In September 2019, the government commissioned Sir Amyas Morse to conduct an independent review of the loan change (the review). The review was published on 20 December 2019 along with the government’s response, which confirmed that it would accept all but one of the review’s recommendations.
The main change is that the government has agreed to defer the loan charge repayment date to September 2020.
The Treasury has also decided to limit the loan charge cut-off date to…
Read MoreIn the December 2019 issue of Employer Bulletin, HMRC set out the action required to avoid any problems when merging or changing ownership of a business, to ensure all employees’ payroll details are transferred to the new business.
When a business merges or changes ownership, employers have to contact HMRC to confirm if the business change should be treated as a merger or a succession. This affects whether the business can continue to use its current employer reference or needs to apply…
Read MoreHMRC have faced another defeat in a tax case involving the IR35 intermediaries’ legislation. In RALC Consulting Ltd v HMRC [2019] TC 07474, the First Tier Tribunal (FTT) allowed an appeal against HMRC’s determination that IR35 applied because of a ‘hypothetical contract’ between various parties making up a service provider chain lacked the requisite ‘mutuality of obligation’.
RALC Consulting Ltd (RALC) (the appellant), was the personal service company (PSC) of IT consultant Richard Alcock, who was the company’s sole director and…
Read MoreHMRC have published company car advisory fuel rates for use from 1 December 2019.
The rates apply when employers reimburse employees for the cost of fuel for business travel in their company cars or require employees to repay the cost of fuel used for private travel. HMRC review rates quarterly on 1 March, 1 June, 1 September and 1 December.
The rates applying from 1 December 2019 are as follows:
Petrol and LPG
…
Following the General election on 12 December, Prime Minister Boris Johnson has confirmed that Sajid Javid remains as Chancellor of the Exchequer and no other changes at HM Treasury have been announced. The Prime Minister has however, confirmed that a more significant cabinet reshuffle will take place after the UK leaves the EU on 31 January 2020.
The Conservative manifesto set out a fairly limited number of tax pledges, with commitment to a triple lock on income tax, national insurance contributions (NICs)…
Read MoreAs things currently stand, the expected cut in the main rate of corporation tax to 17% from April 2020 is unlikely to happen, but current corporation tax rates remain pretty favourable. There are also other areas where company formation may help save tax.
The costs and regulations involved with running a company are usually greater than trading as a sole trader or in partnership, and should not be overlooked. In addition, incorporation generally means an increase in administration, which some businesses may find burdensome.
The starting point for dealing with…
Read MoreWhilst 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 of holding a social function for employees, providing certain conditions are met.
Broadly, a social event – which of course, includes the annual Christmas party – will qualify as a tax-free benefit if the following conditions are satisfied:
– The total cost must not exceed £150 per head, per year;
– The event must be primarily for entertaining staff; and
-…
In an attempt to encourage working overtime shifts, doctors have been promised that their tax bills for higher rate pension relief will be covered by the NHS. This development follows the refusal by doctors to work overtime because of tax penalties received on their pensions due to the £40,000 annual allowance limits.
The amount people can put into pensions tax free was reduced for all pension savers in 2010, when the £255,000 allowance was cut to £40,000 a year. This problem originally arose in 2016 when a tapered annual…
Read MoreIn broad terms, and subject to certain exceptions, a business will be required to register to charge and pay VAT once annual sales reach a pre-set annual threshold, which is currently £85,000. This threshold is determined by total sales and is not the same as total profits (which is generally sales minus expenses).
However, a business can register for VAT even if its turnover (total sales) is below the threshold and it may actually save tax by doing so, particularly if its main clients or customers are organisations that…
Read MoreAs 31 December approaches, many companies will be getting ready to tie up tax matters for their financial year-end and giving consideration to salaries, bonuses and dividends.
Given current tax rates, paying a dividend rather than a salary will often be a more cost-effective way of withdrawing profits from a company. However, if the company is loss-making and has no retained profits, it will not be possible to declare a dividend, and an alternative will need to be considered. This often involves an increased salary or a one-off bonus…
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