29/01/2016, by Tax Insider, Tax tip - Business Tax
Income tax and capital gains tax reinvestment relief is available to investors in the Seed Enterprise Investment Scheme (SEIS). Income tax relief is available to investors who subscribe for shares in a qualifying SEIS company. Shares must be held for three years. Tax relief is given at a rate of 50%. The maximum annual investment is £100,000. Relief is not available if the investor is connected with the company. The company can receive up to £150,000 in SEIS investment.Capital gains tax ... Continue Reading
27/01/2016, by Tax Insider, Tax tip - General Tax
As highlighted in Tip 34 PAYE should be paid on time each month to avoid late payment penalties.However, to avoid getting caught out by bank holidays and weekends, ensure that payment is made early when the normal payment day falls on a bank holiday or a weekend.When this happens, the payment (or in the case of electronic payments, cleared funds) must reach HMRC by the last working day before the bank holiday or weekend on which the normal payment day falls.Where payment is made electronically, payment ... Continue Reading
25/01/2016, by Tax Insider, Tax tip - Property Tax
The tax rules state that the purchaser’s entitlement to capital allowances in relation to commercial property are restricted to the disposal value that the vendor of the property brought into account, even if this was not the immediate past owner. Furthermore, it is the purchaser’s responsibility to obtain and provide details of prior claims and disposal values, which might prove difficult if the original owner has ceased trading or if records are no longer available.It is also a condition ... Continue Reading
22/01/2016, by Tax Insider, Tax tip - Business Tax
Special rules apply to short life assets. If the expected useful life of the asset is no more than eight years from the end of the chargeable period in which the expenditure was incurred, an election can be made to treat the asset as a short life asset.Where such an election is made, the asset is given its own pool. Writing down allowances are given at the main pool rate of 18%. When the asset is sold, balancing allowances or charges are determined by reference to the written down value of the single ... Continue Reading
20/01/2016, by Tax Insider, Tax tip - General Tax
You can save yourself a considerable amount of time, effort and expense by finding out whether you still need to complete a Return after changes in your circumstances.HMRC are keen to reduce their workload in processing self-assessment Returns where they are no longer required and you should review this after any change of circumstances.To check if you need to complete a Tax Return, visit the GOV.UK website at www.gov.uk/check-if-you-need-a-tax-return.Example:Ryan was self-employed for a few years, ... Continue Reading
18/01/2016, by Tax Insider, Tax tip - Property Tax
HMRC do not have the power to tell a landlord how much to charge for the rental of their property but they can restrict the amount of expenses claimed against any rent that is paid. HMRC take the view that unless the landlord charges a full market rent for a property and imposes normal market lease conditions, it is unlikely that the expenses of the property are incurred ‘wholly and exclusively’, which is required to arrive at rental business profits. However, HMRC are prepared to allow ... Continue Reading
14/01/2016, by Low Incomes Tax Reform Group, Tax article - HMRC Administration, Practice & Methods
LITRG warns that compelling small businesses to submit information digitally will result in previously compliant individuals who find themselves unable to satisfy their new obligations becoming involuntarily non-compliant.
Introduction
A Parliamentary petition calling on the Government to scrap plans to make small businesses and self-employed individuals report their tax data quarterly through their digital tax accounts has gathered more than 106,000 signatures in its first three weeks.
LITRG ... Continue Reading
13/01/2016, by Tax Insider, Tax tip - General Tax
Due to the way the tax rules work, it is possible to have a deduction for a bonus declared in a set of company accounts and pay this up to nine months after the year-end.This could be in a different tax year where other income is lower and this would result in a lower tax liability. Alternatively a deferral of the timing of the tax payment could be made.Example:Jane is preparing the company accounts for XYZ Ltd, her own limited company.The company’s year-end is 31 December 2014. She declares ... Continue Reading
11/01/2016, by Tax Insider, Tax tip - Property Tax
If a gift of property is made to a non-spouse/civil partner, capital gains tax (CGT) is charged on the donor as if the market value had actually been received. However, in a situation where joint owners of property wish to become sole owners of part, then provided no money changes hands, a form of ‘reinvestment relief’ can be applied and no CGT charged. The joint owners are treated as if each had sold their share for its market value and then the proceeds ‘reinvested’ in acquiring ... Continue Reading
08/01/2016, by Tax Insider, Tax tip - Business Tax
Smaller VAT-registered businesses can save a significant amount of work by joining the flat rate scheme. The scheme can be used by businesses that have taxable turnover of less than £150,000. Under the scheme VAT is calculated as a percentage of VAT-inclusive turnover. The percentage depends on the nature of the business (see www.gov.uk/vat-flat-rate-scheme/vat-flat-rates).A discount of 1% on the flat rate percentage is given to businesses in their first year of VAT registration, saving them ... Continue Reading
