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Working from home – claim tax relief for your expenses

2019-08-23T16:00:18+01:00August 23rd, 2019|Categories: Blog, Self Employment, Taxation|Tags: , , |

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 [...]

Spare time earnings may be tax-free

2019-08-23T16:22:36+01:00August 7th, 2019|Categories: Blog, Self Employment|Tags: , , |

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 [...]

Making use of the trading allowance

2019-09-01T23:07:09+01:00November 18th, 2018|Categories: Blog, HMRC, Self Employment|Tags: , , , |

The introduction of the new trading and property allowances for 2017/18 onwards mean that those with low levels of income from these sources may not need to report it to HMRC. The trading allowance is £1,000 for 2017/18 and 2018/19. Broadly, those with trading income of less than £1,000 a year, no longer need to report it to HMRC. This may be particularly useful for people with casual or small part time earnings from self-employment, for example, someone who up-cycles old furniture for resale on eBay or similar. Where the trading income is more than £1,000, the trader has the [...]

Class 2 NICs to remain

2019-09-01T22:08:17+01:00October 20th, 2018|Categories: Articles & Guides, Blog, HMRC, Self Employment|Tags: , , , , |

Self-employed earners (i.e. sole traders or partners) over the age of 16 and below state retirement age are currently liable to both Class 2 and Class 4 National Insurance contributions (NICs) unless specifically excepted by provisions contained in the Social Security Contributions and Benefits Act 1992. Former Chancellor, George Osborne, made proposals to abolish Class 2 NICs and reform the system for paying Class 4 NICs. The proposals were designed to simplify the tax system for the self-employed and offer them more equal access to contributory benefits. However, the Treasury recently announced that it will not now proceed as [...]

Change to Class 4 NIC rate reversed

2019-09-01T12:03:39+01:00April 16th, 2017|Categories: Self Employment|Tags: , , |

The Government has confirmed that the proposed increase in the rate of Class 4 National Insurance Contributions, paid by the self-employed on profits from a business, will not now take effect from April 2018. The Chancellor of the Exchequer, Philip Hammond, had announced that the rate would rise from 9% to 10% from 6 April 2018, and again to 11% from April 2019. In a letter to MPs informing them of the decision, Mr Hammond said 'however difficult the fiscal challenges we face, the tax lock and spending ring-fence commitments we have made for this Parliament should be honoured [...]

Abolition of Class 2 NICs

2019-09-01T12:02:08+01:00March 29th, 2017|Categories: Self Employment|Tags: , |

Originally announced at Budget 2016, the 2016 Autumn Statement confirmed that Class 2 National Insurance Contributions (NICs) will be abolished from April 2018, hopefully achieving the desired effect of simplifying National Insurance for the self-employed and making the system fairer for employed and self-employed individuals. At the same time as the abolition of Class 2 NICs, the system for Class 4 NICs will also be reformed to include a new threshold - to be called the 'small profits limit' (SPL). The amount of the SPL for 2018/19 is yet to be confirmed but is likely to be around £6,025. [...]

Disguised remuneration and the self-employed

2019-09-01T11:55:01+01:00January 29th, 2017|Categories: Self Employment|Tags: , |

Following the announcement in the Autumn Statement, HMRC have published the details of a measure designed to tackle the future use of avoidance schemes currently being used by some self-employed people to avoid paying income tax and NICs on their income. The measure will also tackle the existing use of schemes involving loans with a new charge (a 'loan charge') on outstanding loans taken out as part of avoidance arrangements. This charge will apply if tax is not paid on the loan and the loan is not repaid by 5 April 2019. Various 'disguised remuneration' avoidance schemes currently exist, [...]