Archive for May, 2015

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Lack of awareness of VAT

Tuesday, May 12th, 2015

According to research 36% of the UK’s smallest businesses are unaware of the rules governing VAT thresholds.

A third of the UK’s smallest businesses are unaware of the rules governing VAT thresholds, recent research has revealed.

This lack of understanding could mean that approximately 780,000 businesses are at risk of being fined by HMRC.

Meanwhile, according to the research, 9%% of small businesses intentionally limit their trading in order to avoid reaching the VAT threshold.

Under the current rules, where a taxable person (for example an individual, company or partnership) has VAT taxable turnover of more than the current registration threshold of £82,000 in a rolling 12 month period or where turnover is expected to exceed the registration threshold in the next 30 day period then they must register for VAT.

It is important to monitor turnover, as there is a penalty for late registration in addition to the tax payable.

 

Click here to view our Tax Tables.  If you’d like to discuss your VAT liability then Please contact us .

Internet links: icaew news   GOV.UK news

This entry was posted on Tuesday, May 12th, 2015 at 9:41 am by Slaters and is filed under Company Tax, Personal Tax, Tax, Tax planning, Tax relief, VAT. You can follow any responses to this entry through the RSS 2.0 feed.

Confirmation of income for mortgage purposes

Tuesday, May 12th, 2015

Are you self employed and wanting to go for a mortgage – well we have some news!!

Many mortgage lenders now request a copy of the official HMRC tax calculation (SA302) as confirmation of income.

As the result of lobbying from the accounting profession, there has been a change of heart.

From January 2015, self-employed individuals with a self assessment online account can provide proof of their income by downloading copies of their Tax Calculation and their Tax Year Overview from the HMRC online service, which will be the evidence they need to support a mortgage application.
As our clients agents, we can print these documents on our clients behalf; these are acceptable to support your loan or mortgage application. There is still a conflict between planning to minimise income for tax purposes and declaring a higher level of income to support a mortgage application so let us know if you are planning to apply for a new mortgage.

This entry was posted on Tuesday, May 12th, 2015 at 9:35 am by Slaters and is filed under HMRC, Mortgages, Property, Tax planning. You can follow any responses to this entry through the RSS 2.0 feed.

The Conservatives Tax Policies

Tuesday, May 12th, 2015

Now that the outcome of the recent election has been confirmed we thought we’d take this opportunity to recap the Conservatives pledges on tax policies.

As announced in the Budget, the Conservative Party promise to increase the tax-free Personal Allowance to £12,500 and the 40p Income Tax threshold to £50,000.
The Conservatives will pass a new law so that nobody working 30 hours on minimum wage pays Income Tax on what they earn. At £8 an hour that would be £240 a week, or £12,480 a year. They also state that there will be no increases in VAT, National Insurance contributions or Income Tax.

The Manifesto states that they will set a new, significantly higher and permanent level for the

The Conservatives also pledged to take the family home out of tax for all but the richest by increasing the effective Inheritance Tax threshold for married couples and civil partners to £1 million, with a transferable main residence allowance of £175,000 per person in addition to the existing £325,000 nil rate band. This will be paid for by reducing the tax relief on pension contributions for people earning more than £150,000.

Let’s see how all of the above pledges transpire over their coming term in power.

This entry was posted on Tuesday, May 12th, 2015 at 9:30 am by Slaters and is filed under Accountancy, Accounts - General, Business planning, Capital Gains Tax, Company Tax, Personal Tax, Property, Tax, Tax planning, Tax relief. You can follow any responses to this entry through the RSS 2.0 feed.

New business start ups

Wednesday, May 6th, 2015

 This posting lists a few (but not necessarily all) of the tax issues you will need to consider when you are planning a new business:

  1. Get you business registered with HMRC, failure to do this can lead to penalties. If you are incorporating your business, HMRC generally pick up your business registration via their links with Companies House. But if you are aiming to be self employed, as a sole trader or in partnership, you will need to notify HMRC within certain time limits of your commencement date.
  2. In similar vein, if you need to employ staff you must register as an employer with HMRC.
  3. If you intend to register for VAT from the date you commence to trade you can still recover input VAT that you have paid on certain setup costs that you expended prior to the official start date.
  4. If you intend to register your business for VAT could you take advantage of one of HMRC’s special VAT schemes? For example:
  1. Cash accounting: pay over the VAT you have collected on your sales when you are paid by your customer, rather than when you issue your sales invoices. There are turnover limits to registration, but this option can have a significant impact on cash flow if the amounts you are owed is more than the amounts you owe.
  2. Flat rate scheme: using this scheme you calculate the amount you owe as a fixed percentage of your turnover each quarter (including VAT). For smaller businesses, who do not have significant VAT inclusive costs, this scheme can produce additional profits and simplify the calculation of your quarterly returns.
  3. Annual accounting: using this scheme you send in one VAT return a year instead of the usual four. Also for nine months of the year you make agreed payments on account to cover VAT due. The scheme is simple to administer, only one set of calculations per annum, and the monthly payments help to spread the cash flow impact of payments made.
  1. Invest in tax planning. The UK’s tax code is one of the most complex in Europe. We recommend that you take tax planning advice before you start in business and again at certain key moments in your trading year. At the very least you should discuss your trading results with your advisor before the end of your first trading year. It always pays to see what planning options are available before you take action to implement change.

