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Tax-free allowances for Capital Gains Tax

27 Feb, 2018

The annual exemption for Capital Gains Tax (CGT) in the current tax year is £11,300. This exemption allows taxpayers who dispose of chargeable assets such as property, stocks and shares of up to this amount, to make a tax-free gains during 2017-18.

New advisory fuel rates published

27 Feb, 2018

Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. The rates can be used by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel.

HMRC accepts there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where employers pay a rate per mile for business travel no higher than the published advisory fuel rates.

More on inheritance tax shakeup

21 Feb, 2018

The Office of Tax Simplification (OTS) provides advice to the Chancellor on simplifying the UK tax system. In a letter dated 19 January 2018 the Chancellor Philip Hammond wrote to the OTS to request a review of inheritance tax (IHT) regime and asking to hear any proposals for simplification.

HMRC’s requirement to correct

21 Feb, 2018

The new requirement to correct (RTC) legislation was introduced by the Finance (No.2) Act 2017. The legislation created a new statutory obligation for taxpayers with undeclared UK tax liabilities that involve offshore matters to disclose any relevant information to HMRC by 30 September 2018.

The RTC applies to any person with undeclared UK income tax, capital gains tax and/or inheritance tax liability concerning offshore matters or transfers. The RTC legislation relates to offshore tax non-compliance committed before 6 April 2017.

Beware capital allowance claw-back when you sell an asset

21 Feb, 2018

Capital allowances is the term used to describe the tax relief businesses can claim on certain capital expenditure and thereby reduce the amount of taxable profits. Most ‘capital’ items, such as equipment, vehicles, machinery etc last for a reasonably long time and the tax rules do not allow you to automatically deduct the full cost of such items. There are different rules that apply to different types of capital expenditure such as 100% first-year allowances (FYA) for certain energy-saving plant and machinery.

What is reasonable care?

21 Feb, 2018

HMRC expects that taxpayers take ‘reasonable care’ over their tax affairs and do everything reasonably within their power to ensure that tax returns and other relevant documents are accurate.

There is no legal definition of reasonable care from a taxation standpoint and HMRC will take your individual circumstances into account when considering whether you’ve taken reasonable care. HMRC generally accepts that ‘reasonable care’ cannot be identified without consideration of a particular person’s abilities and circumstances.

Dormant company obligations

21 Feb, 2018

If a company has stopped trading and has no other income then HMRC should be informed for corporation tax purposes. HMRC can also send a notification if they think a company is dormant. This notice will state that a company or association is dormant and is not required to pay corporation tax or file company tax returns.

A company is usually dormant for corporation tax if it:

Living abroad and selling UK home?

21 Feb, 2018

A capital gains tax (CGT) charge on the sale of UK residential property by non-UK residents was introduced in April 2015. Only the amount of the overall gain relating to the period after 5 April 2015 is chargeable to tax.

In certain circumstances private residence relief may apply where a property is the owner’s only or main residence. For example, you don’t usually pay any tax for any tax years in which you, your spouse or civil partner spent at least 90 days in your UK home. In most cases, the final 18 months of ownership usually qualifies for full tax relief.

Provisions for termination payment tax changes

19 Feb, 2018

From 6 April 2018, all payments in lieu of notice (PILONs) equivalent to the amount of basic pay will be taxable as earnings, i.e. subject to tax and NICs, regardless of whether there is a PILON clause in the employee’s employment contract. As such, employees will pay Income Tax and Class 1 NICs on the amount of basic pay they would have received if they had worked their notice in full, even if there is no contractual PILON clause in their employment contract.

Campaign to promote shared parental leave

19 Feb, 2018

In its “Good Work” response to the 2017 Taylor Review of Modern Working Practices, the government stated that, as part of its commitment to raising awareness of employment rights, it was to instigate a campaign to encourage more working parents to take shared parental leave (SPL) in their baby’s first year. That campaign, called “Share the joy”, has now been launched. Its intention is to improve working parents’ awareness of their SPL entitlement and it will do this through advertising on social media, digital websites, at train stations and on commuter routes.

Tax Diary March/April 2018

19 Feb, 2018

1 March 2018 - Due date for corporation tax due for the year ended 31 May 2017.

2 March 2018 – Self assessment tax for 2016/17 paid after this date will incur a 5% surcharge.

19 March 2018 - PAYE and NIC deductions due for month ended 5 March 2018. (If you pay your tax electronically the due date is 22 March 2018)

19 March 2018 - Filing deadline for the CIS300 monthly return for the month ended 5 March 2018.

19 March 2018 - CIS tax deducted for the month ended 5 March 2018 is payable by today.

Does a charity pay tax?

14 Feb, 2018

The tax treatment of charities can be very complex. As a first step any charity hoping to benefit from any beneficial treatment needs to be recognised as a charity for UK tax purposes by HMRC as well as meeting other criteria.

A recognised charity may qualify for a number of tax exemptions and reliefs on income and gains, and on profits for some activities. For example, charities don’t pay tax on most types of income as long as they use the money for charitable purposes.

This includes tax:

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