Archive for the ‘VAT’ Category

April – Monthly Round Up

Tuesday, April 7th, 2015

Budget 2015

George Osborne presented the final Budget of this Parliament on Wednesday 18 March 2015.

In his speech the Chancellor reported ‘on a Britain that is growing, creating jobs and paying its way’.

Towards the end of 2014 the government issued many proposed clauses of Finance Bill 2015 together with updates on consultations. Due to the dissolution of Parliament on 30 March some measures have been legislated for in the week commencing 23 March, whilst others will be enacted by a Finance Bill in the next Parliament (depending on the result of the General Election).

The Budget proposed further measures, some of which may only come to fruition if the Conservative Party is in power in the next Parliament.

The articles which follow summarise some of the key changes.

Internet link: GOV.UK Budget

Personal tax rates and allowances

For those born after 5 April 1938 the personal allowance will be increased to £10,600. For those born before 6 April 1938 the personal allowance remains at £10,660.

The reduction in the personal allowance for those with ‘adjusted net income’ over £100,000 will continue. The reduction is £1 for every £2 of income above £100,000. So for 2015/16 there is no personal allowance where adjusted net income exceeds £121,200.

Tax bands and rates for 2015/16

The basic rate of tax is currently 20%. The band of income taxable at this rate is being decreased from £31,865 to £31,785 so that the threshold at which the 40% band applies will rise from £41,865 to £42,385 for those who are entitled to the full basic personal allowance.

The additional rate of tax of 45% is payable on taxable income above £150,000.

Dividend income is taxed at 10% where it falls within the basic rate band and 32.5% where liable at the higher rate of tax. Where income exceeds £150,000, dividends are taxed at 37.5%.

Starting rate of tax for savings income

From 6 April 2015, the maximum amount of an eligible individual’s savings income that can qualify for the starting rate of tax for savings will be increased from £2,880 to £5,000, and this starting rate will be reduced from 10% to 0%. These rates are not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income) exceeds the starting rate limit.

This will increase the number of savers who are not required to pay tax on savings income, such as bank or building society interest. Eligible savers can register to receive their interest gross using a form R85.

Internet link: GOV.UK Budget

Proposed personal allowances to come

The Chancellor announced that the personal allowance will be increased to £10,800 in 2016/17 and to £11,000 in 2017/18. The Transferable Tax Allowance will also rise in line with the personal allowance, being 10% of the personal allowance for the year.

The higher rate threshold will rise in line with the personal allowance, taking it to £42,700 in 2016/17 and £43,300 in 2017/18 for those entitled to the full personal allowance.

Personal Savings Allowance

The Chancellor announced that legislation will be introduced in a future Finance Bill to apply a Personal Savings Allowance to income such as bank and building society interest from 6 April 2016.

The Personal Savings Allowance will apply for up to £1,000 of a basic rate taxpayer’s savings income, and up to £500 of a higher rate taxpayer’s savings income each year. The Personal Savings Allowance will not be available for additional rate taxpayers.

These changes will have effect from 6 April 2016 and the Personal Savings Allowance will be in addition to the tax advantages currently available to savers from Individual Savings Accounts.

The Personal Savings Allowance will provide basic and higher rate taxpayers with a tax saving of up to £200 each year.

Internet link: GOV.UK News

Help to Buy ISA

The government has announced the introduction of a new type of ISA, the Help to Buy ISA, which will provide a tax free savings account for first time buyers wishing to save for a home.

The scheme will provide a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings.

