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On the 4th-5th June 2022, Client Manager, Mikey took part in a charity hike in The Cateran Yomp. A 54-mile hike in 24 hours across rural Perthshire.

It was tough but he completed it and raised vital funds for ABF The Soldiers’ Charity, the Army’s National Charity, providing a lifetime of support to soldiers, veterans and their immediate families. Mikey raised a fantastic £829 + 106.90 Gift Aid. We were delighted to support him on this charity hike and look forward to more with the team in the future!

Well done Mikey from all the team at A&C!

Remember, if your business gets involved in a charity hike this can be tax efficient. We offer a wide range of services which are unique to your businesses who are just getting going! 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.

Our fantastic team at A&C Chartered Accountants are here to help.

Workplace Charging Scheme:

The UK Government is now offering help to businesses with the upfront costs to install charge points.

The Workplace Charging Scheme (WCS) is a voucher-based scheme that provides eligible applicants with support towards the upfront costs of the purchase and installation of electric vehicle (EV) chargepoints.

The scheme is available for B&Bs, campsites, small hotels, charities and any other accommodation business with less than 250 employees.

For more information please follow the link here: Workplace Charging Scheme: guidance for charities and small accommodation businesses – GOV.UK (www.gov.uk

Do you need further guidance on the Workplace Charging Scheme?We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in the hotel and charity sectors. 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.

Our fantastic team at A&C Chartered Accountants are here to help.

Understanding scale rate payments:

As an employer providing business or private expenses for your employees, you have certain tax, National Insurance and reporting obligations.

The rules on cash sum payments for business expenses cover:

• cash sums you provide to meet the costs of your employees’ expenses
• expenses they’ve paid for themselves that you reimburse
• ‘scale rate payments’ you pay at a level agreed with HM Revenue and Customs (HMRC)
• ‘round sum allowances’, which you give to an employee regardless of how they spend them

Scale rate payments

There are separate rules for individual benefits you provide to your employees. You need to follow specific reporting and payment rules for different items, including travel, meals and accommodation.

Payments for private expenses count as earnings.

We offer a wide range of services which are unique to your businesses who are just getting going! 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.

Our fantastic team at A&C Chartered Accountants are here to help.

Should you convert a property to a furnished holiday let?

Normally a residential rental property would be subject to a 28% capital gains tax (CGT) rate on its disposal. However, if it qualifies as a furnished holiday let (FHL) then the capital gains tax rate can be reduced to 10% by taking advantage of Business Asset Disposal Relief (BADR). It may be possible to make a non-FHL into an FHL for the two years prior to disposal and then enjoy BADR on the whole gain.

To qualify as an FHL, a property must be situated in the UK or the European Economic Area (EEA), it must be furnished and let on a commercial basis and the following conditions need to be satisfied:
1. The property must be available for letting for 210 days a year; and
2. It must actually be let for 105 days a year; and
3. The property must not normally be let for periods of more than 31 consecutive days to the same person, but if it is so let, those days do not count towards the 105 day total (above).

In the case of a single property, relief should be available if the property was used as an FHL for two years before the business ceased and the disposal takes place within three years of any cessation.

BADR may not be available when multiple FHLs are held and only some of them have been disposed. This is because HMRC will not automatically accept that this will be the disposal of the whole or part of a business (they say that it depends on the facts). When not all FHLs are sold then the risk is that HMRC resist a BADR claim on the basis that only business assets are being disposed of rather than a definable part of the business.
This all makes me think that in some cases it may be worth bringing a property within the FHL rules two years prior to a disposal.

Example: Giles owns a rental property in Devon which was purchased years ago for £200,000 and is now worth £1.2m. He now wishes to sell the property and is told that he would face a tax liability of £280,000 (£1m at 28%) if he did so. However, if he were to run an FHL business for at least two years then (all things being equal) this tax liability could be reduced to £100,000 (£1m at 10%).

Forbes Dawson view

Although changing a property to an FHL is a significant commercial decision, there can be significant tax savings achieved in doing so because BADR can be enjoyed on the whole gain even when the FHL status has only applied over a relatively short period of ownership. Also, with the rise of websites such as Airbnb, it is now likely to be quite straightforward to set up a qualifying FHL business.

If you have any questions on the above, please do not hesitate to get in touch.

Should you convert a property to a furnished holiday let?

Our team of property accountants can help you answer that question, taking into account your goals and current situation.

We work hard to create smart and effective tax-efficient solutions for our clients. If you want to learn more about how we can help, please contact us.

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.

We offer a wide range of accountancy services, including capital gains tax advice.

If you want to learn more about how our team can help or simply want some start-up advice from a trusted accountant don’t hesitate to contact us. Call us on 0161 962 1855 or fill in the form below and we will contact you as soon as possible.

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.

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.

Our fantastic team at A&C Chartered Accountants are here to help.

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)

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.

Our fantastic team at A&C Chartered Accountants are here to help.

End of tax year payroll procedures:

As the 2021/22 tax year has now ended, employers need to carry out the following end of year procedures:-

• Provide employees with their P60 annual summaries by 31 May 2022,
• Prepare forms P11D for employees’ expenses and benefits by 5 July 2022,
• Update employees’ payroll data for 2022/23, in particular their new tax codes, and

Update their payroll software for 2022/23 if they haven’t already done so.

We have a dedicated in-house payroll team who control all of our clients payroll procedures. We offer a wide range of services which are unique to your business and 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.

Our fantastic team at A&C Chartered Accountants are here to help.

