By Katie Business Advice • Business News • Wealth Planning 0 Comments

Trust planning opportunity still available

Trust planning opportunity still available:

Another tax planning strategy that is still available despite rumours that it would be closed in the Budget was the CGT hold over relief when assets are transferred into or out of a trust.

This relief currently enables a non-business asset, such as an investment property, to be transferred without paying CGT. The relief applies where the transfer is subject to inheritance tax, but where the value transferred is no more than the £325,000 IHT nil rate band the transfer of the asset can take place without IHT or CGT being payable.

For example, Colin, a higher rate taxpayer, wants to gift his adult daughter Liz an investment property worth £300,000.

The property cost him £100,000 a number of years ago. If he were to transfer the property to Liz directly there could be up to £56,000 CGT payable on the £200,000 gain.

If the property is transferred to a trust for the benefit of Liz then the transaction would be immediately chargeable to IHT but covered by the £325,000 nil rate band. The resulting gain could then be held over so that no CGT is payable.

At a later date the property could be transferred from the trustees to Liz providing another opportunity to hold over the capital gain.

If this strategy may be of interest to you please get in touch. You will also need to instruct a competent trust lawyer to set up the trust.

Need more information?

Do you need more guidance on trust planning opportunities? 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.

By Katie Business Advice • Wealth Planning 0 Comments

Regular gifts out of your income is tax efficient

Regular gifts out of your income is tax efficient:

One tax planning opportunity that many thought the chancellor might restrict was the exemption from inheritance tax for regular gifts out of an individual’s income. Inheritance tax is designed to tax transfers of capital so if the donor can demonstrate that the gifts are made out of surplus income then the transfers are not taken into consideration for IHT. The exemption applies where there is a regularity to the payments, such as a standing order to pay school fees. HMRC will also require proof that the payments are paid out of post-tax income and do not limit the donor’s normal lifestyle. Detailed records are required, and we can help you with a suitable spreadsheet.

Need more information?

Do you need more guidance on how your  income can be tax efficient? 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.

By Katie Business Advice • Wealth Planning 0 Comments

Budgeting for an uncertain year ahead

As we come to the end of 2021, its time to start thinking about the budget for next year. One thing is certain – uncertainty.

Business planning and budgeting have become increasingly complex in today’s uncertain and volatile environment. Firms have had to adapt and become more agile in order to react quickly to changing market conditions and budgets should be created with this in mind.

Start with your fixed costs – the things that you can be certain of such as premises, staff costs, raw materials, light, heat, electricity, IT, etc. Next, turn your focus to the longer term aspects of your budget with an analysis of existing strategic or capital spending plans.

Stress test the assumptions, scenarios and decisions that have gone into your draft budget. What if your sales don’t grow next year? What if your annuity income falls because 10% of your customers leave and go to another provider? How does this affect the profitability of the firm?

In uncertain times, it is important to be pragmatic. Create 3 scenarios for your budget – high, medium and low. Start with the medium scenario – the “expected” outcome and from there you can derive variations on whether things turn out better (high) or worse (low).

Scenario-based budgeting is not intended to predict exact outcomes.

Instead it is intended to help the business to understand the likely variances and prepare accordingly.

Hold back some spending centrally as a contingency. This builds some flexibility into the budget so that the business can react to changing circumstances as the year progresses.

Calculate your budget using new data, not historical projections. Budgets may have been squeezed in the past 18 months and may not reflect the current or predicted market trends.

Finally and most importantly, build realistic income models. Ensure you provide for bad debts and write offs in each of your high, medium and low scenarios. Cash is king and in uncertain times every business must focus on getting cash in on a monthly or even weekly basis. Billing cycles and cash collection management should be at the top of the agenda for the management team and offering extended payment terms to customers should be avoided as much as possible. Build these principles into your budget and ensure you keep adequate reserves in case you encounter headwinds during the year ahead.

Need more information?

We offer a wide range of services which are unique to your business and can help you budget for next year. 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.

By Katie Business Advice • Business News 0 Comments

Capital allowances on plant in residential property

The capital allowances legislation specifically denies tax relief for plant and machinery installed in a dwelling house. However, plant and machinery installed in the common areas of blocks of flats such as hallways, stairs and lift shafts would qualify as the flats themselves are the dwellings not the building as a whole.

HMRC have recently confirmed their view that common areas in Houses of Multiple Occupation (HMO) are parts of a “dwelling house” and ineligible for capital allowance claims.