Help to Buy ISAs will be subject to eligibility rules and limits:

  • An individual will only be eligible for one account throughout the lifetime of the scheme and it is only available to first time buyers.
  • Interest received on the account will be tax free.
  • Savings will be limited to a monthly maximum of £200 with an opportunity to deposit an additional £1,000 when the account is first opened.
  • The government will provide a 25% bonus on the total amount saved including interest, capped at a maximum of £3,000 which is tax free.
  • The bonus will be paid when the first home is purchased.
  • The bonus can only be put towards a first home located in the UK with a purchase value of £450,000 or less in London and £250,000 or less in the rest of the UK.
  • The government bonus can be claimed at any time, subject to a minimum bonus amount of £400.
  • The accounts are limited to one per person rather than one per home so those buying together can both receive a bonus.
  • As is currently the case it will only be possible for an individual to subscribe to one cash ISA per year. It will not be possible for an account holder to subscribe to a Help to Buy ISA with one provider and another cash ISA with a different provider.
  • Once an account is opened there is no limit on how long an individual can save into it and no time limit on when they can use their bonus.

The government intends the Help to Buy ISA scheme to be available from autumn 2015 and investors will be able to open a Help to Buy ISA for a period of four years.

Internet link: GOV.UK factsheet

Pension freedoms for those with annuities

The Chancellor has announced a new flexibility for people who have already purchased an annuity. From April 2016, the government will remove the restrictions on buying and selling existing annuities to allow pensioners to sell the income they receive from their annuity for a capital sum.

Individuals will then have the freedom to take that capital as a lump sum, or place it into drawdown to use the proceeds more gradually.

Income tax at the individual’s marginal rate will be payable in the year of access to the proceeds.

The proposal will not give the annuity holder the right to sell their annuity back to their original provider. The government has begun a consultation on the measures that are needed to establish a market to buy and sell annuities and who should be permitted to purchase the annuity income.

The government recognises that for most people retaining their annuity will be the right choice. However, individuals may want to sell an annuity, for instance to pay off debts or to purchase a more flexible pension income product.

We will keep you informed of developments.

Internet link: GOV.UK News

National Minimum Wage rises

The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be paid. NMW rates increases come into effect on 1 October 2015:

From 1 October 2015:

  • the adult rate will increase by 20 pence to £6.70 per hour
  • the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
  • the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
  • the apprentice rate will increase by 57 pence to £3.30 per hour


Penalties may be levied on employers where HMRC believe underpayments have occurred and HMRC ‘name and shame’ non-compliant employers.

If you have any queries on the NMW please get in touch.

Internet links: GOV.UK News

Some of the Budget changes March 2015

Thursday, April 2nd, 2015

Following last week’s Budget, the government has published the Finance Bill 2015. The bill implements tax changes announced at Budget 2014, Autumn Statement 2014 and Budget 2015.

It includes action by the government to support hardworking families keep more of their hard-earned money by:

  • increasing the personal allowance by an extra £400 to £11,000 from April 2017 so that a typical rate taxpayer will be £905 better off compared to 2010, and an individual on the National Minimum Wage working up to 30 hours a week will not pay any income tax
  • exempting children from Air Passenger Duty so that, taken together with measures introduced in Finance Act 2014, a family of four flying to Australia will save £194

The bill also contains key policies to make the UK more competitive for business, such as:

  • supporting investment in the crucial UK oil and gas industry through cutting the Supplementary Charge by 12%, cutting the Petroleum Revenue Tax from 50% to 35% and introducing two new allowances
  • increasing the tax credits available for large and small businesses investing in research and development
  • a new tax relief to promote the production of children’s TV in the UK, and further support for high-end TV and film tax.

Finally, the bill legislates to create a fairer tax system, by clamping down on tax avoidance and ensuring that banks contribute their fair share. This includes:

  • introducing a new Diverted Profits Tax of 25%, aimed at multi-national companies that artificially shift their profits offshore to avoid paying UK tax
  • putting a stop to unfair tax avoidance – raising nearly £2.5 billion by 2019/20 to support the economic recovery
  • increasing the bank levy and introducing new rules for banks – raising nearly £8 billion over the next 5 years

David Gauke, Financial Secretary to the Treasury, said:

The government is committed to supporting hardworking families and backing business. That is why we are making it easier for them to keep more of their hard earned money and access the help they need to grow.

The legislation published today builds on our efforts to create a stable tax system that supports our long-term economic plan.”

