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A partnership may be a simple trading vehicle enabling two or more people to own and run a business, but there are few practicalities worth considering before making the move.
Whilst there are no legal formalities involved in establishing a partnership, and a partnership may come into existence under an oral agreement, it is advisable that a formal partnership deed is drawn up. This is a legal document that sets out what each partner is responsible for and what he can expect from…
Read MoreHMRC have published an updated version of their guidance for businesses on Making Tax Digital for VAT. In particular, the guidance now includes information on how businesses should deal with petty cash transactions.
Petty cash is traditionally a small amount of cash on hand that covers day to day expenses of a business, such as buying a pint of milk. In some businesses it can be used to describe costs that are not attributable to an individual account in their records. Requiring businesses…
Read MoreAccording to a recent survey undertaken on behalf of HMRC, only 25% of people making financial gifts have a working knowledge of inheritance tax (IHT) rules surrounding such payments.
The report entitled Lifetime Gifting: Reliefs, Exemptions, and Behaviours, reveals a significant lack of awareness of the gifting rules, liability for inheritance tax and the risk of making financial gifts without considering tax rules, which can apply for any gifts over £3,000 in value in a given tax year.
The National Insurance Contributions Bill was introduced into Parliament on 25 April 2019. The Bill contains provisions designed to align the income tax and national insurance contributions (NICs) treatment of termination awards and sporting testimonials, closing a loophole which currently allows effective tax planning. If enacted, the new rules are expected to take effect from April 2020.
HMRC believe that ‘the current misalignment incentivises well advised employers to disguise final payments as compensatory termination payments that benefit from a NICs exemption’. Consequently, the…
Read MoreHMRC’s rent-a-room scheme currently allows individuals to receive up to £7,500 of gross income from renting out spare rooms in their only or main home without a liability to tax arising. Broadly, as long as income is below the annual threshold, it does not need to be reported to HMRC.
However, the emergence and growth of peer-to-peer online marketplaces and digital platforms (for example Airbnb) has made it significantly easier to advertise rooms and put those with spare accommodation in touch with a national and global network of…
Read MoreThe VAT flat rate scheme (FRS) is used by many small businesses to help simplify their VAT reporting obligations, although some VAT experts would argue that the scheme is not simple to use.
Broadly, the FRS is a simplified VAT accounting scheme for small businesses, which allows users to calculate VAT using a flat rate percentage by reference to their particular trade sector. When using the FRS, the business ignores VAT incurred on purchases when reporting VAT payable, with the exception of capital items which cost £2,000 or…
Read MoreThe minimum contributions employers and their staff must pay into their automatic enrolment workplace pension scheme increased with effect from 6 April 2019.
From that date, the employer minimum contribution has risen from 2% to 3%, while the staff contribution also increased from 3% to 5%. As part of the ‘phasing’ process, the increases mean that total contributions for employees have gone up from 5% to 8%.
All employers with staff in a pension scheme for automatic enrolment must ensure that they implement the changes and ensure that at least…
Read MoreHMRC have recently lost another high-profile IR35 case. Kaye Adams, the presenter of ITV’s Loose Women programme, has successfully challenged HMRC on her employment status, with a First Tier Tribunal (FTT) finding the terms of her personal services contract for BBC radio shows meant she was not an employee.
In Atholl House Productions Ltd v HMRC [2019] UKFTT 0242, TC07088, the tribunal stated that the essential issue was whether, if the services supplied by the taxpayer to the BBC had been supplied under a contract directly between the…
Read MoreIn its commentary on the economic and fiscal outlook published alongside details of the Spring Statement, the Office of Budget Responsibility (OBR) has pointed out that the government has altered its proposed schedule of fees payable for an application for a grant of probate. The new rates take effect from April 2019, and range between £250 and £6,000, depending on the value of the estate.
Prior to the change, bereaved relatives paid a flat £215 fee for probate, the charge for securing legal…
Read MoreVAT-registered businesses with a taxable turnover above the VAT threshold are required to use the Making Tax Digital (MTD) service to keep records digitally and use software to submit their VAT returns from 1 April 2019.
The exception to this is a small minority of VAT-registered businesses with more complex requirements. As part of planning for the VAT pilot, HMRC consulted with various stakeholders and took the decision to delay mandation for these customers until 1 October 2019 to ensure there is sufficient…
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