Tip of the day
The SSAS – Best in Show For Wealth Protection
Whenever your thoughts drift towards pensions, if you have a company you should be looking at a small self administered scheme (SSAS). Not only do they offer great flexibility and control, they also cannot be touched by any liquidator of your company or trustee of your bankruptcy. Indeed, this is …
Read moreHMRC Remind Us of the Value of Pension Contributions
Rather than read these posts, you could just follow HMRC's website. Yesterday, they published an article on what they call 'adjusted net income'. This is the measure they use in assessing whether your income trips over one of their tax traps. The traps they refer to in the article are …
Read moreHow to Get Rid of the Taxman
I learned something new the other day. I answered the phone to the taxman, and told him I was driving. I was told they are not allowed to talk to us while we're driving. So, if you ever answer the phone to them and wish you hadn't, you have a …
Read moreComputers Aren’t All Bad
HMRC have published a guide to what data needs to be reported under real time information (rti). I think it qualifies as a comprehensive guide. If you're thinking ill of your computer, just read that article and imagine where we'd all be without software. If you think you work only to pay …
Read moreTaxation Magazine Petition Against HMRC Raiding Your Bank Account
The facility for HMRC to dip into your bank account and take what tax you owe them without you consenting has attracted plenty of publicity. It has now attracted an e-petition. If you feel strongly enough to want to stop it from becoming law, then now is your chance. Add …
Read moreFeel Free to Blame Your Accountant
It is a well-trodden path to overturning HMRC penalties to point the finger of blame at others in order to satisfy the conditions that give you a 'reasonable excuse'. It is also with precedent that your pleas of innocence will be looked on more favourably if you took professional advice …
Read moreTribunal Rules That If You Are Struggling With Your Tax Return, You Need to Get it in as Best You Can
A recent case before the First Tier Tribunal denied a taxpayer's appeal against a late filing penalty under self assessment. The taxpayer was claiming that delays on the part of HMRC led to him missing the filing deadline. I extract word for word from the ruling: "We understand that Mr …
Read moreThe Adjudicator Speaks
Most of my tips are about tax, and this one is no different. However, even if you find nothing of interest in what I have to say, I recommend you read the Adjudicator's Office's Annual Report 2014. It is very well-written and a jolly good read. I quote directly: "this …
Read moreImportant Lesson to Learn – HMRC Are Evil Bastards
I always knew this to be true, and following ridiculous cases that HMRC take to court reinforces my opinion on a fairly regular basis. They have just won a case at First Tier Tribunal against a taxpayer who missed paying his tax whilst suffering from a terminal brain tumour. Unable …
Read moreTax Credits Renewal Deadline Extension
If you are panicking about the 31st July deadline for submitting your tax credits renewal, then don't. HMRC have announced a 7-day extension. They are usually pretty good at extending deadlines when stuff happens that will affect our ability to get returns in. This time around, there is a strike …
Read moreDon’t Take a Teenager on Holiday
I am not going to mention names. I want to protect the innocent. If you have young children, enjoy every holiday you can before hormones hit. I was naïve enough to think we might have nice family holidays until maybe the age of 16. The cut-off point I now find …
Read moreDon’t Go On Holiday
It's just too much stress trying to get everything done so that you can go away. As a drinker and a wannabe smoker, I am a big advocate of avoiding stress as a key to a longer and healthier life. The amount of stress holidays cause before you go away has …
Read moreEarly Years Loss Relief
With an ever growing trend to self-employment, there should be plenty use of the capacity to carry back for three years losses incurred in the first four years of business. This is an often overlooked relief which has a significant chance of becoming relevant when many businesses struggle to make profit …
Read moreOne More Cost That You Really Don’t Need
Anything that drives down the profit of your business but affords no tax relief is at best a sad waste and at worst a pernicious evil. Accounting standards and company law dictate that you must depreciate assets, but don’t tell you at what rate. As depreciation only does harm, make …
Read moreQuote From HMRC Annual Report
"HMRC reported compliance yield (the additional revenue it generates through its compliance activities) of £23.9 billion in 2013-14 – its highest yield to date. The Department has improved its measurement of compliance yield since 2010-11. However, in response to the NAO’s review, HMRC found that, when it agreed performance targets …
Read moreRetrospective Claims for Employer NIC’s Holiday
The Tories' sop to the 'tax on jobs' was to exempt new businesses from employers NICs. The first year's bill (subject to a maximum of £5,000) on the first 10 employees was not payable. This came in in 2010 and finished on the 5th September 2013. HMRC yesterday published a guide …
Read moreAre You On The List?
Today's tip is to check the list. The list is of 'deliberate tax defaulters', and you can find it on HMRC's website. Always worth checking to see if you're featured. It's quite a long list this time, as well. Amongst those on the list this time around is a company …
Read moreAnother Decision on Proportionality of VAT Penalties
This is a tricky one for me. By nature, I like to be able to take a side. I love sport not for the beauty of the game, but for the partisanship that it allows. In business, I kind of thought that any victory against HMRC was sweet. They are, …
Read moreGo On, Be A Consultant
HMRC have just announced the conclusion of their consultation into allowing certain groups to be exempt from filing online for VAT. This whole issue has had my attention ever since it first emerged as a tax tribunal slapped HMRC down for their insistence that everyone should have to file online. …
Read moreHMRC Promise Better CIS Repayment System
There is little about the Construction Industry Scheme that is well designed. The repayment facility has been a problem for many years, with companies waiting too long to be given their own money back. Under pressure from stakeholders and politicians, HMRC have said they will do better with company repayments. …
Read moreHMRC 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 …
Read moreNew 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 …
Read moreHusband & 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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 …
Read moreIt’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 moreIt’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 …
Read moreIt’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 moreWhat 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 …
Read moreBeware 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 …
Read moreBudget 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, …
Read moreBudget 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 …
Read moreBudget 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 …
Read moreBudget 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 …
Read moreBudget 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 …
Read moreBudget 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 …
Read moreBudget 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 …
Read moreBudget 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 …
Read moreBudget 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 …
Read more7 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 …
Read moreAre 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 …
Read moreAnother 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. …
Read moreA 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 …
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