This would seem inconsistent with the treatment of blocks of flats and there may be a test case on the interpretation, particularly as there is no definition of “dwelling house” in the tax legislation.

There is also a lack of clarity concerning the status of University Halls of residence where there is often substantial expenditure on plant and machinery in common areas.

Need more information?

Do you need further guidance on the capital allowances legislation?

We offer a wide range of services for your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to hospitality and manufacturing.

Our tax advisors work hard to ensure they create smart, effective solutions for our clients. If you want to learn more about how the team can help, please don’t hesitate to contact us.

By Katie Business Advice 0 Comments

Company loss relief can be claimed early

Company loss relief can be claimed early

Where a company makes a trading loss of no more than £200,000 in an accounting period it is now possible to claim relief for that loss even though the corporation tax return CT600 has not been submitted.

This will enable the company to carry back the loss to earlier years and obtain a repayment of tax previously paid.

HMRC will however need evidence of the loss to support the claim, in particular a PDF of the company’s management accounts for the period.

In determining whether the loss is no more than £200,000 the company is required to claim all available reliefs, in particular capital allowances.

Where companies are members of a group the £200,000 limit applies to each individual company. Note that for members of a group the £2,000,000 limit on the temporary extended carry back applies to the group as a whole. The extended carry back allows companies to carry back trading losses two further years in addition to the normal one year carry back.

We can of course advise you on the best use of trading losses.

Losses carried back will result in a repayment of corporation tax at 19% whereas if carried forward against profits the losses may save tax at up to 25% after April 2023.

Need more information?

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.

By Katie Business Advice 0 Comments

Beware mini-umbrella company fraud

HMRC are urging businesses to look out for the use of mini-umbrella companies (MUCs) to pay contractors supplying their labour via agencies and other intermediaries. Businesses need to be aware of the financial and reputational risks of such entities in their labour supply chain and carry out due diligence to minimise those risks.

You may have heard a BBC File on Four radio programme that highlighted the abuse of the £4,000 employment allowance by 48,000 companies set up to take advantage of the allowance to save employers national insurance. Such structures are also being used to avoid VAT and are currently being marketed as a means of side-stepping the “off payroll” working rules.

HMRC have identified criminals creating a series of MUCs that appear unconnected and claiming the NIC employment allowance of £4,000 for each company. The company is then struck off after about 18 months allowing the criminals to potentially avoid paying thousands of pounds of employers’ NICs.

The risks to end user organisation include becoming liable for unpaid taxes and national insurance contributions including the overclaimed employment allowance.

The business may also be denied the right to claim input tax if the trader should have known their transactions were connected with VAT fraud.

They may also be penalised for criminal offences relating to national minimum wage and national living wage. The business may also face fines for failure to prevent the criminal facilitation of tax evasion.

Please contact us if you would like us to assist you in carrying out due diligence into your labour supply chain to minimise these risks.

Need more information?

Do you need more guidance on mini-umbrella companies?

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.

By Katie Business Advice • Business News • Wealth Planning 0 Comments

E-commerce and other businesses moving goods between UK and EU

E-commerce and other businesses moving goods between UK and EU

If you move goods between the UK and countries in the EU, you need to follow new customs and tax rules. Your business will be affected by the new rules if you: • buy goods from an EU seller and bring them into the UK • send goods you’ve sold to a buyer in an EU country • haven’t exchanged money but need to move equipment that you use for your business, between the UK and the EU. We understand this means a lot of changes are needed, and HMRC are available to help you in several ways. HMRC have a Customs & International Trade helpline on 0300 322 9434, for more help with importing, exporting or customs reliefs. The helpline is open from 8am to 10pm Monday to Friday and from 8am to 4pm at weekends.

HMRC have webinars available for you to attend online starting today. Please see below for a list of these to help you adjust to the new rules.

Exporting: what you need to do to keep your goods moving:
An overview of the actions you need to take now before you export goods from Great Britain to the EU and move goods between Great Britain and Northern Ireland.
Key processes include – zero-rated VAT, customs declarations, using an intermediary as well as licences, certificates, and authorisations.
Please register here to take part if you’re planning to export.

Customs Import Declarations: an overview: If your business or a business you represent, needs to make customs import declarations on goods you’ve imported since 1 January, our webinar helps you to understand what’s needed for simplified declarations, supplementary declarations, and delayed import declarations.
Please register here to take part if you’re planning to import.

