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...
Small business VAT scheme
If you are a registered VAT trader and your present turnover is below £150,000 you may be advised to take a look at the VAT Flat Rate Scheme (FRS). FRS users pay VAT as a fixed percentage of their total sales including VAT. You still add 20% VAT to your invoices but you cannot reclaim VAT on purchases or expenses paid. The...
International tax competitiveness
David Gauke, the Exchequer Secretary to the Treasury, recently gave a speech to the Lord Mayor’s Taxation Forum. His presentation focussed on international tax competitiveness, and how the UK’s system fares compared to our overseas competitors. Here’s an extract of his comments: Competitiveness “Since 2010 we’ve cut corporation tax from 28% to 21%. And this time next year it will fall again, to...
Businesses in automotive supply chain to benefit from new grants
Skills and Enterprise Minister Matthew Hancock unveiled £25 million of additional support for businesses to take the lead in improving training for new and current employees. Businesses can submit their proposals from 6 May 2014 and the offer will be open for 12 weeks. Speaking at a UK Commission for Employment and Skills Investment Showcase, the Minister pledged to support businesses...
Second incomes under HMRC microscope
In the first week of April 2014 HMRC issued guidance on its latest tax gathering campaign. The target group this time is UK taxpayers who have second incomes and are not presently declaring these income streams on their tax return. The information published by HMRC about the scope of the campaign is reproduced below: About the Second Incomes Campaign Introduction The Second Incomes Campaign...
David Cameron writes to crown dependencies
Our Prime Minister has written a letter to the UK’s overseas territories and crown dependencies promoting the value of a public register that would show the ultimate owners of companies registered in their jurisdiction. This follows the publication of the “Company ownership: transparency and trust discussion paper” last week. It concluded: “... we plan to proceed with the following policies: establish a publicly...
Cars, business use, and tax considerations
There are a number of situations where care should be taken in the way in which claims are made for the business use of a vehicle, usually a car, which is also used for private purposes. We have listed below a number of issues that business owners and private car users should be aware. If you are self-employed and your business assets...
HMRC may be extending access to taxpayers’ data
The Treasury has confirmed it was proceeding with plans to legislate making aggregated and anonymised data more widely available. In a published document HMRC said: "The government has decided to proceed with the proposal to remove the legal restrictions that currently limit HMRC's ability to share anonymised individual level data for the purpose of research and analysis and deliver public benefits...