22/07/2016, by Tax Insider, Tax tip - Business Tax
Business assets may be given to other members of the family. In this situation gift hold-over relief may be claimed. This allows the gain to be ‘held over’ so that the tax on it is deferred until the recipient sells the asset.This generates cash-flow advantages.Example:Nigel has been a sole trader for many years operating in business as a mechanic. He wants to retire and pass the business to his son, so gives him his workshop.
He originally bought the workshop for £20,000 and at ... Continue Reading
20/07/2016, by Tax Insider, Tax tip - General Tax
Taxable profits are normally calculated in accordance with Generally Accepted Accounting Practice. This means that profits are determined on the accruals basis by reference to the amount earned in the year, rather than by reference to cash received and paid out.However, small eligible businesses can elect to use the simpler cash basis to work out taxable profits. An election applies for the tax year for which it is made and for subsequent tax years. The cash basis option is only available to the ... Continue Reading
19/07/2016, by Low Incomes Tax Reform Group, Tax article - PAYE and Payroll Taxes, National Insurance, NICs
There are new rules designed to prevent workers engaged through an umbrella company from benefiting from tax and National Insurance contribution (NIC) relief for home to work travel expenses.
Introduction
New rules from 6 April 2016 have been designed to prevent workers engaged through an employment intermediary, such as agency workers working through an umbrella company, from benefiting from tax and National Insurance contribution (NIC) relief for home to work travel expenses. As this was one ... Continue Reading
18/07/2016, by Low Incomes Tax Reform Group, Tax article - Savings and Investments, Pensions and Retirement
Lower annuity rates may lead to more people taking money out of their pension flexibly – but the tax consequences should be borne in mind.
Background
Annuity rates have plummeted in recent years and continue to fall to all-time lows in the wake of the ‘Brexit’ referendum vote. This may lead to even more people seeking to take money out of their pension flexibly, under the relaxed rules introduced from 6 April 2015. If you are thinking about doing this, be aware of the possible ... Continue Reading
18/07/2016, by Tax Insider, Tax tip - Property Tax
Principal Private Residence relief cannot be claimed for any part of the main residence that is used exclusively for business use. To protect the exemption, any part of the home that is used for business purposes needs to also be available for private use. For example, a room used as an office from which to run the business during the day could also be used by the taxpayer’s children to do their homework in the evening.Where there is exclusive business use, any gain arising on sale must ... Continue Reading
18/07/2016, by Low Incomes Tax Reform Group, Tax article - Savings and Investments, Pensions and Retirement
Lower annuity rates may lead to more people taking money out of their pension flexibly – but the tax consequences should be borne in mind.
Background
Annuity rates have plummeted in recent years and continue to fall to all-time lows in the wake of the ‘Brexit’ referendum vote. This may lead to even more people seeking to take money out of their pension flexibly, under the relaxed rules introduced from 6 April 2015. If you are thinking about doing this, be aware of the possible ... Continue Reading
15/07/2016, by Lee Sharpe, Tax article - VAT & Excise Duties
TW Ed points out that HMRC's best VAT guidance on service charges is to be found in its... employer guidance.
As I have already mentioned, I find HMRC’s guide E24 Tips, Gratuities, Service Charges and Troncs to be most useful, on a topic that is relatively simple in theory, but whose implementation in practice can become quite tortuous, given the wide variety of arrangements that can arise in catering.
It is not perfect; I am not sure I can wholly endorse the assertion ... Continue Reading
15/07/2016, by Tax Insider, Tax tip - Business Tax
Although using fixed rates to calculate deductions saves a lot of work, if actual costs exceed the fixed rate costs it is beneficial to calculate the deduction by reference to the actual costs. This will also allow capital allowances to be claimed. However, on the downside this will mean that records of actual costs will need to be kept.Example:Polly has a top of the range sports car which she uses for business purposes. She keeps a record of actual mileage and servicing costs for a year.She undertakes ... Continue Reading
12/07/2016, by Low Incomes Tax Reform Group, Tax article - General
There is guidance available to help you avoid becoming the victim of scammers pretending to be HMRC.
Introduction
Always be careful when approached by people claiming to be HMRC, either via websites, emails, letters, text messages or phone calls. To help you decide if a contact from HMRC is genuine, guidance is available that gives examples of the different methods fraudsters use to get you to disclose personal information.
Updated guidance
HMRC have recently updated their list of known scammers. ... Continue Reading
11/07/2016, by Tax Insider, Tax tip - Property Tax
Interest on a loan used to buy a property for letting is an allowable expense against the rental income as is interest on a loan taken out for repairs.The costs of obtaining loan finance are also allowable. Dependent on the type of loan obtained, the following are tax deductible:Legal and professional expenses for the negotiation of a loan and preparing documents.Underwriting commissions, brokerage and introduction fees.Land registry fees, search fees and valuers’ fees in connection with the ... Continue Reading
