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04 March 2020

Special rules apply to transfers of income streams. The rules make it clear that the sale of an income stream - designed to turn economic income into a return that is treated by tax law as capital - is unlikely to work. For example, shareholders could sell the right to receive a large company dividend in exchange for an amount almost equal to the dividend, without selling the shares....

04 March 2020

The First-Tier Tribunal (FTT) has recently published its decision in a long running case that focused on tax planning arrangements. This important decision represents a significant win for HMRC against a tax avoidance promoter in a case that has been before the FTT since June 2018. The firm in question launched and promoted an arrangement known as the Alchemy scheme. The FTT was clear that...

04 March 2020

Savings income and dividends are taxed at the recipients' highest tax rate.

The relevant legislation in ITA07/S16 sets out the following rules.

  • If a person has savings income but no dividend income, the savings income is treated as the highest part of their total income.
  • If a person has dividend income but no savings income, the dividend income is treated as the...
27 February 2020

Acas has published new guidance for employers and employees on the coronavirus. The guidance covers:

  • what to do if employees do not want to go to work
  • sick pay
  • what to do if employers need to close the workplace
  • other steps for employers to take. 
     
26 February 2020

1 March 2020 - Due date for Corporation Tax due for the year ended 31 May 2019.

2 March 2020 – Self assessment tax for 2019/19 paid after this date will incur a 5% surcharge.

19 March 2020 - PAYE and NIC deductions due for month ended 5 March 2020. (If you pay your tax electronically the due date is 22 March 2020)

19 March 2020 - Filing deadline for the CIS300 monthly...

26 February 2020

The P9 Notice of Coding form is used to notify employers of the tax codes to use for employees. HMRC has begun to send email notifications to employers advising that the coding for the tax year starting 6 April 2020 can be viewed online. The emails are being sent up until 10 March 2020. HMRC has also advised that the paper P9 coding notices should arrive with employers on or around 21 March...

26 February 2020

The new £20 note entered into circulation on 20 February 2020 and features the image of the artist JMW Turner. It will take a few weeks for the notes to become commonplace across the country. The new £20 note includes a number of new security features including two windows and a two-colour foil, making it very difficult to counterfeit.

The new £20 note joins the current £5 and £10 notes...

26 February 2020

There has been much press speculation that the Government is considering cutting higher rate tax relief for pension contributions in the March Budget. However, many Tory MPs are said to be up in arms at such a move and have been trying to quash such a reduction.

There are also concerns that such a complex change to pensions relief could come into effect with very little advance warning...

26 February 2020

In most cases, property rental income must be brought into account in the year in which the income was earned, even if the invoice has not yet been paid. However, a deduction is allowed in respect of bad & doubtful debts.

These are debts which are either clearly irrecoverable (a bad debt) or a doubtful debt to the extent it is estimated to be irrecoverable. The deduction allowable...

26 February 2020

If your total assets exceed £325,000 then the excess will usually be subject to Inheritance Tax (IHT) at 40% when you die. A reduced rate of IHT of 36% applies where 10% or more of a deceased’s net estate is left to qualifying charities or Community Amateur Sports Clubs (CASCs).

The net value of an estate is the total value of its assets (gross value) after deducting the following:...

26 February 2020

Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. The rates can be used by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel. HMRC accepts there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where...

26 February 2020

Goodwill is a subject we hear about often but interestingly is rarely mentioned in legislation. In fact, the term 'goodwill' is not defined for the purposes of the Capital Gains legislation in TCGA 1992.

Most definitions of goodwill are derived from case law. At its simplest you could describe goodwill as the 'extra' value of a business over and above its tangible assets.

In the...

26 February 2020

The VAT system is policed by HMRC and there are penalties for breaches of the legislation.

There are four conditions that must be satisfied in order for an activity to be within the scope of UK VAT.

These conditions are that the activity:

  1. Is a supply of goods or services
  2. That the supply takes place in the UK
  3. Is made by a taxable person
  4. Is...
26 February 2020

There is a special VAT refund scheme called the VAT Retail Export Scheme or Tax-Free Shopping that allows individuals not resident in the EU to obtain a VAT refund on goods bought in the UK and taken out of the EU. The scheme does not apply to services, for example hotel bills.

The scheme can be used to reclaim VAT on purchases from participating shops. It is important to note that not...

20 February 2020

Following Brexit, the government has published an updated toolkit for employers on how to support their employees who are EU citizens (including EEA and Swiss citizens) to apply to stay in the UK. The content includes print and digital fact sheets, leaflets and posters covering the key areas of the EU Settlement Scheme, i.e. eligibility, the application process, the wide range of support...

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