Posts by frances

Delay to roll out of Tax free childcare

The government have announced a delay to the roll out of tax free childcare which was expected to be fully implemented by the end of the year. From 24 November 2017 the service is available to parents whose youngest child is under 6 or who has their 6th birthday on that day. Parents can apply online through the childcare service which can be accessed via the Childcare Choices website. In April 2017, HMRC started rolling out the childcare service via a single website through which parents can apply for both 30 hours free childcare and Tax-Free Childcare. The roll out
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Pension contribution increases and temporary staff

The Pensions Regulator is reminding employers that they need to comply with their auto enrolment duties with regard to pension contribution increases temporary staff. Automatic enrolment still applies to temporary staff this Christmas With the festive season fast approaching, employers may be planning to take on temporary staff to help their business survive the rush. Automatic enrolment applies to these employees in the same way as permanent employees, even if they will only be working for a short time. Employers will still need to assess temporary staff and auto enrol any eligible employees into a qualifying pension scheme. Once auto
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Delay in the abolition of Class 2 NIC

The government has announced that it will introduce legislation, to abolish Class 2 national insurance contributions (NIC) and to make further proposed NIC changes in 2018. The measures the legislation will implement, will now take effect one year later than previously announced, from April 2019. These measures include the abolition of Class 2 NIC paid by self employed individuals, reforms to the Class 1A NIC treatment of termination payments (the £30,000 rule) and changes to the NICs treatment of sporting testimonials. On 2 November 2017 the Government announced a one year delay to the abolition of Class 2 NICs. Class
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Employee gifts – tax free?

At this time of year some employers may wish to make small gifts to their employees. A tax exemption is available which should give employers certainty that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must satisfy the following conditions: The cost of providing the benefit does not exceed £50 per employee (or on average when gifts made to multiple employees). The benefit is not cash or a cash voucher. The employee is not entitled to the voucher as part of a contractual
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Budget 2017: Personal Tax

The personal allowance The personal allowance is currently £11,500. The personal allowance for 2018/19 will be £11,850. Comment A reminder that not everyone has the benefit of the full personal allowance. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000, which is £1 for every £2 of income above £100,000. So for 2017/18 there is no personal allowance where adjusted net income exceeds £123,000. For 2018/19 there will be no personal allowance available where adjusted net income exceeds £123,700. Tax bands and rates The basic rate of tax is currently 20%. The band
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Budget 2017: Business Taxes

Making Tax Digital for Business: VAT In July 2017, the government announced significant changes to the timetable and scope of HMRC’s digital tax programme for businesses. VAT will be the first tax where taxpayers will keep digital records and report digitally to HMRC. The new rules will apply from April 2019 to all VAT registered businesses with turnover above the VAT threshold. As with electronic VAT filing at present, there will be some exemptions from Making Tax Digital for VAT. However, the exemption categories are tightly-drawn and unlikely to be applicable to the generality of VAT registered businesses. Comment Keeping
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Budget 2017: Employment Taxes

Different forms of remuneration In the Spring Budget the government stated it wished to consider how the tax system ‘could be made fairer and more coherent’. A call for evidence was subsequently published on employee expenses. The government’s aim is to better understand the use of the income tax relief for employees’ business expenses. It sought views on how employers currently deal with employee expenses, current tax rules on employee expenses and the future of employee expenses. Following the call for evidence: The government announced that the existing concessionary travel and subsistence overseas scale rates will be placed on a
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Budget 2017: Capital Taxes

Capital gains tax (CGT) rates The current rates of CGT are 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains; mainly chargeable gains on residential properties with the exception of any element that qualifies for private residence relief. There are two specific types of disposal which potentially qualify for a 10% rate, both of which have a lifetime limit of £10 million for each individual: Entrepreneurs’ Relief (ER). This is targeted at working directors and employees of companies who own at least 5%
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Budget 2017: Other matters

Business rates Business rates have been devolved to Scotland, Northern Ireland and Wales. The business rates revaluation took effect in England from April 2017 and resulted in significant changes to the amount of rates that businesses will pay. In light of the recent rise in inflation, the government will provide further support to businesses including: Bringing forward the planned switch in indexation from RPI to CPI to 1 April 2018. Legislating retrospectively to address the so-called ‘staircase tax’. Affected businesses will be able to ask the Valuation Office Agency to recalculate valuations so that bills are based on previous practice
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Simple Assessment

HMRC have changed the way in which they will assess some taxpayers, removing the need for these individuals to complete a Self Assessment Tax Return. These changes, known as Simple Assessment, took effect from September 2017. The affected taxpayers fall into one of two categories: New state pensioners with income more than the personal tax allowance (£11,000) in 2016/17; and Employees or pensioners with PAYE tax codes who have underpaid tax and who cannot have that tax collected through their tax code because it is too high to code out. HMRC have also confirmed that all existing state pensioners who
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