The measures contained in the bill were announced by the Chancellor at Budget 2014, Autumn Statement 2014 or Budget 2015.

Budget Statement 18 March 2015

Thursday, March 19th, 2015

 Personal Tax and miscellaneous matters

 Personal Tax allowance

The personal allowance for those born after 5 April 1948 will be increased to:

  • For 2015-16 – £10,600
  • For 2016-17 – £10,800
  • For 2017-18 – £11,000

From 2016-17, there will be one Income Tax personal allowance regardless of an individual’s date of birth.

 Income Tax rate bands

There was significant press commentary prior to the Budget predicting an increase in the threshold at which tax payers are liable to the 40% Income Tax rate. The declared higher rate thresholds are:

  • For 2015-16 – £42,285
  • For 2016-17 – £42,700
  • For 2017-18 – £43,300

If your income before allowances exceeds these amounts you will be paying 40% Income Tax on the excess (this assumes that you are only entitled to the basic personal allowance).

The threshold at which the 45% rate starts is unchanged at £150,000.

There were no changes to the basic Income Tax rate (20%), the higher rate (40%) and the additional rate (45%).

 Personal savings allowance (PSA)

From 6 April 2016, a PSA will apply to provide exemption of up to £1,000 of a basic rate taxpayer’s savings income, and up to £500 of a higher rate taxpayer’s savings income. The PSA will not be available to additional rate (45%) Income Tax payers.

These benefits will be in addition to the tax advantages offered from ISAs.

 Annuity flexibility

From April 2016 people who are drawing an annuity will be able to sell that income to a third party for a capital sum. The change will allow annuity holders to sell their annuities without punitive tax penalties of up to 70%.

To prepare for this flexibility the Government has published a consultation to develop a secondary market in annuities.

 Pension’s lifetime allowance

From 6 April 2016 the pension’s lifetime allowance will be reduced to £1m (currently £1.25m).

 Trivial benefits in kind

From 6 April 2015 employee benefits costing £50 or less will be exempt for tax purposes.  An annual cap of £300 (of combined trivial benefits) will apply to office holders of close (smaller) companies and family members of those office holders.

From the same date the £8,500 threshold for benefits in kind is abolished.

 Working tax credits (WTCs)

In order to tighten the eligibility conditions for those claiming WTCs based on their status as a self-employed person, it will be necessary for claimants to demonstrate that their business is viable, or is working towards viability. The test will mirror the principles already set out in tax case law.

 Excise duties

Alcohol duty is being reduced from 23 March 2015. This reduction will amount to:

  • 1p off a typical pint of beer
  • 18p off a typical bottle of spirits
  • 1p off a typical litre of cider

The duty rates on wine not exceeding 22% abv, and sparkling cider of a strength not exceeding 5.5% abv, have been frozen.

 Tobacco duty rates

Duties are increased by 2% above the rate of inflation. The price of a pack of 20 cigarettes will increase by 16p.

 Vehicle excise duty 2015-16

Rates for cars, vans and motorcycles will increase in line with the Retail Prices Index.

Rates for heavy goods vehicles will be frozen.

 Transferrable allowances

From April 2015 a spouse or civil partner, who is not a taxpayer, or who does not pay tax above the basic rate, will be entitled to transfer up to £1,060 of their personal allowance to their spouse or civil partner. This will not advantage higher rate tax payers as the recipient of the transfer cannot be subject to tax at higher than the basic rate. This could result in a saving of up to £212 for the recipient (20% of £1,060 in 2015-16). The limit will increase to £1,080 in 2016-17 and £1,100 in 2017-18.

Business Tax

 Corporation Tax rate

The main rate of Corporation Tax from 1 April 2015 is 20%. The main rate and small company rate will be the same from this date dispensing with the need for marginal rate calculations.

 National Insurance for under 21s partially abolished

From 6 April 2015 employers with employees under 21 years old will no longer have to pay Class 1 Secondary National Insurance Contributions (NICs) on earnings up to the Upper Secondary Threshold (UST) for those employees.