Trader responsibilities when using an intermediary: This webinar explains your responsibilities as a trader, if you choose to use an intermediary to complete import or export declarations for your business. These are complex and an intermediary can save you a lot of time.
Please register here to take part if you’re planning to import or export.

Importing: what you need to know about staged controls: This webinar takes you through the three stages of the new border controls introduced from 1 January 2021, and what actions you need to take for each stage.
Please register here to take part if you’re planning to import.

You can also:

• watch HMRC’s YouTube channel to familiarise yourself with the new customs processes and what you need to do before you trade goods with the EU
• use the trader checklist to make sure you’re familiar with the new rules that affect you
• use the updated guides to understand the new customs and VAT requirements when moving goods between the UK and EU countries
• sign-up to the Trader Support Service if your client’s business is moving goods between GB and Northern Ireland and use their suite of educational products – including online training modules and webinars for support with the Northern Ireland Protocol

Need more information?

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.

By Katie Business Advice • Business News 0 Comments

Uber drivers are workers not self employed

The Supreme Court has ruled that drivers for the ride hailing App Uber are workers not self-employed individuals and hence are entitled to holiday pay, pension rights and the right to be paid the national minimum wage. This case will have implications for other workers in the “gig” economy and may also have a bearing on the tax status of such workers. HMRC will certainly be taking an interest in the Supreme Court ruling. Note that tax law doesn’t necessarily follow employment law, but the boundaries are becoming increasingly blurred making it difficult to determine an individual’s employment status with absolute certainty.

The court determined that the drivers were in a position of subordination to Uber. The only way the worker could increase their earnings would be to work longer hours as Uber set the fare charged to the customer. This indicates that the driver is under the control of Uber, a key factor in determining employment status. However, it could be argued that there is limited Mutuality of Obligation as the drivers are able to refuse certain rides, although that may result in sanctions by Uber.

Need more information?

Are you an Uber driver? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in your 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.

By Katie Business Advice • Business News 0 Comments

5% VAT rate for food, attractions and accommodation extended

In order to continue to support businesses and jobs in the hospitality sector, the reduced 5% VAT rate will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK until 30 September 2021.

The 5% reduced rate of VAT will also continue to apply to supplies of accommodation and admission to attractions across the UK. From 1 October until 31 March 2022 the rate will be set at 12.5% and will then revert to 20% from 1 April 2022.

Need more information?

Do you need help with the 5% VAT rate? 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.

By Katie Business Advice • Business News 0 Comments

Get ready for the new off-payroll working rules

Are you ready for the new off-payroll working rules?

This time last year businesses were preparing for important changes to the rules where workers supply their services via their own personal service companies. The start date was then deferred from 6 April 2020 to 6 April 2021.

The new rules are scheduled to apply to large and medium-sized businesses as defined by the Companies Act. Those businesses will be required to consider whether or not the worker would be regarded as an employee if directly engaged and so deduct tax and national insurance from payments as if they were an employee. This change does not apply where the end user is a small business under the Companies Act rules, where the current IR35 rules will continue to apply.

Thus, small organisations will not yet be required to consider the status of the worker or deduct tax.

Please contact us if you are affected by these changes as we may be able to help you with the determination of your workers’ employment status. If you are a worker supplying your services through your own company, we will also be able to advise you on the implications of these changes.

Need more information?

Do you need more help with IR35 and payroll?

Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. We work hard to create smart and effective tax-efficient solutions to aid growth. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant don’t 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.

By Katie Business Advice • Business News 0 Comments

Top tips for driving your Business Development efforts this year

Top tips for driving your Business Development (BD) efforts this year.

Business development is often misunderstood. Some might say that it’s all about relationships, another will say it’s all about sales and others will talk about marketing. They are all right, in a way. Business Development is the creation of long-term value for a firm, through effective management of customers, markets and relationships.

Understand your customers

Customers pay the bills and should be front and centre of your BD strategy. Invest time and energy into researching and understanding your customers. Who are they, what products or services would add value for them and how can your firm help them to make a purchase decision? In the current environment, your customer research may help you to identify a new gap in the market. For example, your customers may need to buy online. Can you offer a better online experience than your competitors? Do you have a delivery mechanism that ensures that your products or services can be distributed to your customers easily and efficiently? You may find that your customers have turned to online marketplaces such as Amazon to buy everything. Maybe your firm needs to have a storefront on Amazon, in order to make it easier for your customers to buy from you.

