News2017-09-08T11:03:34+00:00

News & Updates

Green Divider

Read through our news and updates below for information on all the latest financial rules and regulations.

1211, 2018

Apprenticeship Levy

November 12th, 2018|

The apprenticeship levy was introduced from 6 April 2017 and is payable by employers who have an annual pay bill of more than £3 million. An employer’s annual pay bill comprises all payments to employees that are subject to Class 1 National Insurance contributions. The levy is charged at 0.5% of the annual pay bill. HMRC have recently updated their guide to the apprenticeship levy. The guide is available on [...]

811, 2018

EYU for National Insurance

November 8th, 2018|

HMRC have published updated guidance for employers who need to submit an Earlier Year Update (EYU) which includes a negative amount of employee’s National Insurance (for example, where the amount of National Insurance deducted or reported is too high). When making the submission, the employer will need to set the ‘NIC refund indicator’ to ‘yes’ if a refund has been made to an employee or no refund was due (for [...]

511, 2018

Postgraduate Loans

November 5th, 2018|

New student loan products for those undertaking Masters and Doctorates have been launched by the Department of Education. Students studying for a Masters are now able to apply for a Postgraduate Masters Loan, set at £10,609 for the whole course where the course started on or after 1 August 2018, £10,280 where the course started in the 2017/18 academic year and £10,000 where the course started in the 2016/17 academic [...]

111, 2018

Welsh Rate of Income Tax

November 1st, 2018|

The Welsh rate of income tax (WRIT) will come into effect from 6 April 2019. A taxpayer who is resident in Wales or who has their main place of residence in Wales will pay the WRIT. The task of identifying whether a taxpayer is liable to the WRIT will not fall on employers and pension providers – HMRC will identify Welsh taxpayers from information held on their systems. Welsh taxpayers [...]

2910, 2018

Using Basic PAYE Tools to Notify Leavers

October 29th, 2018|

Under RTI, when an employee leaves, the employer must tell HMRC. HMRC have published a step-by-step guide for employers using Basic PAYE Tools setting out the procedure that should be followed when an employee leaves. The guide is available on the Gov.uk website. Basic PAYE Tools is HMRC’s free payroll software which can be used by employers with nine or fewer employees. It can be downloaded from the Gov.uk website.

2510, 2018

November Tax Diary

October 25th, 2018|

Tax Diary for November 2018 1st November 2018 Corporation tax due for companies with a 31 January 2018 year end. 2nd November 2018 P46 (car) for quarter to 5 October 2018 due to HMRC. 5th November 2018 End of PAYE month 7 7th November 2018 Due date for VAT returns for periods ending 30 September 2018 and payment of associated VAT. 19th November 2018 Payment of PAYE/NIC and CIS [...]

2210, 2018

Risk-Based Approach to PAYE Penalties

October 22nd, 2018|

Following a review of the effectiveness of a risk-based approach to charging PAYE penalties, HMRC have confirmed that they have decided to continue this approach for the 2018/19 tax year. The effect of this approach is that penalties will continue to be reviewed on a risk-assessed basis, rather than being issued automatically. HMRC will issue the first penalties for the 2018/19 tax year in September 2018. The risk-based approach will [...]

1810, 2018

Advisory Fuel Rate for Electric Cars

October 18th, 2018|

A new advisory fuel rate for electric cars has been announced; HMRC confirmed in the August 2018 issue of Employer Bulletin that they accept that there is no profit if employers pay up to 4 pence per mile when reimbursing employees for business travel in a fully-electric company car. As long as the rate paid is not more than 4 pence per mile, there is no taxable profit and no [...]

1510, 2018

PSAs and Scottish Rates of Income Tax

October 15th, 2018|

Tax and National Insurance due under a PAYE Settlement Agreement (PSA) for 2017/18 must reach HMRC by 22 October 2018 where payment is made electronically. An earlier deadline of 19 October 2018 applies where payment is made by cheque. From 2018/19, form PSA1 – the form that employers complete to submit PSAs – will be changing. This is to reflect the differing income tax rates and thresholds applying to Scottish [...]

