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Paying Family Members

Many small businesses, whether incorporated or not, pay family members for working for the business. However, as a recent case shows, it is easy to make mistakes which can prove costly. The case in question, Nicholson v HMRC (TC06293), concerned the payment of wages by a sole trader to his son while at university. Mr[…] Read more »

Making Tax Digital For VAT – What Records Must Be Kept Digitally

Making Tax Digital (MTD) for VAT starts from 1 April 2019. VAT-registered businesses whose turnover is above the VAT registration threshold of £85,000 will be required to comply with MTD for VAT from the start of their first VAT accounting period to begin on or after 1 April 2019. If the business is VAT-registered but[…] Read more »

Tax-Free Parties – How To Exceed The £150 Per Head Limit

The tax system contains a limited exemption for Christmas parties and other annual functions, under which employees can enjoy an employer-provided annual function tax-free as long as the cost per head is not more than £150. However, by combining this exemption with that for trivial benefits, it is possible to exceed the £150 per head[…] Read more »

Getting Ready For Making Tax Digital

HM Revenue & Customs (HMRC) have announced their plan to Make Tax Digital (MTD) by 2019. Under the new scheme, people will have online tax accounts that track their professional and business transactions automatically. These accounts will be submitted quarterly to HMRC to estimate the taxes due. The online system is intended to be more[…] Read more »

Flipping – How To Choose Your Main Residence To Maximise Relief

Private residence relief (also known as main residence relief) takes the gain arising on the disposal of a person’s main or only residence out of the charge to capital gains tax. This relief means that in the majority of cases, any gain arising when a person sells their home is tax-free. However, as with any[…] Read more »

Mileage Allowances – What Is Tax-Free

Employees are often required to undertake business journeys by car, be it their own car or a company car, and may receive mileage allowance payments from their employer. Up to certain limits, mileage payments can be made tax-free. The amount that can be paid tax-free depends on whether the car is the employee’s own car[…] Read more »

Tax-Free Allowances For Trading And Property Income

New allowances were introduced from the 2017/18 tax year for trading and property income. The availability of these allowances means that those with low levels of trading or property income may not need to report this to HMRC. Trading allowance The trading allowance is £1,000 for both the 2017/18 and 2018/19 tax years. If you[…] Read more »

Making Tax Digital For Businesses

Reporting taxes just once a year is on its way out. Some businesses will need to start making quarterly tax submissions from 2019. Although it may mean you have to make changes, it can actually help streamline tax and accounting. Summary: In a bid to simplify tax reporting, HM Revenue & Customs (HMRC) are moving[…] Read more »

Reporting Benefits In Kind For 2017/18

Taxable expenses and benefits provided to employees during the 2017/18 tax year need to be reported to HMRC on form P11D unless: • the benefit has been payrolled; • it has been included in a PAYE Settlement Agreement; or • it is covered by an exemption. The form must be filed by 6 July 2018,[…] Read more »

Tax Code Changes For 2018/19

Tax codes are the lynchpin of the PAYE system – unless the tax code is correct, the PAYE system will not deduct the right amount of tax from an employee’s pay. The tax code determines how much pay an employee may receive before they pay any tax. The most straightforward scenario is that the person[…] Read more »