Archives for Company Tax

Tax-free gifts to employees

Some employers may wish to give small tax-free gifts to employees. As long as the employer meets the relevant conditions, no tax charge will arise on the employee. A tax exemption is available which should help employers ensure 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
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Leaving the EU with no deal

The government has published a collection of documents in preparation for the scenario of the UK leaving the EU without a Withdrawal Agreement a so called ‘no deal’ Brexit. The guidance states: ‘The government does not want or expect a no deal scenario. However, it is the duty of a responsible government to prepare for a range of potential outcomes, including the unlikely event of no deal. In the event of leaving the EU without a deal, legislation will be necessary to ensure the UK’s Customs, VAT and Excise regimes function as intended after the UK leaves the EU and
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Budget 2018 Business Tax

Making Tax Digital for Business: VAT HMRC is phasing in its landmark Making Tax Digital (MTD) regime, which will ultimately require taxpayers to move to a fully digital tax system. Regulations have now been issued which set out the requirements for MTD for VAT. Under the new rules, businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. The new rules have effect from 1 April 2019 where a taxpayer has a ‘prescribed accounting period’ which begins on that date, or otherwise from the
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Budget 2018 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% of
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Budget 2018 Other matters

Penalties for late submission of tax returns Taxpayers are required to submit tax returns by specified dates. When taxpayers submit their returns late they generally incur a penalty. Draft legislation has been issued which sets out a new points-based penalty regime for regular submission obligations. Returns have to be submitted more frequently in some circumstances. Depending on the frequency of the return submission obligation, a defined number of penalty points will accrue to a threshold. Once this threshold has been reached, a fixed penalty will be charged to the taxpayer. After this each late submission will attract a fixed penalty, until
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Off-payroll working in the private sector consultation

HMRC has launched a consultation on how to tackle non-compliance with the off-payroll working rules in the private sector and are asking for comments on the best way to do this. HMRC estimates only 10% of PSCs that should apply the legislation actually do so, and the the cost of this is projected to increase from £700m in 2017/18 to £1.2bn in 2022/23. This consultation provides an early evaluation of the public sector reform and invites responses on how best to deal with non-compliance in the private sector. This consultation considers a number of potential options for tackling the non-compliance
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IR35 News – Consultation is launched

The long awaited IR35 consultation for ‘off-payroll’ working in the private sector has been published by HMRC. The sub heading says the “Consultation looks at improving the rules around ‘off-payroll’ working so contractors who work through their own company pay the right tax.” It follows with: “the consultation will specifically look at how to increase compliance with the existing ‘off-payroll’ working rules. These rules mean that contractors such as IT and management consultants who work through their own company but are in practice employed by a third party, pay the right tax as employees.” “Evidence suggests that the taxpayer could be missing
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Changing priorities at HMRC

Over the coming years, the government plans to phase in its landmark Making Tax Digital (MTD) initiative, which will see taxpayers move to a fully digital tax system. However HMRC has shared a statement about how they are prioritising change in the department and as a result some parts of MTD will be delayed. HMRC has acknowledged the challenges in: Exiting the EU, and The ambition to become the world’s most digitally advanced tax authority. While some of the finer details are still being decided, HMRC have announced that, to achieve the above, some aspects of MTD are to be
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Spring Statement 2018 Business Tax

Making Tax Digital for Business: VAT HMRC is phasing in its landmark Making Tax Digital (MTD) regime, which will ultimately require taxpayers to move to a fully digital tax system. Regulations have now been issued which set out the requirements for MTD for VAT. Under the new rules, businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. The new rules have effect from 1 April 2019, where a taxpayer has a ‘prescribed accounting period’ which begins on that date, and otherwise from
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Tribunal rules BBC journalist is caught by ‘IR35’ legislation

A First Tier Tribunal has ruled that Christa Ackroyd who presented BBC news programme Look North and was paid via a personal service company was caught by the IR35 rules resulting in additional tax and national insurance contributions being payable. The IR35 rules in broad terms mean that those working via a personal service company have to consider whether, if the services were provided by the individual contractor directly to the client, there would be a contract of employment. The tribunal looked at lots of factors pertinent to Ms Ackroyd’s engagement and considered it significant that the BBC could control
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