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Tax-free expenses for home-workers

2019-10-03T00:15:53+01:00October 4th, 2019|Categories: Blog, Taxation|Tags: , , , |

Providing certain conditions are met, no tax liability will arise if an employer makes payments to employees for reasonable additional household expenses, which the employee incurs in carrying out duties of their employment at home under 'homeworking arrangements'. 'Homeworking arrangements' are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home. There is no requirement for any part of the employee's home to be used exclusively for the purposes of the employment. HMRC will accept that homeworking arrangements exist where: - there are arrangements between the [...]

Overdrawn director’s loan accounts

2019-08-23T16:24:33+01:00September 20th, 2019|Categories: Blog, Taxation|Tags: , , |

In a personal or family company, the lines between the directors as individuals and the company are often blurred – the director may lend money to the company when cashflow is tight and the company may lend money to the director or pay personal bills on the director’s behalf. Transactions between the director and the company are tracked via the director’s account. If the director’s account is overdrawn at the end of the accounting period (such that the director owes the company money) and the company is close, there are tax consequences to consider. Broadly, a close company is [...]

Changes to main residence relief

2019-09-02T11:42:40+01:00September 13th, 2019|Categories: Blog, Property|Tags: , , , , , |

In his Budget on 29 October 2018, the Chancellor outlined a number of changes to main residence relief. The changes affect the final period exemption and the availability of lettings relief, which applies where a property which has at some time been an only or main residence, is let out. Main residence exemption No capital gains tax is payable on a gain arising on a property which throughout the period of the taxpayer’s ownership has been his or her only or main residence. If the property has been an only or main residence at some point, the taxable gain [...]

VAT ALERT: DOMESTIC REVERSE CHARGE IMPLEMENTATION DELAYED

2019-09-10T12:41:54+01:00September 7th, 2019|Categories: Blog, VAT|Tags: , , , |

There has been a last-minute change to the start date for the VAT domestic reverse charge (DRC) for building and construction services. This was scheduled to begin on 1 October 2019. It is now delayed until 1 October 2020. The government cites concern that some businesses are not yet ready to implement the change – and possible coincidence with Brexit – as the reasons for the delay. Despite the delay, the government is still committed to the DRC and there has been no change to the detail of the legislation. The DRC changes the way that VAT is accounted [...]

Expenses that landlords can deduct

2019-08-23T16:24:28+01:00September 2nd, 2019|Categories: Blog, Property|Tags: , , |

Landlords must pay tax on any profit from their property rental business (although income from property of less than £1,000 a year can be ignored). In working out the profits, expenses are deducted from rental income. To ensure that the landlord does not pay more tax than is necessary, it is important to deduct all allowable expenses. Remember, the profit calculation is undertaken for the property income business as a whole, not on a property by property basis. Consequently, it does not matter whether the expenses incurred in relation to an individual property exceed the rental income from that [...]

The CGT annual exemption – use it or lose it!

2019-08-23T16:24:19+01:00August 30th, 2019|Categories: Blog, Taxation|Tags: , , |

Capital gains tax (CGT) is normally paid when an item is either sold or given away. It is usually paid on profits made by selling various types of assets including properties (but generally not a main residence), stocks and shares, paintings, and other works of art, but it may also be payable in certain circumstances when a gift is made. Some assets are exempt from CGT, including assets held in an Individual Savings Account (ISA), betting, lottery, or pools winnings, cash held in sterling, jewellery, antiques, and other personal effects that are individually worth £6,000 or less. The most [...]

Give to charity to reduce your inheritance tax bill

2019-08-23T16:24:08+01:00August 27th, 2019|Categories: Blog, Taxation|Tags: , , , |

Making gifts to charity can be an effective way to reduce the amount of inheritance tax (IHT) payable on your estate. Charitable gifts can work to reduce the IHT payable in two ways: reducing the value of the net estate chargeable to IHT; or where the gifts to charity are worth at least 10% of the net estate at death, reducing the rate at which inheritance tax is payable. Lifetime gifts and bequests on death made to qualifying charities and registered housing associations are exempt from inheritance tax, provided that the gift was made outright. Qualifying charities A qualifying [...]

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 [...]

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