To July’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!
Employers will be aware that various changes have been made to the reporting requirements for employee benefits and expenses from April 2016, which mean that some employers will no longer have to complete annual return forms P11D. The three main changes are: – read more >>
HMRC guidance on senior accounting officers
HMRC have published Brief 12(2016), which contains information on changes to their senior accounting officer guidance (SAOG). The Brief aims to clarify HMRC practice and reflects administrative changes to their operational procedures. These include:- read more>>
Help-to-save consultation launched
HMRC have launched a consultation on the government’s proposed ‘Help-to-Save’ scheme, which is designed to encourage people on low incomes to build up their savings.
Broadly, the scheme will be open to some 3.5 million adults in receipt of universal credit with minimum weekly household earnings equivalent to 16 hours at the National Living Wage, or those in receipt of working tax credit. – read more>>
FRS 102 guidance on directors’ loans revised
HMRC have recently updated their online toolkit on directors’ loan accounts to help tax advisers and agents preparing 2015/16 company read more >>. The update reflects the changes to reporting requirements under UK GAAP, as taxing debt will now be largely driven by FRS 102 requirements for financial instruments. –
HMRC outlines 3 key objectives for the period 2016 to 2020
M Revenues & Customs has been having a hard time of late and has received justified criticism from customers, accountants and the National Audit Office for providing what is often seen as an inadequate and inefficient service. The good news is HMRC has taken the criticism on the chin, and has vowed to do things better from now on. To this end, it has just released a statement which outlines 3 key changes it intends to introduce before the end of the current Parliament in 2020. – read more >>
RTI penalty easement policy extended by HMRC
HM Revenue and Customs has softened its approach to strict enforcement of late filing penalties for full payment submissions (FPS) and announced that its three-day easement and risk-assessed approach to PAYE late filing penalties will now be extended until at least April 2017. – read more>>
July 2016 Questions and Answers
Q1. My mother died last year and left my brother and me a commercial business unit. Probate is nearly complete now. If we sell the property in the future, what are the capital gains tax implications on the sale?
A: I presume that you and your brother are inheriting equal shares in the property. Your acquisition value, for future capital gains tax computation purposes, is the market value at the date of death – known as the ‘probate value’. Capital gains tax will be calculated under the normal rules on any increase in value from that date.
Q2. I have recently registered for VAT. I am not very good when it comes to administration and I have heard that the flat rate scheme might help me. How does the scheme work?
A: Broadly, the flat rate scheme for VAT is designed to help small businesses with a turnover of no more than £150,000 a year, excluding VAT, by taking some of the work out of recording VAT sales and purchases.
With the flat rate scheme: – You pay a fixed rate of VAT to HMRC; and
– You keep the difference between what you charge your customers and pay to HMRC; but
– You can’t reclaim the VAT on your purchases – except for certain capital assets over £2,000.
The percentages applicable to this scheme currently vary between 4% and 14.5%, depending on the nature of the services provided. Full details of the scheme are included in the HMRC VAT Notice 733: Flat rate scheme for small businesses, which you can download from the HMRC web site.
In your first year of VAT registration you get a 1% reduction in flat rate, which means that you can take 1% off the flat rate you apply to your turnover, until the day before your first anniversary of becoming VAT registered.
The scheme works well for some but not others. On the positive side, the scheme may save you some admin because you don’t have to work out every item of input and output tax, but if your customers are VAT registered, you do have to calculate the VAT and issue VAT invoices in the normal way. Financially, the flat rates averages may work out cheaper for you than normal accounting or you may find this scheme more expensive.
Q3. I have a part time job and I earn about £8,000 a year. As my earnings are less than the tax-free personal allowance, can I transfer the unused amount to my husband?
A: Since April 2015, a spouse or civil partner who is not liable to income tax or not liable above the basic rate for a tax year may transfer part of their personal allowance to their spouse or civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. The transferor’s personal allowance will be reduced by the same amount. For 2016/17 the amount that can be transferred is £1,100 (£1,060 for 2015/16). The spouse or civil partner receiving the transferred allowance will be entitled to a reduced income tax liability of up to £220 for 2016/17 (£212 for 2015/16). Note, however, that married couples or civil partnerships entitled to claim the married couple’s allowance are not entitled to make a transfer. For further information on this, see the gov.uk website at www.gov.uk/marriage-allowance.
July 2016 Key Tax Dates
5 – Deadline for PAYE settlement agreement for 2015/16
6 – Deadline for 2015/16 forms P11Db, P11D and P9D to be submitted and copies of P11D and P9D to be issued to relevant employees
Deadline for employers to report share incentives for 2015/16 – form 42
14 – Return and Payment of CT61 tax due for quarter to 30 June 2016
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/7/2016 or quarter 1 of 2016/17 for small employers
Class 1A NIC due in respect of the tax year 2015/16
31 – Second self assessment payment on account due for 2015/16
Second 5% penalty surcharge on any 2014/15 outstanding tax due on 31 January 2016 still unpaid
Deadline for Tax Credits to finalise claims for 2015/16 and renew claims for 2016/17
Penalty of 5% of tax due or £300, whichever is greater for 2014/15 personal tax returns still not filed.