HMRC have been consulting on changes to the relief from stamp duty land tax (SDLT) when two or more properties are acquired at the same time. This indicates that a change in the rules is imminent, and purchasers should take advantage while the relief continues to apply.

Currently where at least two dwellings are purchased in a single transaction, or as part of a series of linked transactions between the same vendor and purchaser, the purchaser can choose to have the rate of SDLT determined by the average value of the dwellings purchased, rather than their combined value. Purchasers can therefore benefit from multiple nil-rate and lower percentage bandings, significantly reducing the amount of SDLT payable. Multiple dwellings relief doesn’t apply automatically; it must be claimed in a land transaction return and your solicitor may not be aware of this important relief.

Do you need further guidance on stamp duty land tax? 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.

Our fantastic team at A&C Chartered Accountants are here to help.

The Annual Tax on Enveloped Dwellings (ATED) was introduced in April 2012 and is charged where certain residential properties are owned within a corporate structure. This tax not only catches UK properties owned by wealthy oligarchs via offshore companies but also applies to UK resident companies. Originally the charge only applied where the value of the property exceeded £2 million but that threshold has been subsequently reduced to £500,000.

The charge for 2022/23 starts at £3,800 and rises to £244,750 where the property value is more than £20 million.

Properties need to be revalued every five years and the latest valuation date is 1 April 2022. With significant increases in property values in recent years this may mean that more companies may be required to complete an ATED return.

There are numerous exemptions and reliefs from ATED but companies still need to submit an ATED Relief Declaration Return.

MAIN ATED RELIEFS

The main situations where there is a relief from ATED are where the property is:-

• let to a third party on a commercial basis
• being developed for resale by a property developer
• owned by a property trader as the stock of the business for the sole purpose of resale
• a farmhouse occupied by a farm worker or a former long-serving farm worker

We offer a wide range of services which are unique to your businesses who are just getting going! 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.

Our fantastic team at A&C Chartered Accountants are here to help.

Reimburse private fuel for your company car?

Unless there is full reimbursement of fuel provided for the private use of a company car there is a benefit in kind charge based on a fixed figure of £24,600 which is multiplied by the CO2 emissions percentage that is used to calculate the company car benefit for that vehicle.

For a high emission car that percentage can be as high as 37%, resulting in a benefit in kind charge of £9,102 and an income tax bill of £3,640.80 for a higher rate taxpayer. Even with current fuel prices, that would be an awful lot of private mileage, so the employee should consider reimbursing the employer using the HMRC approved mileage rates by 5 July 2022 for 2021/22.

Do you need further guidance on private fuel and own a company car? 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.

Our fantastic team at A&C Chartered Accountants are here to help.

The 130% super-deduction for companies that invest in new plant and machinery applies where the expenditure is incurred between 1 April 2021 and 31 March 2023. Many companies recovering from the coronavirus pandemic have not had the resources to commit thus far and the war in Ukraine may have made them reluctant to invest until the political and economic situation stabilises. Thankfully the special tax relief announced in the Spring 2021 Budget will be available for expenditure up until 31 March 2023 potentially saving £247 for every £1,000 invested in new equipment.

It is hoped that the current £1 million Annual Investment Allowance (AIA) will continue to be held at that level once the super-deduction ends. Note that the AIA is available to unincorporated businesses as well as limited companies and for second hand as well as new equipment.

Do you need further support with the super-deduction tax relief? We offer a wide range of services which are unique to your business and 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.

Our fantastic team at A&C Chartered Accountants are here to help.

Trading losses – carry back or forward?

In the March 2021 Budget, it was announced that the normal one-year carry back for trading losses would be extended to three years. That means that many businesses that have made losses during the COVID-19 pandemic may be able to obtain a repayment of tax paid in that earlier three-year period. This enhanced carry back applies to unincorporated businesses as well as limited companies and will provide a much-needed tax refund.

However, with the corporation tax rate increasing to 25% from 1 April 2023 for profits over £250,000 it may be more beneficial to carry the loss forward. Note that the marginal rate is 26.5% where profits are between £50,000 and £250,000 a year. So, there is a trade-off between a tax refund now and a possible bigger tax saving in the future.

For the enhanced carry back the company’s loss-making accounting period must end between 1 April 2020 and 31 March 2022. For unincorporated businesses, the trading loss must be incurred in 2020/21 or 2021/22.

For corporation tax purposes, it is no longer necessary to finalise the year-end company accounts and file the CT600 corporation tax return to claim loss relief where the loss is no more than £200,000. HMRC will however require evidence of the loss to process the claim such as management accounts for the period.

Do you need further guidance on trading losses?

Our team of corporation tax specialists have a wealth of experience in a broad range of sectors. We work hard to create smart and effective tax-efficient solutions for start-ups, SMEs and beyond.

If you want to learn more about how the team can help, please fill in a contact form or call 0161 962 1855.

Changes to VAT rates from 1 April 2022:

Many in the hospitality sector were hoping that the Chancellor would extend the 12.5% reduced rate that has applied since 1 October 2021 but, as scheduled, the rate has reverted to 20% from 1 April 2022.

The increase applies to hospitality, visitor attractions, catering services including restaurants and takeaways.

This has a consequential effect on the VAT Flat Rate Scheme percentages from 1 April 2022 onwards as set out below:

Do you need further guidance on the changing VAT rates?

Our VAT advisors have a wealth of experience in a broad range of sectors, from construction and property to the charity sector.

If you want to learn more about how the team can help or simply want some tax advice from a trusted accountant, please contact us by filling in a contact form or calling 0161 962 1855.