Errors In PAYE Accounts

Employers should be able to trust HMRC to keep an accurate record of the PAYE they pay, but recently some employers have found odd amounts in their online PAYE accounts. In some cases the figure of PAYE paid or due has disappeared completely from the account. In mid-September HMRC posted this message in the “service…

Simple Assessments

Do you remember how personal tax worked before self-assessment? The inland revenue would raise an estimated tax assessment; the taxpayer would appeal, a tax return would be submitted and eventually the figures would be agreed, then the tax would be paid. HMRC seem to have turned the clock back to pre-self assessment days with a…

Pensions Annual Allowance

The annual allowance for pension contributions is £40,000 for 2016/17. However there are two circumstances in which the allowance is reduced to a minimum of £10,000: A) Where the taxpayer has flexi-accessed their defined contribution pension scheme or SASS; B) Where the taxpayer has net income of £150,000 o more for the tax year. Situation…

VAT On Pre-Registration Assets

When a business becomes VAT registered, it can reclaim VAT paid on stock or assets acquired in the four years before the date of registration, which is held, or in the case of assets, still in use for business purposes at that date. The business may also reclaim VAT incurred on services purchased for business…

Marriage Allowance

The marriage allowance is not a separate allowance; it is a reallocation of 10% of the personnel allowance from one person in a marriage (or civil partnership) to the other person. It can only be claimed where the individuals either pay no tax at all, or pay tax at a rate of no more than…

Savings Allowance

There is currently no HMRC guidance available on the interaction of the personnel allowance, savings rate band (SRB), savings allowance, and different categories of income. This is a shame, as taxpayers need to appreciate how their savings will be taxed in the current tax year. From 6th of April 2016 savings income (includes interest but…

Overseas VAT Claims

When a VAT registered business sends its employees or directors on business trips to other EU countries, those individuals will incur expenses such as; hotel accommodation, restaurant meals and car hire. The VAT element of those expenses cant be reclaimed on the business’s UK VAT return, because the VAT incurred is overseas VAT not UK…

Union Customs Code

If you import or export goods you need to be aware of the Union Customs Codes (UCC) which came into effect accross the EU on 1 May 2016. It imposes changes to import, export and storage of goods procedures. The most important change is the requirement to provide a financial guarantee (security) to HMRC for…

Purchase Of Own Shares

The huge difference between the rates of CGT (10% or 20%) and the higher rates of income tax (40% and 45%), is encouraging entrepreneurs to extract value from their companies in a way which is subject to CGT. Where the company needs to continue to trade, capital treatment for a distribution to a shareholder may…

Disclosure Opportunities

HMRC is convinced there is a large population who fail to declare all of their taxable income. So it has set up a permanent digital disclosure service (DDS) to allow individuals, companies and trustees to come clean about their tax affairs. The DDS allows the taxpayer, or us as your tax agent, to make a…

NI Numbers Validation

HMRC have admitted that there is a problem with new national insurance numbers containing the prefix ‘KC’. Such NI numbers have been issued by the DWP since June 2016 but the RTI computer at HMRC doesn’t recognise those numbers as valid NINOs. HMRC has now announced (in a service issues message to Basic PAYE Tools)…

Loans & Disguised Remuneration

The Government is using all the means within its power to discourage the use of loans to replace remuneration, and in particular loans made by employee benefit trusts (EBTs). The law has been changed to ensure such loans don’t provide a tax advantage, and settlement opportunities have been provided for existing schemes. If you were…

Entrepreneurs’ Relief on sale of business premises

Entrepreneurs’ Relief (ER) came into affect on 6th of April 2008 to replace taper relief, but the range of gains that qualify for ER is more restricted than those which qualified for taper relief. In particular the disposal of a building that has been used for business purposes wont necessarily qualify for ER, where it…

VAT on unuaual homes

The first sale of a newly constructed home (or conversion from a commercial building) is zero rated, subsequent sales are exempt from VAT. The zero rating allows a builder to reclaim VAT incurred on building costs. Until now HMRC has insisted that a single dwelling must consist of a single building. HMRC now accept that…

Trading Or Capital Gain

The Government wants overseas investors to pay UK tax when they sell their UK properties, so it is introducing a new tax rule (Finance Bill 2016) to take effect for property disposals made on and after 5th Of July 2016. However, this new law may also catch UK property investors, including some buy-to-let landlords. If…

Supporting A Student

Following the release of A-Level results last week many of you will be delighted that your child has won a  place at university, but you may also be worried about how to finance the huge costs involved. Where you control your own company, the shares of that company can be used to provide tax-free dividend…

Lifetime Allowance Protection

The pensions lifetime allowance reduced to £1m from £1.25m on 6th April 2016. This threshold is tested when an individual starts to take their pension benefits. If the pension fund value exceeds the lifetime allowance this triggers a tax charge of 55% on the excess value taken ( where those benefits are taken as a…

Winding-Up The Company

Finance Bill 2016 includes a Targeted Anti-Avoidance Rule (TAAR), which seeks to charge income tax rather than CGT on the distributions from a closed company on a winding-up, if the business is later reborn in another form (phoenixed). Although the bill hasn’t yet been passed into an act, the new law will take effect for…

Making Tax Digital

HMRC have recently published six consultation documents focusing on different aspects of the making tax digital strategy. The strategy will radically reform the way in which individuals and businesses interact with HMRC. The proposals are far reaching and will affect all clients. This is not time to bury ones head in the sand. The timescale…

Threshold income For Student Loan Repayments

A borrower who has a student loan is required to make repayments of that loan if his or her income exceeds the repayment threshold. For 2016/17 the threshold for a Plan 1 loan is £17,495 and for a Plan 2 loan is £21,000. Once the threshold is reached, where repayment is made via the self-assessment…