If you are about to set-up a new business please call, we offer a no obligation first appointment to prospective new clients.    

This entry was posted on Wednesday, May 6th, 2015 at 12:00 am by Slaters and is filed under Accountancy, Accounts - General, Bookkeeping, Business, Business planning, Company Tax, Consultancy, Employers, HMRC, Management accounts, Pension, Personal Pension, Personal Tax, Tax, Tax planning, Tax relief, Uncategorized, VAT. You can follow any responses to this entry through the RSS 2.0 feed.

Tax Diary May/June 2015

Tuesday, May 5th, 2015

19 May 2015 – PAYE and NIC deductions due for month ended 5 May 2015. (If you pay your tax electronically the due date is 22 May 2015.)

 19 May 2015 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2015.

 19 May 2015 – CIS tax deducted for the month ended 5 May 2015 is payable by today.

 31 May 2015 – Ensure all employees have been given their P60s for the 2014-15 tax year.

 1 June 2015 – Due date for Corporation Tax due for the year ended 31 August 2014.

 19 June 2015 – PAYE and NIC deductions due for month ended 5 June 2015. (If you pay your tax electronically the due date is 22 June 2015.)

 19 June 2015 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2015.

 19 June 2015 – CIS tax deducted for the month ended 5 June 2015 is payable by today.

This entry was posted on Tuesday, May 5th, 2015 at 12:00 am by Slaters and is filed under Tax, Tax planning, Tax relief. You can follow any responses to this entry through the RSS 2.0 feed.

HMRC scores hat-trick

Tuesday, May 5th, 2015

HM Revenue and Customs has secured three tribunal wins against tax avoidance schemes, protecting over £260 million in tax.

All three rulings uphold earlier judgments in HMRC’s favour at the First-tier Tribunal.

The Upper Tribunal dismissed an appeal brought by users of a scheme that sought to create artificial losses by using a combination of the employment Income and Capital Gains Tax rules on share options. The judges dismissed the appeal without needing to hear substantive arguments from HMRC, and indicated that written reasons would follow. There were 420 users of this scheme.

The Upper Tribunal also dismissed two other cases. These bespoke schemes were designed by banks to provide the users with a much higher tax-free return on their cash deposits than they could have obtained by placing funds in a normal deposit account. Both of these schemes were marketed and sold by banks some years ago for substantial fees. The court joined these two separate cases because of similarities between the schemes.

This entry was posted on Tuesday, May 5th, 2015 at 12:00 am by Slaters and is filed under HMRC, Tax relief. You can follow any responses to this entry through the RSS 2.0 feed.

Reclaim VAT from mileage payments

Tuesday, May 5th, 2015

If you pay your employees a mileage rate for the business use of their personal vehicles, as long as you do not exceed the approved rates per mile, there is no necessity to report these payments to HMRC and the payment will not be treated as a taxable benefit. Employers and employees may also find the notes that follow instructive:

  1. The maximum tax free rates per mile for the use of a car are: 45p per mile for the first 10,000 business miles and 25p per mile thereafter.
  2. Employers are not obliged to pay these rates, but if they are exceeded the excess will need to be reported to HMRC as a benefit in kind.
  3. If employers pay less than the 45p (25p) rates the employee can obtain tax relief on the difference by making a claim to HMRC.
  4. Employers can reclaim the deemed VAT on the fuel elements of the mileage allowance payments by using the approved fuel rates. See table below.

 Advisory fuel rates per mile from 1 March 2015 are:

  • 1400cc or less: petrol 11p; LPG 8p.
  • 1401-2000cc: petrol 13p; LPG 10p.
  • Over 2000cc: petrol 20p; LPG 14p.

 Diesel rates are:

  • 1600cc or less: 9p
  • 1601-2000cc: 11p
  • Over 2000cc: 14p

 Example:

 David is paid for a 200 mile business trip at 30p per mile (his annual business mileage claims are well below the 10,000 maximum). He runs a 1500cc petrol car. He can make a claim to HMRC to deduct £30 mileage allowance from his taxable pay (200 x 15p).

 His employer can recover VAT input tax on the fuel element (200 x 13p) x 1/6 = £4.33.

 If you would like help to make back-dated claims to recover VAT if you are an employer; or make a claim if you are paid less than the 45p (25p) rate, please call for further advice.

This entry was posted on Tuesday, May 5th, 2015 at 12:00 am by Slaters and is filed under Company car, Company Tax, HMRC, Tax, Tax planning, VAT. You can follow any responses to this entry through the RSS 2.0 feed.

Business and corporate tax changes from 1 April 2015

Tuesday, May 5th, 2015

The published list of tax changes that affect primarily businesses are listed below.

