r
_

Author Archives: DavidSmith

HMRC Announce First Batch of Card Receipts Data

We have known for a little while now that HMRC are acquiring data from card processing companies that they claim they can match against tax (and VAT) returns to identify under-declarations of income. They have just announced that they have started doing this and that it is in sets of monthly data. We do not […]

Read more

New Amnesty for Employees with a Sideline

HMRC like these little ‘amnesties’.  Time and the Freedom of Informstion Act will tell us whether they were ever any good or not. They have done loads of them.  Private landlords, doctors, plumbers, teachers.  They have all had their time in the spotlight. Now, HMRC are going to allow the employeed to get away with […]

Read more

Husband & Wife Companies – Do Both Serve as Directors?

There are loads of these up and down the country. When first setting up a new company, you definitely allocate shares to your spouse.  This enables you to use two basic rate tax bands for the distribution of profits.  It also allows for two lots of entrepreneurs relief. For the above to work, it is […]

Read more

It’s a New Tax Year. So What’s New is £1/2m of AIA

This is great news for business, and is something that has been in my tax planning since its announcement in the Budget. Now at a level that few businesses will be able to enjoy to the full, the first £500,000 of investment in qualifying fixed assets will attract a 100% profit write-down in the year of purchase. Time to get spending […]

Read more

It’s a New Tax Year. So What’s New is Social Investment Relief

Operating very much like the Enterprise Investment Scheme, Social Investment Relief affords 30% income tax relief and capital gains tax advantages to investments in qualifying social organisations. You would expect these to generate smaller returns, but be potentially more secure than EIS which encourages you to put your money into smaller = riskier companies. Also […]

Read more

It’s a New Tax Year. So What’s New is that There Will be Fewer Employment Agencies

From 6th April, HMRC have rather cleverly tweaked the tax legislation as it applies to the employment status of agency workers. Employment agencies had previously relied on the facility for the worker to provide a substitute to justify treating them as self-employed. This facility is now gone and where the worker is under the control, […]

Read more

It’s a New Tax Year. So What’s New is that You can Now Code Out up to £3k of Unpaid Tax

Used to be £2,000.  From 6th April 2014, you can now ask HMRC to collect your tax bill through your PAYE tax code should your bill be < £3,000. This offers very useful cash flow advantage for those who don’t fancy or are unable to pay their self assessment come 31st January 2015 and beyond.

Read more

It’s a New Tax Year. So What’s New is That You Now Have Less Time to Sell Your House After You Have Moved Out

In most cases, the sale of your home is free from capital gains tax. The waters get a bit muddied when you sell it whilst living in another home. The old rules used to give you 3 years after you moved into another home to sell your original one. That length of time has now […]

Read more

It’s a New Tax Year. So What’s New is that the Main Rate of Corporation Tax Has Been Cut

In keeping with Gorge Osborne’s fiscal strategy of lowering the UK’s rate of corporation tax to 20%, 1st April 2014 sees the rate fall to 21%. Small companies profits rate remains at 20%. The main rate is for profits in excess of £1.5m, but it also directly affects the marginal rate of corporation tax for […]

Read more

It’s a New Tax Year. So What’s New is that One-Man Companies Can Pay Themselves Above the Secondary NICs Threshold

It used to be that owner-directors take up to the point where they pay national insurance by way of salary and any other appropriations by dividends. That point for 2014/15 is now £153 a week or £663 a month. However, if your company cannot use the whole £2,000 employment allowance on its employees, owner-directors should think […]

Read more

It’s a New Tax Year. So What’s New is the Lowering of the Official Rate of Interest

The last tip was to signal the doubling of the de minimis for cheap employer loans. Today, I want to celebrate the reduction in the rate of interest payable on these loans when you breach that de minimis. Used to be 4%.  From 6th April, it is 3.25%. This is of particular value for anyone drawing […]

Read more

It’s a New Tax Year. So What’s New is the £2,000 Employment Allowance

I am hoping that this will be almost impossible to miss out on, as it is given through the payroll and will be sorted by software providers. Definitely worth checking your first month’s PAYE bill, though.  Just to make sure you are getting the allowance that exempts the first £2,000 of employers national insurance.  

