By Katie Tax Advice • Tax News 0 Comments

Diary of main tax events – June/July 2022

Please see below for the diary of main tax events – June/July 2022. If you need help with meeting these deadlines we are here to help.

Date What’s Due
01/06 Corporation tax for year to 31/8/21 (unless pay quarterly)
19/06 PAYE & NIC deductions, and CIS return and tax, for month to 5/6/22 (due 22/06 if you pay electronically)
01/07 Corporation tax for year to 30/9/21 (unless pay quarterly)
05/07 Last date for agreeing PAYE settlement agreements for 2021/22 employee benefits
05/07 Deadline for agents and tenants to submit returns of rent paid to non-resident landlords and tax deducted for 2021/22
06/07 Deadline for forms P11D and P11D(b) for 2021/22 tax year. Also, deadline for notifying HMRC of shares and options awarded to employees.
19/07 PAYE & NIC deductions, and CIS return and tax, for month to 5/7/22 (due 22/07 if you pay electronically)
31/7 50% payment on account of 2022/23 tax liability due.

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    By Katie Business Advice • Tax Advice 0 Comments

    Advisory fuel rate for company cars – June 2022

    Advisory fuel rate for company cars – June 2022:

    Unbelievably there were very few changes to the HMRC advisory fuel rates from 1 March 2022, which may not have been your experience at the filling station!

    Now that the increased prices have fed through into the HMRC calculations there are some significant increases from 1 June 2022, as set out in the table below.

    In cases where the employee pays for the car fuel, these mileage rates should be used by the employer to reimburse the employee for business journeys.

    In cases where the employer pays for the car fuel, these mileage rates should be used by the employee to reimburse the employer for private mileage, if they want to avoid a fuel benefit in kind arising.

    Engine Size Petrol Diesel LPG
    1400cc or less 14p

    (13p)

    		 9p

    (8p)
    1600cc or less 13p

    (11p)
    1401cc to 2000cc 17p

    (15p)

    		 11p

    (10p)
    1601 to 2000cc 16p

    (13p)
    Over 2000cc 25p

    (22p)

    		 19p

    (16p)

    		 16p

    (15p)

     

    Where there has been a change, the previous rate is shown in brackets. The previous rate can continue to be used until 30 June 2022, if so desired.

    Note that for hybrid cars the appropriate petrol or diesel rate should be used.

    Need more information?

    Do you need further guidance on the Advisory fuel rate for company cars? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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      By Katie Tax Advice • Tax News 0 Comments

      Capital gains tax on separation and divorce

      Capital gains tax on separation and divorce:

      When a married couple or civil partners separate, tax planning is understandably not at the top of the list of their thoughts. However, a ‘no gain/no loss’ rule allows capital assets to be transferred between them free of capital gains tax (CGT) up to the end of the tax year in which they permanently separate. Beyond that date, asset transfers between the couple will often give rise to a CGT liability. With many divorce settlements taking several months this is worth careful consideration.

      The Office of Tax Simplification has recommended to the Treasury that the no gain/no loss rule should be extended to two years from the date of permanent separation. The government have accepted this recommendation, but the change in rules is yet to be legislated.

      The actual date that assets are treated as transferred between the separating couple depends upon how the marriage or civil partnership is dissolved.

      It is also important to consider private residence relief (PRR) on the family home. It should be noted that where one spouse or civil partner leaves the matrimonial home, they may continue to be eligible for PRR even if they no longer live in the property. There are specific conditions that need to be satisfied for this to apply.

      All in all, CGT on separation is a complex area and please do talk to us if any issues may be in point. We understand the sensitivity of the situation and are here to help.

      Need more information?

      Do you need further help with capital gains tax? We offer a wide range of services which are unique to your business relating to this matter. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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        By Katie Tax Advice • Tax News 0 Comments

        Salary sacrifices – make sure you get the timing right

        Salary sacrifices – make sure you get the timing right:

        Many employers and employees have been putting in place salary sacrifice arrangements to give up some of their contractual salary in exchange for additional pension contributions or an electric company car. In these specific cases and if correctly structured, the employee is taxed on the lower of the taxable benefit and the salary foregone.

        In the case of the electric car the benefit is currently 2% of the original list price. There is no taxable benefit on employer pension contributions.

        When the director or employee enters into the salary sacrifice arrangement, they must agree with their employer to vary the employment contract well in advance of the date when the first payment under the new arrangement is due to be made. If the contractual changes have not been completed by that date, the terms of the previous contract continue to be in force.

        This means that the employee is still entitled to receive, and is therefore still taxable on, the previous higher salary, even though the smaller, post- sacrifice amount is paid.

        Need more information?

        Do you need help with Salary sacrifices? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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          By Katie Business Advice • Tax Advice 0 Comments

          The employment allowance – is your business entitled?

          The Employment Allowance (EA) is a £5,000 allowance set against employer National Insurance Contributions (NICs) and has to be claimed each tax year by qualifying employers. The EA was increased from £4,000 to £5,000 this tax year to help to soften the blow of the 1.25% increase in employer contributions, now calculated at 15.05%.

          If two or more companies or charities are connected with one another, then only one of them may claim the EA.

          Employers are not eligible to claim the EA where their employers’ Class 1 National Insurance liabilities in the previous tax year exceeded £100,000.

          Another important exclusion from the EA are single director companies where the director is the sole employee of the company.

          Need more information?

