News

UK Infrastructure Bank set-up

19/05/2022

The UK Infrastructure Bank Bill, announced as part of the measures in the Queen’s speech, represents the final step in setting up the UK Infrastructure Bank as an operationally independent institution. The new Bank officially opened for business in June 2021 but the Bill will remove legal obstacles so the Bank can lend directly to local

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Free company information

19/05/2022

There is a significant amount of information about companies that can be obtained from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and storing company information and making company information available to the public. Much of this information is available at no cost. This

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VAT – discounts and free gifts

19/05/2022

When you issue an invoice to your customer, you must ensure that you charge the correct rate of VAT. Whilst most businesses in the UK charge VAT at the standard rate of 20% there are a number of different VAT rates and exemptions that you should be aware of. In the UK, there are three separate VAT rates, the standard rate @ 20%, the

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Intrastat – trading goods with EU

19/05/2022

Intrastat declarations were historically used to collect information on the movement of goods from the UK to other EU countries and vice versa. Any business that exceeded the exemption threshold for either arrivals or dispatches of goods were obliged to submit monthly returns. This changed following Brexit and there were further changes

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Corporation Tax – reminder HMRC contact details

19/05/2022

HMRC can be called by phone on 0300 200 3410 for help with general Corporation Tax enquiries. You will need your 10-digit Unique Tax Reference (UTR) when calling HMRC and this reference number cannot be provided over the phone. The UTR is the primary identifier for a company and should be used whenever HMRC is contacted. The number can

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Access to cash protection increased

18/05/2022

The new Financial Services and Markets Bill, announced as part of the Queen's speech, will provide increased protections for those still dealing with cash. Access to cash remains vital for many people across the UK, including the more vulnerable in society. The government has committed to preserving the use of cash as an option even as

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Reminder to look out for tax credit renewal packs

12/05/2022

HMRC is currently sending the annual tax credit renewal packs to some 2.1 million tax credit claimants and is encouraging recipients to renew their tax credits claim online. HMRC started writing to taxpayers at the end of April and expects all packs to be with recipients by 27 May 2022. A renewal is required if the pack has a red line

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Holiday lets occupancy check

12/05/2022

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes. In order to qualify as a furnished holiday letting, the following criteria need to be met: The property must be let on a commercial basis with a view to the realisation of profits. Second

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When you are required to register for PAYE

12/05/2022

There are a multitude of rules that new businesses must follow when they start employing staff for the first time. These include ensuring registering for PAYE as an employer with HMRC. This must be done before the first payday and this process must even be completed by directors of a limited company who are employed by the company. There

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ISAs 2022-23

12/05/2022

The maximum amount that can be invested in an ISA in the current (2022-23) tax year is £20,000. ISA’s are a valuable and flexible relief and should be considered as an option for most investors. An ISA is a tax-exempt savings account available to UK residents. Whilst the amount invested in an ISA does not benefit from tax relief the

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Structures and Buildings Allowances

12/05/2022

The Structures and Buildings Allowances (SBA) allows for tax relief on qualifying capital expenditure on new non-residential structures and buildings. The relief applies to the qualifying costs of building and renovating commercial structures. The relief was introduced in October 2018 at an annual capital allowance rate of 2% on a

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Income excluded from a property business

12/05/2022

HMRC publishes a list of income streams that are excluded from a UK property business. The list includes fishing concerns, hotels and guest houses, tied premises, caravan sites, lodgers and tenants in your own home, extra services to tenants and letting surplus trade accommodation. In most cases the income from these activities will be

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Mortgage interest on rented property

05/05/2022

Under new rules that came into effect from April 2017 the tax relief on mortgage costs for residential landlords was restricted to the basic rate of tax. The finance costs restriction was phased in over a number of years and is now fully in place since 6 April 2020. This means that all finance costs, such as mortgage interest on rented

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Builders – when you may not have to charge VAT

05/05/2022

VAT for most work on houses and flats by builders and similar trades, like plumbers, plasterers and carpenters, is charged at the standard rate of 20%. However, there are a number of exceptions where special VAT rules apply and a reduced or zero rate of VAT may apply. A builder may not have to charge VAT (zero rate) on some types of

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Tax benefits of switching to electric cars

05/05/2022

There are many benefits to encourage the use of electric cars including lower running costs, the environmental advantages and reduced noise pollution. There are also tax benefits to encourage the purchase of electric cars. We have listed some of these benefits below. The benefit-in-kind (BIK) due on company cars can be significantly