1110, 2018

Employer Bulletin

October 11th, 2018|

The August 2018 edition of Employer Bulletin, HMRC’s bi-monthly magazine for employers and agents on payroll topics, has been published. It contains articles on a range of topics, including: reporting payroll information accurately and on time; irregular payments and completion of the Full Payment Submission (FPS); completing a starter declaration on the FPS correctly; PAYE settlement agreements and the Scottish income tax; advisory rate for electric cars; Welsh rates of [...]

810, 2018

Excess Pension Relief at Source

October 8th, 2018|

A pension scheme administrator is required to tell HMRC if they have claimed too much relief at source for pension scheme members. This must be done within 90 days of discovering that too much relief has been claimed. The administrator should: report the excess relief to HMRC on the interim claim; send information about the excess relief with that claim; and repay the excess amount Guidance on the procedure to [...]

410, 2018

Unused Pension Annual Allowances

October 4th, 2018|

HMRC have produced a calculator which can be used by individuals to check whether pension savings are more than their annual allowance and whether they have any unused annual allowances to carry forward. The calculator can be found on the Gov.uk website, and associated guidance on the annual allowance is available here. An individual cannot use the calculator if their pension scheme is a hybrid scheme (one that has aspects [...]

110, 2018

P800 Errors

October 1st, 2018|

HMRC have commenced the reconciliation process of taxpayer’s PAYE records for 2017/18 and started to send out tax calculations where there is an overpayment or underpayment. This will usually take the form of a P800 tax calculation, but may be a PA302 simple assessment. The ICAEW have reported that the Tax Faculty have started to receive reports of incorrect calculations. They are seeking specific details of incorrect calculations so that [...]

2709, 2018

HMRC Use Voice Identification Technology

September 27th, 2018|

HMRC are using voice identification (Voice ID) technology to enhance the security of taxpayers’ accounts. The technology reduces the risk of fraud, making information safer. HMRC also state that it makes it easier and faster to speak to an HMRC adviser. HMRC have published a privacy impact assessment of the project’s use of personal data. The assessment is readily available on the Gov.uk website here. HMRC use biometric technology to [...]

2409, 2018

Landfill Tax – Are You Liable?

September 24th, 2018|

Legislation introduced by the Finance Act 2018 and taking effect from 1 April 2018 extended the scope of landfill tax to include disposals at sites without an environmental disposal permit, but which ought to have one. Changes were also introduced as to what constitutes a chargeable disposal for landfill tax purposes. The changes are potentially far reaching, bringing clients within the scope of the charge to landfill tax if they [...]

2009, 2018

Directors’ Bonuses

September 20th, 2018|

When looking to extract profit from a close company, the usual wisdom is that dividend payment is more tax efficient than additional salary or bonus. However, as the current dividend regime erodes the tax advantages of dividend extraction, it’s a good time to review the overall position. Timing, Flexibility & Opportunities Bonuses differ from dividends in being a deduction from company profits, and are taxed on the director as employment [...]

1709, 2018

Making Tax Digital for VAT – HMRC Issue New Guidance

September 17th, 2018|

The introduction of Making Tax Digital (MTD) for VAT will require businesses registered for VAT with a taxable turnover above the VAT registration threshold of £85,000 to keep VAT records digitally and file their VAT returns using MTD compatible software. This will start from their first VAT period starting on or after 1 April 2019. Businesses with a taxable turnover that has always been below the VAT threshold will not [...]

1209, 2018

October Tax Diary

September 12th, 2018|

Tax Diary for October 2018 1st October 2018 Corporation tax due for companies with a 31 December 2017 year end. 5th October 2018 End of PAYE month 6. 7th October 2018 Due date for VAT returns for periods ending on 31 August 2018 and payment of associated VAT. 19th October 2018 Payment of PAYE/NIC and CIS deductions for month 6 (to October 5 2018) to reach HMRC where payment [...]

3007, 2018

Tax Diary for August 2018

July 30th, 2018|

Tax Diary for July 2018 1st August 2018 Penalty of 5% of tax due or £300 if greater if the 2017/18 self-assessment tax return has not yet been filed. Corporation tax due for companies with a 31 October 2017 year end. 2nd August 2018 P46 (Car) for quarter to 5 July 2018 where car and fuel benefits not payrolled. 5th August 2018 End of PAYE month 4. 7th August [...]

