31/08/2016, by Tax Insider, Tax tip - Business Tax
Entitlement to the state pension and contributory benefits is contingent on having paid sufficient National Insurance contributions. Fortunately it is possible to achieve this for zero cost.Persons with earnings between the lower earnings limit (£112 per week for 2015/16) and the primary earnings threshold (£155 per week for 2015/16) are treated as paying NICs at a zero rate. These notional contributions preserve entitlement to the state pension and contributory benefits. For 2015/16 ... Continue Reading
22/08/2016, by Tax Insider, Tax tip - Property Tax
DifferenceAnyone buying property to let out on a long-term basis will most likely be deemed an investor, whereas someone buying to refurbish then sell, whether resulting in a gain or not, may be deemed to be dealing or trading in properties and be taxed accordingly. The two main factors to consider are intention and whether the transaction has the characteristics of being a trade.Capital/investment transactionUnless losses are incurred on sale, it is usually preferable for a transaction to be of ... Continue Reading
19/08/2016, by Tax Insider, Tax tip - Business Tax
Most businesses incur travel expenses and these can be significant. It is therefore important that you deduct allowable travel expenses when computing your profits.The rules relating to travel expenses are complicated and the Government has announced that they are going to review the rules. In the case of a sole trader or partnership, if the business is based away from home, the costs of travelling to the business base are not deductible. Costs of commuting are not allowable as these are incurred ... Continue Reading
17/08/2016, by Tax Insider, Tax tip - General Tax
Your tax code determines how much tax is deducted under PAYE. You should always check that your tax code is correct as errors may result in too much or too little tax being deducted. Revised codes are sent out automatically after a Tax Return has been submitted and these essentially assume that taxpayer’s circumstances remain the same. This may not be the case. For example if you declare untaxed interest on your Tax Return, the auto coding process will assume that you have this income in the ... Continue Reading
16/08/2016, by Low Incomes Tax Reform Group, Tax article - General
The tax credits renewals deadline has passed. If you missed it, all is not lost but you need to act quickly. Here’s what to do.
Introduction
For the 2015/16 renewals cycle, claimants had until 31 July 2016 to contact HMRC to renew their tax credits awards. This applies to claimants who received an annual declaration form as well as an annual review form.
Each year, tax credits claimants receive a renewal pack from HMRC. The renewals process does two things: firstly, it finalises the claim ... Continue Reading
15/08/2016, by Lee Sharpe, Tax news - PAYE and Payroll Taxes, National Insurance, NICs
HMRC has for some time expressed concern about the amount of tax and NIC it is losing out on, because employers are offering cost-effective alternatives to cash salary as part of overall remuneration packages. It warned in the 2015 Autumn Statement that it would be monitoring the perceived increase in the use of salary sacrifice, and has now launched a Consultation Document
Consultation on Salary Sacrifice for the Provision of Benefits in Kind
HMRC now proposes to apply Income Tax and Class ... Continue Reading
15/08/2016, by Lee Sharpe, Tax news - Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
HMRC Online appears incorrectly to be stating that all Trusts have received notices to file 2016 Trust tax returns, even where no Trust tax returns have been filed for several years.
We have advised HMRC that, in cases that we are aware of, all agents' Trust tax clients are noted on HMRC's Online SA facility as having been issued wih Notices to File 2015/16 Trust tax returns, even if marked dormant and with no Trust tax returns having been submitted for almost a decade (or any actual Notices to ... Continue Reading
15/08/2016, by Lee Sharpe, Tax article - Property Taxation
The following is a review of the new legislation in Finance Bill 2016 in relation to the restriction of tax relief for mortgage interest and related finance costs, for landlords of residential properties. It should be read in conjunction with the previous article:
New Residential Mortgage Interest Relief Restriction: Review of Principles and Legislation
It seems on first (and second) reading that the government has adequately addressed the concerns raised in earlier posts, e-mails, etc. The offending ... Continue Reading
08/08/2016, by Tax Insider, Tax tip - Property Tax
Under the ‘Non-Resident Landlord Scheme’ (NRLS) where the deductible expenses exceed rental income for any quarter the excess expenses are:carried back for offset against rental income paid to the same landlord for previous quarters in the same tax year, on a ‘last in, first out’ basis; thencarried forward for offset against future quarters’ net rental profits.RepaymentsCarry back will result in a repayment of tax for the previous quarter in the tax year – the ... Continue Reading
05/08/2016, by Tax Insider, Tax tip - Business Tax
Where there are several shareholders, for 2015/16 profits can be extracted tax-free by paying dividends to each up to the basic rate limit. Where shareholders have other income, the best result is obtained if the gross dividend is equal to the unused portion of their basic rate band.However, unlike salary there is no flexibility to choose how much to pay each shareholder as dividends must be paid in relation to shareholdings. However, this restriction can be overcome by having different classes of ... Continue Reading
