To June’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 on your own specific circumstances. We’re here to help!
Make the Best of Allowances
As the sole owner/director of your company you face a dilemma over how to extract income from that company. If you pay yourself a salary of more than £8,060 per year you will have to pay class 1 NIC at the rate of 12% on the excess pay above that threshold up to £42,385 pa. However, income tax is not due until your salary tops £10,600 (the value of your personal allowance for 2015/16). – read more >>
Non-resident Capital Gains Tax
If you are involved with sales of UK residential property where the buyer or seller is tax-resident outside of the UK, you need to be aware of a new tax that came into effect on 6 April 2015: non-resident CGT (NR CGT). – read more >>
The Enterprise Investment Scheme (EIS) provides some very attractive tax incentives for investors who subscribe for shares in small companies. If you are thinking of attracting investors using the EIS you should first get an advance assurance from HMRC that your company will qualify. – read more >>
If you provide clothes for your staff to wear at work you need to be aware of the tax and VAT implications which may vary according to the items provided. – read more >>
HMRC’s Strict Liability Late Self-Assessment Filing Submissions
Are ‘Nothing Short of Oppressive’, Claims Tax Reform Charity.
Have you ever been fined £100 by HMRC for the late filing of your self-assessment tax return?
Have you ever thought this penalty was unfairly levied, or did you think your reasonable excuses were ignore or disregarded? Well, sadly you are not alone. – read more >>
Have you received a letter from The Pension Regulator (TPR) telling you to “ACT NOW” to prepare for auto-enrolment? The letter gives you just a few weeks to nominate a contact to receive communications about auto-enrolment, with the threat of fines or prosecution if you don’t take action. – read more >>
June Question and Answer Section
Q. I work as a self-employed air-conditioning engineer, which involves servicing and maintaining air-conditioning units and occasionally fitting new units. I would like to take advantage of the flat rate VAT scheme for small businesses, but I am confused as to what business category to choose. Do you have a suggestion?
A. It is crucial to choose the right business sector when registering for the flat rate scheme, as the sector can’t be changed retrospectively. The higher the flat rate percentage (which is determined by the business sector), the more VAT you have to pay over to HMRC each quarter.
If the majority of your income comes from other businesses it would be sensible to choose “business services not listed elsewhere” which carries a flat rate percentage of 12%. If the larger proportion of your income is from individuals then the business category “repairing personal or household goods” may be more appropriate, which carries a flat rate percentage of 10%. You must choose the business category which is appropriate to the largest slice of your income, and review that decision every year on the anniversary of entering into the flat rate scheme.
Q. Following the relaxation of the pension rules in April I took a cash lump sum from my pension scheme but the pension company deducted tax from the payment. I have no other income in this tax year so I shouldn’t have to pay any tax. How do I get that tax back?
A. You make a tax refund claim using one of the online forms on the GOV.UK website designed specifically for this situation (form P55, P50Z or P53Z). The form to use depends on whether you have other income or not and whether you have taken out your entire pension pot or not. We can advise you which tax reclaim form is right for your circumstances.
Q. My father employs a care-worker to provide personal care for his disabled wife in their home. The cost is significant, including NIC and PAYE. Is there anything he can do to reduce the cost?
A. People who employ care-workers in their own homes can claim the employment allowance for 2015/16 which is worth up to £2,000 to set against the employer’s national insurance contributions (NIC). The allowance wasn’t available for such employers in 2014/15 due to the general block on using it against class 1 NIC due on the pay of domestic workers, but the law changed in April 2015.
Your parents may also qualify for state support such as the Attendance Allowance and Disability Living Allowance which are not taxable. If your mother is aged under 65 she may qualify for Personal Independent Payment (PIP).
June Key Tax Dates
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/6/2015