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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 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

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

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

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...

20 February 2020

As part of a review into changes to the operation of the off-payroll working rules (IR35), HMRC has announced that the changes will only apply to payments made for services provided on or after 6 April 2020. Previously, the rules would have applied to any payments made on or after 6 April 2020, regardless of when the services were carried out. It means businesses will only need to determine...

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...

19 February 2020

This article is a reminder to payroll staff about the electronic PAYE payment dates. The due date for electronic PAYE payments falls on the 22nd of the month and when a payment is made electronically, a payment on the day usually suffices.

However, where the due date falls on a non-banking day (weekend or bank holidays), HMRC must have cleared funds by the last bank working day before...

19 February 2020

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. The current tax-free threshold of £7,500 per year has been in place since 6 April 2016. If you are using this scheme you should ensure that rents received from lodgers during the current tax year do no exceed £7,500. The tax exemption is automatic if you earn less than £7,500 and there...

19 February 2020

From 6 April 2020, the car and car fuel benefit calculations are changing with the introduction of 11 new bands for ultra-low emission vehicles (ULEVs) including a separate zero emissions band.

If a car has a CO2 emission figure of 1-50g/km employers will need to provide the car’s zero emission mileage. This is the maximum distance that the car can travel in miles on a single electric...

19 February 2020

If you have a student loan, have finished your studies and entered the workforce you must begin to make loan repayments from the April after you have finished your studies or when your income begins to exceed the annual threshold. The annual threshold amounts are currently £18,935 for plan 1 and £25,725 for plan 2. The Department for Education has confirmed that the thresholds will increase to...

19 February 2020

The 'badges of trade' tests, whilst not conclusive, are used by HMRC to help determine whether an activity is a proper economic / business activity or merely a money-making side-line to a hobby. Eventually, taxpayers may have to decide if their hobby has morphed into a trade - and therefore subject to tax. The badges of trade can be used at this time to help resolve this dilemma.

Both...

19 February 2020

As a general rule, Inheritance Tax (IHT) is collected from a person's estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. There is normally no tax to be paid if the value of the estate is below the IHT nil rate threshold of £325,000.

The remaining amount after deducting the nil rate band, main residence nil-rate band, IHT exemptions and...

19 February 2020

There are tax implications that you will need to consider if you previously left the UK to live abroad and are now returning to live and work in the UK or are considering such a move.

In most cases, if you have returned to live in the UK, you will be classed as resident in the UK and you will be required to pay UK tax on your UK income and gains, and any foreign income and gains.

...
19 February 2020

After a tumultuous few days in politics, it has been confirmed by the new Chancellor of the Exchequer, Rishi Sunak that the Budget will take place as planned on Wednesday 11 March 2020.

There has been fevered press speculation that the new Chancellor might delay the Budget date to give him more time to prepare. Rishi Sunak was previously the chief secretary to the Treasury and has had a...

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