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13 July 2017

The VAT DIY Housebuilders scheme is a special scheme that enables homeowners building a home to benefit from the special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. In this way, any VAT paid on certain qualifying costs can be recovered. The scheme has been designed to effectively put homeowners in a similar position to a...

13 July 2017

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for some specific tax purposes. Individuals, partnerships, trustees and companies who let furnished holiday accommodation situated within the UK or elsewhere in the EEA can benefit from having a FHL. HMRC’s guidance on the scheme has recently been updated.

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13 July 2017

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. The limit increased to a generous £7,500 from 6 April 2016, after remaining stagnant for many years and has remained at the same level for the current tax year.

The relief applies only to the letting of furnished accommodation and is usually used when one bedroom is rented out in...

06 July 2017

As many of our readers will be aware, new payroll legislation on the treatment of certain business expenses and benefits came into effect from 6 April 2016. One of the main changes was the removal of the requirement for employers to report certain expenses paid to employees (whether deductible or not) on form P11D at the end of the tax year.

The business expenses and benefits that no...

06 July 2017

A recent First Tier Tribunal case examined whether a company director had an obligation to submit a Self Assessment tax return without receiving a notice to file. The taxpayer in question appealed against penalties totalling £1,300 relating to his 2014-15 Self Assessment return on the basis that he had a reasonable excuse for his appeal.

Part of the appeal was based on the interesting...

06 July 2017

One of the most often used and valuable of the Capital Gains Tax (CGT) exemptions covers the sale of the family home. In general, there is no CGT payable on the sale of a property which has been used as the main family residence. An investment property which has never been used will not qualify. This relief from CGT is commonly known as private residence relief (PRR).

One of the...

06 July 2017

An Essex based financial adviser has admitted tax fraud and has been jailed for five years. He set himself up as tax adviser despite having no financial qualifications. He had previously worked as a bricklayer and his clients were mainly made up of crane drivers, builders and other construction industry workers.

The "financial adviser" assisted his clients in making fraudulent claims...

06 July 2017

There are penalties for employers who don’t pay staff what they are legally entitled to under the National Minimum Wage (NMW) and National Living Wage (NLW) rates.

Employers who have paid a worker below the correct minimum wage must pay any arrears immediately. If not, there are penalties for non-payment of up to 200% of the amount owed, unless the arrears are paid within 14 days. The...

06 July 2017

Employees can obtain a tax-free benefit when provided with an employment-related cheap or interest-free loan. The most common is where the combined outstanding loan value to an employee is less than £10,000 throughout a tax year.

The benefit is calculated as the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan...

28 June 2017

Director shareholders are wont to ensure that they pay the lowest amount of tax and NIC consistent with their obligations under the relevant legislation. For many years, director shareholders have followed a high dividend, low salary extraction strategy. This tended to reduce Income Tax and NIC contributions. The dividend changes that came into effect in April 2016, took some of the shine off...

28 June 2017

The Cycle to Work scheme was introduced in 1999 to help promote a healthy commute to work.

The scheme allows employers to provide (technically loan) bicycles and cyclists’ safety equipment to employees as a tax-free benefit. Where the scheme conditions are satisfied, employees can benefit from a tax and National Insurance Contributions (NICs) reduction of between 32% and 42% through a...

28 June 2017

Do you have an employee suggestion scheme in place? There are still commercial and tax advantages to setting up such a arrangement. HMRC offers two tax-free award schemes that can be made available to employees:

  1. Encouragement awards - for good suggestions, or to reward your employees for special effort. Encouragement awards are exempt from tax and National Insurance up to a small...
28 June 2017

Employers and employees may have noticed that HMRC has clamped down on the tax and NIC benefits of some aspects of salary sacrifice schemes. The changes are being rolled out gradually from April 2017, and will affect a number of employees who have sacrificed part of their salary for benefits and are currently paying less tax and NIC as a result.

For the time being, all arrangements in...

28 June 2017

As our readers are most likely aware, there are special rules which allow individuals who set up private pension scheme(s) to benefit from significant tax reliefs when saving for their retirement. There is no overall limit to the amount of employer or employee contributions and no upper limit to the total amount of pension saving that can be built up. However, there are important limits that...

27 June 2017

With the General Election having returned a minority government and with the government’s priority being to legislate for Brexit, a rather more modest agenda for employment law reform was outlined in the Queen’s Speech 2017 than originally may have been envisaged. Parliament will also sit for two years instead of the ordinary one year, to give MPs sufficient time to consider the laws required...

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