The zero rate won’t apply to Class 1A or Class 1B NICs. Class 1 Secondary NICs will apply if the employee is earning above the UST.

 Capital Gains Tax – Entrepreneurs’ Relief (ER)

Where this relief is linked to the disposal of privately held assets used in a business, to qualify for ER the disposal of these assets must be linked to a significant material disposal of the business. This is defined as at least a 5% shareholding in a company or of a 5% share in the assets of the partnership carrying on the business.

Legislation is also being introduced to prevent claims for ER in respect of gains on shares in certain companies that invest in joint venture companies, or which are members of partnerships. This new provision will deny relief where the investing company has no trade of its own.

Both these changes apply from 18 March 2015.

 Entrepreneurs’ Relief on disposal of goodwill

ER is denied in respect of gains on business goodwill where the goodwill has been disposed of to a limited company which is related to the claimant. This change was introduced 3 December 2014 following the Autumn Statement.

Following consultation, the legislation has been amended to allow ER to be claimed if the partners in a firm do not hold or acquire any stake in the successor company.

 Capital Gains Tax – wasting assets exemption

From April 2015, the exemption for wasting assets will only be available where the qualifying assets have been used in the seller’s own business.

 Van benefits for zero emission vans

From 2020-21 there will be a single benefit charge applying to all vans. This compares with the current £nil rate. The transitional steps will be:

  • 2015-16 – 20%
  • 2016-17 – 40%
  • 2017-18 – 60%
  • 2018-19 – 80%
  • 2019-20 – 90%
  • 2020-21 a single rate will apply with no reduction for zero emission vans.

 Farmer’s averaging of profits

It is proposed that farmers will be able to average results for Income Tax purposes for up to 5 years, presently only 2 years, from April 2016.

  Flood defence relief

Contributions made by companies and unincorporated businesses after 1 January 2015, to flood relief partnership funding schemes, will be deductible for both Corporation Tax and Income Tax purposes. The relief will apply to monetary contributions and for the cost of contributed services.

 Landlord’s energy saving allowance (LESA)

LESA will not be extended beyond 31 March 2015, for corporate landlords, and 5 April 2015 for unincorporated landlords of let residential property.

 Bank loss relief restriction

The proportion of a bank’s annual profits that can be offset by carried forward losses is to be restricted to 50%. Following consultations an allowance of £25m will be included for groups headed by a Building Society.

 Banks’ compensation payments

Although no date was set for its implementation, the Government will consult on making customer compensation payments non-deductible for Corporation Tax purposes.

 Bank levy rate increase

The bank levy is to be increased to 0.21% from 1 April 2015.

 Film, orchestra and television tax relief changes


  1. High-end television tax relief: the minimum UK spend requirement reduced from 25% to 10%. Changes to the cultural test will also be made to bring them into line with similar changes to the film cultural test.
  2. Children’s television tax relief: from 1 April 2015 producers of children’s television programmes, including game shows and competitions, will be able to benefit from tax relief.
  3. Film tax relief: payable tax credits to increase to 25% for all films from 1 April 2015.
  4. A new tax relief will be introduced for orchestras from 1 April 2016.


VAT registration and deregistration limits

From 1 April 2015:

  • Registration threshold increased from £81,000 to £82,000
  • Deregistration threshold increased from £79,000 to £80,000

 VAT refunds for charities

From 1 April 2015 charities that provide palliative care will be able to obtain a refund of the VAT they incur in providing these services and also in relation to their non-business activities.

A similar scheme will be introduced for “blood-bike” charities to enable them to recover the VAT incurred on the purchase of goods and services.

 Gift Aid Small Donations Scheme

From 6 April 2016 the maximum amount that can be claimed through the scheme will be increased to £8,000. This will allow Charities and Community Amateur Sports Clubs to claim a Gift Aid top up payment of up to £2,000 a year.

