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September Questions and answers

Q. I have recently changed jobs and need to use my car to make business journeys. Will I have to pay tax on the mileage expenses my employer reimburses me for these trips?

A. Employers can pay employees a tax-free and national insurance-free amount for every mile they drive on business duties, currently:

– 45p per mile for the first 10,000 miles
– 25p per mile for each subsequent mile
– 24p per mile for motorcycles
– 20p per mile for bicycles
– 5p per mile extra for each passenger carried on work-related journeys

If…

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EU consultation on ending VAT on eBooks

The future of the chargeable rate of VAT on digital publications and eBooks is under review as the European Commission (EC) has launched a two-month consultation with a view to abolishing the current full rate VAT.

Member States currently have the option to tax printed books, newspapers and publications at a reduced rate (minimum 5%) and some Member States were granted the applications of VAT rates lower than 5% (super-reduced rates) including exemptions with a deductions right of VAT at the preceding stage (so called zero rates) to certain…

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FB 2016 amendment on OTS appointments proposed

The chairman of the Treasury Select Committee, Rt Hon. Andrew Tyrie MP, recently wrote to the Chancellor of the Exchequer, Rt Hon. Philip Hammond MP, to inform him that the Committee disagrees with his predecessor’s decision not to consent to a recommendation that the Committee be given the right of veto over the appointment and dismissal of the Officer for Tax Simplification’s Chair and Tax Director.

In order to be successful, the Committee says the OTS must be in a position to provide the Government with robust, dispassionate and…

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CIOT examines new corporate offence proposals

The Chartered Institute of Taxation (CIOT) has recently expressed its concerns that the new corporate offence of failure to prevent the criminal facilitation of tax evasion may lead to a string of prosecutions in relatively small cases where civil penalties can already provide enough punishment.

The Institute set out its concerns in its response to a HMRC consultation on the new corporate criminal offence, which aims to overcome the difficulties in attributing criminal liability to corporations for the criminal acts of those who act on their behalf.

It is still…

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Dividend Allowance

Legislation included in Finance Bill 2016 implements the new 0% rate for dividend income, as well as changing the rates of tax for dividend income. Once enacted, the changes will apply from 6 April 2016. Broadly, the new nil rate applies to the first £5,000 of a person’s dividend income and is available annually. From 6 April 2016, UK residents pay tax on any dividends received over the £5,000 allowance at the following rates:

7.5% on dividend income within the basic rate band;

32.5% on dividend income within the higher…

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August Key Tax Dates

  • 2 – Last day for car change notifications in the quarter to 5 July – Use P46 Car
  • 19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/8/2016
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August Questions and Answers

Q1. I have five employees who I recently took out for dinner to celebrate the success of the company. The total cost of the meal was £225. Do I have to report this as a benefit-in-kind to HMRC?

A: Finance Bill 2016 legislates for a new tax exemption relating to trivial benefits, which broadly means that if the cost of providing the benefit does not exceed £50 per employee, you will not have to account for it to HMRC, and the employees will not have to pay tax and…

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Casual Employees

Some employers will be considering taking on extra staff on a ‘casual’ basis to cover the summer period. There are a few issues which employers should think about when taking on people on a temporary basis.

Firstly, the employment status of the worker needs to be carefully considered. The term ‘casual worker’ is not precisely defined in statute. It is often used to refer to individuals who are engaged on an ‘as and when required’ basis, and often, the intention is that the individual will not have employment status…

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HMRC Focus on Contractor Loan Schemes

HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017.

The withdrawal of the relief was announced at the 2016 Budget, as part of the package of changes totackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these…

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Spotlight on Tax Avoidance Schemes

HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017.

The withdrawal of the relief was announced at the 2016 Budget, as part of the package of changes totackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these…

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