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Beware fake tax rebate offers

22/02/2024

HMRC continues to warn of the ever-present problem of fraudulent phishing emails, suspicious phone calls and texts. These unwanted emails, phone calls and texts are being sent from around the world as HMRC and other agencies continue to combat the problem. These messages aim to obtain taxpayers personal and or financial information such

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Cost of living final payment 2023-24

22/02/2024

The Cost of Living support package has been designed to help over 8 million households in receipt of means tested benefits. The details of Cost of Living Payments due in the 2023-24 tax year were published in 2023 and have recently been updated with details of the final payment. Eligible recipients will receive up to 3 Cost of Living

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Are you self-employed?

22/02/2024

Self-employed taxpayers should notify HMRC as soon as practicable when they begin working for themselves. HMRC must be officially notified by 5 October following the end of the tax year so that a self-assessment return can be issued on time and to avoid any unnecessary penalties. HMRC’s guidance says that you are probably self-employed

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Types of limited companies

22/02/2024

A limited company is a company ‘limited by shares’ or ‘limited by guarantee’. Limited by shares This is the most common limited company structure. A limited by shares company is a separate legal entity owned by its shareholders and managed by its directors. In smaller limited companies, shareholders and directors are the same persons.

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Entitlement to Business asset disposal relief

22/02/2024

Business Asset Disposal Relief (BADR) applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available sellers can benefit from a 10% tax charge on exit from their business if BADR is available. When the relief is available Capital Gains Tax (CGT) of 10% is

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Letting part of your home

22/02/2024

In general, there is no Capital Gains Tax (CGT) on a property which has been used as the family's main residence. This relief from CGT is commonly known as Private Residence Relief or PRR. However, where part of the home has been let out the entitlement to relief may be affected. Homeowners that let out part of their house may not benefit

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Top-line, bottom-line?

20/02/2024

Most small business owners are happy, from a financial point of view, if sales are in line with expectations. And there are obvious grounds for this conclusion, after all, if sales dry up there are no funds feeding into cashflow. Unfortunately, top-line sales are just one aspect of a business that measure bottom-line profitability. To

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Importing or exporting for the first time?

20/02/2024

If you are considering selling or buying to or from companies based outside the UK, you may well be overawed by the plethora of regulation you are required to be familiar. As a first step, you could make use of the GOV.UK website and access HMRC’s “digital assistant”. You could use this to find out about: getting an EORI

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A reminder that NLW and NMW rates are increasing

15/02/2024

A reminder for our readers that the National Living Wage (NLW) and the National Minimum Wage (NMW) rates will increase with effect from 1 April 2024. The increase will see the NLW rate increased to £11.44 per hour, an increase of over £1 over the current rate of £10.42. This means the annual earnings of a full-time worker on the NLW will

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Checking Furnished Holiday Let property occupancy

15/02/2024

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes. In order to qualify as a furnished holiday letting, the following criteria need to be met: The property must be let on a commercial basis with a view to the realisation of profits. Second

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Eligibility for the VAT Flat Rate Scheme

15/02/2024

The VAT Flat Rate scheme is open to VAT registered businesses that expect their taxable turnover in the next 12 months to be no more than £150,000, excluding VAT. The annual taxable turnover limit is the total of everything that a business sells during the year that is not VAT exempt. Under the scheme rules, businesses pay VAT as a fixed

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Tax on inherited private pensions

15/02/2024

Private pensions can be an efficient way to pass on wealth, but it is important to consider what, if any, tax will be payable on a private pension you inherit. The person who died will usually have nominated you by telling their pension provider that you should inherit any monies left in their pension pot. If the nominated person can’t be

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What is Class 1A NIC?

15/02/2024

Class 1A NICs are paid by employers in respect of most benefits in kind provided to employees such as a company car. Class 1A NICs are also due on charge on termination awards above a £30,000 threshold that have not already been subjected to Class 1 NICs deductions. There’s no employee contribution payable for Class 1A NICs. Class 1A

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Autumn Finance Bill 2023 update

15/02/2024

The government published the Autumn Finance Bill 2023 on 29 November 2023. The Bill is officially known as Finance Bill 2023-24. The Bill contains the legislation for many of the tax measures announced in the recent Autumn Statement. The Bill has now completed its passage through the House of Commons and the 1st reading at the House of

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The Valuation Office Agency tackles holiday lets

14/02/2024

The Valuation Office Agency (VOA) is writing to some owners of self-catering holiday lets that are assessed for business rates. They are doing this because they need further information about the income and expenditure of these properties. Last year, the VOA wrote to most self-catering holiday let owners in England and Wales to ask them

