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Regular readers may recall that I got a little aerated over HMRC’s “Call for evidence on Cash, Tax Evasion and the Hidden Economy” in the 2015 Autumn Statement. HMRC does not like cash. Some may also recall the uproar around 4 years ago, when a Treasury minister was widely reported to have asserted that it was “morally wrong” to pay tradesmen in cash. HMRC has now published its Summary of Reponses received. Astonishingly – and despite HMRC’s emphasising ... Continue Reading

The Income Tax calculation is now so challenging that even the Chancellor appears confused, says TWed Introduction We often hear that tax is to be made simpler. Or that it is to be ‘reformed’. There should be few things simpler than introducing a new tax allowance. And I should say that I think the idea is a good one. But the implementation, frankly, stinks. The resulting legislation is a study in cack-handed stumblebuttedness, as I have previously observed. The March of the Allowances The ... Continue Reading

TWEd points out that the UN has suggested that the UK’s austerity policy is in breach of its Human Rights obligations. Introduction This is a tax website, and readers might be forgiven for wondering why the UN, Human Rights (as a formal title, rather than a broad concept) and the Conservatives’ austerity policies might be relevant. They are relevant because the UN has criticised the UK’s tax policy, in the light of its austerity measures, and the government’s Human Rights ... Continue Reading

TW Ed points out a quite bizarre bit of guidance on the new .GOV website Introduction I recently gave a chat on the 2016 Budget to  roughly 40 accountants. As an aside, I asked for a show of hands on whether or not the audience thought that the new .GOV website was any good. I did not bother to count exactly how many thought it was pants. I did not need to. There was one lone voice: a lady said she thought it was "quite useful". A crumb of comfort to HMRC, perhaps. But then, I am not so ... Continue Reading

If you want to tip restaurant staff, the most efficient way to do it is simply to give them some real money, says TW Ed. Employers Withholding Tips There has been some publicity in the press about employers taking a cut of their employees’ tips – ostensibly to cover transaction charges, breakages, etc. It always surprises me that employers want to get involved in tips, because of the NIC implications and costs of doing so. I thought it might be helpful to set out some of the key points ... Continue Reading

As a general rule entertaining expenses are not deductible. However, there are some types of expenditure for which a deduction is allowed.The main exception is entertaining of employees, the costs of which can be deducted.Promotional events are not treated as entertainment and the costs can be deducted. However, the costs of any food, drink or any other hospitality are not allowable.Example:LMN Ltd is a family company.The company holds a Christmas party each year, which is attended by staff and their ... Continue Reading

Many people are unaware that if a trading loss is claimed against other income, either for the current or previous year, then by election this can be extended to capital gains, resulting in a further refund of taxes.This can be of considerable benefit depending on the circumstances.Example:Steve makes a loss in 2015/16 of £50,000.In 2015/16 he also has income from other sources of £30,000 and chargeable gains (after deducting the annual exemption) of £20,000.His profit for 2016/17 ... Continue Reading

HMRC and DWP are jointly making available material on the New Enterprise Allowance (NEA) which provides money and support to people receiving certain benefits who want to start their own business. Introduction HMRC and the DWP are jointly offering a series of videos, case studies and promotional material on the New Enterprise Allowance (NEA). If you have a good idea for a business, then the NEA could provide you with the money and support you need to get that business off the ground. HMRC and ... Continue Reading

Special rules apply for the claiming of capital allowances on the purchase of ‘integral features’ that comprise the following are relevant to property lettings: solar heating; electrical system, including a lighting system; cold water system; heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling in such a system; lift or escalator. Any item not on this list, even if it forms part of the building, is outside the scope of the ... Continue Reading

Entrepreneurs’ relief provides relief against capital gains tax on qualifying gains made by an individual on the disposal of all or part of the business, the assets in the business after it has stopped trading and shares in a personal trading company. HMRC Helpsheet 275 has more details on the relief.Gains that qualify for entrepreneurs’ relief are taxed at 10% up to the maximum lifetime limit. Since 6 April 2011 the lifetime limit has been £10m.This is a very valuable relief and ... Continue Reading