907, 2018

Tax Diary for July 2018

July 9th, 2018|

Tax Diary for July 2018 1st June 2018 Corporation tax due for Companies with a 30 September 2017 year end. 5th July 2018 End of PAYE month 3. 6th July 2018 P11D and P11D(b) for 2017/18 due to HMRC. 7th July 2018 Due date for VAT returns for periods ending on 31 May 2018 and payment of associated VAT. 19th July 2018 Payment of PAYE/NIC and CIS deductions due [...]

2506, 2018

VAT Registration Threshold

June 25th, 2018|

In December 2016, the Office of Tax Simplification (OTS) were charged with looking at the VAT registration threshold and examining the’ issues and impacts which would be involved if the VAT registration threshold were higher or lower than at present’. Their finds, published in November 2017, were that the relatively high level at which the UK VAT threshold is set has a ‘distortionary impact on business growth’ as a result [...]

1806, 2018

Are your Dividends in Order? (Part 3 of 3)

June 18th, 2018|

Alphabet Shares With ‘alphabet shares’ different shareholders hold different classes of share – Class A, Class B, Class C and so on. This gives flexibility, as shareholders can then be given different levels of dividend.   On the other hand, it can also give rise to HMRC challenge, for example in cases where shares have no rights, other than income. HMRC may also seek to challenge on the grounds that alphabet [...]

1106, 2018

Are your Dividends in Order? (Part 2 of 3)

June 11th, 2018|

Profits Available for Distribution Section 830 of the Companies Act 2006 provides that a dividend or distribution to shareholders may only be made out of profits available for the purpose, as shown in the ‘relevant accounts’. Relevant accounts include year-end accounts drawn up according to applicable UK Law and accounting standards, and for private companies interim management accounts which contain sufficient information to support the decision to pay a dividend. [...]

406, 2018

Are your Dividends in Order? (Part 1 of 3)

June 4th, 2018|

The end of the tax year has particular implications for the company director client and the payment of dividends, but this year the dividend allowance falls from 6 April. From £5,000, it goes to £2,000. So, in the last couple of days left to plan for 2017/18, what are the dangers to be avoided – and what opportunities may there still be for clients to take advantage of? Last Minute [...]

2805, 2018

Partnership Returns

May 28th, 2018|

The rules requiring the inclusion of the unique taxpayer reference (UTR) for each and every partner in the partnership return have been relaxed. For returns made after 15 March 2018 there is no longer a need to include every partner’s UTR where the partnership is making a return under the Common Reporting Standard or under the Foreign Tax Compliance Act (FTCA). However, the partnership return must include a statement confirming [...]

2105, 2018

Tax Diary for June 2018

May 21st, 2018|

Tax Diary for June 2018 1st June 2018 Corporation tax due for Companies with a 31 August 2017 year end. 5th June 2018 End of PAYE month 2. 7th June 2018 Due date for VAT returns for periods ending on 31 April 2018 and payment of associated VAT. 19th June 2018 Payment of PAYE/NIC and CIS deductions due for month 2 (to 5 June 2018) to reach HMRC where [...]

2105, 2018

Relief for Landlords Interest Costs

May 21st, 2018|

Changes are being phased in which restrict the amount of relief available for mortgage interest and other finance costs when calculating the profits of an unincorporated property business. The changes gradually move the mechanism by which relief is obtained from one by deduction to one in the form of a basic rate tax reduction. This will eventually cap all relief for interest and finance costs at the basic rate – [...]

1405, 2018

Pension Changes

May 14th, 2018|

From 6 April 2018 the level of minimum contributions which must be paid into a qualifying pension scheme under auto-enrolment went up to 5% of qualifying earnings, of which employers must make a minimum contribution of at least 2%, with employees contributing the balance. Prior to 1 April 2018, the minimum contribution was 2%, of which employers were required to contribute a minimum of 1%. Employers should ensure that they [...]

2004, 2018

Tax Diary for May 2018

April 20th, 2018|

Tax Diary for May 2018 1st May 2018 Corporation tax due for companies with a 31 July 2017 year end. Start of daily penalties for late 2016/17 self-assessment returns. 3rd May 2018 P46 (Car) for quarter to 5 April 2018 due to HMRC. 5th May 2018 End of PAYE month 1. 7th May 2018 Due date for VAT returns for periods ending 31 March 2018 and payment of associated [...]