Consider your target markets

Your customers are part of a specific market. For example, if they are businesses based in the UK then, from your perspective, they are part of the UK B2B market. Customers based in the USA might be part of your online and international market. Markets are constantly evolving. Customers who may not have purchased online 18 months ago may now be doing so on a daily or weekly basis due to lockdowns.

Perhaps overseas clients will be more receptive to buying from your business as they can no longer purchase products or services in a face to face environment. This shift to online presents new opportunities for businesses. Perhaps you could begin to have sales meetings with clients over Zoom or Skype video? Before March 2019, this would have been an alien concept, whereas today is has almost become the ‘new normal’.

Focus on building relationships

Relationships are the gravity that keep the planets aligned. The best businesses build, manage and leverage relationships that are based on trust and the ability to add value. Your relationship building efforts should focus on maintaining contact with customers, targets, employees, suppliers, referrers and industry bodies. Due to remote working, many of your contacts will be feeling a bit lonely and will be more open to the offer of a catch up call, virtual meeting, etc. You can leverage this as an opportunity to keep your firm front of mind, so that when a potential opportunity arises, your firm will be first on the list to get a call.

An opportunity to innovate

The current trading environment offers many businesses an opportunity to innovate. Customers have changed their buying habits, are more open to change and so now is a good time to rethink your sales process. If you don’t currently have an online product or service offering or a way of interacting with customers remotely, then now is the time to rethink how you engage with your target market.

Need more information?

Are you interested in business development in 2021. We offer a wide range of services which are unique to your business and here to help your business take new heights this year. 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.

By Katie Business Advice • Business News • Wealth Planning 0 Comments

Delivering effective training to your team remotely

Providing training for your team when they are working remotely can be challenging.

Delivering a training session to a room full of people can be difficult enough. Engaging with your audience remotely presents a whole new challenge.

The first thing to think about is the delivery method.  Your firm may already have a webinar or conference platform in place. If not, there are lots of good options available such as Zoom, Microsoft Teams or Skype. Ideally you will want to use a platform that allows you to screen share, instant message and share files.

Getting people to attend training sessions when they are busy and working remotely can be a challenge. Creating a training schedule and sharing it well in advance can help.

Provide sufficient notice, explain the benefits of the training session and people will tend to prioritise attending your sessions.

Ideally you should record your session giving anyone who can’t make it the option to view the training session at a convenient time.

Remote employees will want to begin their training by knowing what the process will look like and what the expectations are, so outline a schedule reflecting the aims of the training and the overall principles it will explore – but save from going into the detail of the course itself.

Your training is only as successful as your pre-planning allows it to be, so make sure you invest the time before the training is rolled out. It’s also a good opportunity to troubleshoot any problems before they have a chance to arise, whether that’s to do with the platform you’re using, screen sharing, testing that any video content works, or having a test run through the learning content itself.

Keep your training session interesting by including videos, polls and asking questions which stimulate dialogue among your audience. The more discussion you can encourage, the more immersive the training session will be. Provide post-training materials that your attendees can refer back to.

The idea of post-training is to provide remote employees with the tools to refresh what they learned or build on it in their own time.  Post-training should include some resources that help people to implement what they learned – short videos, infographics and ‘how-to’ guides can be a helpful way of revisiting the training content.

Need more information?

We offer a wide range of services which are unique to your business and we understand the importance of remote working. We also offer all training to clients remotely including Xero and Sage training. 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.

By Katie Business Advice • Wealth Planning 0 Comments

New years resolution to save tax with pension planning

At this time of year we think about New Year’s resolutions and pension planning could be a great way. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April.

An obvious tax planning point would be to maximise your ISA allowances for the 2020/21 tax year (currently £20,000 each).

You might also want to consider increasing your pension savings before 5 April 2021 as the unused annual pension allowance is lost after three years.

For those looking to do some inheritance tax planning, it would be a good time to review (or make) your Will.

Pension planning

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and by their employer.

Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the current, but then lapses if unused.

Hence the unused pension allowance for 2017/18 will lapse on 5 April 2021 if unused.

Note that there are rumours that pension tax relief may be restricted in the next Budget. Under the current rules, the net after tax cost of saving £4,000 in a personal pension for a higher rate taxpayer is £3,000. HMRC then add a further £1,000 to your contribution and there is a further £1,000 relief when your tax liability is calculated, thus the value of your pension pot would be £5,000, for a net cost of £3,000. Remember that pension fund investments can go down as well as up, but a 40% fall would be unlikely.