Savers and investors


ISAs – increased flexibility

Regulations will be introduced in autumn 2015 to enable savers to withdraw and replace money in their cash ISA accounts without it counting towards their annual ISA subscription limit for that year.

 Help to Buy ISA

In order to encourage and support first time house buyers to raise a deposit, the Government is to introduce a Help to Buy ISA from autumn 2015. The essential elements of the scheme are:

  • Maximum monthly savings to an account will be set at £200.
  • Maximum initial deposit will be £1,000.
  • A Government bonus amounting to 25% of the amount saved will be added to the account when saver buys their first home. The maximum bonus will be £3,000 based on achieved savings of £12,000.
  • The bonus is only available for the purchase of homes in the UK by first time buyers.
  • Accounts can be opened for 4 years, but once opened you can save for as long as you like.
  • The bonus is available on homes up to £450,000 in London or £250,000 elsewhere.
  • Only available to persons who are 16 years or over.
  • The accounts are open to individuals so a couple could have two accounts.

Our summary of the latest tax updates

Tuesday, March 10th, 2015

As there are so many small things to update you on in March, we’ve pulled them all together into one post:

Avoid losing your personal allowance

For every £2 that your adjusted net income exceeds £100,000, the £10,000 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.

Get ready for the new flexible pension rules

For those aged 55 and over and with a SIPP or other money purchase schemes, the new flexible pension rules commence on 6 April 2015. The new rules allow such pensioners to withdraw as much or as little income as they like from their fund but the income drawn will be taxed at their marginal tax rate.

Those affected should discuss the options with an Independent Financial Adviser who will need to work closely with us as the tax payable on the pension will depend upon their level of other income.

Make charitable payments under gift aid to save more tax

Higher rate taxpayers should make any charitable payments under Gift Aid so that you obtain additional tax relief. The charity will also be able to reclaim the basic rate tax from HMRC.


Year end capital gains tax planning

Have you used your 2014/15 annual exemption of £11,000? Consider selling shares where the gain is less than £11,000 before 6 April 2015. Also, if you have any worthless shares consider a negligible value claim to establish a capital loss. You may even be able to set off the capital loss against your income under certain circumstances.

Take advantage of your 2014/2015 ISA allowances

Your maximum annual investment in ISAs for 2013/14 is £15,000. Your investment needs to be made before 6 April 2015. In addition, have you thought about investing for your children or grandchildren by setting up junior ISAs or pensions? In the 2014/15 tax year, you can invest £4,000 into a Junior ISA for any child under 18 who does not have a Child Trust Fund.


Other tax efficient investments

If you are looking for investment opportunities, have you considered the Enterprise Investment Scheme (EIS), which offers income tax relief of 30 per cent as well as capital gains tax relief when you buy shares in certain qualifying companies? An even more generous tax break is available for investment in a qualifying Seed EIS company where income tax relief at 50 per cent is available. It is possible to shelter 50% of your capital gains in 2014/15 and there is a capital gains tax exemption when the shares are sold. Note however that qualifying Seed EIS companies tend to be risky investments so professional advice should be taken.
A 30% income tax break is also available by investing in a Venture Capital Trust.

Inheritance tax planning before 6 April 2015

Have you made use of your annual inheritance tax exemptions? The general annual exemption is £3,000 per donor (plus last year’s £3,000 exemption if you did not use it). Also consider making regular gifts out of your income to minimise the growth of your estate that will be liable to IHT.

The £2,000 employment allowance continues for 2015/16

The £2,000 “employment allowance” introduced in 2014/15 continues to be available for 2015/16.

Click here to read full story

Maximise tax relief for capital expenditure

Those running a business should take advantage of the temporary increase in the Annual Investment Allowance (AIA) to £500,000. 5th April 2015 is not relevant for this tax break as the limit continues until 31 December 2015 when it is scheduled to reduce to just £25,000. AIA provides a 100% tax write off for plant and equipment used in your business. This tax relief extends to fixtures and fittings within business premises such as electrical, water and heating systems.