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Full-time and part-time contracts

14/02/2024

As an employer, the tax and employment responsibilities you have for your staff will depend on the type of contract you give them and their employment status. Contract types include: full-time and part-time contracts fixed-term contracts agency staff freelancers, consultants, contractors zero-hours contracts There are also

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Tax Diary March/April 2024

09/02/2024

1 March 2024 - Due date for Corporation Tax due for the year ended 31 May 2023. 2 March 2024 - Self-Assessment tax for 2022-23 paid after this date will incur a 5% surcharge unless liabilities are cleared by 1 April 2024, or an agreement has been reached with HMRC under their time to pay facility by the same date. 19 March 2024 - PAYE

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Alcohol duty freeze takes effect

08/02/2024

As part of the Autumn Statement measures the Chancellor announced that the duty rates on beer, cider, wine and spirits would be frozen at the current rates until 1 August 2024. This change took effect from 1 February 2024 and will last for 6 months. The alcohol duty freeze will mean that more than 38,000 pubs will benefit. Not increasing

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Record number of taxpayers file on time

08/02/2024

HMRC has confirmed that more than 11.5 million people submitted their 2022-23 self-assessment tax returns by the 31 January deadline. This included over 778,000 taxpayers who left their filing until the final day and almost 33,000 that filed in the last hour (between 23:00 and 23:59) before the deadline! Whilst this was the highest ever

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Reporting employee changes to HMRC

08/02/2024

There are rules that businesses must follow when they are reporting employee changes. These changes must be sent to HMRC using a Full Payment Submission (FPS). The FPS is a submission that is required every time you pay your employees and must be submitted on or before the usual date you pay your employees. The information provided on an

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Landlords - claiming maintenance and repairs costs

08/02/2024

Landlords are able to claim for allowable expenses as a deduction from their rental income when calculating taxable rental profits to declare to HMRC. The expenses must relate wholly and exclusively for the purposes of renting out the property. There is also a range of other types of expenses that can be claimed as a deduction when paid

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Should you pay tax on selling goods online?

08/02/2024

HMRC has published new guidance for taxpayers that regularly sell goods or services through an online marketplace. The guidance makes it clear that this activity could be treated as a ‘trade’ for UK tax purposes. If this is the case taxpayers may need to pay tax on income they earn from buying and selling goods as a trade or business

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Using your own vehicles for work-related journeys

08/02/2024

If you are an employee and use your own money to buy things you need for your job you can sometimes claim tax relief for the associated costs. Usually, it is only possible to claim tax relief for the cost of items used solely for your work. You may also be able to claim tax relief for using your own vehicle, be it a car, van, motorcycle

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Government promotes electric vehicles

06/02/2024

The government department active in the promotion of electric vehicles has published guidance regarding the costs, charging issues and infrastructure. We have extracted a few comments and reproduced them in this post. Buying an electric vehicle While a new electric vehicle (EV) costs more to buy up front, today most drivers in the UK

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Does your business offer customs services?

06/02/2024

If your business does offer customs services, did you know that HMRC could offer you a free listing on their published lists. HMRC do not vet, approve or recommend individual firms. Information is simply provided to HMRC by customs agents and fast parcel operators and listed as presented. However, many businesses that need the services

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Using the HMRC app

01/02/2024

HMRC’s free tax app is available to download from the App Store for iOS and from the Google Play Store for Android. The latest version of the app includes some updated functionality. The app can be used to see: your tax code and National Insurance number; your income and benefits; your income from work in the previous 5 years; how

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Time to Pay your tax

01/02/2024

Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. Any tax, duty, penalties or surcharges that you cannot afford to pay can be included. An online payment plan for self-assessment tax bills can be

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Penalties if you missed the filing deadline

01/02/2024

Have you missed the 31 January 2024 filing deadline for your 2022-23 self-assessment return? If you have missed the filing deadline, then you will be charged a £100 fixed penalty if your return is up to 3 months late, regardless of whether you owed tax or not. If you do not file before 1 May 2024 then you will face additional daily

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File early to have self-assessment tax coded out

01/02/2024

The coding out threshold may entitle you to have tax underpayments collected via your tax code when you are in employment or in receipt of a company pension. Instead of paying off debts in a lump sum, money is collected in equal monthly instalments over the tax year. If you want to benefit from this opportunity to pay tax due on 31

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Joining or leaving the VAT Cash Accounting Scheme

01/02/2024

The VAT Cash Accounting Scheme can offer useful benefits to small businesses. Under standard VAT accounting, VAT is payable on sales whether or not the customer has paid and can lead to claims for Bad Debt Relief. By using the VAT Cash Accounting Scheme no VAT needs to be paid over to HMRC until the customer has paid for his goods /

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Capital sums derived from assets

01/02/2024

HMRC’s guidance is clear that where a capital sum is derived from an asset, the relevant legislation treats the owner as having made a disposal for capital gains purposes. The legislation contained in s22 TCGA92 states that there is: “…..a disposal of assets by their owner where any capital sum is derived from assets

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Do you need to tell HMRC about additional income?

