March 2021 Tax Insider

Included in this month’s artice:

  • Opt-in to VAT deferral new payment scheme by 31 March 2021
  • Personal allowance and higher-rate threshold to increase 0.5%
  • Changes to prompt-payment code aim to end late payments
  • Record number miss self-assessment filing deadline due to COVID-19
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Off-Payroll Working In The Private Sector

Exactly a year later than planned, changes to the off-payroll rules – known as IR35 – will take effect in the private sector next month. The emergence of COVID-19 put paid to the changes affecting large and medium-sized private-sector organisations this time last year, but now it’s for real.

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National Insurance Planning

Our state pension, benefits, health service and more are all funded by National Insurance contributions (NICs).

These are paid in different ways and at different rates by employers, employees and the self-employed, and they can also be paid voluntarily.

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Complying With Your Tax Obligations

It’s not often that HMRC makes exceptions to its tax deadlines or late-filing penalties, but the past year has, as in so many ways, been different.

Between optional deadline deferrals, new payment schemes and temporary reliefs, keeping on top of the changes to the usual tax timetable hasn’t been easy.

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February 2021 Tax Insider

Included in this months article:

  • Hardest-hit businesses offered new government grants of up to £9,000
  • Pre-Christmas furlough extension stems the tide of redundancies
  • Record number of small businesses ‘set to close for good in 2021’
  • COVID-19 sees retail sales slump to a 25-year low in 2020
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2021 Tax Year End Guide

With the ever-changing circumstances of 2020/21 it is hard to imagine that we are already close to the tax year end again.

Feels like we did nothing and went nowhere in the last 12 months!

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Sending goods to the EU — problems and solutions

A number of exporters have faced problems with sending their goods to the EU. Many lorries have been turned back at the border by Border Force and over 150 have incurred fines in Kent for the failure to have complete paperwork. Here we identify the issues that are most frequently found and explain how to get it right first time.

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January 2021 Tax Insider

Included in this month’s article:

  • Annual investment allowance remains at £1m until 2022
  • HMRC issues last reminder for 2019/20 personal tax returns
  • One-year freeze for business rates multiplier in England
  • National living wage to increase alongside age threshold fall
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STRATEGIES FOR EXPORTS AFTER BREXIT

The UK has left the EU, and for British exporters, that presents both opportunity and uncertainty.
While the new trade agreement places no tariffs or quotas on goods traded between the UK and EU from 1 January 2021, it may come with additional costs and bureaucracy as the UK is no longer part of the single market and customs union.

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CLAIMING VAT ON PAYMENT OF THIRD-PARTY LEGAL COSTS

My client has been in dispute regarding a road traffic accident between one of his company’s lorries, and another VAT registered business’ lorry. A small claims court has judged in favour of the third-party business, and has awarded them payment for damages, including reimbursement of their legal costs. The third-party is a partially exempt business, and so they would like reimbursement for the net amount of their costs, plus the VAT – will the third party raise a VAT invoice to us for payment of those costs and can my client claim back any of the VAT?

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GAINS ON UK RESIDENTIAL PROPERTY

Earlier this year, a new rule requiring capital gains tax on UK residential property to be reported and paid to HMRC within 30 days kicked in.

This ushered in another change to tax rules affecting residential property owners, which seeks to raise more tax from the disposal of additional homes and to collect this tax quicker.

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Tax Insider December 2020

INCLUDED IN THIS MONTH’S ARTICLE:

  • VAT-REGISTERED TRADERS URGED TO PREPARE FOR LIFE AFTER BREXIT
  • FURLOUGH SCHEME EXTENDS UK-WIDE UNTIL THE END OF MARCH
  • GOVERNMENT BODY URGES CAPITAL GAINS TAX OVERHAUL
  • SELF-EMPLOYED FEAR TAX RETURNS MAY AFFECT FOURTH SEISS CLAIM
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Covid19 Update : Commentary on 3rd SEISS Claim

We have attached a commentary on the 3rd SEISS claim to help you decide if you should claim. We hope this helps. The claim window opens Monday.

Council Grants

The Council arbitrary grants opened last week – York’s can be found at

Application Form: https://www.york.gov.uk/xfp/form/263

Information: https://www.york.gov.uk/COVID19BusinessGrants     https://www.york.gov.uk/AdditionalRestrictionsGrant

Bounce Back Loan Scheme (BBLS) 

A reminder that the BBLS closes on 31 January 2021, so if you are eligible and have not yet applied, or have scope to extend your original loan, please take urgent action.

Deferral of tax and payment by instalments 

Many people deferred the second instalment of 2019/20 tax which was originally due on 31 July 2020 with deferral to 31 January 2021. HMRC have now announced that you can further delay payment by arranging instalments for any self-assessment tax falling due on 31 January 2021.