  • The Corporation Tax rate has been reduced to 20%
  • The new Diverted Profits Tax has been introduced
  • The bank levy has increased from 0.156% to 0.21%
  • Air Passenger Duty has been restructured – abolishing bands C and D
  • Hospice charities, blood bikes, search and rescue, and air ambulance charities will be eligible for VAT refunds
  • Business rates changes (England only):

    • The business rates multiplier has increased from 48.2p to 49.3p (47.1p to 48.0p for small business multiplier). This includes the 2% inflation cap
    • The Small Business Rate Relief scheme has doubled for a further year – providing 100% relief for businesses with a single property with a rateable value of less than £6,000, and tapered relief with a rateable value of £6,000 – £12,000
    • The business rates discount for shops, pubs, cafes and restaurants with a rateable value of £50k or below has increased from £1,000 to £1,500
  • The cultural test for high-end TV tax relief has been modernised and the minimum UK expenditure requirement for all TV tax reliefs has reduced from 25% to 10%
  • A new tax relief on the production of children’s television has been introduced
  • The amount of banks’ annual profit that can be offset by carried forward losses has been restricted to 50%
  • Two new bands for the Annual Tax on Enveloped Dwellings (ATED) have been introduced
  • Capital Gains Tax exemption for wasting assets will only apply if the corporate selling the asset has used it in their own business
  • An investment allowance for North Sea oil and gas, replacing the existing offshore field allowances and simplifying the existing regime, has been introduced
  • A reduced rate of fuel duty to methanol will apply – the rate is 9.32 pence per litre
  • Fuels used to generate good quality electricity by CHP (combined heat and power) plants for onsite purposes are exempt from the Carbon Price Floor
  • Climate Change Levy main rates have increased in line with RPI
  • The VAT registration threshold has increased from £81,000 to £82,000 and the deregistration threshold from £79,000 to £80,000
  • Scottish Government’s Land and Buildings Transactions Tax (LBTT) will replace Stamp Duty Land Tax in Scotland
  • The associated companies rules have been replaced with simpler rules based on 51% group membership
  • The standard and lower rates of landfill tax have been increased in line with RPI

Again, if you need more information on any of these changes please call.

This entry was posted on Tuesday, May 5th, 2015 at 12:00 am by Slaters and is filed under Capital Gains Tax, Company Tax, HMRC, Tax, Tax planning, Tax relief. You can follow any responses to this entry through the RSS 2.0 feed.

Personal tax changes from 6 April 2015

Tuesday, May 5th, 2015

 HMRC has kindly published a list of the tax changes that affect individuals from 6th April 2015. We have reproduced the list below.

  • Individuals over the age of 55 have flexible access to their defined contribution pension savings
  • The Income Tax Personal Allowance increases to £10,600
  • The higher rate Income Tax threshold increases to £42,385
  • The new Marriage Allowance comes into effect
  • The starting rate of savings Income Tax reduces from 10% to 0% for savings up to £5,000
  • The cash ISA limit increases to £15,240
  • Child Trust Funds can now be transferred into Junior ISAs
  • Spouses can now inherit their deceased partner’s ISA benefits
  • If an individual dies before the age of 75, they can now pass on their unused defined contribution pension savings free of Income Tax
  • Beneficiaries of individuals who die under the age of 75 with a joint life or guaranteed term annuity can now receive any future payments from such policies free of Income Tax
  • Employers will no longer have to pay employer NICs for employees under the age of 21
  • Class 2 NICs for the self-employed can now be collected through Self Assessment
  • The Employment Allowance extends to include people employing care and support workers to look after themselves or family members
  • A new annual remittance basis charge of £90,000 is introduced for non-domiciled individuals who have been resident in the UK in at least 17 of the last 20 years, and the charge paid by non-domiciled individuals who have been resident in the UK in at least 12 of the last 14 years has increased from £50,000 to £60,000
  • Non-UK resident individuals, trusts, personal representatives and narrowly controlled companies are now subject to Capital Gains Tax on gains accruing on the disposal of UK residential property
  • Capital Gains Tax annual exemption amount has increased to £11,100
  • The Capital Gains Tax charge on disposals of properties liable to ATED extends to cover residential properties worth £1 million – £2 million
  • The requirement that 70% of Seed Enterprise Investment Scheme money must be spent before EIS or VCT funding can be raised is removed
  • The Fuel Benefit Charge multiplier for both cars and vans increases by RPI
  • The Van Benefit Charge increases by RPI. In 2015-16 the Van Benefit Charge rate paid by zero emission vans is 20% of the rate paid by conventionally fuelled vans
  • Tax Credit payments are stopped in-year where, due to a change in circumstances, a claimant has already received their full annual entitlement

If you need more information regarding any of these changes please call.

This entry was posted on Tuesday, May 5th, 2015 at 12:00 am by Slaters and is filed under Personal Tax, Tax. You can follow any responses to this entry through the RSS 2.0 feed.

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