Read more

It’s a New Tax Year. So What’s New is that HMRC Will Charge Interest on Unpaid PAYE Within the Tax Year

It used to be that interest on late payment of PAYE was only levied when it was still unpaid after the end of the tax year. From 2014/15, HMRC are now going to charge interest on PAYE late payments as soon as each respective payment is late. Be warned.

Read more

It’s a New Tax Year, So What’s New Is the Doubling of the Tax Limit on Directors Loans

There are 2 tax consequences of directors receiving loans from their personal companies. The first is on the company where a 25% tax ‘bond’ is payable on any loans not repaid within 9 months of the accounting year-end. The second (and the one that is moving in the right direction) is on the director who is taxed as if […]

Read more

It’s a New Tax Year. So What’s New is that Employers Can’t Reclaim SSP Anymore

Rather unfair, this one. The reclaim of SSP has always been restricted to the smallest of employers.  It has now gone altogether. So, from 6th April 2014 when an employee goes off sick, you have to pay them statutory sick pay with no recourse to claim it back from anyone. Sorry.

Read more

What Are They Doing to Company Car Tax?

To be honest, I have all but given up trying to commit company car tax rates to my memory. I wander this earth with so much tax information sloshing around inside my head.  Company car tax rates are so complex and change so quickly, I fear that if I were to memorise them, such brain […]

Read more

Beware the April Fool

’tis a very important general lesson in life. Having spent a number of days considering the recent proposals made in the recent Budget speech, it is worth remembering that politicians sometimes change their minds and sometimes lie. If it is in the Finance Bill it will be in the Finance Act and it is real. Anything […]

Read more

Budget 2014 – Immediate Pension Changes to Trivial Commutation Part 2

As generous as the new overall limit is and as generous as the proposed April 2015 changes will be, it is still useful to be aware of the budget changes to the definition of trivial individual pension funds. Even if you have combined funds that would not qualify as trivial, you can empty individual pension […]

Read more

Budget 2014 – Immediate Pension Changes to Trivial Commutation Part 1

As part of the Chancellor’s makeover of pensions and how you can take them, the criteria have been loosened for when you can take your pot in one go because it is such a small size that no pension company would want to convert it into an annuity. Before last week, if you were over […]

Read more

Budget 2014 – Immediate Pension Changes to Flexible Income Drawdown

Yesterday, I looked at the increase from 120% to 150% of the cap on income drawdown. George has also loosened the restrictions on the qualification criteria for flexible drawdown. Today is the last day that you had to have £20,000 fixed income from other sources in order to be able to draw whatever you want […]

Read more

Budget 2014 – Immediate Pension Changes to Capped Income Drawdown

George Osborne wants to change the pensions world.  He said so.  He is now going to consult with experts and interested parties and April 2015 will bear witness to how radical his reforms are. What we have now is something.  It is not as far reaching as what he is proposing for next year, but […]

Read more

Budget 2014 – What Did He Just Say About Pensions?

I was glad I was there on March 19th 2014.  Well, not there exactly.  I wasn’t sat in Westminster.  I meant that I was in front of my tv to watch the budget. I had that sort of incredulous reaction that the title of this post suggests when George made his announcement: “Pensioners will have […]

Read more

Budget 2014 – A Pensions Revolution – an Overview

There has been so much bad publicity over pensions and annuities.  Auto-enrolment was never going to be enough.  Pensions needed to be made more attractive to the populous to get people saving for retirement. That is how I would have been thinking had I been in government.  It may be that Cameron and Osborne were […]

Read more

Budget 2014 – The Annual Investment Allowance

A very nice surprise to all of us who were merely hoping that George Osborne would extend the annual investment allowance from its end-date of 31st December 2014.  Not only is the generous capital allowance extended for another 12 months, it has been doubled to £1/2m! This is great news for businesses with capital expenditure […]

Read more

Budget 2014 – £10,500 personal allowance is more important than you might think

Hard to know where to start with so much going on in yesterday’s budget. I will start with something that will, at first sight, have appeared quite innocuous. £10,500 personal allowance for the 2015/16 tax year. This is only an increase of £500 from 2014/15, which itself enjoyed an increase of £560.  2013/14 saw an […]

Read more

Budget 2014

Wow.  That was a good one, that. Well, it was for me and my clients, anyway. Loads in it that many of you will need to get to grips with as it affects how you plan your tax affairs and also how you plan your savings and retirement income. Over the next few days, I […]

Read more

7 Days Is a Long Time in Accountancy

A tactic little used is the facility to move your financial year-end around for up to seven days either side of your official balance sheet date. As far as Companies House is concerned, seven days out is as good as being on-time when it comes to your year-end date.  Pity they don’t apply the same […]

Read more

Are You On the List?

