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Class 1 NICs zero rate band

20 Jul, 2017

Many director shareholders take a minimum salary and any balance of remuneration as dividends. This tends to reduce National Insurance Contributions (NICs), and in some case income tax. The planning strategy is to pay a salary at a level that qualifies the director for State benefits, including the State Pension, but does not involve payment of any NICs.
 

Making Tax Digital – common sense prevails

20 Jul, 2017

A new timetable for the introduction of Making Tax Digital (MTD) has been announced. The new regime was due to start from April 2018, but was delayed by the snap general election earlier this year. The government now appears to have listened to concerns that the roll-out of the MTD was moving too fast. The original proposals would have required most businesses to upload quarterly figures to HMRC.

Under the new implementation plan these obligations have been substantially changed. They are:

New Finance Bill to be published

20 Jul, 2017

The government has confirmed that a new Finance Bill will be introduced as soon as possible after the summer recess. The House of Commons returns to Westminster on 5 September 2017.

In a joint press release from HMRC and HM Treasury we are told that the new Finance Bill will legislate for all policies that were included in the pre-election Finance Bill but not included in the Act that was rushed through Parliament before the snap election.

Gift Aid donations only available to taxpayers

20 Jul, 2017

The Gift Aid scheme is available to all UK taxpayers, but in order to sign up to the Gift Aid scheme when you make a donation, you must be paying UK income tax.

There are clear advantages for charities if you make your donation in this way. The charity or Community Amateur Sports Clubs (CASC) concerned can take your donation and, provided all the qualifying conditions are met, can reclaim the basic rate tax, which means that the value of your donation increases by 25p for every pound donated to charity.

Changes to deemed domicile rules

20 Jul, 2017

In July 2015, the then Chancellor George Osborne announced a series of reforms to the non-domicile rules. The new rules were due to come into effect from April 2017, but were removed from the cut-back Finance Bill that was rushed through parliament before the general election. It has now been announced that the necessary legislation to introduce these reforms will be included in the new Finance Bill to be published after the summer recess and that these measures will have retroactive effect from April 2017 as originally intended.

Employed or self-employed?

20 Jul, 2017

Working out whether you are an employee or self-employed can be a tricky business and HMRC’s view can sometimes be at odds with status defined under employment law.

Clearly, although not always, there are tax and NIC advantages for you and the business that contracts for your services if you are treated as self-employed as opposed to employed. However, you may have more rights - holiday pay for example - if you are employed rather than self-employed.

Rangers EBT kicked into touch

13 Jul, 2017

The Supreme Court has ruled in favour of HMRC over a long running tax avoidance case against a former incarnation of Rangers football club (now in liquidation). The case concerned a tax avoidance scheme under which the club paid remuneration to their employees through a complex employee benefit trusts and sub-trusts structure in the hope that the scheme would avoid liability to Income Tax and Class 1 National Insurance contributions. This involved the payments of over £47m to players, managers and directors of the football club between 2001 and 2010.

VAT relief on building a new home

13 Jul, 2017

The VAT DIY Housebuilders scheme is a special scheme that enables homeowners building a home to benefit from the special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. In this way, any VAT paid on certain qualifying costs can be recovered. The scheme has been designed to effectively put homeowners in a similar position to a property developer.

Online filing exclusions for 2016-17

13 Jul, 2017

HMRC’s list of exclusions from online filing for 2016-17 continues to multiply. The list of exclusions has been updated with the publication of version 4.0 of the document. There are now a total of 32 live exclusions on the list including 5 new additions to the list.

Future changes to Corporation Tax?

13 Jul, 2017

The Office of Tax Simplification (OTS) provides independent advice to the government on simplifying the UK tax system, with the objective of reducing compliance burdens on both businesses and individual taxpayers. The OTS operates on a permanent, statutory footing and seeks to draw together expertise from across the tax and legal professions, the business community and other interested parties. 

Rent-a-room scheme

13 Jul, 2017

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room. The limit increased to £7,500 from 6 April 2016 and remains at the same level for the current tax year 2017-18. HMRC’s rent-a-room scheme guidance has been updated for 2017-18.

Tax-free loans to employees

06 Jul, 2017

Employees can obtain a tax-free benefit when provided with an employment-related cheap or interest-free loan. The most common is where the combined outstanding loan value to an employee is less than £10,000 throughout a tax year.

The benefit is calculated as the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan obtained elsewhere. These types of loans are referred to as beneficial loans.

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