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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 [...]

The importance of keeping good business records

2019-08-23T16:22:22+01:00August 20th, 2019|Categories: Blog|Tags: , , |

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 [...]

Employment allowance

2019-08-23T16:22:32+01:00August 9th, 2019|Categories: Blog, PAYE|Tags: , , , |

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 [...]

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 [...]

Changes in accounting for VAT after prices are altered

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

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, [...]

The correct way with directors’ NICs

2019-08-23T16:22:52+01:00August 4th, 2019|Categories: Blog, PAYE|Tags: , , , |

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 [...]

HMRC consultation on Partial Exemption and Capital Goods Scheme

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

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: [...]

Dividend Allowance

2019-08-23T16:23:01+01:00July 31st, 2019|Categories: Blog, Limited Company, Personal Finance, Taxation|Tags: , , |

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 [...]

Furnished holiday lettings – is it worth qualifying?

2019-06-13T00:03:44+01:00July 23rd, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , |

Furnished holiday lettings – is it worth qualifying? 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 [...]

Stamp duty land tax on non-residential properties

2019-06-13T00:01:50+01:00July 13th, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , , , |

Stamp duty land tax on non-residential properties 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 [...]

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