The list is one published every quarter by HMRC, naming and shaming ‘deliberate tax defaulters’. I have checked and can’t see me or anyone I know on it. I was, however, intrigued by an entry for someone who earned a living from “commission income double glazing”.  In one year, this individual is said to have […]

Read more

Another Tribunal Win for HMRC on Self-Employed Travel Expenses

Following swiftly on the back of the well-publicised doctor Samadian, who was denied tax relief on the cost of travel from his home surgery to a couple of hospital where he regularly did work, we now have the case of a flying instructor being denied the cost of travel to airports. Both times that HMRC have […]

Read more

A Diary is Private

HMRC’s right to inspect a sole trader’s business diary has been dismissed by the First-tier Tribunal. The particular case was a doctor who provided cosmetic treatments. HMRC asked to have a look inside and the taxpayer refused, arguing that it held no financial information. The Tribunal ruled that in this case the diary “was not […]

Read more

CIS and Paying Your VAT

A recent First-tier Tribunal case found in favour of the taxpayer who was appealing VAT late-payment penalties on the grounds that HMRC had got their money in wrongly collected CIS deductions. The particulars of the case were that the taxpayer should not have had CIS deducted by his contractors and this makes it rather niche. […]

Read more

Appeal. You Never Know Your Luck.

A recent appeal against a VAT late filing surcharge gives us all hope. You can appeal on grounds of having a reasonable excuse. HMRC’s culture is such that they are less likely to find your excuse reasonable than are an independent tribunal. This particular case was of a family business in which daughter was responsible […]

Read more

A Silly Waive

This country has a lot of husband-wife companies. At present, the shareholdings in such companies can be structured so that both basic rate bands can be used to get double the tax-free dividends out. It is important, however, that you know what you are doing. A recent case before the Tribunal went in HMRC’s favour […]

Read more

New Advisory Fuel Rates

From 1st December 2013, the amounts that you can pay employees who pay for their own fuel in a company car has gone up to 14p per mile for cars up to 1.4l, 16p for 1.4-2l and 24p per mile for cars with engine sizes over 2 litres. Sadly, one diesel rate has actually come […]

Read more

National Minimum Wage Penalties Just Got Scarier

All employers need to be aware of areas within their business where non-compliance could be very expensive. Not many will wilfully ignore the national minimum wage, but the penalty regime was always one that would not make it a critical issue. Basically, you are liable for a penalty of 50% of any underpayment.  These are subject […]

Read more

Steam Cook Your Turkey

Merry Christmas to all my readers.  Yes, that’s you, Mum! Now, there is no need to have got up at 6 this morning to put your turkey in the oven. We always follow Phil Vickery’s technique of steaming the bird at 200c for 2 hours and 20 minutes on a bed of chunky veg in stock and […]

Read more

VAT Repayment Supplement Only Paid When Repayment on a Return

A recent VAT tribunal case has agreed with HMRC who refused to pay repayment supplement on a VAT repayment because it was claimed by the taxpayer in a letter and not a return. The very strict wording of the VAT Act is being applied here.  The legislation provides for repayment supplement on claims made on […]

Read more

VAT and Splitting Your Supply

A recent VAT tribunal case has found against the taxpayer who wanted to split his supply of a central heating system into different parts, some of which were eligible for the 5% reduced rate. The tribunal ruled that the manner in which the supply mas made meant that it was just one supply.  This meant […]

Read more

HMRC Attack Intermediary Agencies

Part of a general move against the practice, the Revenue have issued a consultation document 6 days after George Osborne’s Autumn Statement 2013.  It is entitled ‘Onshore Employment Intermediaries: False Self Employment’. This is a niche area and many will be unaffected, but it will impact on the construction and security industries and so it […]

Read more

Quote from HMRC on Investigation Triggers

“We do use Google Street View but our investigations have a greater focus in looking at an individual’s bank account, employment history and the value of their property. No tax inquiry would commence purely on the basis of information from Street View — identifying cases for possible inquiry is a very sophisticated process.”

Read more