18/05/2016, by Tax Insider, Tax tip - Business Tax
Businesses can claim immediate relief for capital expenditure on most items of plant and machinery by means of the annual investment allowance (AIA). Capital expenditure up to the AIA limit qualifies for a 100% deduction against profits. The AIA limit is £500,000 from 1 April 2014 for corporation tax purposes and 6 April 2014 for income tax purposes until 31 December 2015. From 1 January 2016 it is £200,000. Transitional rules apply where an accounting period spans 1 January 2016.Once ... Continue Reading
16/05/2016, by Tax Insider, Tax tip - Property Tax
The ‘Pre-Owned Assets Tax’ (POAT) is an income tax charge levied on the ‘benefit’ earned on any property that has been given away (or sold for less than its full value at any time since 18 March 1986) but of which the owner still enjoys the use. The charge also applies if the owner gives someone the funds to purchase a property, or an interest in it, or owned another property which was sold and the proceeds gifted to buy the property. The charge will not apply if there is ... Continue Reading
13/05/2016, by Tax Insider, Tax tip - Business Tax
Losses made in the opening years of a business can be carried back against the total income of the preceding three tax years.However, this is not the only option for relieving early year losses. The loss can also be set against other income for the year in which the loss was incurred or the previous tax year or carried forward against future trading profits.The basic aim of loss relief planning is to obtain relief at the highest marginal rate of tax and earlier rather than later. The decision as ... Continue Reading
12/05/2016, by Low Incomes Tax Reform Group, Tax article - General
The LITRG has produced a printable guide and website material to assist serving personnel, veterans, their families and advisers to check that they are paying the correct amount of tax.
Introduction
This guide is part of a wider HMRC project with the Low Incomes Tax Reform Group (LITRG) and aims to give better taxation advice to this group of taxpayers.
The Armed Forces project
Due to the nature of their work, armed forces personnel are paid special allowances, some of which are taxable while ... Continue Reading
11/05/2016, by Tax Insider, Tax tip - General Tax
If you do not fill in a Tax Return you need to claim relief for expenses incurred in relation to your employment on form P87. If you do not claim the relief, you will miss out. The claim must be made within four years of the end of the tax year.Form P87 is available to download from the GOV.UK website at www.gov.uk/government/publications/income-tax-tax-relief-for-expenses-of-employment-p87.Example:Chris is an employee. Each year he pays professional fees and subscriptions of £700 relevant ... Continue Reading
09/05/2016, by Tax Insider, Tax tip - Property Tax
The ‘Non-Resident Landlord Scheme’ (NRLS) is a scheme for taxing the UK rental income of non-resident landlords. Usually basic rate tax is deducted from the net rent collected by an agent (less expenses paid) or paid by a tenant unless the agent/tenant has authority from HMRC to pay the landlord gross.‘Non-resident landlords’ under this scheme are persons (individuals, companies, trustees) who are in receipt of UK rental income, and whose ‘usual place of abode’ ... Continue Reading
04/05/2016, by Tax Insider, Tax tip - General Tax
Under the Approved Mileage Allowance Payments (AMAP) Scheme employers can pay employees tax-free mileage rates when they use their own car for business. Provided that the amounts paid do not exceed the rates set by HMRC, no tax liability arises and there is nothing to report on the P11D.However, many employees are unaware that if their employer pays them at a rate that is less than the approved rate they can claim a tax deduction for the shortfall. The approved rates for 2015/16 for cars and vans ... Continue Reading
29/04/2016, by Tax Insider, Tax tip - Business Tax
You can tailor your capital allowances claim to suit your circumstances. It is not a case of claiming either the AIA or WDA, nor is it necessary to use up any remaining AIA before claiming WDAs on the balance. Further, there is generally no requirement to claim capital allowances at all. By mixing the claims you can claim the allowances that give the best tax result.Example:Adam is a sole trader.In the year to 31 March 2016 he incurs capital expenditure of £17,000. He has unrelieved expenditure ... Continue Reading
28/04/2016, by Low Incomes Tax Reform Group, Tax article - General
LITRG urges anyone who has not yet filed their online self-assessment tax return for the year ended 5 April 2015 to do so by 30 April or risk more penalties.
Background on overdue tax returns
HMRC’s next round of late filing fines kick in on 1 May 2016, when the tax authority is allowed to charge taxpayers with overdue tax returns £10 per day until the return is submitted. These fines are on top of the £100 fixed penalty that HMRC will already have charged people for missing the ... Continue Reading
27/04/2016, by Tax Insider, Tax tip - General Tax
It is always worth bearing in mind that when you sell certain types of business asset, it is possible to postpone the gain by reinvesting in a qualifying asset for roll-over relief purposes.This is quite a restricted relief these days and care should be taken before relying on the availability of the relief.The best feature about this relief is that you can claim it on more than one new purchase, and can include assets purchased one year before to three years after the date of sale of the original ... Continue Reading
