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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 [...]

Capital allowances SBA update

2019-09-02T11:29:22+01:00July 6th, 2019|Categories: Blog|Tags: , , |

HM Treasury and HMRC have recently published a summary and response document relating to the consultation on a new capital allowance for structures and buildings (SBA). Broadly, the SBA allows businesses that invest in new builds or renovations on or after 29 October 2018, to claim tax relief at 2% a year on eligible costs. A technical note outlining the key features of the allowances was published at Autumn Budget 2018, with the subsequent draft legislation released for consultation at Spring Statement 2019. Power to introduce the new allowance was contained in FA 2019, s. 30. Detailed legislation will be introduced [...]

MTD for VAT: guidance updated

2019-09-02T11:23:22+01:00June 16th, 2019|Categories: Blog, VAT|Tags: , , , , |

HMRC have published an updated version of their guidance for businesses on Making Tax Digital for VAT. In particular, the guidance now includes information on how businesses should deal with petty cash transactions. Petty cash is traditionally a small amount of cash on hand that covers day to day expenses of a business, such as buying a pint of milk. In some businesses it can be used to describe costs that are not attributable to an individual account in their records. Requiring businesses to record each of these transactions in digital records could be an unreasonable administrative burden for [...]

Making use of gift exemptions for IHT

2019-09-02T11:23:11+01:00June 14th, 2019|Categories: Blog, Personal Finance, Taxation|Tags: , , , , |

According to a recent survey undertaken on behalf of HMRC, only 25% of people making financial gifts have a working knowledge of inheritance tax (IHT) rules surrounding such payments. The report entitled Lifetime Gifting: Reliefs, Exemptions, and Behaviours, reveals a significant lack of awareness of the gifting rules, liability for inheritance tax and the risk of making financial gifts without considering tax rules, which can apply for any gifts over £3,000 in value in a given tax year. The research also revealed that those with potentially smaller estates (below £500,000) appear to have a limited knowledge of the longer-term reach of inheritance [...]

New NIC treatment of termination payments

2019-09-02T11:22:57+01:00June 12th, 2019|Categories: Blog, PAYE|Tags: , , , , |

The National Insurance Contributions Bill was introduced into Parliament on 25 April 2019. The Bill contains provisions designed to align the income tax and national insurance contributions (NICs) treatment of termination awards and sporting testimonials, closing a loophole which currently allows effective tax planning. If enacted, the new rules are expected to take effect from April 2020. HMRC believe that 'the current misalignment incentivises well advised employers to disguise final payments as compensatory termination payments that benefit from a NICs exemption'. Consequently, the new provisions will affect businesses that structure termination payments to reduce the tax and NICs liability with [...]

Spring Statement 2019

2019-09-02T11:21:53+01:00March 15th, 2019|Categories: Spring Statement|Tags: , , , , |

Summary Chancellor Philip Hammond has delivered his 2019 Spring Statement to the House of Commons. A supporting Written Ministerial Statement (WMS) provides more detail on some of the announcements in the Spring Statement, and sets out details of other forthcoming government policies. Mr Hammond opened his Statement by acknowledging that the most urgent task at present is to 'lift the uncertainty', but he also added a positive note, stating that the 'economy itself is remarkably robust'. The Chancellor indicated that if the UK does leave the EU with a deal, there will be an economic boost due to a [...]

Voluntary disclosures

2019-09-02T11:24:03+01:00March 8th, 2019|Categories: Blog, HMRC, Personal Finance|Tags: , , , , |

HMRC have updated their online guidance on disclosing unpaid tax to include information on authorising an agent to deal with a disclosure made through the Digital Disclosure Service (DDS). The DDS gives individuals and companies a chance to bring their affairs up to date in a simple, straightforward way. Anyone who owes tax on your income you must tell us about any unpaid tax now. Anyone who owes tax on income or gains must tell HMRC about any unpaid tax. They will then have 90 days to calculate and pay what is owed. - How to make a voluntary disclosure to HMRC explains [...]

HMRC reaffirm income tax charge on winding up

2019-09-01T23:09:18+01:00February 27th, 2019|Categories: Blog, HMRC, Taxation|Tags: , , |

HMRC have published Spotlight 47, which provides guidance on tax avoidance schemes that try to avoid the income tax charge on distributions when a company is being wound up. In recent years, HMRC have endeavoured to prevent schemes being used by shareholders to take advantage of more favourable capital gains tax rates when extracting value from their company. Until 6 April 2016, under arrangements known as 'phoenixism', an individual shareholder who intended to carry on the company's activities could arrange matters enabling them to wind up the company and receive the company's undistributed profits. The profits would be classed [...]

HMRC warn of tax scams targeting university students

2019-09-01T23:07:54+01:00December 2nd, 2018|Categories: Blog, HMRC|Tags: , , |

HMRC have published a series of warnings that university students are being targeted by scammers with fake tax refunds in an effort to steal money and personal details. The scammers are using seemingly legitimate university email addresses (for example '@uc.ac.uk') in order to avoid detection, and HMRC have received thousands of fraud reports from students at colleges across the UK. This is the first time HMRC has seen a tax scam attack directly targeting university students in such high volumes.  HMRC never inform people about potential tax refunds by email, text or voicemail. Therefore, if someone does receive such [...]

Software requirements under MTD

2019-09-01T23:07:17+01:00November 22nd, 2018|Categories: Blog, HMRC, MTD|Tags: , , , |

Under HMRC's new Making Tax Digital (MTD) regime, which kicks in for VAT-registered businesses with a taxable turnover in excess of £85,000 from April 2019, businesses will no longer be able to keep manual records. Currently, spreadsheets are commonly used - not only to maintain records, but also to convert the information from accounting software into the VAT return figures. MTD requires spreadsheets to interact directly with software. Overcoming these issues may be challenging. Compatibility MTD requires businesses to maintain relevant information about sales and purchases in an electronic format, using 'functional compatible software'. Compatible software is a software product [...]

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