Providing certain conditions are met, no tax liability will arise if an employer makes payments to employees for reasonable additional household expenses, which the employee incurs in carrying out duties of their employment at home under ‘homeworking arrangements’.
‘Homeworking arrangements’ are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home. There is no requirement for any part of the employee’s home to be used exclusively for the purposes of the employment.
HMRC will accept that…
Following a series of defeats, HMRC have won a First Tier Tribunal (FTT) case concerning the employment status of three BBC presenters who used personal service companies (PSCs).
The case concerned the working arrangements for presenters Joanna Gosling, David Eades and Tim Willcox. Unusually, the judges disagreed about the IR35 status of the presenters, although they were unanimous that the ‘imbalance of bargaining power’ between the presenters and the BBC was a significant factor in the case, saying "The BBC were in a unique position and used it to…
HMRC have published Brief 10 (2019), which explains that the introduction of the domestic reverse charge for construction services will be delayed for a period of 12 months until 1 October 2020.
A domestic reverse charge is an anti-fraud provision, which means that the UK customer who receives supplies of construction services must account for the VAT due on these supplies on their VAT return, rather than the UK supplier.
To allow for potential cash-flow and administrative impacts the change could have on businesses, there has been a long…
HMRC have published a Brexit edition of their Agent Update publication, which contains some useful information on changes to various procedures after Brexit.
In particular, articles are included on the following topics:
Grants for businesses completing customs declarations: £16m in new government funding is now available to help businesses train staff in making customs declarations, and to help businesses who support others who trade goods to invest in IT. This will ensure that trade with the EU continues as smoothly as possible after Brexit on 31 October.
Customs agents currently help…
The Employment Allowance (EA) is a valuable relief, particularly for small businesses as it potentially cuts the business’s national insurance contributions (NIC) bill by allowing a pre-set annual amount to be offset against PAYE NIC costs. The current limit is £3,000, and it is widely available to most employers. However, from April 2020 the allowance is being restricted to smaller businesses with an NIC bill of less than £100,000 in the previous tax year.
Most employers with a liability to pay employer (secondary) NIC are eligible to claim…
Significant changes to the tax rules governing zero emissions company cars will take effect from 6 April 2020, potentially making an electric car a more attractive option.
The tax rules for calculating the taxable benefit arising on a car are not changing – this will still be calculated (broadly) using the car’s full manufacturer’s published UK list price multiplied by the ‘appropriate percentage’, which can be found by reference to the car’s CO2 emissions level. This calculation gives the taxable value of the…
Finding a parking space in a town centre or near to the station is often frustratingly limited. So, if you have a driveway, field or land that can be utilised for parking, you may well have an excellent opportunity to earn some extra tax-free income.
Two new allowances – each set at £1,000 – were introduced from 6 April 2017, one for trading income and one for property income. The allowances are available in addition to the personal allowance.
The National Audit Office has published a report on HMRC’s 2018-19 accounts. The report shows that HMRC raised £627.98bn of tax revenues during 2018-19, an increase of £22.1bn (3.6%) on 2017-18. Of this total, around £250bn was paid in PAYE and National Insurance.
Currently, around 5.7m small businesses represent more than 95% of businesses in the UK. These businesses paid £115bn in corporation tax, VAT and other taxes during 2018-19. Small businesses are defined as having a turnover below £10m and fewer…
In certain situations the non-cumulative nature for calculating employee Class 1 National Insurance Contributions (NICs) makes it possible to manipulate earnings to reduce the overall amount payable by taking advantage of the lower rate of primary Class 1 contributions payable once the upper earnings limit has been reached.
This means that that an employee who is paid £2,000 each month of the year will pay considerably more in primary contributions than someone who is paid £600 for 11 months and £23,400 for one month, even…
At Spring Statement 2019, the government announced that it would launch a call for evidence exploring ways to improve the operation of Partial Exemption (PE) and the Capital Goods Scheme (CGS), following the findings of the 2017 Office of Tax Simplification (OTS) VAT review.
HMRC have now published the consultation document covering both subjects. These are two areas of VAT which can involve a significant amount of administration for businesses, with complex calculations often being required for some businesses to determine the amount of input…