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Venture Capital Trusts – are the dividends exempt?

When preparing a tax returns, it is easy to look at a dividend statement from a VCT and think “It’s exempt” and simply file it away. Of course, in most cases this is probably sufficient. However, sometimes a little more care is needed.

Dividend exemption

Where an individual aged 18 or over acquires qualifying shares up to the permitted annual maximum of £200,000, any dividends paid on the shares whilst the VCT remains approved are exempt from tax. In addition, if the VCT shares are newly issued, the individual may…

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Reporting Covid-19 support payments

A business receiving support payments for Covid-19 needs to ensure the receipt is correctly recorded as taxable income for corporation tax purposes. For unincorporated businesses using the cash basis, this is straightforward enough. However, where the accounts are prepared using GAAP, more care is needed.

Section 106 of Finance Act 2020 that payments received under the following schemes are within the scope of this:

– the coronavirus job retention scheme;
– the self-employment income support scheme;
– any other scheme that is the subject of a direction given under section 76 of…

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Import One-Stop Shop

One of the consequences of Brexit is that exports of goods from GB to customers based in the EU are now zero-rated as far as UK VAT is concerned. However, if the consignment is valued at more than £22 there will be an import VAT liability at the other end. This isn’t too much of a problem for B2B sales where the customer is VAT registered – they can simply claim back the VAT according to the particular process relevant to that country. However, for unregistered businesses and…

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HMRC launches UK VAT number checking tool

Following the UK’s exit from the European Union, VAT registration details of UK companies will no longer be maintained on the VAT Information Exchange System (VIES). Being able to check the validity of a new supplier’s VAT number is an important step in combatting VAT fraud.

For example, a rogue supplier might provide what looks like a valid VAT invoice to another business. In reality, the supplier isn’t VAT registered and the VAT registration number on the invoice is fake. The supplier simply pockets the 20% “VAT” charged. The…

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First-year allowances for zero emission cars to continue

There was some confusion when Finance Act 2020 was published. The government had announced that it would be extending the current enhanced 100% first-year allowance (FYA) available for zero-emission vehicles. However, when the legislation was published there was no mention of any extension, leading to speculation that the FYA would be scrapped in April 2021.

The position has now been clarified, and the 100% FYA will be available for the purchase of zero-emission cars until April 2025. It will also be available for purchases of equipment for gas refuelling…

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Reverse charge for building services imminent

After two delays, the new rules for certain building services will finally take effect from 1 March 2021. Under the current rules, a business (for example a builder) will add VAT to their sales invoices passed to their customers, and then account for this to HMRC via the VAT return. The problem is that HMRC feels that there is a high amount of what is called “missing trader fraud” in the construction industry, i.e. where the trader charges and collects VAT, but then absconds with it without paying…

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Latest round up

With much of the country entering Tier 3 restrictions around Christmas, and Wales being put back into a stay at home lockdown from 28 December, it is inevitable that there would be further announcements made with respect to business-related COVID-19 measures.

Extension of furlough scheme

The Coronavirus Job Retention Scheme (CJRS) was initially supposed to end on 31 October 2020. However, this was extended to 31 March. On 17 December, the Chancellor announced that the scheme would be further extended to the end of April 2021. The government will therefore…

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GUIDANCE FOR OUR CLIENTS – CORONAVIRUS (COVID-19) – CJRS/Furlough Extension – 3nd November 2020

After the Prime Minister’s surprise announcement late Saturday afternoon we wanted to share the limited information we have regarding The Coronavirus Job Retention Scheme extension (also known as ‘furlough’) with clients.

The below only provides guidance on the Job Retention Scheme Extension, we strongly advise clients to seek employment/HR advice prior to placing any employee(s) on furlough or extending an employee’s furlough.

Key Points:
The extension will last until December 2020.
The scheme will be based on the August 2020 rules, this means employers can claim 80% of their employees normal wages…

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HMRC review of import VAT deducted as input tax by non-owners

HMRC have recently clarified the correct treatment for the deduction of import VAT paid by a taxable person who is not the owner of the relevant goods.

Following the publication on HMRC Brief 2 (2019), which restated the long-standing policy of who is entitled to reclaim VAT paid on imports under current UK legislation, HMRC received a number of representations from businesses and business representatives about the application of the rules in specific cases. HMRC’s have now completed their review and have confirmed that the policy outlined Brief 2…

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The ‘new normal’ for Christmas parties?

As we approach the end of the year, thoughts may be turning towards upcoming Christmas celebrations and alike – although this year, the traditional work’s Christmas party is likely to look very different.

Whilst the tax legislation does not include a specific allowance for an employer providing a Christmas party for employees, HMRC do allow limited tax relief against the cost providing social functions. Relief will still be available even where such an event is being held in a different format due to the coronavirus restrictions – possibly even…

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