To January’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 all our clients don’t pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We’re here to help!
Increased Annual Investment Allowance
The annual investment allowance (AIA) gives a 100% deduction for tax purposes for the cost of plant, equipment and certain fixtures in buildings, which qualify for capital allowances. The AIA has an annual cap. This started at £50,000 in 2008, was increased to £100,000 by the previous government, and was cut to £25,000 in April 2012 by the current incumbents. – read more >>
RTI – More Information
The rules for reporting wages, hours worked and payroll deductions under real time information (RTI) are still being written.
What to report – RTI reports will need to be made where at least one employee is paid above the lower earnings limit (LEL), (£109 per week for 2013/14). For wages between the LEL and the Primary threshold (£149 per week for 2013/14) the worker is given NI credits although they don’t actually pay any NI, so the level of their wages needs to be reported. – read more >>
New Tax Free Allowance
The standard personal allowance (amount of tax-free income) for 2013/14 will be £9,440. We had been expecting a smaller increase to £9,205. – read more >>
Polytunnels and Glasshouses
In the past the Taxman has refused to allow a tax deduction for the cost of such structures, on the basis that greenhouses are buildings. A greenhouse is generally expected to last several years, so the cost of the structure should be treated in the business accounts as ‘capital’ rather than as a ‘revenue’ expense. – read more >>
January Question and Answer Section
Q. If I purchase a Land Rover Defender for use in my partnership business can I reclaim the VAT paid on the purchase? I will use the Land Rover 75% for business and 25% for private journeys.
A. You first need to check that the specific model of Land Rover Defender is regarded as a commercial vehicle for VAT purposes by HMRC. You can do this by ringing the VAT helpline on 0800 010 9000.
If HMRC agrees the Defender is a commercial vehicle, you can reclaim 75% of the VAT paid on the purchase, on the basis that it will be used for business purposes for 75% of its useful life. You should keep accurate mileage records of all your business journeys so you have evidence of the business use of the vehicle, in case HMRC ask you to prove the business use percentage. If the percentage of business use of the vehicle changes you may have to make an adjustment to your VAT return.
Q. The Christmas feasting has taken its toll on the waistlines of everyone in our company. Can I give the workforce a boost by having the company pay for gym membership for me and all my staff?
A. A company may provide sports or recreational facilities for its workforce, but unless those facilities are used mainly by current and former employees with exclusion of the general public, there will be a benefit in kind tax charge for the employees and the company. A membership for a gym open to any paying member from the general public would be taxed as a benefit for employees, the taxable value being the cost to the company of providing that membership.
Q. My business has started exporting goods. I’ve heard I need an EORI number. What is it, and how do I get one?
A. The Economic Operator Registration and Identification (EORI) scheme started on 1 July 2009 and replaced the previous TURN system. The EORI provides a unique number for a business to quote to any Customs authority in the EU, for example when the business needs to make a customs declaration when goods arrive or depart from the EU.
If your business had a number under TURN, it should automatically have been issued with an EORI number. If your business is VAT registered in the UK you need to complete form C220 to obtain an EORI number, if you are not VAT registered the form to complete is C220A. These application forms can be sent by email to firstname.lastname@example.org
January Key Tax Dates
1– Due date for payment of Corporation Tax for the year ended 31 March 2012/
14 – Return and payment of CT61 tax due for quarter to 31 December 2012
19/22 – PAYE/NIC and CIS deductions due for month to 5/1/2013 or quarter 3 of 2012/13 for small employers
31 – Deadline for filing 2012 Self Assessment personal, partnership and trust Tax Returns – £100 first penalty for late filing even if no tax is due or tax due is paid on time
Balancing self assessment payment due for 2011/12
Capital gains tax payment due for 2011/12
First self assessment payment on account due for 2012/13
Interest accrues on all late payments
Half yearly Class 2 NIC payment due
Further penalty of 5% of tax due or £300, whichever is greater for personal still not filed for 2010/11
5% penalty for late payment of tax unpaid for 2010/11 self assessment