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Changes to the VAT flat rate scheme

In a surprise announcement in the 2016 Autumn Statement, the Chancellor announced that changes are to be made to the existing flat rate scheme for VAT (FRS) in order to tackle perceived ‘aggressive abuse’. The changes, which will take effect from 1 April 2017, are designed to ‘reduce the incentive for firms and agencies to move employees to self-employment to exploit VAT simplification aimed at small businesses’. The subsequent HMRC policy paper published on 5 December sets out the details of the changes, which will affect any users,…

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December Questions and Answers

Q. I live near the Millennium Coastal Path and I’m considering renting out my spare room via Air BnB to walkers and cyclists. Would this be considered a business and should tell the tax man?

A. Firstly, it is important that you make sure you have a freehold arrangement on your property. A recent tribunal ruled that a flat owner was breaking the terms of her leasehold contract by renting out a room this way, since her contract stipulated that hers was a private residence only.

If you have a…

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December key tax dates

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/12/2016

30 – Deadline for 2015/16 self assessment online returns to be filed if you are an employee and want tax underpaid to be collected by adjustment to your 2017/18 PAYE code (for underpayments of up to £3,000 only)

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December questions and answers

Q. My wife doesn’t work. Can she transfer her unused personal tax allowance to me?

A. Since April 2015, it has been possible for a spouse or civil partner who is not liable to income tax or not liable above the basic rate for a tax year, to transfer part of their personal allowance to their spouse or civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate.

The transferor’s personal allowance will be reduced by the same amount. For 2015/16…

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A Gentle Change of Weather From The Autumn Statement

As expected, Chancellor Phillip Hammond’s Autumn Statement was a cautious one, offering perhaps a small dip in temperature, but no impending storms for the coming months.

However, he did raise some points which small business owners should take note of:

From April 2017 businesses which use the flat rate scheme to account for VAT, and firms who supply services rather than goods, will need to check the level of costs they incur to make sure they are using the correct flat rate.

If purchases of goods are below certain limits they…

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Autumn Statement 2016

Making the most of your money and achieving your financial goals in a world of complex and ever-changing tax legislation requires careful planning and expert advice.

This guide introduces some of the kay areas to consider when planning to maximise your business and personal wealth, although your exact requirements will depend on your individual circumstances.

If you have any questions or would like one-to-one advice tailored to your needs, please call us on 01792 466 428 or email Read More

Five New Year’s Resolutions Every SME Should Consider Making

Wales is the home of small businesses and business start-ups, with 99 percent of Welsh firms being SMEs. And across the UK, this year alone, almost 600,000 entrepreneurs put their dreams into action by setting up shop.

The Centre for Entrepreneurs’ Start Up Britain campaign heads for Wales this month, with a host of events going ahead throughout our towns and cities, aimed to help people grow their small business.

Here at Morgan Hemp, we specialise in providing expert business planning advice and tools to SME’s – in…

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Self-assessment and disclosure

Finance Act 2016, which became law on 15 September 2016, contains provisions designed to help clarify the time allowed for making a self-assessment.

The time limit is four years from the end of the tax year to which the self-assessment relates. This is the same time limit as for assessments by HMRC. The provisions will have effect on and after 5 April 2017, although there are transitional arrangements for years previous to this, as follows:

– for tax years prior to 2012/13, taxpayers have until 5 April 2017 to submit…

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November key tax dates

2 – Last day for car change notifications in the quarter to 5 October – Use P46 Car

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/11/2016

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Restriction of tax relief on finance costs for individual landlords

New provisions will take affect from April 2017, which will see tax relief for finance costs on residential properties being gradually restricted over a period of three years, until, by 2020/21, all financing costs incurred by a landlord will be restricted to the basic rate of income tax.

Such finance costs include mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan.

Landlords will no longer be able to…

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