01/02/2024

There is an online tool that allows taxpayers to check if they need to notify HMRC about additional income. The online tool can be found at www.gov.uk/check-additional-income-tax. This could include money earned from sources such as: selling things, for example at car boot sales or auctions, or online; doing casual jobs such as

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Changes at Companies House

29/01/2024

Companies House have issued an update on their first implementation of changes brought about by The Economic Crime and Corporate Transparency Act. We have copied in the relevant comments made in a recent blog post. Companies House are aiming to introduce the first set of changes on 4 March 2024. The introduction of these changes needs

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Does your business have a March year end date?

29/01/2024

Leaving aside tax planning issues all businesses should be considering business planning opportunities if they presently have an accounting year end date of 31 March 2024. For example: Do directors need to review year end bonuses or final dividends? Have capital expenditure budgets been considered? Should large investments in

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Correcting payroll mistakes

25/01/2024

Employers generally use payroll software or other payroll services to record employees pay, deductions and National Insurance contributions on or before each payday. They also need to consider other deductions such as pension contributions and student loan payments. These payments are reported to HMRC in real time using a Full Payment

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Reporting company car changes

25/01/2024

There is a requirement to notify HMRC if you make any company cars available for private use by company directors or employees. The definition of ‘Private use’ includes employees’ journeys between home and work unless they are travelling to a temporary place of work. HMRC’s guidance states that you need to send a P46 (Car) form to HMRC

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Do you need to register for self-assessment?

25/01/2024

There are a number of reasons why you might need to complete a self-assessment tax return. This includes if you are self-employed, a company director, have an annual income over £150,000 and / or have income from savings, investment or property. The £100,000 self-assessment threshold changed for taxpayers taxed through PAYE only. The

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Assets made available to an employee

25/01/2024

Assets such as computers, televisions and bicycles that are made available to employees can create certain tax, National Insurance and reporting obligations. There is no requirement to report anything to HMRC if the asset is office equipment only used for business use. Assets that are made available as part of a salary sacrifice

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VAT – option to tax property

25/01/2024

There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be subject to VAT at the standard rate. The ability to convert the treatment of VAT exempt

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Tax and working from home

25/01/2024

Employees who are working from home may be able to claim tax relief for bills they pay that are work related. Employers may reimburse employees for the additional household expenses incurred through regularly working at home. The relief covers expenses such as business telephone calls or additional heating and lighting costs. Expenses

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Government launches new WhatsApp channel

22/01/2024

The Government has launched a new account on WhatsApp Channels, allowing members of the public to subscribe to receive important updates to their phones. As a trusted, verified account the UK Government channel will focus on reiterating important information which is relevant directly to the public in areas like updating on public

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Government steps to secure UK supply chains

22/01/2024

Industry leaders have welcomed the Government’s new Critical Imports and Supply Chain Strategy, safeguarding UK supplies of critical goods such as medicines, minerals and semiconductors. In a press release issued 17 January 2024, The Department for Business and Trade said: “More than 100 top UK firms, including pharmaceutical and

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Bed and breakfast share sales

18/01/2024

The term bed and breakfasting (sale and repurchase) of shares refers to transactions where shares are sold and bought back the next morning. This used to have Capital Gains Tax (CGT) benefits by crystallising a gain or a loss but is no longer tax effective over such a short period. The change to the rule happened in 1998 when new

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Full expensing of capital purchases

18/01/2024

A reminder to readers that the full expensing 100% first-year capital allowance for qualifying plant and machinery assets came into effect last April. To qualify for full expensing, expenditure must be incurred on the provision of “main rate” plant or machinery. Full expensing is only available to companies subject to

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Year end payroll reporting

18/01/2024

It is not that long until the current 2023-24 tax year comes to an end and there are a number of year end payroll chores that must be completed. This includes sending a final PAYE submission for the tax year. The last Full Payment Submission (FPS) needs to be submitted no later than the last payday for your employees of the 2023-24 tax

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Reminder to claim the Marriage Allowance

