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LITRG finds that while some Budget measures help younger people and those in work, many add to the complexity of the tax system, which is not helpful. Introduction The Chancellor’s aims for his Budget 2016 were to “put the next generation first” and to support small businesses and working people. Some of the measures can certainly be viewed as supporting younger people and allowing those in work to keep more of what they earn. Many of the measures will, however, add to the complexity ... Continue Reading

The success of the business may rest on one individual and insurance (key man insurance) may be taken out to protect against loss of profits resulting from the death, critical illness, accident or injury of that person. This may provide peace of mind.As an added benefit, the premiums on such a policy are allowable in calculating the profits of a company or a partnership (but not a sole trader) if the sole purpose of taking out the insurance is to meet a loss of trading income arising from the loss ... Continue Reading

Under real time information (RTI) employers must report details of pay and deductions to HMRC by means of a full payment submission (FPS) ‘on or before’ the date on which payment is made to the employee. Where no payments are made to employees in the tax month, employers must notify HMRC of this by filing an employer payment summary (EPS).This means that employers submit an FPS to HMRC on or before each payday in the month. Until 5 April 2016, a slight relaxation applies to micro employers ... Continue Reading

A summary of the 2016 Budget, from Grant Thornton Key Figures: Corporation Tax rate from 1 April 2016                            20% 2016/17 personal allowance                                           ... Continue Reading

A property deal is termed as being made at ‘arm's length’ if it is a normal commercial transaction between two or more persons. A transaction not likely to be at arm's length is one undertaken by persons related by blood, adoption or marriage, or who are living together.HMRC requires a valuation of property if the transaction has not been made at ‘arm’s length’. The valuation will determine the market value and that is the figure that will be used as the proceeds amount ... Continue Reading

A company can only pay a dividend if there are sufficient retained profits from which to pay the dividend. There are no such restrictions on the payment of a salary.Salary payments are deductible for corporation tax and there is no restriction on the payments where this creates or augments a loss.In formulating an extraction policy in this situation it is also necessary to take into account the way in which the loss is relieved. Carrying a loss back and setting it against profits of the previous ... Continue Reading

Tips on how to save CGT by Howlader & Co.   Introduction More money is collected by HM Revenue and Customs for Capital Gains Tax than for Inheritance Tax. With that in mind, make sure you are doing all the right things so that you do not hand over more than you should to the tax man.   Particularly as the end of the financial year approaches on 5 April, it is worth reviewing your finances and seeing if there is any way you could reduce the amount of CGT you owe.    What ... Continue Reading

Claiming the marriage allowance can save married couples or civil partners up to £212 of tax for the current tax year, but many couples have not claimed it yet. Background Since 6 April 2015, married couples or civil partners can claim to transfer £1,060 of personal allowance from one spouse or partner to the other, provided that the recipient does not pay tax at a rate higher than basic rate. The main couples to benefit from this are likely to be pensioner couples where one spouse ... Continue Reading

Hefty penalties apply to people who fail to file their Tax Return on time and you could pay as much as £1,300 in penalties if you file your Tax Return six months late.The longer the delay in filing the Return, the higher the penalty that is charged. Paper Returns for 2014/15 must be filed by 31 October 2015 and online Returns must be filed by 31 January 2016.Where a Return is filed after these dates, a penalty is charged.The penalty is £100 if the Return is filed one day late, even if ... Continue Reading

HM Revenue & Customs (HMRC) have issued examples of ‘phishing’ emails, letters, text messages, and bogus calls used by fraudsters to get your personal information. Introduction ‘Phishing’ is a crime and unfortunately most people do not realise it is happening to them until it is too late. The Low Incomes Tax Reform Group (LITRG) is aware that people continue to get caught out by phishing, so here the group tells you more, and what can you do to protect yourself. What ... Continue Reading