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Uncategorised

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

Latest news round up

Budget

The Budget finally took place on 3 March 2021. None of the speculated tax changes, e.g. raising CGT came to pass, although the main rate of corporation tax will increase in 2023. Several allowances, such as the personal allowance and CGT annual exempt amount have been frozen until April 2026. Further detail of the Budget announcements were included in our Budget newsletter.

Covid-19

In terms of Covid-19 measures, details of the fourth SEISS grant have now been published. Additionally, a fifth tranche for the period from May to September…

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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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Latest news round up

Covid-19

There have been relatively few announcements related to Covid-19 support this month. The only real announcement of note was an amendment to the terms of the Pay As You Grow scheme for repaying Bounce Back loans. Under the revised rules, a borrower will be able to take a six-month repayment holiday without needing to have made any previous instalments. Before the amendment, they would have needed to have made at least six payments before this was an option. Full details are available here.

Self-assessment

A welcome announcement in February…

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Leaving the UK: a look at split-year treatment

According to reports, the number of people leaving the UK during 2020 was “unprecedented”. The Economic Statistics Centre of Excellence reported that as many as 700,000 left London alone in the 15-month period to September 2020. This brings the question of tax residence into sharp focus.

Residence

For any given tax year, an individual is either UK-resident or non-UK resident for tax purposes as determined by the statutory residence test (SRT) set out in Finance Act 2013, Sch. 45. However, if they move out of (or indeed into) the…

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Self-assessment – DIY time-to-pay options

The tax return filing deadline for 2019/20 has now passed. However, where taxpayers have struggled to pay any tax they owed by the 31 January deadline, it is still possible to set up an instalment plan – or “time-to-pay” – arrangement. In the right circumstances, this can be done online with no need to contact HMRC by phone.

An online plan can be set up if the taxpayer:

– owes £30,000 or less;
– does not have any other payment plans or debts with HMRC;
– does not…

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Deregistering from VAT

As a result of the Covid-19 crisis, many businesses are currently experiencing reduced turnover. In many cases, the business is VAT-registered, and some owners are asking whether they can now deregister. What are the rules here, and is it always advisable to do so?

There can be a number of motives for VAT deregistration. For example, if the majority of sales are B2C sales, i.e. not to other VAT-registered businesses, the VAT charge is a real cost to the customer. On the face of it, deregistering can possibly offer…

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Latest news round up

Covid-19 – business support

Unsurprisingly, Christmas 2020 was dampened by the ongoing Covid-19 measures. The Prime Minister revised his plans to permit “Christmas bubbles” to be formed between for up to five days between multiple households. In the end, such bubbles were only permitted on Christmas day, and then only for areas that weren’t in tier 4.

The New Year brought further bad news with the announcement of a third national lockdown for England starting on 6 January, lasting until at least mid-February before review. Scotland and Wales had announced…

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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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