18/01/2024

The marriage allowance applies to married couples and those in a civil partnership where a spouse or civil partner does not pay tax or does not pay tax above the basic rate threshold for Income Tax (i.e., one of the couples must currently earn less than the £12,570 personal allowance for 2023-24). The allowance works by permitting the

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IHT gifts – 7 year limit

18/01/2024

Most gifts made during a person’s life are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. These gifts or transfers achieve their potential of becoming exempt if the taxpayer survives for more than 7-years after making the gift. If the taxpayer dies within 3-years

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Using the VAT Flat Rate Scheme

18/01/2024

The VAT Flat Rate scheme allows businesses to pay VAT as a fixed percentage of their VAT inclusive turnover. The actual percentage used depends on the type of business. The scheme has been designed to simplify the way a business accounts for VAT and in so doing reduce the administration costs of complying with the VAT legislation. The

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A reminder to protect your business capital

16/01/2024

The beginning of a new year is an opportune time to undertake basic business planning. One aspect that needs continuous management is to protect your business capital. The downturn in global trade continues to be affected by the war in Ukraine, the situation in the Middle East and now the disruption to movement of goods in the Red Sea.

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Tax Diary February/March 2024

11/01/2024

1 February 2024 - Due date for Corporation Tax payable for the year ended 30 April 2023. 19 February 2024 - PAYE and NIC deductions due for month ended 5 February 2024. (If you pay your tax electronically the due date is 22 February 2024) 19 February 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 February

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Less than one month to tax return filing deadline

11/01/2024

A new press release from HMRC has highlighted that 49,317 taxpayers took the time to file their tax returns online over the New Year holiday. It is estimated that over 6.5 million taxpayers have already filed their tax returns for 2022-23. This leaves almost 5.7 million taxpayers that are yet to file. The deadline for submitting a

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VAT on period products scrapped

11/01/2024

Before Brexit, the UK was unable to zero rate VAT on women’s sanitary products under EU rules and the items were subject to 5% VAT. Following the end of the transition period the UK was no longer bound by the EU VAT Directive which mandated a minimum 5% rate of VAT on all sanitary products, and the VAT charge, known as the ‘tampon tax’,

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National Insurance and tax after State Pension Age

11/01/2024

If you have reached the State Pension age and continue to work, in most cases, you no longer need to pay National Insurance Contributions (NICs). At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you will remain liable to pay any NICs due to be paid to you before reaching the State Pension age. If you

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Business Asset Disposal Relief

11/01/2024

Business Asset Disposal Relief (BADR) is available on the sale of a business, disposal of shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available sellers can benefit from a 10% tax charge on exit from their business. When the relief if available Capital Gains Tax (CGT) of 10% is

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Beware higher rate tax on dividends

11/01/2024

Readers are reminded that if the dividends they draw from their company, when added to their other income, exceeds the basic rate Income Tax Band, then much higher rates of dividend tax will apply. The tax rates for dividends received (in excess of the current £1,000 dividend tax allowance) are as follows: 8.75% for basic rate

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New tax credits for film, TV and game makers

11/01/2024

A number of reforms to tax reliefs for the creative sectors came into effect from 1 January 2024. Under the reformed system, a children’s TV production, animated TV production or film with £1 million of qualifying expenditure will receive an additional £42,500 in relief. A high-end TV production, film production or video game will receive

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Setting up a payment plan with HMRC

09/01/2024

The 31st of January is a key date for those of us who are registered for self-assessment. There are three deadlines: The closing date to file your 2022-23 tax return without incurring an initial £100 late filing penalty. The date by which any balance of tax, NIC, or student loan payback needs to be made for 2022-23. Due date for

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Using your vehicle for work related journeys

09/01/2024

If you use your car or other vehicle to undertake business journeys on behalf of your employer, and your employer does not: Fully reimburse you for the business use, or Reimburses you but at a lower rate per mile than the approved HMRC rates (see below). Then you may be able to make a claim to HMRC and reduce your overall tax

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Do you need to register for VAT in 2024?

04/01/2024

The taxable turnover threshold that determines whether businesses should be registered for VAT is currently £85,000. The taxable turnover threshold that determines whether businesses can apply for deregistration is £83,000. Businesses are required to register for VAT if they meet either of the following two conditions: at the end of

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Utilise your 2023-24 IHT reliefs

04/01/2024

We wanted to remind you of the Inheritance Tax (IHT) implications of making cash gifts during the current 2023-24 tax year that will end on 5 April 2024. You can give away up to £3,000 worth of gifts each tax year. This is known as your annual exemption. Any unused part of the annual exemption can be carried forward, but only for one

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