1304, 2018

NMW Guidance

April 13th, 2018|

For HMRC guidance on the National Minimum Wage and the National Living Wage, visit the Gov.uk website at www.gov.uk/government/collections/national-minimum-wage. The collection includes guidance for employers and workers, consultation, policy documents, research documents and press releases. The National Living Wage (NLW) must be paid to workers aged 25 and over. The NLW is set at £7.50 an hour (1 April 2017 to 31 March 2018). It will rise to £7.83 per [...]

1304, 2018

Tax Diary for April 2018

April 13th, 2018|

Tax Diary for April 2018 1st April 2018 Start of Financial Year 2018. Corporation tax due for companies with a 30 June 2017 year end. 5th April 2018 End of 2017/18 tax year. End of PAYE month 12. 6th April 2018 Start of 2018/19 tax year. 7th April 2018 Due date for VAT returns for periods ending 28 February 2018 and payement of associated VAT. 19th April 2018 Payement [...]

1903, 2018

Delay to Making Tax Digital Start Date

March 19th, 2018|

Under the original timetable for making tax digital (MTD), the requirement to maintain digital records and report to HMRC quarterly was to have applied to unincorporated businesses whose turnover was above the VAT registration threshold of £85,000 from April 2018. This start date has now been put back and instead MTD will now start from April 2019 for VAT purposes only for businesses whose turnover is in excess of the [...]

1203, 2018

New Rules for Termination Payments from April 2018

March 12th, 2018|

Changes to the way in which payments made on the termination of an employment are taxed come into effect from 6 April 2018.   As a result of the changes, payments in lieu of notice (PILONs) will be taxed as earnings, regardless of whether there is a contractual entitlement to the PILON, or an expectation that a PILON will be made. Under the new rules, the payments made on termination are [...]

503, 2018

Rates & Allowances for 2018

March 5th, 2018|

Personal Allowance The personal allowance increases to £11,850 for the 2018/19 tax year.   As for 2017/18, the personal allowance is reduced by £1 for every £2 by which adjusted net income exceeds £100,000.   This means that anyone with income in excess of £123,700 in 2018/19 will not receive a personal allowance. Marriage Allowance The marriage allowance – set at 10% of the personal allowance – is increased to £1,185 for [...]

2602, 2018

National Insurance for the Self-Employed

February 26th, 2018|

Abolition of Class 2 Delayed Class 2 National Insurance contributions were due to be abolished with effect from 6 April 2018, with Class 4 contributions being reformed from the same date to provide the mechanism by which the self-employed can build up their contributions record and earn entitlement to the state pension and to certain contributory benefits. However, the start date of the reforms has been delayed and they will [...]

1902, 2018

Tax Diary for March 2018

February 19th, 2018|

Tax Diary for March 2018 1st March 2018 Corporation tax due for companies with a 31 May 2017 year end. 5th March 2018 End of PAYE month 11. 7th March 2018 Due date for VAT returns for periods ending on 31 January 2018 and payment of associated VAT. 19th March 2018 Payment of PAYE/NIC and CIS deductions due for month 11 (to 5 March 2018) to reach HMRC where [...]

1902, 2018

Dividend Allowances Reduced for 2018

February 19th, 2018|

The dividend allowance is reduced from £5,000 to £2,000 with effect from 6 April 2018. The dividend allowance is effectively a zero-rate band and dividends that are covered by the allowance are received free of tax. All individuals are entitled to a dividend allowance, regardless of whether they pay tax at the basic, higher or additional rate. Many personal and family companies extract profits in the form of dividends once [...]

1202, 2018

Company Cars 2018

February 12th, 2018|

Higher Diesel Supplement The appropriate percentage used to work out the taxable benefit in respect of a diesel company car is subject to a diesel supplement.   From 6 April 2018, the diesel supplement is increased from 3% to 4%. The supplement will apply to all diesel cars registered on or after 1 January 1998 which do not meet the Real Driving Emissions Step 2 (RDE2) standard. Following the increase in [...]

502, 2018

Mileage Rates for Landlords

February 5th, 2018|

From 6 April 2017 landlords with an unincorporated property business will have the option of using mileage rates to claim a deduction for business journeys in a car, van or motorcycle as an alternative to claiming capital allowances and a deduction for actual costs incurred. The mileage rates for landlords are the same as those which can be paid tax-free to employees who use their own cars for business, namely [...]