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Writing off a director’s loan

05/05/2022

An overdrawn director's loan account is created when a director (or other close family member) 'borrows' money from their company. Many companies, particularly 'close' private companies, pay for personal expenses of directors using company funds. Where these payments do not form part of a director’s remuneration, they are usually posted

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Exchange of joint interests

05/05/2022

HMRC’s internal manuals consider the reliefs available where there is an exchange of joint interests in land. The manuals state that: The exchange of interests in land which are jointly owned by two or more persons constitutes a disposal by each owner for Capital Gains Tax purposes. In some cases, the exchange is made simply to

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IHT business asset relief

05/05/2022

There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone who had died. One of these reliefs is known as Business Relief and is a valuable tax relief for taxpayers with business interests, offering either 50% or 100% relief from IHT on the value of the business assets if certain

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Reclaiming VAT

28/04/2022

For most fully taxable businesses, VAT can be reclaimed on goods and services used in the course and furtherance of their business activities. This means that businesses must consider where there is personal or private use of goods or services bought for the business and can usually only reclaim the business proportion of any VAT

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Tell HMRC if your company is dormant

28/04/2022

If a company has stopped trading and has no other income, then the company is usually classed as dormant for Corporation Tax purposes. A company is usually dormant for Corporation Tax if it: has stopped trading and has no other income, for example investments is a new limited company that hasn’t started trading is an unincorporated

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PAYE settlement agreements

28/04/2022

A PAYE Settlement Agreement (PSA) allows employers to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for their employees. The expenses or benefits included in a PSA must belong to one of the following categories; minor - e.g., a small birthday

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Accountancy expenses arising out of an enquiry

28/04/2022

HMRC’s internal manual offer some revealing insights as to the treatment of accountancy expenses arising out of an enquiry. As a matter of course, HMRC allows companies to claim a tax deduction for normal accountancy expenses incurred in preparing accounts or accounts information and in assisting with preparing Self-Assessment tax

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Check which EORI number is required

28/04/2022

The Economic Operators' Registration and Identification System (EORI) was setup as a European Union (EU) wide initiative that helps businesses communicate with customs officials when they are importing and exporting goods. The EORI allows businesses to provide pre-arrival/pre-departure information for goods. Following the end of the

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Tax Diary May/June 2022

26/04/2022

1 May 2022 - Due date for corporation tax due for the year ended 30 July 2021. 19 May 2022 - PAYE and NIC deductions due for month ended 5 May 2022. (If you pay your tax electronically the due date is 22 May 2022). 19 May 2022 - Filing deadline for the CIS300 monthly return for the month ended 5 May 2022. 19 May 2022 - CIS tax

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Paying staff on jury service

26/04/2022

If you have staff that have been called up to serve on a jury, then you must allow them the necessary time off. You can ask them to request to delay their jury service if their absence would seriously harm your business. Your employee would need to agree to this request and would need to provide written evidence explaining why a delay has

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Asset disposals not subject to Capital Gains Tax

21/04/2022

Capital Gains Tax (CGT) is a tax on the profit made from selling certain assets such as property, shares or other investments. CGT is usually charged at a flat rate of 20% and applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain, they may only be subject to CGT at a

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Dividend tax increase from 6 April 2022

21/04/2022

A reminder that the 1.25% increase in NIC contributions that came into effect on 6 April 2022 are reflected in a similar increase in the tax charge on dividends. This means that the dividend tax rates for 2022-23 are as follows (all rates having increased by 1.25% over the 2021-22 rates): Basic rate taxpayers will pay tax on

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Tax-free mileage expenses

21/04/2022

If you use your own vehicle for business journeys, then you may be able to claim a tax-free allowance from your employer known as a Mileage Allowance Payment or MAP. The allowance is paid when employees use their own car, van, motorcycle or bike for work purposes. It is important to note that this tax-free allowance is not available for

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Basic principles of domicile

21/04/2022

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong. However, actually determining domicile status can be complex. In fact, HMRC’s guidance states that domicile cannot be defined precisely, but the concept rests on various basic principles. Every individual must have a

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Planning for Basis Period reform

21/04/2022

The basis period reforms will change the way trading income is allocated to tax years. The reforms will change the basis period from a ‘current year basis’ to a ‘tax year basis’. Under the current rules there can be overlapping basis periods, which charge tax on profits twice and generate corresponding ‘overlap relief’ which is usually

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