Background The machinery of the tax system is largely contained in a law which is now almost 50 years old – the Taxes Management Act 1970 (TMA 1970) – and was written before the automation of many of HM Revenue & Customs (HMRC) functions. This includes the rules surrounding the issuing of a notice to file a tax return and the issuing of automatic penalties. The...
Higher National Living Wage rates
Businesses that have a significant number of workers who are paid at the National Minimum Wage or National Living Wage (NLW) rates should probably read the recent independent report that suggests rates of NLW could rise, as internationally, there is evident that realistic rises have little impact on employment levels but do have a positive impact on the take home...
Employing someone at home
Believe it or not, HMRC will consider you are the employer of a nanny, housekeeper, gardener or anyone else who works in your home if both the following criteria apply: you hire them, and they are not self-employed or paid through an agency. If these criteria do apply this means you have certain responsibilities, like meeting the employee’s rights and deducting the right...
Negligible value claims
Occasionally, the tax system in the UK throws up an issue that does not make sense. For example, how can you create a tax loss for capital gains tax (CGT) purposes without disposing of the asset? After all, CGT applies when an asset subject to CGT is sold or otherwise disposed. If you sell an asset for more than you acquire...
Taxing aspects of electric cars for your business
This article does not cover the risks of owning an electric car, depreciation rates etc. Instead it discusses the tax implications if you buy an electric car for business purposes. As electric cars have zero carbon emissions for tax purposes it should be possible to claim what is called a “first year allowance” when the car is purchased from new. Effectively,...
Gifts and Inheritance Tax
When you make a gift to third parties you are potentially transferring part of your estate and a life-time charge to IHT may be applied. However, in most cases you will not need to open your cheque book as there are a number of exemptions that may cover your intended gifts. The current gift exemptions are reproduced below. You can give away £3,000...
Working after State Pension age
It is fine to keep working past your State Retirement Age unless your employment is subject to retirement at a compulsory retirement age. If your employer does this, they must give a good reason, for example: the job requires certain physical abilities (e.g. in the construction industry) or the job has an age limit set by law (e.g. the fire...
Selling shares?
As a general rule, if you sell shares for more than you paid for them, any profit you make will be chargeable to Capital Gains Tax (CGT). Shares and investments you may need to pay tax on include: shares that are not in an ISA or PEP units in a unit trust certain bonds (not including Premium Bonds and Qualifying Corporate Bonds). CGT will not...
Tax Diary November/December 2019
1 November 2019 - Due date for Corporation Tax due for the year ended 31 January 2019. 19 November 2019 - PAYE and NIC deductions due for the month ended 5 November 2019. (If you pay your tax electronically the due date is 22 November 2019.) 19 November 2019 - Filing deadline for the CIS300 monthly return for the month ended 5...
Muras Matters: Help to Buy ISA Closing
Background The Help to Buy ISA was introduced in December 2015 and was aimed at helping first-time buyers save towards the purchase of a home. The government contributes £50 for every £200 put into the ISA up to a maximum of £15,000 (including the government’s share). As such it offers a relatively easy and tax-free form of helping first-time buyers build a deposit. The option to...