If your tax debt is below £30,000 and you have no existing Time To Pay arrangements in place you can apply online using your Government Gateway login. For debts over £30,000 or if you have existing payment arrangements you have to call HMRC on 0300 200 0822 to request instalment payments.

Just worth mentioning that we are seeing quite a few clients having difficulties obtaining mortgages with outstanding tax liabilities so maybe speak to your adviser if you are thinking of re-mortgaging / using time to pay.

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VQOTW: POST BREXIT SUPPLIES OF DIGITAL SERVICES – VAT MOSS

I have a number of clients supplying various kinds of digital /electronically supplied services to businesses and consumers in the EU. Their activities include the supply of downloadable software and Apps, and access to information, photo or videos held online. They currently use the VAT Mini One Stop Shop (VAT MOSS) via their UK VAT registration, to account for VAT on the sales to EU Consumers. How is this going to change after we leave the EU on 1st January 2021?

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TAX INSIDER NOVEMBER 2020

INCLUDED IN THIS MONTH’S ARTICLE:

– GROUP SLAMS LATEST TAXABLE GRANTS FOR THE SELF-EMPLOYED
– IMPROVED JOB SUPPORT SCHEME OPENS FOR EMPLOYERS
– SUNAK HINTS AT SPRING TAX HIKES TO ‘BALANCE THE BOOKS’
– THREE IN FIVE BOUNCE-BACK LOANS MAY NEVER BE REPAID, WATCHDOG CLAIMS

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BUSINESS ASSET DISPOSAL RELIEF

Last March, one of the headline-grabbing measures announced in what will be the only Budget speech of 2020 surrounded what we knew as entrepreneurs’ relief.
The relief was designed to be an incentive for entrepreneurs to start a new business by reducing the amount of capital gains tax payable when the time came to dispose of (or sell) certain business assets, where conditions are met.

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TO FLIP OR NOT TO FLIP YOUR MAIN RESIDENCE?

With property being one of the most reliable investments around in a period of historic low-interest, many money-savvy people these days end up owning additional properties.
They might rent them out, live in them or simply sit on them to sell on when the time is right.

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TAXES TO CONSIDER WHEN MOVING HOME

If you are considering moving home in the second half of 2020/21, you are by no means alone.
In the month leading up to 8 August 2020, 149,000 properties were put on the market – the highest number since before the financial crash in 2008.

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FINANCE COST RELIEF FOR RESIDENTIAL LETS

Historically, landlords have enjoyed generous income and capital gains tax reliefs which helped make residential property an attractive investment for those looking to add to their monthly incomes or provide for retirement. But over the years the Treasury has eroded these reliefs, both income and capital.

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Tax Insider October 2020

Included in this month’s article:

  • Commission set to recommend national living wage freeze
  • Chancellor reveals new support measures amid second-wave fears
  • Tax group calls for extension to the annual investment allowance
  • Fraudulent furlough claims or those paid in error cost £3.5BN
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Types of Employment Relationship

The determination of an individual’s employment status is not always straightforward and there is no single definition. Employment tribunals and HMRC may consider different factors in deciding the issue. This topic explores the distinctions in statute and common law between an employee (who works under a contract of employment), a worker and an independent contractor. This topic examines each of these in turn, including the tests established by common law to determine employment status. It also considers the atypical types of contract that have grown in popularity in recent years, notably part-time and fixed-term contracts, zero-hours contracts, zero-hours contracts, apprentices and individuals employed by employment agencies.

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Furlough fraud penalties confirmed by HMRC

According to reports, the number of fraudulent claims has continued to increase in recent weeks as exploitation of the Coronavirus Job Retention Scheme (the furlough scheme) becomes a new Government threat. HMRC has announced the penalties that can be imposed on the employers who commit furlough fraud. Opeyemi Ogundeji, researcher and employment law writer at Croner-i, explores this in more detail below.

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VQOTW: TEMPORARY REDUCED RATING FOR THE HIRE OF BOATS AND MOTORHOMES

My client’s limited company owns various holiday cottages and they are applying the temporary reduced rate to this income from 15th July 2020 to 12th January 2021. They also own several narrow boats, camper vans and motorhomes which have become very popular this year with more families wanting to holiday in the UK in their own personal space. They have read various articles online and they are a little confused as to whether the reduced rate can be applied to the rental income received from narrow boats, camper vans and motorhomes?