Need more information?

We offer a wide range of services which are unique to your business and can assist with pension planning. 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.

By Katie Business Advice 0 Comments

Christmas Gifts For Employees: Are They Tax-Free?

Are you thinking about rewarding your employees with a Christmas gift this year?

As it turns out, certain gifts to staff at Christmas are tax-free if structured correctly. Since April 2016, employers have been allowed to provide their directors and employees with certain “trivial” benefits-in-kind. The rules were brought in as a simplification measure, so that these benefits do not need to be reported to HMRC and are tax-free for the employee.

There are, of course, a number of conditions that need to be satisfied to qualify for the exemption, which we explain below.

Which employee gifts are tax-free?

For the tax-free exemption to apply, the following conditions must be met:

  • The cost of providing the benefit does not exceed £50.
  • The benefit is not cash or a cash voucher.
  • The employee is not entitled to the benefit as part of any contractual obligation, such as a salary sacrifice scheme.
  • The benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services).

So, what does that all mean in practical terms?

It means that you can give your employees small, thoughtful gifts, such as a bottle of wine, a box of chocolates, or a store voucher, to mark key occasions. And here’s the thing, this doesn’t just apply at Christmas – you could also provide a gift on an employee’s birthday, to celebrate their wedding, or even religious festivals like Eid or Diwali.

As long as each gift costs £50 or less, isn’t cash or a cash-equivalent voucher, isn’t part of their employment contract, and isn’t a reward for doing their job, then it qualifies as a trivial benefit and does not create a tax liability for either you or them.

Is there a limit?

Yes and no!

For regular employees, there is no limit to the number of trivial benefits an employee can receive in a tax year, as long as each one individually meets the criteria.

However, for directors of ‘close’ companies (typically those controlled by five or fewer shareholders), there is an annual cap of £300 on trivial benefits.

What if the value of the gift exceeds the tax-free threshold?

If your gift exceeds £50, even by a single penny, the gift no longer qualifies as a trivial benefit. As a result, the entire amount becomes a taxable benefit.

This means it may need to be reported to HMRC via a P11D form, and both the employee and employer could face additional tax and National Insurance charges.

What about Christmas bonuses?

We get this question a lot. Towards the end of the year, if a company has done well, it may reward staff with a cash bonus.

A bonus payment typically does not fall under the trivial benefits scheme, as it contravenes the following conditions:

  • The benefit is not cash or a cash voucher.
  • The benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services).

A bonus, whether it’s paid at Christmas or any other time, is considered a reward for services performed. That makes it part of an employee’s earnings, and as such:

  • It must be added to their salary for PAYE purposes.
  • You must deduct Income Tax and National Insurance through payroll as usual.

That said, bonuses are generally considered allowable business expenses. That means they can be deducted from your company’s taxable profits as a means of managing or reducing tax liabilities. If you want more advice on that, speak to our corporation tax specialists.

Need more information?

Gifts are a simple and tax-efficient way to show appreciation for your team. You just have to make sure you stay within the rules. But the tax-free benefits don’t stop there, you can also provide parties and social events throughout the year, to the tune of £150 per head. You can find out more about that here: Tax Relief For Staff Parties And Annual Functions

If you need more guidance on Christmas gifts for employees, please don’t hesitate to get in touch with us. We support businesses with a wide range of services, including end-of-year accounting, tax advice, and R&D claims.

By Katie Business Advice 0 Comments

Reference Pay

An employee’s reference pay will depend upon whether or not they were on the payroll and subject to an RTI submission for 2019/20 on or before 19 March 2020. Where that is the case their reference pay will be that used under previous furlough claims. Where the employee has joined since that date or not subject to an RTI submission prior to 19 March the reference pay will generally be that for the last pay period ending before 30 October.

There are exceptions to these rules and complications for those working variable hours and with variable rates of pay.

Reference pay: calculating 80% of wages

If an employee was not previously eligible for CJRS, 80% of wages must be calculated for employees:

  • on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020
  • whose pay varies – 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins

80% of wages is capped at the maximum wage amount which will be calculated in the in the way it was for CJRS before the extension .

We can of course assist you with your claims, or alternatively prepare them on your behalf.

 

Need more information?

Do you need further support with your payroll?

Our team offers a complete range of payroll services for companies across all sectors, from charities to construction firms.

