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LITRG highlights the tax and related problems with Access to Work - a funding programme to assist disabled people in a work environment.   Access to Work and potential tax issues Access to Work is a specialist disability programme, funded by the Department for Work and Pensions (DWP), to support disabled people overcome work-related obstacles resulting from their disability. Tax issues arise where the funding is used to buy in the services of a worker to support a disabled person ... Continue Reading

LITRG explains what to do if your employer pays you less than the HMRC-approved business mileage rates, particularly noting a change in the rates from 6 April 2011.   Introduction Employees needing to use their own vehicle  to carry out the duties of their job often find that their employer reimburses them on a “pence per mile” basis. In order to avoid employers reporting expense payments for qualifying business travel to HMRC, against which employees would have to ... Continue Reading

HM Revenue & Customs has today announced that it will refund the Class 1A NI Contributions assessed on holiday homes bought through a company - in cases where (broadly) the company has been created in order to buy the holiday home. Many readers will remember that 'personal' ownership - particularly by foreigners - of property in some of the former Eastern Bloc countries was either difficult or impossible. For this and other reasons, many UK individuals, families, etc., incorporated companies ... Continue Reading

LITRG tells us about its new website – Revenuebenefits – which is aimed at advisers and provides reference material on tax credits and other HMRC-administered benefits.   Tax and tax credits complexities Taxes are complex, but tax credits are even more so. There is wide array of advisers who do not deal with HMRC on a daily basis, but who need to give appropriate and accurate advice to the millions of vulnerable people who are entitled to benefits which are administered ... Continue Reading

Peter Arrowsmith FCA highlights a selection of NIC matters, and provides a tip for employers who have taken advantage of the NIC holiday for new businesses. NIC Bill The Bill had its third reading and was passed by the House of Lords on 22 March. It subsequently received Royal Assent on the same day, bringing into effect next week's 1% rate increase across the board and at last giving legality to the 'NIC Holiday' scheme for new businesses. Limits Changing Too Supplementing the ... Continue Reading

In the first of two articles which looks at joint property ownership of rental properties (excluding furnished holiday lets), Malcolm Finney looks at joint ownership between spouses. What Does "Joint Ownership" Mean for Tax Purposes? The term “joint ownership” refers to “beneficial” not “legal” joint ownership; tax consequences follow beneficial ownership. Rates of Income Tax The renting out of property produces rental income which is subject ... Continue Reading

HM Revenue & Customs (HMRC) has issued an alert to employers about key PAYE changes coming in this spring. The changes affect Employer Annual Returns and starter and leaver PAYE forms:  From April, employers with fewer than 50 employees must now send starter and leaver forms – P45s, P46s and similar pension information – online to HMRC. All employers who send their Employer Annual Return to HMRC after the 19 May filing deadline will now receive a late-filing penalty. ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP looks at overdrawn loan account waivers and the potential NIC implications. Introduction It is not uncommon in owner-managed companies for directors’ overdrawn loan accounts to be waived. For Income Tax purposes, the write-off of a loan falls to be treated as earnings (ITEPA 2003 s 188). However, where loans to participators of close companies are waived, tax is chargeable on the participator under ITTOIA 2005 s 415). This treatment takes precedence ... Continue Reading

LITRG comments on the proposed use of HMRC tax data in calculating child maintenance payments and says that tax and tax credits guidance is needed for separating couples.   Introduction The Child Maintenance and Other Payments Act 2008 heralded changes to child support, yet to come into effect. Further amendments to the law are now being sought, with detailed regulations expected later this year. But so far LITRG has seen little to allay its fears that basing the new system on tax ... Continue Reading

HM Revenue & Customs has announced in HM Revenue & Customs Brief 15/11 that it will be taking a more lenient approach when dealing with 'timing difference errors' - i.e., where there's a difference on one return that has, or will be, offset by an opposite adjustment in a later return. Typical examples will be differences on closing stock figures, because if the closing stock valuation is low by £10,000 in one year, it will only mean that the opening stock valuation in the ... Continue Reading