Last chance to plan for 2014-15

Monday, March 2nd, 2015

As we mentioned in our January 2015 newsletter there are a number of tax planning opportunities that will cease to exist once the clock passes midnight, 5 April 2015. For businesses whose year end coincides with the 5 April 2015 (or 31 March 2015) these opportunities included:

  • The timing of capital purchases: equipment, vehicles and so on.
  • The timing of significant overhead expenditure.
  • Dividend and profits extraction planning if your business is a limited company.
  • And again, if you have a limited company is your director’s loan account overdrawn?

In fact, all taxpayers, whether in business, employment or receiving a pension, may have opportunities to legitimately reduce their tax liabilities for 2014-15. The point of this article is to remind you that once the tax year end passes these opportunities will be lost, very often permanently.

Readers who are in business, or who have significant or complex sources of income, should have contacted and consulted with their tax advisors by now. If not, there is still just over three weeks to take action. Please call to see if there are any advantages that may be available to you.

 You may be kicking yourself later this year if you pass over this planning window without taking action.

What is tax avoidance

Monday, March 2nd, 2015

HMRC has published a list of ten items that serial tax avoiders need to be aware. It’s a reminder as we approach the end of another tax year that overstepping the mark can have serious consequences.

 Here’s what HMRC has said:

  1. HMRC is serious about stopping avoidance: the Government is taking unprecedented steps to clamp down on the small minority who try to avoid paying tax that is legally due.
  2. Other people are getting out of avoidance: increasing numbers of people involved in multiple avoidance schemes are approaching HMRC to settle up so that they can put the past behind them and protect their reputation.
  3. HMRC wants to help tax avoiders to get out of avoidance: HMRC will work with avoiders who demonstrate a commitment to resolving their avoidance arrangements to finalise their tax liability and will provide certainty over payment terms.HMRC has set up a single point of contact to help establish the possible terms for exit from each scheme a serial avoider uses.
  4. HMRC is moving more quickly to tackle serial avoiders: as they close in and increase their focus on this minority, HMRC will look ever more carefully at those who use multiple schemes.
  5. The tax avoider is the one who is responsible: even if a promoter or agent has arranged the avoidance scheme for the user, the avoider remains responsible for their own tax affairs and what is put on their tax return. Serial avoiders will personally have to provide HMRC with information and documents regarding their tax affairs.
  6. HMRC has a special unit looking at tax avoiders: the Serial Avoiders Unit is identifying users of multiple schemes who choose not to approach HMRC to settle their affairs.
  7. Tax avoiders may personally have to attend meetings with HMRC investigators: HMRC will ask questions about their tax affairs and will be checking that they have the full facts about their arrangements.
  8. HMRC will look at all the tax avoider’s tax affairs: serial avoiders will be subject to a more co-ordinated approach to challenge and resolve their tax affairs. HMRC will look at their current activity, not just enquiries that are already open. And they will look at all the entities and structures the tax avoiders are connected with, to challenge any avoidance and evasion in all areas of their affairs.
  9. Tax avoiders may have to pay up front: HMRC will fundamentally reduce the incentive to engage in serial tax avoidance and recover all duties legally due at the earliest opportunity. Multiple users of schemes may receive Accelerated Payment Notices before other users of a scheme.
  10. There are heavy sanctions: HMRC will evaluate the behaviour of each serial avoider and this could result in penalties for careless or deliberate behaviour or for any failure to disclose avoidance. Deliberately misleading or concealing information from HMRC could lead to prosecution and criminal conviction.

None of the above comments should stop you considering strategies that minimise your tax position based on current law and best practice. One thing that HMRC has failed to mention in the above list is the number of taxpayers in the UK who pay too much tax because they failed to claim allowances and reliefs available. This underlines the first article in this month’s newsletter, planning is critical especially if your tax affairs are complex.