502, 2018

Chargeable Gains of Companies

February 5th, 2018|

End of Indexation Allowance Indexation allowance for chargeable gains of companies is frozen at 31 December 2017.  For disposals which occur on or after 1 January 2018, indexation allowance is computed by reference to the retail prices index or indexation factor for December 2017, regardless of the date on which the asset is disposed of. Please contact us on 01275 852 255 for personal advice on your own affairs or [...]

102, 2018

On-Time Self Assessment Returns Breaks the Record Once Again

February 1st, 2018|

HM Revenue and Customs (HMRC) has once again surpassed its record of completed tax returns with a huge 10.7 million customers submitting theirs before the 31 January deadline. Proving increasingly popular with its handy tips and helpful advice, the department’s online service was used by 9.9 million customers –meaning more than 92.5% of total returns were completed online. There were 758,707 people who completed their return on the last day [...]

2901, 2018

Disincorporation Relief Not Extended

January 29th, 2018|

Disincorporation relief comes to an end on 31 March 2018 and availability of the relief will not be extended beyond this date. The relief allows a company to transfer certain types of assets to shareholders who continue the business in an unincorporated form without triggering a corporation tax charge on the disposal of the assets. Companies looking to disincorporate and wishing to take advantage of the relief need to do [...]

2601, 2018

Tax Diary for February 2018

January 26th, 2018|

Tax Diary for February 2018 1st February 2018 Initial £100 penalty where a 2016/17 tax return has not been filed online by 31 January 2018 or where a paper return was filed after 31 October 2017. Corporation tax due for companies with a 30 April 2017 year end. 2nd February 2018 P46(Car) for quarter to 5 January 2018 due to HMRC. 5th February 2018 End of PAYE month 10. [...]

2711, 2017

Company Cars

November 27th, 2017|

Despite rising tax bills, company cars remain a popular benefit. The rules for taxing company cars reward employees driving, cheaper, low emission models with a lower tax bill. After 5th April 2015 electric cars have been taxed according to appropriate percentage for the 0 to 50g/km emissions band (9% for 2017/18, rising to 13% for 2018/19). Technological advances mean that electric cars are becoming a more viable alternative to petrol [...]

2011, 2017

VAT Flat Rate Scheme

November 20th, 2017|

The VAT Flat Rate Scheme for small businesses is a simplified scheme which allows eligible traders to calculate the VAT that they pay over to HMRC by reference to a fixed percentage applied to gross (i.e. VAT-inclusive) turnover.   Businesses with VAT taxable turnover of £150,000 a year or less can join the scheme. Prior to 1st April 2017 the flat-rate percentage was determined solely by reference to the trade sector [...]

1311, 2017

Cash Basis for Landlords

November 13th, 2017|

Under the cash basis, accounts are prepared simply by reference to money received and money paid out.   By contrast, under Generally Accepted Accounting Practice (GAAP) profits must be worked out using the accruals basis (sometimes referred to as the ‘earnings basis’) which recognises income earned in a period and expenditure incurred in a period, regardless of when income is received or the payment made. From 6th April 2017 onwards, the [...]

611, 2017

PAYE Settlement Agreements

November 6th, 2017|

A PAYE Settlement Agreements (PSA) is an agreement that an employer makes with HMRC under which the employer agrees to pay the tax and National Insurance on certain benefits and expenses provided to employees Benefits and expenses included in the PSA do not need to be notified to HMRC on form P11D. A PSA can only be used for payments that are made irregularly and are minor. Previously it was [...]

3010, 2017

Termination Payments

October 30th, 2017|

The rules on the tax and National Insurance treatment of termination payments is changing from 6th April 2018. Payments made on the termination of an employment are treated differently depending on whether the payment is a payment of earnings, such as normal wages and salary, or a compensation payment, such as damages for loss of office.   Payments taxed as compensation payments benefit from a £30,000 tax-free exemption and are only [...]

2310, 2017

Dividend Allowances

October 23rd, 2017|

The dividend allowance is to fall from £5,000 to £2,000 from 6th April 2018. This will impact anyone who receives dividends, either from investments or as part of a profit extraction strategy from a personal or family company. All Taxpayers are eligible for the ‘Dividend Allowance’.  Once the Dividend Allowance (and the Personal Allowance) has been used up, to the extent they fall within, the Dividends are taxed as follows: [...]

