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19 March 2019

As the Brexit date fast approaches, it seems the only thing we can say with any certainty is that uncertainty continues to plague the issue of our leaving the EU. The negotiations on the terms of the UK’s exit from the EU are unresolved and there are three possible outcomes: a delayed Brexit by extending Article 50, a no-deal Brexit or a modified Brexit.

HMRC has published a letter to...

19 March 2019

The list of company benefits that can be provided tax-free to employees is quite short. However, some of the benefits that can be provided include the following:

  • Meals: Free or subsidised meals in a staff canteen where meals are provided for all employees on a reasonable (not overly extravagant) scale. The exemption does not apply where free or subsidised meals are provided as part...
14 March 2019

In many circumstances it can be beneficial to make voluntary Class 2 National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension if you are self-employed.


You might want to consider making voluntary NICs because:



  • you’re close to State Pension age and do not have enough qualifying years to...
14 March 2019

As a general rule, most deposits made by customers serve as advance payments and create a VAT tax point when the deposit is received. It is important that businesses ensure that the VAT element of any deposits received is accounted for correctly. Usually this will mean that VAT is due on a deposit when it is received and not when the supply is actually made.


VAT does not...

14 March 2019

A capital sum received by an individual in respect of the sale or relinquishment of income to be derived from his or her personal activities, can sometimes be treated as earned income and chargeable to Income Tax. If this is the case, the amount charged to Income Tax is not also charged to Capital Gains Tax.


The following conditions must all be present before the sale of...

14 March 2019

Your Unique Taxpayer Reference (UTR) identifies your tax records at HMRC. The number is also known as your taxpayer number or tax reference number and should be used whenever you contact HMRC, or when you file your tax returns. The UTR is a unique 10 digit code. You are automatically given a UTR when you set yourself up to file Self Assessment tax returns or form a limited company.

...
14 March 2019

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. Careful consideration needs to be given when deciding if a hobby has become a taxable activity.


It is clear from the significant amount of case law on this subject that a decision...

13 March 2019

The P9X form is used to notify employers of the tax codes to use for employees. The basic Personal Allowance for the tax year starting 6 April 2019 will be £12,500 and the tax code for emergency will be 1250L. The basic rate band is between £12,501 to £50,000 except for those defined as Scottish taxpayers who have a lower basic rate limit as well as...

13 March 2019

The following comments were written on the 13th March 2019 immediately following Philip Hammond’s presentation of the 2019 Spring Statement to Parliament. In theory, the government uses the Spring Statement to respond to the most recent forecasts made by the Office of Budget Responsibility (OBR).


In a nut-shell, the OBR forecast that:



  • the UK economy...
12 March 2019

Capital Allowances are the deductions which allow businesses to secure tax relief for certain capital expenditure. Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable to Corporation Tax.


Interestingly, the Capital Allowance legislation does not specifically define plant and machinery (P&M...

06 March 2019

According to HMRC’s published guidance there are special rules for the taxation of post-cessation receipts and expenses. These provisions apply to professions, vocations and trades.


Tax relief may be available for post-cessation expenses of a trade, although such expenses still have to satisfy the wholly and exclusively test and be revenue in nature to qualify for relief. In...

06 March 2019

Sometimes tax-payers may sell an asset at a loss. If acceptable as capital losses, they can be deducted from Capital Gains made in the same or future years.  As a general rule, if the asset would have been liable to CGT had a gain taken place then the loss should be an allowable deduction. 


These allowable losses are deducted automatically. It is not necessary to make a...

06 March 2019

There are Late Filing Penalties which are designed to encourage companies to file their accounts and reports on time. The penalties were first introduced in 1992 and were significantly increased from February 2009. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. The late filing penalties guide has recently been...

06 March 2019

Companies can use incentive award schemes to encourage their employees in various ways, for example, to sell more of their own goods and services. The award can take various forms including cash, vouchers or other gifts.


Where an employer meets the tax payable on a non-cash incentive award given to a direct employee by entering into a PAYE settlement agreement (PSA), the...

06 March 2019

HMRC has published a press release to remind qualifying couples to claim the Marriage Allowance. The Marriage Allowance allows lower earning couples to share part of their personal tax-free allowance.


The Marriage Allowance is available to married couples and those in a civil partnership where one partner doesn’t pay more than the basic 20% rate of Income Tax and the other...

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