If you want to learn more about how the team can help, or simply want some start-up advice from a trusted accountant, don’t 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.

By Katie Business Advice 0 Comments

Green Homes Grant: make energy improvements to your home

Green Homes Grant: make energy improvements to your home

Homeowners

What is the Green Homes Grant?

The government will provide a voucher up to £5,000 that covers up to two-thirds of the cost of energy efficiency and low carbon heat improvements to your home. See which improvements are included in the scheme below.

You may be able to receive a bigger grant if you are a homeowner and you or a member of your household receives one of the qualifying benefits. The government will cover 100% of the cost of the improvements up to £10,000.

How do I apply?

  1. Check if you’re eligible for a voucher
  2. Check what improvements may be suitable for your home
  3. Choose which improvements you would like and see an estimate of how much they may cost
  4. Find registered installers to get quotes to carry out the work
  5. Apply for your voucher

The Green Homes Grant scheme will never include official representatives coming to your property uninvited or cold calling on the phone to encourage you to join the scheme.

Tradespeople

Tradespeople and businesses that are appropriately certified to install energy efficiency and/or low carbon heating improvements in homes need to register with TrustMark to carry out work under the scheme. This confirms to homeowners that you will install measures to high standards.

You will be added to a directory of TrustMark registered  installers and homeowners can then contact you to obtain a quote.

Tradespeople and businesses that install low carbon heating improvements in homes will also need to be MCS certified.

Once you are registered with TrustMark, you need to apply to become a Green Homes Grant installer so you can deliver work in the 600,000 homes that will receive vouchers.

Working during national restrictions

Tradespeople, including Green Homes Grant installers, can continue to work in people’s homes under the national restrictions from 5 November.

You must follow the COVID-19 Secure guidelines.

Installers do not need to physically attend a customer’s home to provide a quote and can do this remotely using a video call or detailed photos.

Need more information?

If you need more information on the green homes grant, do not hesitate to contact us – 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.

By Katie Business Advice 0 Comments

Considering an electric company car?

Considering an electric company car? There is currently a zero P11d benefit for the drivers of electric cars in 2020/21. The legislation for this change is included in Finance Act 2020 which also states that the benefit will be 1% of list price in 2021/22 and then 2% in 2022/23.

The zero taxable benefit also applies to hybrid cars emitting no more than 50 grams of CO2 per kilometre with a range using its electric motor of at least 130 miles, but only for cars first registered on or after 6 April 2020. Unfortunately, the range of most plug in hybrids is considerably less than 130 miles. For example, the Mercedes A 250e costing £32,980 emits 26g CO2 but has a PEV range of only 45 miles.

An additional benefit for the business is that motor cars that emit no more than 50g CO2 per kilometre currently also qualify for a 100% first year allowance which means that the full cost can potentially be set off against business profits.

The Mercedes A 250e would currently qualify for a 100% first year allowance but the P11d benefit would be 6% for the employee in 2020/21.

Note however that the 50g CO2 threshold reduces to zero from April 2021 which means that hybrids will cease being eligible for the 100% write off. If the business can afford to do so it’s a good time to buy a plug in hybrid.

Need more information?

Do you need help purchasing an electric 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.

By Katie Business Advice • Business News 0 Comments

Virtual meetings: running effective meetings

We have adapted our accountancy practice to work with existing and new clients through virtual meetings. Over the course of the past few months, we have all had to adapt to working remotely.

Despite lockdown restrictions, many businesses have found ways to move their operations online, with all staff working remotely. This has given rise to an increased volume of virtual meetings on services such as Skype, Zoom, Teams, WebEx or other popular online meeting services. This has resulted in a new challenge – how to have an effective virtual meeting.

Agenda

Just like any meeting, take the time to set an agenda and circulate it in advance of the call along with any supporting documents.

Setting an agenda and sticking to it helps to keep the virtual meeting on track. If there are lots of documents, make sure that you circulate them in time to allow people to read them well in advance.

Choose the right technology

There is nothing more frustrating than dialling into a video or conference call and not being able to connect due to a technical glitch. Before you set up your virtual meeting, check with the attendees that they are comfortable (and able) to use your platform of choice. If possible, use a system that allows users to join via a web browser – most platforms such as Skype, Teams, Zoom, WebEx, etc. allow this.

