Our previous government enacted legislation that removed the personal allowance for certain high income earners. The present government has made no change to this process. Basically, for every £2 your income exceeds £100,000, your personal allowance is reduced by £1. Take, for example, the case of Joe Smith who has income for 2014-15 of £100,000 and a personal tax allowance of...
HMRC’s second incomes campaign
On 9 April 2014 HMRC published details of their latest campaign to encourage taxpayers to declare and pay unpaid tax on second incomes. HMRC will expect settlement of any taxes due four months from the date of declaration of untaxed income sources to HMRC. The types of income highlighted by HMRC include: consultancy fees, for example, providing training organising parties and events providing services like...
VAT online filing relaxed
HMRC has proposed to relax the current online filing of VAT returns. They are going to improve the telephone filing service by making it possible for taxpayers to ring HMRC rather than making an appointment for HMRC to ring them. They are also providing: a dedicated line, and providing a service outside normal working hours. The service will be more...
The end of Private Residence elections?
At present, taxpayers who own more than one property used as residences by them, can make a formal election to determine which of their properties should be considered their private residence for tax purposes. The election needs to be based on the facts – how has each property been used as a private residence - and HMRC has a right to...
Tax Diary June/July 2014
1 June 2014 - Due date for Corporation Tax due for the year ended 31 August 2013. 19 June 2014 - PAYE and NIC deductions due for month ended 5 June 2014. (If you pay your tax electronically the due date is 22 June 2014.) 19 June 2014 - Filing deadline for the CIS300 monthly return for the month ended 5 June...
Tax free gains
There are a number of assets that you can sell at a profit without paying capital gains tax (CGT) on the sale. They include: Any car that is owned personally, and not by a business. Personal possessions worth up to £6,000 each. For example jewellery, paintings or antiques. Stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs. UK...
Charity based tax schemes quashed
HMRC have had recent successes in the courts that have neutralised tax schemes utilising charity tax reliefs. Here’s what they have to say on the GOV.uk website: HM Revenue and Customs (HMRC) successfully challenged the tax avoidance scheme used by Nicholas Green and designed by Afortis Limited as part of an ongoing crackdown on charitable tax relief abuse. The First-tier Tribunal...
Tax anomalies
Institute for Fiscal Studies director, Paul Johnson, recently spoke at the annual Chartered Tax Advisor Address. He pointed out a number of the unnecessary complications and policies that have left the UK tax system more complex and less efficient. “For example: There is a basic rate of income tax of 20%, a higher rate of 40% and a top rate now of...
Why it\’s important to plan
Consider this case study: Bill Smith, a self-employed electrician, purchased a brand new van 15 March 2014 for £18,000. Due to a downturn in the local economy his trading profits for the year to 31 March 2014 were just £9,400. Fortunately, he had secured a number of regular contracts for the following year that should net at least £30,000 in the trading...
NIC employment allowance
HMRC have published further clarification regarding who can, or cannot, claim the new £2,000 a year NIC Employment Allowance. Extracts from the update are set out below: Public authorities Public authorities (such as local authorities, town councils and parish councils) are not eligible for the Employment Allowance unless they have charitable status. Pharmacies Independent pharmacies conducting a business, including over the counter sales...