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Uncategorised

Please find below all the articles that have been categorised as 'Uncategorised'.

HMRC launch MTD campaign

According to recent research undertaken by the Institute of Chartered Accountants in England and Wales (ICAEW), over 40% of businesses that will be affected by Making Tax Digital (MTD) for VAT are not yet aware of it. With only six months to go until MTD goes live for some businesses in April 2019, HMRC have only recently launched a major communications campaign to try and build awareness amongst small businesses.

The ICAEW survey also shows that although there has been a significant increase in the number of businesses now…

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VAT on holiday accommodation

Letting of residential accommodation is generally an exempt supply for VAT purposes. However this exemption does not apply to holiday accommodation (includes furnished and non-furnished holiday lettings. The definition of ‘holiday accommodation’ for these purposes includes property that is advertised or held out as holiday accommodation and those consider suitable for holiday or leisure use. It is not restricted to periods of letting or availability.

Supplies of holiday accommodation are therefore taxable supplies and should be standard-rated, which means that if the rental income goes above the VAT registration…

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Help-to-Save accounts go live

Many people on low incomes who wish to build up a savings pot can now register for a government-incentivised Help-to-Save account. The launch of the new account follows an eight-month trial, with over 45,000 customers who deposited over £3 million.

The new scheme is easy to use, flexible and secure, will help those on low incomes build up a ‘rainy day’ fund, and encourage savings behaviours and habits. How much is saved and when is up to the account holder, and they don’t need to pay in every month…

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Class 2 NICs to remain

Self-employed earners (i.e. sole traders or partners) over the age of 16 and below state retirement age are currently liable to both Class 2 and Class 4 National Insurance contributions (NICs) unless specifically excepted by provisions contained in the Social Security Contributions and Benefits Act 1992.

Former Chancellor, George Osborne, made proposals to abolish Class 2 NICs and reform the system for paying Class 4 NICs. The proposals were designed to simplify the tax system for the self-employed and offer them more equal access to contributory benefits. However, the…

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HMRC consult on BIK changes

Following the recent consultation covering the taxation of employee expenses (as announced in the Autumn 2017 Budget), draft Finance Bill 2018-19 contains proposals to amend some of the existing rules concerning travel and subsistence payments.

BSRs and OCRs

Currently, there are no income tax or NIC implications where an employer uses HMRC’s approved benchmark scale rates (BSR) to pay or reimburse employees’ qualifying expenses incurred when travelling for work. The BSRs are designed to cover modest meal allowances with which employers can reimburse their staff for food and drink…

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MTD research published

HMRC have published a document entitled Making Tax Digital Research – Attitudes, Behaviour and Engagement, which reports on research undertaken to help HMRC understand how individual customers and agents respond to the core principles of MTD. The key objectives of the research were to explore:

– individual customers’ and agents’ overall attitudes and expectations of the elements of MTD that may affect them;
– levers and barriers that may influence engagement with MTDi; and
– anticipated impacts and experiences across different individual customer groups of moving to MTD.

Is summary, the…

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VAT treatment of vouchers

A summary of responses to HMRC’s consultation on VAT and vouchers was published on 6 July 2018. The consultation sought views about proposed new rules for the VAT treatment of vouchers and gift cards. The consultation focussed on how an EU directive, providing for the VAT treatment of vouchers, should be transposed into UK law. Broadly, the EU Vouchers Directive (Council Directive (EU) 2016/1065) was agreed on 27 June 2017 and legislates for a common VAT treatment of vouchers across the EU. It applies to any vouchers…

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OTS proposals new online PAYE platform

An increasing number of individuals are finding work through online platforms (for example Deliveroo and Uber workers), usually on a self-employed basis, whereas in the past they might have been employees whose relatively simple tax affairs were dealt with under PAYE. The Office for Tax Simplification (OTS) has published a paper entitled Platforms, the Platform economy and Tax Simplification, which explores the possibility of re-creating for them, in the context of self-employment, an arrangement that looks and feels more similar to that of an employee from an…

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Further MTD guidance published

In response to calls for additional clarity from businesses and their representatives, HMRC have published further information on Making Tax Digital (MTD) to support them with preparation in the run up to the start of the mandatory MTD VAT service from April 2019.

The guidance includes:

– A new HMRC VAT Notice entitled Making Tax Digital for VAT (Notice 700/22). The Notice explains the digital records businesses must keep, and ways to record transactions digitally in certain circumstances; and what counts as ‘functional compatible software’, and when software programs…

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Saving tax with simplified expenses

Certain sole traders and partnerships may benefit from using HMRC’s simplified expenses regime to calculate business expenses for vehicles, working from home and living on the business premises.

Currently, businesses can either calculate expenses by working out the actual costs, or use HMRC’s published flat rates.

HMRC’s checker can be used to work out which method will produce the most favourable result.

The checker asks the user to make estimates about some of their business expenses.

However, the tool:

– does not give exact figures to use in the individual’s your tax…

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