A qualifying furnished holiday let (FHL) enjoys a number of favourable tax breaks – including business asset disposal relief, and the ability to claim capital allowances and rollover relief – when compared with non-qualifying properties.
FHL status is subject to occupancy conditions. The main two rules are that the property must be available for occupation as furnished holiday accommodation letting for at least 210 days in the year, and that it must actually be let commercially as furnished holiday accommodation to the public for at least 105…
Health and Social Care Levy
Rumours of an imminent rise in NI rates started to circulate at the beginning of September, and were confirmed on 7 September with the publication of the government policy paper Build Back Better: Our Plan for Health and Social Care. The increase will initially take the form of a 1.25% increase on certain classes of National Insurance from April 2022, before becoming a separate ring-fenced charge from April 2023. The affected classes are:
– Primary and secondary Class 1
In most cases, it doesn’t make sense to simply give away money to save tax during a person’s lifetime. For example, a higher rate taxpayer can claim tax relief to offset their income tax bill on qualifying donations made via the gift aid scheme. However, the cost of the donation will always exceed the relief, so it doesn’t make sense to make additional donations purely from a tax perspective, though they can be useful for helping to avoid things like the high-income child benefit charge.
However, when it comes…
The self-assessment system includes the right for HMRC to make enquiries to ensure the correct amount of tax is collected. However, these rights and the underlying time limits etc. are often a source of confusion. They have changed since self-assessment was introduced in the 1990s, which some taxpayers are completely unaware of.
Previously, HMRC had one year from the filing deadline to open an enquiry if the return was filed on time. It didn’t matter if the return was filed early. The problem with this was that it provided…
Companies are able to relieve losses for tax purposes, subject to certain restrictions. These restrictions have been relaxed slightly in recent years, e.g. allowing companies to claim trading losses against other profits for future trading years.
However, COVID19 has seen many businesses, including companies, closing down. It is also anticipated that further insolvencies will occur once government assistance, such as furlough, ends, and companies are required to start making repayments on the various loan programmes introduced during the pandemic. As a result, terminal loss relief may prove more important…
September is the final month of the furlough scheme, subject to any last-minute extension. Employers will need to top up the government’s contribution, which is now 60% of wages (up to a maximum cap of £1,875) to ensure the employee receives the requisite 80% (up to £2,500). The deadline for claiming the government contribution for this final month will be 14 October.
HMRC’s guidance on the fifth SEISS grant was revised on 20 August to clarify that claimants that became partners during 2020/21 should work out their share of…
HMRC has issued a reminder to working parents that Tax-Free childcare (TFC), the scheme the government phased in between 2017 and 2018, is not just for "traditional" childcare costs, such as regular hours after school during term time. It’s also possible to use the account to pay for things like accredited clubs or sports activities over the summer.
TFC is available for children aged up to 11 generally and takes the form of a top-up scheme – parents pay into the account and HMRC tops it up…
One of the fundamental requirements for re-claiming input tax on a VAT return is the need to have a valid VAT invoice. A valid invoice must include certain requisite information, such details of the goods or services procured, the VAT registration number of the supplier, their address, and show the amount of VAT on a separate line to the cost of the expense.
HMRC routinely carry out VAT inspections for compliance purposes. If they find invoices that don’t meet these requirements there will be classed as invalid…
Investors’ Relief (IR) was introduced in April 2016 to complement what was then called entrepreneurs’ relief. IR is intended to encourage outside investment into smaller entrepreneurial companies by those investors who may not wish to get involved with the day-to-day running of the business. Entrepreneurs’ relief, now called Business Asset Disposal Relief (BADR), requires the shareholder to be a director or employee of the issuing company. In contrast, IR prohibits the shareholder from being a "relevant employee " (with some exceptions) during the minimum shareholding period – referred…
From 1 August the government contribution will fall to 60%, meaning the employer will need to pay 20% to ensure the employee receives their entitlement of 80% (subject to a £2,400 per month). This will remain in place until the end of September when the scheme is set to close.
HMRC published new guidance for those who have received SEISS grant payments last month. The guidance covers situations where the SEISS income may not have been correctly reported on the self-assessment return. The income…