The latest Tax News, VAT News, HMRC News and Fee Protection Insurance News from the experts at Vantage Fee Protect.
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September 2022 Mini-Budget
Today’s mini-budget contained a few surprises. We will be reviewing the changes in more detail in the coming weeks but for now here are the headline changes. Income Tax – from April 2023 the basic rate of tax will be cut to 19%, the additional rate of 45% is abolished as is the additional rate…
CONTROVERSIAL ADMINISTRATIVE CHANGE FOR R&D TAX RELIEF FROM 1ST APRIL 2023
Draft legislation for upcoming changes to R&D tax relief were revealed as part of Legislation Day, back in July. There were few surprises where R&D tax relief was concerned as many of the forthcoming changes had been widely publicised already. The key changes include: The expansion of qualifying expenditure to include data and cloud computing…
Household bills are increasing but what can I claim back from my business for working from home as a sole trader?
The UK has seen a significant increase in energy costs with most households on variable tariffs, and some households penalised for their energy provider going bust and being switched to one of the bigger companies. As a sole trader (but not as an employee) you can use the simplified expenses claim in your business, to…
My client owns a rental property and in light of proposed interest changes has decided to re-mortgage the property. Their lender has charged an Early Redemption Penalty. They have the option to settle this in full now or roll it into a new mortgage with a different lender.Would the payments be tax deductible?
Early redemption penalties (“ERP”) can be deductible against the rental profits. Section 272B(5)(c) IITOIA 2005 allows a deduction for: interest, amounts economically equivalent to interest, andthe incidental costs of finance. HMRC manual BIM45820 confirms that they accept that an ERP falls into the final definition of an “incidental cost of finance” so relief for the…
Is it a business?
For approximately 40 years, HMRC have relied upon a published set of 6 questions, derived from the historic Tribunal cases involving Lord Fisher and Morrison’s Academy Boarding Houses Association, to be asked and considered when deciding if an activity undertaken should be considered a business activity within the context of VAT. The questions were: Is…
I have a client who is a director of a limited company which he intends to wind down. He is also on the payroll as an employee and would like to take £30,000 from the company as a tax-free redundancy payment. Can he do this?
This is a question we are being asked more regularly following both the COVID-19 period and also changes to the Off Payroll Worker Regulations. First, we need to look at the definition of redundancy. HMRC determine a redundancy as: An employee who is dismissed shall be taken to be dismissed by reason of redundancy if…
The organisation of football and netball leagues and pitch hire have been held to amount to the exempt grant of an interest in land, by the Upper Tribunal (UT) in the Netbusters (UK) Ltd v HMRC [2020] UKFTT 0438 (TC) (2 November 2020)
The question was is this a supply of an interest in land or a supply of sports league services? The appellant Netbusters (UK) Limited (NUL) is registered for VAT and organises competitive football and netball leagues. It enters into binding agreements with third parties, such as local authorities and schools, to hire venues belonging to…
Reminder of Changes to Principal Private Residence (PPR) relief from 6 of April 2020
PPR relief has been a tax relief against the gains arising on the sale of a property that is or has been an individual’s only or main residence. New rules came into effect in April 2020, introducing the tightening of two common extensions to the relief which is likely to increase the number of sales…
The return of two Corporation Tax rates
In March 2021 it was announced that from 1 April 2023 the rate of corporation tax would increase to 25%, however companies with profits below £50,000 would continue to be taxed at 19%. A tapered rate would operate on profits above £50,000 such that only businesses with profits of £250,000 or more will be taxed…
Working from home allowance – current position
The working from home allowance has been around for 20 years but it was “relaxed” during covid meaning more people were entitled to claim. If you are required to work from home, you could claim up to £6 per week as an expense, for a basic rate taxpayer this means a reduction in tax liability…
Recovery of VAT incurred on digital services prior to VAT registration
We receive many queries regarding the charging of VAT on supplies of digital services supplied by overseas suppliers to UK businesses before they register for VAT and whether that VAT can be recovered as input tax once the UK business registers for VAT; queries such as: “My client is a Limited Company and was trading…
Specialist Consultation
As accountancy practices start to emerge from the pandemic at the start of 2022 and look at improving all aspects of their business operations don’t forget to take the opportunity to review whether or not your current fee protection provider and their policy offering remain the best option for you and your clients. Here at…
Time to change the tax year?
The Office of Tax Simplifications wants the Government to simplify the tax year. PQ magazine editor Graham Hambly looks at the arguments. There are clear benefits in adopting a tax year that is either aligned with the calendar year or with a calendar month-end, says a new report from the Office of Tax Simplification (OTS).…
Moving goods between mainland UK and Northern Ireland within a VAT Group
Q: My client is a UK VAT Group registration with members being located in both mainland UK (GB) and Northern Ireland (NI). One of the GB based Group members is to transfer stock to another Group member based in NI. Prior to Brexit this transfer would not have been treated as a transaction for the…
Making Tax Digital (MTD) is being imposed on everyone
HMRC have published a policy paper outlining the final phase of Making Tax Digital (MTD) for VAT returns which means that from April 2022 MTD's being imposed on everyone . So far, the only VAT registrations that have had to comply with MTD are those trading above the £85k compulsory registration threshold. This final phase…
Are you ready for the plastic packaging tax?
Craig Harman explains the new plastic packaging tax will mean for businesses and why they should be planning for the changes now. The UK uses an estimated five million tonnes of plastic every year, nearly half of which is packaging. As the plastic problem worsens, countries across the globe have been looking at ways to…
VAT – Temporary reduced rating, and the return to normal for hospitality, holiday accommodation and attractions
It did not take long for the effects of lockdown to be felt in the hospitality sector, and while some food and beverage businesses were resourceful in establishing new working patterns to accommodate fewer covers, or develop a takeaway offering, the same could not be said of the hotel and attractions businesses that so many…
Annual Investment Allowance for accounting periods straddling 1 January 2022
Currently the maximum Annual Investment Allowance (AIA) available on expenditure incurred on Plant and Machinery (P&M) is £1,000,000. From 1 January 2022 this drops to £200,000 – so how will the affect claimants whose accounting period straddles this date? First, we need to understand what happens to the AIA for short accounting periods. If a…
TAX PLANNING WITH SHARES AND SPOUSES – AVOID THE TRAPS!
Many “one-man” companies, and indeed many “close” companies within the OMB/SME sector, utilise their directors’ tax free allowances by paying them a small salary, usually up to the primary threshold, so as to incur no PAYE or NICs but still maintain entitlement to state benefits and the state pension. The company gets corporation tax relief…
Goodwill Hunting
Mark McLaughlin points out two circumstances in which business owners may be thankful for goodwill in the business The valuation of assets can be important for tax purposes. For example, a valuation may determine the amount of inheritance tax (IHT) payable on a lifetime transfer (e.g. the transfer of an investment property to a discretionary…
Deal Or No Deal?
Mark McLaughlin points out that some shareholders may prefer proceeds from a company purchase of their shares to be treated as income rather than capital for tax purposes. Individual shareholders selling their shares back to the company normally prefer the proceeds from the share disposal to be treated as a capital receipt, where possible. This…
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