Resources

You are here

Topping up your self-employed NIC contributions

14 Mar, 2019

In many circumstances it can be beneficial to make voluntary Class 2 National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension if you are self-employed.

You might want to consider making voluntary NICs because:

  • you’re close to State Pension age and do not have enough qualifying years to get the full State Pension
  • you know you will not be able to meet the qualifying years you need to get the full State Pension during your working life
  • you’re self-employed and do not have to pay Class 2 cont

Sale of income by an individual

14 Mar, 2019

A capital sum received by an individual in respect of the sale or relinquishment of income to be derived from his or her personal activities, can sometimes be treated as earned income and chargeable to Income Tax.

What are the badges of trade?

14 Mar, 2019

The 'badges of trade' tests, whilst not conclusive, are used by HMRC to help determine whether an activity is a proper economic / business activity or merely a money-making side line to a hobby. Careful consideration needs to be given when deciding if a hobby has become a taxable activity.

It is clear from the significant amount of case law on this subject that a decision on whether there is a business activity is often not clear.

Treatment of deposits for VAT purposes

14 Mar, 2019

As a general rule, most deposits made by customers serve as advance payments and create a VAT tax point when the deposit is received. It is important that businesses ensure that the VAT element of any deposits received is accounted for correctly. Usually this will mean that VAT is due on a deposit when it is received and not when the supply is actually made.

VAT does not apply to some types of deposit. For example, a deposit received as security to ensure the safe return of goods hired out does not create a tax point.

Lost your Unique Tax Reference number?

14 Mar, 2019

Your Unique Taxpayer Reference (UTR) identifies your tax records at HMRC. The number is also known as your taxpayer number or tax reference number and should be used whenever you contact HMRC, or when you file your tax returns. The UTR is a unique 10 digit code. You are automatically given a UTR when you set yourself up to file Self Assessment tax returns or form a limited company.

If you have mislaid your UTR, you should be able to find the number on previous tax returns and other documents from HMRC, for example, on notices to file a return and payment reminders.

Employee tax codes 2019-20

13 Mar, 2019

The P9X form is used to notify employers of the tax codes to use for employees. The basic Personal Allowance for the tax year starting 6 April 2019 will be £12,500 and the tax code for emergency will be 1250L. The basic rate limit is £37,500 except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate.

Spring Statement - 13 March 2019

13 Mar, 2019

The following comments were written on the 13th March 2019 immediately following Philip Hammond’s presentation of the 2019 Spring Statement to Parliament.

Expenditure on building that qualifies as plant

12 Mar, 2019

Capital Allowances are the deductions which allow businesses to secure tax relief for certain capital expenditure. Capital Allowances are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable to Corporation Tax.

Interestingly, the Capital Allowance legislation does not specifically define plant and machinery (P&M). However, there is legislation that makes it clear that most buildings, parts of buildings and structures are not P&M.

Post cessation receipts and expenses

06 Mar, 2019

According to HMRC’s published guidance there are special rules for the taxation of post-cessation receipts and expenses. These provisions apply to professions, vocations and trades.

Tax relief may be available for post-cessation expenses of a trade, although such expenses still have to satisfy the wholly and exclusively test and be revenue in nature to qualify for relief.

Incentive award schemes and tax

06 Mar, 2019

Companies can use incentive award schemes to encourage their employees in various ways, for example, to sell more of their own goods and services. The award can take various forms including cash, vouchers or other gifts.

Where an employer meets the tax payable on a non-cash incentive award given to a direct employee by entering into a PAYE settlement agreement (PSA), the award is not chargeable to tax on the employee.

With the exception of non-cash awards covered by a PSA, incentive awards made to employees are chargeable as employment income.

Utilising unused losses for CGT

06 Mar, 2019

Sometimes tax-payers may sell an asset at a loss. If acceptable as capital losses, they can be deducted from Capital Gains made in the same or future years.  As a general rule, if the asset would have been liable to CGT had a gain taken place then the loss should be an allowable deduction. 

These allowable losses are deducted automatically. It is not necessary to make a claim for set-off of losses. However, it is possible to claim that losses are allowable and the preference to be given to such losses.

Companies House – Late Filing Penalties

06 Mar, 2019

There are Late Filing Penalties which are designed to encourage companies to file their accounts and reports on time. The penalties were first introduced in 1992 and were significantly increased from February 2009. All companies, private and public, large or small, trading or non-trading must send their accounts to Companies House. The late filing penalties guide has recently been updated although there have been no changes to the penalty amounts.

Pages