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When Should a Business Register for VAT?

All traders – whether sole traders, partnerships, or limited companies – are obliged to register to charge and pay VAT once annual sales reach a pre-set annual threshold. This threshold remains at £85,000 for the year commencing 1 April 2019. The annual VAT threshold is determined by total sales and is not the same as…

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When Does the Diesel Supplement Apply?

Employees with a company car are taxed – often quite heavily – for the privilege. The charge is on the benefit which the employee derives from being able to use their company car for private journeys. The amount charged to tax is a percentage of the ‘list price’ of the car – known as the…

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Entrepreneur’s Relief – The Basics

Entrepreneurs’ relief is intended to reduce the rate of capital gains tax to a flat rate of 10% on certain qualifying business disposals. Certain aspects of the relief have recently changed, and this may affect any subsequent tax liability. A qualifying business disposal must include a material disposal of business assets. For these purposes, a…

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Tax Aspects of Using a Work’s Van

If an employee is able to use a work’s van for private use, which generally includes home-to-work travel, there will be a taxable benefit and a subsequent tax charge. From 6 April 2019, the flat-rate van benefit charge has risen from £3,350 to £3,430, representing a small increase in real terms to a basic rate…

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Is the Summer Party Tax-Free?

A statutory exemption exists, which allows employers to meet the cost of certain social events for staff without triggering a liability to tax or NICs, providing certain conditions are met. The legislation refers to ‘an annual party or similar annual function’. Although HMRC do not seem to interpret this to mean that the same event…

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Reporting Expenses and Benefits for 2018/19

Where employees were provided with taxable benefits and expenses in 2018/19, these must be notified to HMRC. The reporting requirements depend on whether the benefits were payrolled or not. Benefits not payrolled Taxable benefits that were not payrolled in 2018/19 must be reported to HMRC on form P11D. There is no need to include benefits…

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Voluntary National Insurance Contributions – Should You Pay?

The payment of National Insurance contributions provides the mechanism by which an individual builds up their entitlement to the state pension and certain contributory benefits. Different classes of contribution provide different benefit entitlements. Employed earners pay Class 1 contributions where their earnings exceed the lower earnings limit – set at £118 per week (£512 per…

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Tax-free Savings Income of £18,500

Where income is mainly derived from savings, it is possible to enjoy tax-free savings income of up to £18,500 tax-free in 2019/20 in addition to that held in tax-free wrappers, such as individual savings accounts (ISAs). The ability to enjoy savings income tax-free is made up of three components: the personal allowance; the zero-starting rate…

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Reducing Your Payments on Account

Under the self-assessment system, a taxpayer is required to make payments on account – advance payments towards the eventual tax and National Insurance liability – where the previous year’s self-assessment bill was £1,000 or more, unless more than 80% of the tax liability is deducted at source, for example, under PAYE. The self-assessment return for…

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Fuel and Mileage Payments for Company Car Drivers

The car benefit tax charge does not cover fuel provided for a company vehicle. Where the company pays for all fuel (business and private), the fuel benefit will be charged, which is based on the cash equivalent of the benefit each tax year (£24,100 for 2019/20 multiplied by a percentage depending on the car’s CO2…

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