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FRS 102 guidance on directors’ loans revised

HMRC have recently updated their online toolkit on directors’ loan accounts to help tax advisers and agents preparing 2015/16 company tax returns. The update reflects the changes to reporting requirements under UK GAAP, as taxing debt will now be largely driven by FRS 102 requirements for financial instruments.

If an entity makes loans to/from directors/employees where there is no explicit interest rate or the interest rate charged is not at a market rate, then the prescribed accounting treatment will depend on which accounting framework the entity has adopted.

Where…

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Help-to-save consultation launched

HMRC have launched a consultation on the government’s proposed ‘Help-to-Save’ scheme, which is designed to encourage people on low incomes to build up their savings.

Broadly, the scheme will be open to some 3.5 million adults in receipt of universal credit with minimum weekly household earnings equivalent to 16 hours at the National Living Wage, or those in receipt of working tax credit. It will work by providing a 50% government bonus on up to £50 of monthly savings into a Help-to-Save account. The bonus will be paid after…

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HMRC guidance on senior accounting officers

HMRC have published Brief 12(2016), which contains information on changes to their senior accounting officer guidance (SAOG). The Brief aims to clarify HMRC practice and reflects administrative changes to their operational procedures. These include:

– A change of practice allowing submission of certificates by electronic means in addition to the currently accepted methods;
– Extensive updates to reflect organisational change within HMRC and the role of Wealthy and Mid-Size Business Compliance (WMBC);
– New examples of how groups and aggregation should be applied;
– Clarification of HMRC’s view on the inability…

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Trivial Benefits

Employers will be aware that various changes have been made to the reporting requirements for employee benefits and expenses from April 2016, which mean that some employers will no longer have to complete annual return forms P11D. The three main changes are:

– The dispensations regime has been replaced with an expenses exemption – broadly, where an employee would have been entitled to tax relief in full for a benefit or expense, the employer does not need to deduct tax or NICs, and they do not need to report…

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June Questions and Answers

Q1. I am thinking of purchasing a new house that I will use as my main residence, but I will still own other properties. Will I be liable to the new 3% stamp duty land tax (SDLT) change?

A: HMRC guidance on the new higher rates of SDLT for purchase of additional residential properties explains that if a previous main residence is replaced within three years, then you will not be liable to the additional 3% SDLT charge, even though you own other residential properties.

Q2. I commenced trading…

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Free pension advisory services to be merged

Pension Wise, the free advice service set up to promote and advise on pensions reform and annuity freedoms, is to be merged with other publically funded advice services on pensions, to create a single website and advisory service.

The Low Incomes Tax Reform Group (LITRG) believes that the merger is a great opportunity for the new unified service to better help those on low incomes. Commenting on the merger, LITRG chairman, Anthony Thomas, said:
‘Advice on money matters has previously been delivered in penny packets by bodies specialising in discrete…

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HMRC go live with Verify identity authentication

Gov.uk Verify, the online service taxpayers will need to use to prove their identity before accessing HMRC’s digital services and other government online services, is now live. The central government platform for online identity assurance has been under development for some time by the government digital service (GDS) and has been available in a beta version. It has now passed its service assessment.

It should take around ten minutes for an individual to verify their identity the first time they use gov.uk Verify, and a couple of minutes any…

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OTS examines potential for new trading vehicle

The Office of Tax Simplification (OTS) recently published a series of recommendations following its simplification review of small company taxation (see OTS recommends simplifications for small companies, April 2016 newsletter). The review focused on incorporated businesses with fewer than 10 employees, known as ‘micro’ businesses, of which there are now some 4.1 million in the UK, with 1.3 million operating through a company structure.

Currently, the UK operates a corporate tax regime on a ‘one-size fits all’ basis, modelled on a traditional company, with third party shareholders and clear…

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New PSC register requirements take effect

From 6 April 2016, all unlisted UK companies, limited liability partnerships (LLPs), or societas europaea (SEs)  are required to maintain a register of the people who have significant control over them. This new register of ‘people with significant control’ is known as the PSC register, and its purpose is to identify individuals who ultimately own or control more than 25% of a company’s shares (or more than 25% of an LLP’s assets), more than 25% of the company/LLP’s voting rights, or who otherwise exercise control over the company…

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