The latest news from the world of taxation, brought to you by the experts at Vantage Fee Protect.
Tax Articles
R&D TAX RELIEF – IT WILL NEVER BE A BETTER TIME TO CLAIM
One area which has been widely scrutinised in recent weeks, and has become a target area for clamping down on abuse, is that of research & development tax relief. It has been well documented that Rishi Sunak has been an advocate of the large company “RDEC” scheme, whilst questioning whether the SME scheme (for small…
100,000 taxpayers fined by HMRC for inaccurate tax returns
Volume of fines paints stark picture of non-compliance, in timely warning to the self-employed. In the 2021/22 tax year, over 100,000 workers were issued with fines by HMRC, according to a Freedom of Information (FOI) request lodged by RSM, an audit, tax and consultancy firm. In total, the tax office issued 101,045 financial penalties in the…
MTD Update: Government announces more time to prepare for MTD for ITSA mandation
Please can we draw your attention to the important update below, issued by HMRC in respect of Making Tax Digital and its delayed implementation. Written Ministerial Statement Written statements - Written questions, answers and statements - UK Parliament The UK Government has announced that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA)…
Autumn Statement 2022
The new chancellor, Jeremy Hunt, delivered his Government’s Autumn Statement on 17 November 2022, having previously reversed almost all the previously announced changes in his predecessors mini-budget statement. The previously announced direct tax changes that are to remain in place are: Reversing the 1.25% increase in National Insurance from November.No Stamp Duty Land Tax on…
The High Income Child Benefit Charge – An Unexpected Cost For Those With ‘High Income’
With the rise in living costs, child benefit will become more important than ever to enable families to provide their children with the food and clothes they require. However, receiving child benefit can cause complications for those who are classed as earning a ‘high income’. Background to the High Income Child Benefit Charge The High…
SEIS / EIS – What Is It And What Could Possibly Go Wrong?
You’ve found an investor who sees the potential in your company and wishes to invest, however they will only do so if they can benefit from valuable tax reliefs via Seed Enterprise Investment Scheme (“SEIS”) or Enterprise Investment Scheme (“EIS”). Unless you’ve been involved in these schemes before, you’re probably wondering what this means and…
The National Living Wage (NLW) will rise to £10.42 from 1 April 2023, an increase of 92 pence or 9.7 percent!
In the autumn budget on the 17 November 2022, it was announced that the living wage would increase from £9.50 to £10.42 from 1 April 2023, but what does this mean for people on low income and how will it really help? If you earn under £12,570 then you are likely to see an extra…
When someone dies and their residential property is sold, should the disposal and capital gain be reported on the deceased’s Tax Return for the year of death?
Was the property sold before the individual died? If the property was sold before the individual died, the disposal was made by that individual and unless any gain realised was fully covered by Private Residence Relief, should be reported on the Self-Assessment Tax Return that will need to be prepared for the period from 6th…
Annual Investment Allowance for accounting periods straddling 1 April 2023
Currently the maximum Annual Investment Allowance (AIA) available on expenditure incurred on plant and Machinery (P&M) is £1,000,000. From 1 April 2023 this drops to £200,000 – so how will the affect claimants whose accounting period straddles this date? First, we need to understand what happens to the AIA for short accounting periods. If a…
September 2022 Mini-Budget
Today’s mini-budget contained a few surprises. We will be reviewing the changes in more detail in the coming weeks but for now here are the headline changes. Income Tax – from April 2023 the basic rate of tax will be cut to 19%, the additional rate of 45% is abolished as is the additional rate…
CONTROVERSIAL ADMINISTRATIVE CHANGE FOR R&D TAX RELIEF FROM 1ST APRIL 2023
Draft legislation for upcoming changes to R&D tax relief were revealed as part of Legislation Day, back in July. There were few surprises where R&D tax relief was concerned as many of the forthcoming changes had been widely publicised already. The key changes include: The expansion of qualifying expenditure to include data and cloud computing…
Household bills are increasing but what can I claim back from my business for working from home as a sole trader?
The UK has seen a significant increase in energy costs with most households on variable tariffs, and some households penalised for their energy provider going bust and being switched to one of the bigger companies. As a sole trader (but not as an employee) you can use the simplified expenses claim in your business, to…
My client owns a rental property and in light of proposed interest changes has decided to re-mortgage the property. Their lender has charged an Early Redemption Penalty. They have the option to settle this in full now or roll it into a new mortgage with a different lender.Would the payments be tax deductible?
Early redemption penalties (“ERP”) can be deductible against the rental profits. Section 272B(5)(c) IITOIA 2005 allows a deduction for: interest, amounts economically equivalent to interest, andthe incidental costs of finance. HMRC manual BIM45820 confirms that they accept that an ERP falls into the final definition of an “incidental cost of finance” so relief for the…
I have a client who is a director of a limited company which he intends to wind down. He is also on the payroll as an employee and would like to take £30,000 from the company as a tax-free redundancy payment. Can he do this?
This is a question we are being asked more regularly following both the COVID-19 period and also changes to the Off Payroll Worker Regulations. First, we need to look at the definition of redundancy. HMRC determine a redundancy as: An employee who is dismissed shall be taken to be dismissed by reason of redundancy if…
Reminder of Changes to Principal Private Residence (PPR) relief from 6 of April 2020
PPR relief has been a tax relief against the gains arising on the sale of a property that is or has been an individual’s only or main residence. New rules came into effect in April 2020, introducing the tightening of two common extensions to the relief which is likely to increase the number of sales…
The return of two Corporation Tax rates
In March 2021 it was announced that from 1 April 2023 the rate of corporation tax would increase to 25%, however companies with profits below £50,000 would continue to be taxed at 19%. A tapered rate would operate on profits above £50,000 such that only businesses with profits of £250,000 or more will be taxed…
Working from home allowance – current position
The working from home allowance has been around for 20 years but it was “relaxed” during covid meaning more people were entitled to claim. If you are required to work from home, you could claim up to £6 per week as an expense, for a basic rate taxpayer this means a reduction in tax liability…
Time to change the tax year?
The Office of Tax Simplifications wants the Government to simplify the tax year. PQ magazine editor Graham Hambly looks at the arguments. There are clear benefits in adopting a tax year that is either aligned with the calendar year or with a calendar month-end, says a new report from the Office of Tax Simplification (OTS).…
Are you ready for the plastic packaging tax?
Craig Harman explains the new plastic packaging tax will mean for businesses and why they should be planning for the changes now. The UK uses an estimated five million tonnes of plastic every year, nearly half of which is packaging. As the plastic problem worsens, countries across the globe have been looking at ways to…
TAX PLANNING WITH SHARES AND SPOUSES – AVOID THE TRAPS!
Many “one-man” companies, and indeed many “close” companies within the OMB/SME sector, utilise their directors’ tax free allowances by paying them a small salary, usually up to the primary threshold, so as to incur no PAYE or NICs but still maintain entitlement to state benefits and the state pension. The company gets corporation tax relief…
Goodwill Hunting
Mark McLaughlin points out two circumstances in which business owners may be thankful for goodwill in the business The valuation of assets can be important for tax purposes. For example, a valuation may determine the amount of inheritance tax (IHT) payable on a lifetime transfer (e.g. the transfer of an investment property to a discretionary…