To August’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.
Please contact us for advice in your own specific circumstances. We’re here to help!
HMRC Annual Report Published
The National Audit Office has published a report on the 2015-16 accounts of HMRC.The report shows that HMRC raised £536.8bn of tax revenues during 2015-16, an increase of £19.1bn (3.7%) on 2014-15 and paid out £40bn in benefits and credits (approximately one-fifth of the government’s total benefit expenditure). – read more >>
Spotlight on Tax Avoidance Schemes
HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017. – read more>>
HMRC Focus on Contractor Loan Schemes
HMRC have recently published new guidance on ‘contractor loan schemes’, which have been widely marketed by scheme promoters as a method of receiving non-taxable income. HMRC are adamant that such schemes do not work and they are likely to challenge anyone using them. – read more>>
Some employers will be considering taking on extra staff on a ‘casual’ basis to cover the summer period. There are a few issues which employers should think about when taking on people on a temporary basis. – read more >>
Small Businesses call for the Prime Minister to make small businesses top priority
What should be your top priority when you take over as Prime Minister? Negotiating favourable terms to leave the EU; gaining full, unfettered access to the single market or controlling immigration? Well, new Tory PM, Theresa May, has barely got her feet under the table, yet she’s undoubtedly got a lot on her plate right now. – read more >>
HMRC Taskforces will still target the SME community
If the answer is £540 million; what’s the question? The question is how much have HM Revenues & Customs’ specialist investigators collected in unpaid tax from sole traders and small businesses since 2010? According to figures released by HMRC, tax investigators have stepped up their efforts significantly in the year to April and have reclaimed £248 million in unpaid tax – increasing income ten-fold since 2010. – read more>>
August Questions and Answers
Q1. I have five employees who I recently took out for dinner to celebrate the success of the company. The total cost of the meal was £225. Do I have to report this as a benefit-in-kind to HMRC?
A: Finance Bill 2016 legislates for a new tax exemption relating to trivial benefits, which broadly means that if the cost of providing the benefit does not exceed £50 per employee, you will not have to account for it to HMRC, and the employees will not have to pay tax and NICs on it.
The cost of the benefit is defined in the legislation as:
– the cost of providing the benefit; or
– if the benefit is provided to more than one person and the nature of the benefit or the scale of its provision means it is impracticable to calculate the cost of providing it to each person to whom it is provided, the average cost per person of providing the benefit.
So, although different employees will have chosen different food and drinks, HMRC will accept that the cost per head can be taken as £45 (£225/5). The benefit of the meal will therefore be covered by the exemption as the cost per employee did not exceed the £50 trivial benefit limit. You will not have to report it to HMRC.
Q2. Is there any update on Finance Bill 2016 Progress?
A: There has been much speculation on when the Finance Bill 2016 will receive Royal Assent. According to the latest information, all stages of the Bill have been provisionally scheduled to take place in the House of Lords on Tuesday 13 September. It is expected that Royal Assent will be achieved shortly after that time.
Q3. How long do I need to keep VAT records for?
A: VAT-registered businesses must:
– keep records of sales and purchases;
– keep a separate summary of VAT; and
– issue correct VAT invoices
In the UK, VAT records must be kept for at least six years (or ten years the trader uses the HMRC VAT mini-one-stop-shop (VAT MOSS) service. VAT records may be kept on paper, electronically or as part of a software program (e.g. book-keeping software) – but whichever method is used, the records must be accurate, complete and readable. HMRC can visit businesses to inspect record-keeping and impose penalties if the records are not in order.
August Key Tax Dates
2 – Last day for car change notifications in the quarter to 5 July – Use P46 Car
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/8/2016