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Tax Insider September 2020

INCLUDED IN THIS MONTH’S ARTICLE:

  • VIDEO-WITNESSED WILLS BECOME LEGAL IN ENGLAND AND WALES
  • BUSINESSES CLAIM LATE PAYMENTS CRISIS DEEPENS DURING LOCKDOWN
  • FURLOUGHED WORKERS GET REDUNDANCY PAY PROTECTION
  • FIRMS ‘UNABLE TO PREPARE’ FOR END OF BREXIT TRANSITION PERIOD
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GET ON TOP OF YOUR TAX RETURN

With everything that’s happened so far this year, it might be easy to forget your obligations to file a tax return for 2019/20 by midnight on 31 January 2021.
The coronavirus pandemic and subsequent economic crisis has caused chaos with businesses up and down the country, most of which closed entirely during April 2020.

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HOW MUCH IS YOUR BUSINESS WORTH?

Whether you’re making exit plans or you want to give confidence to investors, knowing the value of your business is a vital step. From the inside, it might be hard to say what that value is. You’ve put long hours of hard work into building your business from the ground up, but what does that mean to a buyer or investor in monetary terms?

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VQOTW: VAT CHANGE OF RATE AND IMPACT ON VOUCHERS

My client operates a luxury hotel in the UK. They have recently reopened and will now recommence selling face value gift vouchers. The holder can redeem their vouchers against room reservations, dining at the restaurant/bar and when using the leisure and spa facilities. The restaurant does not offer a takeaway service. Historically the client has always charged VAT at the standard rate on all their supplies. Could you please clarify the impact of the temporary rate change on the issue of face value vouchers. When will the VAT be due and at which rate?

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TQOTW: MAIN RESIDENCE

Several years ago I separated from my wife but the divorce has now gone through. I still own half of the marital home but I have been living in rented accommodation since the separation. Can I claim that my old marital home is still my main residence for capital gains tax purposes when it is sold?

I intend to remarry and my girlfriend wants to give me a share of her current home after we are married. Apparently this was let for a time before my girlfriend made it her home. Would there be any capital gains tax advantage in doing this?

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VQOTW: Self supply car non qualifying use

My client is a limited company operating a self-drive car hire business. I understand that because the cars are intended to be used primarily for self-drive hire, the vehicles are excepted from the block on recovery of input tax, and my client has recovered VAT in full on the purchase of each car.

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CORPORATE TAX PLANNING IN 2020/21

Even among those who follow good tax-planning practice and maintain forecasts running several years forward, it is unlikely that many foresaw the dramatic end to the 2019/20 tax year.

With the arrival of COVID-19 and the subsequent lockdown, the economy shrank a record 20.4% in April 2020, and 19.1% in the three months to May 2020.

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POST-COVID-19 SUPPORT FOR BUSINESSES

Since the Budget in March, businesses have seen a stream of different support schemes and policies announced to help them manage the financial impacts of the coronavirus lockdown.

When Chancellor Rishi Sunak stood in the House of Commons again on 8 July, it was in the context of the gradual reopening of the economy, with several lockdown restrictions having been lowered on 4 July.

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Tax Insider August 2020

INCLUDED IN THIS MONTHS ARTICLE:

  • CAPITAL GAINS TAX UNDER REVIEW AS TREASURY CONSIDERS OVERHAUL
  • APPLICATIONS OPEN FOR SECOND PHASE OF SELF-EMPLOYED INCOME SUPPORT
  • MAKING TAX DIGITAL TO ‘APPLY TO ALL VAT-REGISTERED TRADERS BY 2022/23’
  • MPS: LET OPTED-OUT WORKERS RE-ENROL BACK INTO WORKPLACE PENSIONS EARLY
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COVID-19 Update – All things Furloughed

The Coronavirus Job Retention Scheme will close on 31 October 2020. HMRC have now issued guidance on how the flexible furloughing will work. I suggest a strong drink and print out the attached and go into a quiet room for several hours to digest!

A quick summary of the position over the next few months follows but the detailed Flexible furlough document attached is how to make the claims and what it involves!

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Covid19 Update VAT rate change to 5%

Please find enclosed our guidelines for the Vat change today relating to the hospitality, attraction and accommodation supply sectors. Remember Supply is the main word. It is fairly clear cut for most businesses but become Grey for those on the fringes of these sectors. If you supply these industries, in most cases, nothing has changed.

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TRACING LOST PENSION PLANS

Helping you plan for your retirement is one of our core services, ensuring you are prepared when the time comes to call it a day.

With medical advances enabling more people to live for longer, the average person who retires at 65 lives for another 20 years.

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TAX IMPLICATIONS OF PROVIDING COMPANY CARS

Offering a company car as a benefit can be a valuable and attractive perk to any valued employee.

Unfortunately, it is not necessarily a tax-free perk and it may be liable for PAYE because HMRC considers the private use of a company car to be a benefit-in-kind.

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