2006, 2017

Pension Allowances for 2017/18

June 20th, 2017|

However, the allowance is reduced where a person has income excluding pension contributions of more than £110,000 and income inclusive of pension contributions (including any employer contributions) of more than £150,000. Where this is the case, the allowance is reduced by £1 for every £2 by which income exceeds the £150,000 limit, subject to a maximum reduction of £30,000. This means that if your income is more than £210,000 for [...]

1306, 2017

Salary Sacrifice Arrangements – New Valuation Rules

June 13th, 2017|

Salary sacrifice arrangements used to be a cost-efficient way of allowing employees to enjoy tax-exempt benefits without passing the cost of providing those benefits on to the employer. However, changes in the rules which came into effect from 6 April 2017 mean that salary sacrifice and flexible benefit schemes are no longer as attractive as they once were. Under the new rules, unless the benefit is one of a limited [...]

606, 2017

Cash Basis

June 6th, 2017|

The cash basis is a simplified accounting basis under which profit is worked out by reference to cash in and out rather than by reference to income earned and expenses incurred in the period (as under the accruals basis). The cash basis has been optional since 2013 for businesses with turnover under the VAT registration threshold. As part of the Making Tax Digital reforms the cash basis threshold has been [...]

3005, 2017

Making Tax Digital

May 30th, 2017|

Making Tax Digital (MTD) is an initiative by the Government to turn the UK into one of the most digitally advanced tax administrations. The proposals are far reaching and will ultimately affect all taxpayers. Under the MTD reforms, businesses will be required to keep digital records and report digitally to HMRC each quarter. MTD is being introduced gradually and will apply from April 2018 to unincorporated businesses and landlords with [...]

2305, 2017

Flat Rate Scheme

May 23rd, 2017|

The VAT flat rate scheme is an optional simplified accounting scheme for small businesses. The scheme is available to businesses which are eligible to be registered for VAT and whose taxable turnover (excluding VAT) in the next year will be £150,000 or less. Once in the scheme, a business can remain in it as long as its taxable turnover for the current year is not more than £230,000. The flat [...]

1805, 2017

Trading & Property Allowances

May 18th, 2017|

New tax-free allowances for trading and property income are available for 2017/18 and later tax years. The allowances, each set at £1,000, mean that trading and/or property income no longer needs to be reported to HMRC where the income is less than £1,000 in the tax year. Where a person has both trading income and property income, he will be entitled to both allowances. Where trading income or property income [...]

1605, 2017

Rates & Allowances

May 16th, 2017|

Personal Allowances The personal allowance increases to £11,500 for the 2017/18 tax year. As for 2016/17, the allowance will be reduced by £1 for every £2 by which adjusted net income exceeds £100,000. This means that anyone with income in excess of £123,000 for 2017/18 will not receive the personal allowance. Income tax rates and bands For 2017/18 the basic rate of tax remains at 20%, the higher rate at [...]

1203, 2017

Deemed Domicile

March 12th, 2017|

From 6 April 2017, anyone who has been a resident in the UK for 15 of the previous 20 tax years will be deemed to have a UK domicile where they do not already have one. This will apply for all tax purposes and will replace the current deemed domicile rule for inheritance tax purposes whereby an individual is deemed to be domiciled in the UK where he or she [...]

1003, 2017

Lifetime ISA

March 10th, 2017|

The Lifetime ISA will launch in April 2017. A Lifetime ISA can be opened by anyone between the ages of 18 and 40. Savings of up to £4,000 a year made before the individual’s 50th birthday will earn a Government bonus of 25% – a potential bonus of up to £1,000 a year. There is no minimum contribution. The Lifetime ISA can only be used to save for a deposit [...]

403, 2017

New Exemption for Pensions Advice

March 4th, 2017|

From 6 April 2017 employers’ will be able to provide employees with pensions advice costing up to £500 a year without triggering a taxable benefit. The new exemption will cover not only advice on pensions, but will also extend to advice on general financial and tax issues relating to pensions. The exemption will replace the current exemption, capped at £150 a year, available solely for pensions advice. Money purchase annual [...]