Tax Diary March/April 2015

Monday, March 2nd, 2015

 1 March 2015 – Due date for Corporation Tax due for the year ended 31 May 2014.

 2 March 2015 – Self Assessment tax for 2013/14 paid after this date will incur a 5% surcharge.

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

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

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

 1 April 2015 – Due date for Corporation Tax due for the year ended 30 June 2014.

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

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

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

Year end tax planning 2014-15

Thursday, February 26th, 2015

The 2014-15 tax year finishes midnight, 5 April 2015. There are a number of tax planning opportunities that need to be considered before this date. Only a few weeks to go. If you have not already done so we recommend you speak with your professional advisor without delay.

Who should be concerned?

Tax year end planning should be considered by:

  • Anyone in business
  • Individuals who are paying income tax at the 40% or 45% rate, and
  • Individuals with multiple sources of taxable income.

All tax payers in these groups should consider their tax planning options before 6 April 2015.

What should you consider?

It is beyond the scope of this blog posting to cover all the planning issues that may be of benefit. The following list is for general information only. The strategies outlined may or may not benefit your situation as everyone’s circumstances are unique. There is no substitute for a conversation with your tax advisor.

  1. High income earners should consider options to reduce their income for tax purposes in 2014-15. For example, if your income exceeds £100,000 you will not only be paying income tax at 40%, but you will suffer a reduction in your personal tax allowance. There are a number of strategies you could consider to avoid this.
  2. If you are in business, and your accounting year end coincides with the tax year end, generally 31 March 2015, there are a number of timing issues to consider:
  1. Are you planning a significant capital purchase (equipment etc) that would qualify for the 100% write off by claiming under the Annual Investment Allowance? Would the expenditure win you more tax relief by being delayed until after 31 March?
  2. In a similar vein, should you defer significant revenue expenditure?
  1. If your business is incorporated what is the best way to extract profits in order to minimise corporation tax for your company and income tax for shareholders and directors?


Once the 5 April deadline passes numerous planning opportunities lapse. Please call if you would like to discuss strategies that may benefit your tax position.

HMRC gives small businesses additional guidance on 1 January VAT changes

Tuesday, January 13th, 2015

Revenue and Customs brief issued on incoming changes for digital service suppliers


HM Revenue and Customs (HMRC) has published additional guidance forUK micro and small businesses who supply digital services to consumers in other EU Member States.

The Revenue and Customs brief tells them:

  • how to comply with new VAT rules on the place of taxation of digital services that come into force on 1 January 2015
  • how to register for HMRC’s VAT Mini-One Stop Shop (MOSS) and still benefit from the UK’s VAT registration threshold for sales to UKconsumers.

Affected are UK businesses that sell digital services cross-border to consumers in other EU Member States.

On 1 January 2015, the VAT rules for cross-border Business to Consumer supplies of ‘digital services’ (ie broadcasting, telecoms and e-services) will change. From that date, VAT must be accounted for in the Member State where the consumer normally lives, rather than where the supplier of the service is established.

The change means that sellers of digital services will no longer be able to unfairly undercut businesses in the UK by locating themselves in another EUMember State with a lower VAT rate.

More information about these changes is available here.

VAT “Mini One Stop Shop” (MOSS)

Wednesday, December 3rd, 2014

There is a very important change in the VAT place of supply rules for businesses supplying digital services to consumers (B2C). From 01 January 2015, the place of supply for digital services will be where the customer belongs, instead of the current rule (where the supplier belongs). Digital services include telecoms, satellite TV, the downloading of computer software, music, books and manuals.


From 01 January 2015, the UK trader will need to identify where in the EU their non-business customer is located and apply the VAT rate for that country, instead of UK VAT. The customer’s location will be where the consumer is established, has their permanent address or usually resides.


The VAT Mini One Stop Shop (MOSS) has been introduced to save these businesses from having to register for VAT in every EU Member State in which they supply their services.


Businesses can now register for the online service from 20 October 2014. Registration for the service has to be carried out by the business itself. Once registered, you can authorise us as your agent to act on your behalf for VAT MOSS.