 2019|Categories: Articles & Guides, Blog, VAT|Tags: , , |

The VAT domestic reverse charge for building and construction services comes into effect from 1 October 2019. The reverse charge represents part of a government clamp-down on VAT fraud. A domestic reverse charge means that a contractor receiving a supply of specified construction services must account for the output VAT due, rather than the sub-contractor who supplied the services. The contractor also deducts the VAT due on the supply as input VAT, subject to normal VAT rules, meaning no net tax is usually payable to HMRC. The reverse charge thus removes the scope to evade any VAT owing to [...]

Case study: Common mistakes that landlords make

2019-08-23T16:22:28+01:00August 11th, 2019|Categories: Articles & Guides, Blog|Tags: , |

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 [...]

Furnished holiday lettings – is it worth qualifying?

2019-09-02T11:32:21+01:00July 23rd, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , |

When it comes to taxing rental income, not all properties are equal. Different rules apply to properties which meet the definition of ‘furnished holiday lettings’ (FHLs). While the rules now are not as generous as they once were, they still offer a number of tax advantages over other types of let. Advantages Properties that count as FHLs benefit from: capital gains tax reliefs for traders (business asset rollover relief, entrepreneurs’ relief, relief for business assets and relief for loans for traders); and plant and machinery capital allowances on items such as furniture, fixtures and fittings. In addition, the profits [...]

Stamp duty land tax on non-residential properties

2019-09-02T11:32:13+01:00July 13th, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , , , |

Stamp duty land tax (SDLT) is payable in England and Northern Ireland on the purchase of property over a certain price. It applies equally to residential and non-residential properties, although the rates are different. Stamp duty land tax is devolved with land and buildings transaction tax (LBTT) applying in Scotland and land transaction tax (LTT) applying in Wales. Non-residential property As the name suggests, non-residential property is property other than that which is used as a residence. This includes commercial property, such as shops and office, agricultural land and forests. The non-residential rates of SDLT also apply where six [...]

Entrepreneur’s relief – the basics

2019-09-02T11:29:46+01:00July 12th, 2019|Categories: Articles & Guides, Blog, Taxation|Tags: , |

Entrepreneurs’ relief is intended to reduce the rate of capital gains tax to a flat rate of 10% on certain qualifying business disposals. Certain aspects of the relief have recently changed, and this may affect any subsequent tax liability. A qualifying business disposal must include a material disposal of business assets. For these purposes, a disposal of business assets is a disposal of: the whole or part of a business; of (or of interests in) one or more assets in use, at the time at which the business ceases to be carried on, for the purposes of the business; [...]

Travel expenses and the 24-month rule

2019-09-02T11:29:33+01:00July 10th, 2019|Categories: Articles & Guides, Blog|Tags: , |

As a general rule, employees are denied a tax deduction for the cost of travel between home and work. Likewise, subject to a few limited exceptions, if the employer meets the cost of home to work travel, the employee is taxed on it. One of the main exceptions to this rule is where an employee attends a ‘temporary workplace’. This is a workplace that the employee goes to in order to perform a task of limited duration or one that he attends for a temporary purposes, even if the attendance is on a regular basis. Example 1 Polly is [...]

Beware disposals to family members – the ‘market value’ rule

2019-09-02T11:29:25+01:00July 7th, 2019|Categories: Articles & Guides, Blog|Tags: , , |

At first sight, the calculation of a capital gain or loss on the disposal of an asset is relatively straightforward – simply the difference between the amount received for the sale of that asset and the cost of acquiring (and, where relevant) enhancing it, allowing for the incidental costs of acquisition and disposal. However, as with all rules there are exceptions, and particular care needs to be taken when disposing of an asset to other family members. Spouses and civil partners The actual consideration, if any, is ignored for transfers of assets between spouses and civil partners. Instead, the [...]

Give from income to save inheritance tax

2019-09-02T11:29:18+01:00July 6th, 2019|Categories: Articles & Guides, Blog, Taxation|Tags: , , |

Within a family scenario, there are many situations in which one family member may make a gift to other family members. However, the way in which gifts are funded and made can make a significant difference to the way in which they are treated for inheritance tax purposes. Not all gifts are equal There is no inheritance tax to pay on gifts between spouses and civil partners. A person can make as many lifetime gifts to their spouse or civil partner as they wish (as long as they live in the UK permanently). There is no cap on the [...]

When does the diesel supplement apply?

2019-09-02T11:29:13+01:00July 4th, 2019|Categories: Articles & Guides, Blog|Tags: , , |

Employees with a company car are taxed – often quite heavily – for the privilege. The charge is on the benefit which the employee derives from being able to use their company car for private journeys. The amount charged to tax is a percentage of the ‘list price’ of the car – known as the 'appropriate percentage'. The percentage depends on the level of the car’s CO2 emissions. A supplement applies to diesel cars. For 2019/20, as for 2018/19, the supplement is set at 4%. However, the application of the diesel supplement cannot take the percentage of the price [...]

Annual tax on enveloped dwellings

2019-09-02T11:29:08+01:00July 2nd, 2019|Categories: Articles & Guides, Blog, Property, Taxation|Tags: , , , |

The annual tax on enveloped dwellings (ATED) is a tax that applies, in the main, to companies owning residential property which is valued at more than £500,000. The tax only applies on properties that are classed as ‘dwellings’. This is a property where all or part of it is used as a residence, for example a house or a flat. The ‘dwelling’ also includes the property's gardens or grounds. However, properties such as hotels, guest houses, boarding school accommodation and student halls of residence fall outside the definition of a ‘dwelling’, and thus outside the scope of the tax. [...]

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