          Do you need further guidance on The Employment Allowance? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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            By Katie Business Advice • Tax Advice 0 Comments

            Employee benefits on form P11D – report by 6 July

            Employee benefits on form P11D – report by 6 July:

            P11D forms for reporting expenses and benefits in kind provided to employees and directors in 2021/22 need to be submitted by 6 July 2022.

            Remember that reimbursed expenses no longer need to be reported where they are incurred ‘wholly, exclusively and necessarily’ in the performance of the employee’s duties. HMRC do however expect internal controls to be in place to ensure that the reimbursed expenses qualify under these terms.

            Note also that non-cash ‘trivial benefits’ that cost no more than £50 do not usually need to be reported. This typically covers non-cash gifts to employees at Christmas and on their birthdays.

            Need more information?

            Do you offer Employee benefits? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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              By Katie Business Advice • Tax Advice 0 Comments

              Buying a second hand electric car for your business

              Buying a second hand electric car for your business:

              The shortage of semiconductors has meant long delays in the delivery of new cars. This has caused many company car drivers to choose a second hand car instead, but what are the tax consequences?

              Unless the car has zero emissions, the capital allowance rules are the same for new and used cars bought by the business. Plant and machinery capital allowances may be claimed on the purchase price of the car at either 18% or 6%, depending on whether the CO2 emissions for the vehicle are below or above 50g CO2 per km.

               

              Where a zero-emission car is acquired by the business, a special 100% first year allowance only applies to new cars. There is however an exception for certain ex-demonstrator cars. HMRC accept a car is unused and not second hand provided it has been driven for a limited number of miles for the purposes of testing, delivery, and test driven by potential purchasers.

              When calculating the P11D benefit of company cars the original list price inclusive of extras should be used, not the purchase price. Hence the P11D value for a second hand company car may be significantly higher than the price paid for the vehicle.

              Need more information?

              Are you considering buying a second hand electric car for your business? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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                By Katie Business Advice • Business News 0 Comments

                The Employment Allowance – Don’t forget to claim

                The Employment Allowance (EA) is a £5,000 allowance set against employers National Insurance Contributions (NICs) and has to be claimed each tax year if the employer qualifies. This allowance was introduced in 2014/15 and was increased to £5,000 from 2022/23. Employers make a claim for the Employment Allowance through their payroll software. They do this by completing and submitting a Real Time Information – Employer Payment Summary (EPS) to HMRC. The employer must enter “Yes” in the “Employment Allowance Indicator” field of the EPS confirming that they are eligible to claim the allowance.

                Eligible employers can claim the Employment Allowance at any time during a tax year. Employers may also claim the Employment Allowance against closed tax years, provided they have not already claimed the allowance for those years. However, claims for closed tax years are limited to the four tax years falling before the current tax year.

                The Employment Allowance can be claimed by most employers who pay secondary Class 1 NICs on their employees. This includes:

                • businesses (includes self- employed persons, companies and partnerships who have employees)
                • charities (includes private businesses that have charitable status such as schools, academies, further education colleges and universities)
                • Community Amateur Sports Clubs

                If two or more companies are connected with one another, or two or more charities are connected with one another, then only one of those companies/charities may claim the Employment Allowance and they must decide which company/charity claims the allowance.

                For recently updated guidance on connected businesses see: –

                https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim06560

                 

                Other Employers Excluded from claiming the Employment Allowance

                Employers are not eligible to claim the Employment Allowance where their employers’ Class 1 National Insurance liabilities in the previous tax year exceeded £100,000.

                Another important exclusion from EA are single director companies where the director is the sole employee of the company.

                Employment Allowance counts towards the total de minimis State Aid you’re allowed to get over a 3 year period. Employers that exceed the de minimis State Aid threshold for their sector (Agriculture products for example 20,000 euros) are also excluded from claiming EA.

                Please contact us if you need help with your payroll.

                Need more information?

                Do you need further guidance on the above? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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                  By Katie Business News 0 Comments

                  Treasury Starts Conversation to Reform UK Capital Allowance Regime

                  Treasury Starts Conversation to Reform UK Capital Allowance Regime

                  A publication aiming to kickstart a conversation with businesses about how to reform the UK’s capital allowances regime was published earlier this month.

                  The publication sets out how firms can work with the government on capital allowances to help foster a new culture of enterprise and growth in the UK, with responses requested by 1 July 2022.

                  The UK has a long-standing issue with productivity and one of the key underlying causes is a lack of capital investment.

                  According to OECD data, companies invest just 10% of GDP each year, compared with 14% in our competitor countries – our tax system doesn’t reward investment as much as other countries do.

                  The Spring Statement set out some illustrations of the types of changes government could make to the current capital allowances regime. This new guidance delves into those options in further detail, which includes:

                  • increasing the permanent level of the Annual Investment Allowance
                  • increasing the rates of Writing Down Allowances
                  • introducing general First-Year Allowances (FYAs) for qualifying expenditure on plant and machinery
                  • introducing an additional FYA
                  • introducing permanent full expensing

                  While some business organisations have called for full expensing to be introduced following the super-deduction, this could cost over £11 billion a year. The government is keen to hear views as to whether that would be well targeted if funding is available, and if it isn’t available, how to best target their approach.

                  See:  Treasury Starts Conversation to Reform UK Capital Allowance Regime – GOV.UK (www.gov.uk)

                  Need more information?

                  Do you need further guidance on the Capital Allowance Regime? We offer a wide range of services which are unique to your business! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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