Etiquette

A virtual meeting is still a meeting, so make sure you give it your full attention. Ask all attendees to use video – this makes it harder for them to do something else during the virtual meeting as they will be on everyone’s screen. In addition, seeing people on screen can help those who have been working from home during COVID-19 to feel more connected.

Jump into the content

Don’t waste time (yours or other people’s) during a virtual meeting. Keep it short and get straight into the agenda. Aim to follow up within 24 hours of the meeting with any relevant action points as it keeps people’s attention. By sending the notes around 2 weeks after a meeting, momentum on any actions may be lost.

Need more information?

We have adapted our business to provide clients with virtual meetings. We offer a wide range of services which are unique to your business and work with clients virtually all over the world. 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.

By Katie Business Advice 0 Comments

VAT definition of “motor car”

For VAT purposes the definition of a motor car has been amended several times over the years.

The current definition states:   “Motor car” means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:

  1. a) is constructed or adapted
    solely or mainly for the
    carriage of passengers; or
  2. b) has to the rear of the
    driver’s seat roofed
    accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows;

There are a number of exceptions to this rule: notably vehicles constructed to carry a payload of one tonne or more, i.e. double cab pick-ups such as a Toyota Hilux.

COMPANY VANS WERE MOTOR CARS

The Court of Appeal have now ruled on the tax status of certain vehicles provided to employees of Coca Cola. The court has upheld the HMRC view that vans with windows and a second row of seats behind the driver are not goods vehicles but motor cars for benefit in kind purposes.

Consequently, the income tax and national insurance payable by employee and employer is significantly higher than if the vehicles had been classified as goods vehicles.

The income tax legislation defines a “goods vehicle” as “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description…”

At the Tax Tribunal it was decided that modified VW Kombi vans failed this test whereas modified Vauxhall Vivaro vans did fall within the definition of goods vehicles.

It has now been determined that the Vauxhalls should also be taxed as motor cars for P11d benefit in kind purposes. This means that where the vehicle is available for private use the taxable benefit will be based on the original list price multiplied by a percentage based on the vehicle’s CO2 emissions.

The decision means that employers may need to reconsider providing such vehicles. They may also need to rectify the P11d reporting in respect of earlier years and we await further guidance from HMRC.

What is also particularly confusing, and thus difficult for businesses to deal with, is that the benefit in kind rules are not the same as the rules for recovery of input VAT and it would be useful if there was a common definition for tax purposes

Need more information?

Do you need more guidance on the VAT definition of “motor car”?

Our specialist VAT accoutants can help. Please contact us by filling in a contact form or calling 0161 962 1855.

By Katie Business Advice • Insights 0 Comments

Stamp duty cuts

Second home buyers and buy-to-let landlords welcome stamp duty land tax cut. 

Although the temporary increase in the Stamp Duty Land Tax (SDLT) threshold to £500,000 was aimed at those buying their main residence, it also benefits those buying a second or subsequent property where there is a 3% supplementary charge. Thus, the rate of SDLT on a second home costing up to £500,000 is now 3%. Previously, the rate was 3% up to £125,000, then 5% up to £250,000 and then 8% up to £825,000. So the SDLT on a second home costing £400,000 is now £12,000 compared to £22,000 if the purchase had completed before 8 July 2020.

Note that there are different thresholds and rates of Land and Buildings Transaction Tax for properties located in Scotland and Wales.

Need more information?

Do you need further guidance on the stamp duty cuts? We offer a wide range of services which are unique to you. 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.

By Katie Business Advice • Business News 0 Comments

More details on hospitality VAT reduction

When the Chancellor announced a temporary cut in the rate of VAT for the hospitality sector and attractions in his Summer Statement on 8 July there were a number of areas that needed clarification. The reduction applies to supplies made between 15 July 2020 and 12 January 2021.

The reduction is one of a number of additional measures announced to support the economy as the COVID-19 pandemic continues to affect individuals and businesses.

VAT on food and non-alcoholic drinks

From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector:

  • A 5% rate of VAT applies to supplies of:
    • food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
    • hot takeaway food and hot takeaway non-alcoholic beverages.
  • Alcoholic drinks will remain subject to the standard 20% rate.
  • Food and drink supplied as part of a supply of catering services for consumption off-premises continue to be standard rated.

HMRC have now set out more details of which supplies will attract the 5% temporary rate as well as the impact on invoicing, deposits and the flat rate scheme.

Need more information?

We offer a wide range of services for the hospitality industry. Our team of chartered accountants have a wealth of experience to suit your hospitality needs. 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.

By Katie Business Advice 0 Comments

CGT private residence relief changes go ahead

The latest Finance Bill includes important changes to private residence relief that took effect from 6 April 2020.

The first change is to limit to just 9 months the period prior to disposal that counts as a period of deemed occupation and thus exempt from CGT even though the owners are not living in the property during that period

The second is to limit “letting relief” to periods where the taxpayer is in shared occupation with the tenant.

Final period exemption now reduced to 9 months

The final period exemption was for many years the last 36 months which was felt to be too generous. The period was then reduced to the last 18 months and has now been further reduced to the last 9 months.

The final period exemption will remain at 36 months for those with a disability, and those in or moving into care.

CGT Lettings Relief Changes

Lettings relief provided a further exemption for capital gains of up to £40,000 per property owner.

The additional relief was introduced in 1980 to encourage people to let out spare rooms within their property on a casual basis without losing the benefit of PRR, for example where there are a number of lodgers sharing the property with the owner. It no longer applies where property owners rent out their former main residence.

Those who are renting their property temporarily whilst working elsewhere are unlikely to be affected by this change as there are alternative reliefs available under those circumstances.

 

Need more information?

We offer a wide range of services for private residence businesses. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. We are here to help and understand this difficult time with Coronavirus. 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.

By Katie Business Advice 0 Comments

Buy new equipment before 6 April?

Now might be the time to think about new equipment for your company. Your business year-end, not 5 April, is relevant for capital allowances purposes. If however you are running a business and making up accounts to 31 March or 5 April you should consider buying plant and machinery to take advantage of the £1 million Annual Investment Allowance (AIA).

The AIA provides a 100% tax write-off for equipment used in your business. This tax relief extends to fixtures and fittings within business premises such as electrical, water and heating systems.

AIA does not apply to motor cars but there is a special 100% tax relief if you buy a new car that emits no more than 50g CO2 per kilometre.

Need more information?

If you need any more guidance on this subject matter please do not hesitate to contact our team of chartered accountants. We offer a wide range of services which are unique to your business and can work with you to help make your business tax efficient. 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.

By Katie Business Advice 0 Comments

Married couples and civil partners are encouraged to claim the Marriage Allowance before end of tax year

HM Revenue and Customs (HMRC) is proposing to married couples and those in civil partnerships to sign up to a £250

Marriage Allowance lets you transfer £1,250 of your Personal Allowance to your husband, wife or civil partner.

This reduces their tax by up to £250 in the tax year (6 April to 5 April the next year).

To benefit as a couple, you (as the lower earner) must normally have an income below your Personal Allowance – this is usually £12,500.

You can calculate how much tax you could save as a couple. You should call the Income Tax helpline instead if you receive other income such as dividends, savings or benefits from your job. You can also call if you don’t know what your taxable income is.

When you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple.

Please see below and example from Gov.uk

Your income is £11,500 and your Personal Allowance is £12,500, so you don’t pay tax.

Your partner’s income is £20,000 and their Personal Allowance is £12,500, so they pay tax on £7,500 (their ‘taxable income’). This means as a couple you are paying Income Tax on £7,500.

When you claim Marriage Allowance you transfer £1,250 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,250 and your partner gets a ‘tax credit’ on £1,250 of their taxable income.

This means you will now pay tax on £250, but your partner will only pay tax on £6,250. As a couple you benefit, as you are only paying Income Tax on £6,500 rather than £7,500, which saves you £200 in tax.

So who is eligible to apply?

You can benefit from Marriage Allowance if all the following apply:

  • you’re married or in a civil partnership
  • you do not pay Income Tax or your income is below your Personal Allowance (usually £12,500)
  • your partner pays Income Tax at the basic rate, which usually means their income is between £12,501 and £50,000 before they receive Marriage Allowance

You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.

If you’re in Scotland, your partner must pay the starter, basic or intermediate rate, which usually means their income is between £12,501 and £43,430.

It will not affect your application for Marriage Allowance if you or your partner:

  • are currently receiving a pension
  • live abroad – as long as you get a Personal Allowance.

Can I backdate my claim?

You can backdate your claim to include any tax year since 5 April 2015 that you were eligible for Marriage Allowance.

Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.

If your partner has died since 5 April 2015 you can still claim – phone the Income Tax helpline. If your partner was the lower earner, the person responsible for managing their tax affairs needs to phone.

Need more information?

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.