By Katie Business Advice • Business News • Tax News 0 Comments

Childcare accounts can subsidise summer childcare costs

If you have children under 12 who attend a nursery, after school club, playscheme or childminder, or you are considering sending them to a summer camp, you should think about setting up a tax-free childcare account. The government adds 25% to the amounts that you save in the account – up to £2,000 for each child – so £8,000 is topped up to £10,000 (a higher amount applies for disabled children).

The account is then used to pay Ofsted registered childcare providers. Note that it doesn’t need to be the child’s parents paying into the account; uncles, aunts, grandparents and others can also make payments, The government have noticed that many families who are eligible for this scheme are yet to set up their accounts, so if you are an employer you could bring this to the attention of your staff to increase the take up.

Note that parents are not eligible if either of them have adjusted net income in excess of £100,000 for the current tax year.

Need more information?

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    By Katie Business Advice • Tax Advice 0 Comments

    June advisory fuel rate for company cars

    The table below sets out the HMRC advisory furl rates from 1 June 2024. These are the suggested reimbursement rates for employees’ private mileage using their company car.

    Where the employer does not pay for any fuel for the company car these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.

    Engine Size Petrol Diesel LPG
    1400cc or less 14p

    (13p)

    		 11p

    (11p)
    1600cc or less 13p

    (12p)
    1401cc to 2000cc 16p

    (15p)

    		 13p

    (13p)
    1601 to 2000cc 15p

    (14p)
    Over 2000cc 26p

    (24p)

    		 20p

    (19p)

    		 21p

    (21p)

     

    Where there has been a change the previous rate is shown in brackets.

    You can also continue to use the previous rates for up to 1 month from the date the new rates apply.

    Note that for hybrid cars you must use the petrol or diesel rate.

    For fully electric vehicles the rate is 8p (9p) per mile.

    Employees using their own cars

    For employees using their own cars for business purposes the Advisory Mileage Allowance Payment (AMAP) tax-free reimbursement rate continues to be 45 pence per mile (plus 5p per passenger) for the first 10,000 business miles, reducing to 25 pence a mile thereafter. Note that for National Insurance contribution purposes the employer can continue to reimburse at the 45p rate as the 10,000 threshold does not apply.

    Input VAT

    Within the 45p/25p payments the amounts in the above table represent the fuel element. The employer is able to reclaim 20/120 of the amount as input VAT provided the claim is supported by a VAT invoice from the filling station. For a 2500cc petrol-engine car, 4 pence per mile can be reclaimed as input VAT (24p x 1/6).

     

     

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      By Katie Business Advice • Tax News 0 Comments

      Investing an unquoted trading company

      Investing an unquoted trading company

      If you are considering lending money to, or subscribing for shares in, an unquoted trading company then, like many investments, there is always a risk that you may lose your money.

      However, there is potentially tax relief for the lender if the loan meets certain conditions, in particular the money lent is used by the borrower wholly for the purposes of its trade, and the trade does not consist of or include the lending of money.

      The tax relief is by way of a capital loss that can be set against gains in the same or future tax years. In order to make a claim for capital loss relief, any outstanding amount of the principal of the loan must have become irrecoverable, the claimant must not have assigned their right to recover that amount, and the claimant and the borrower were not each other’s spouses or civil partners, or companies in the same group, when the loan was made or at any subsequent time.

      Capital loss on shares in an unquoted trading company

      Where an individual subscribes for a new issue of shares in an unquoted trading company, there is an even more generous form of loss relief where those shares are disposed of at a loss, including the situation where the shares have become worthless. In that situation, it is possible to make a negligible value claim which creates a deemed disposal and reacquisition of the shares at that low value, thereby creating a capital loss. A further claim can then be made to set that capital loss against the subscriber’s income in the year of the loss and/or the previous year. The attraction here is the income tax relief could save tax at 40% for higher rate taxpayers and 45% for additional rate taxpayers, as opposed to a capital gains tax saving at a maximum 24% (on residential property gains).

      Converting loans into shares

      As mentioned above, where a loss is made on a loan to an unquoted trading company, relief for that loss may claimed against capital gains, whereas the loss on subscriber shares can be set against income, saving tax at higher rates. It is possible for the lender to be issued with shares in the company in satisfaction of the loan, which potentially would allow the investor to claim relief for any subsequent loss against their income. Note that where the company is already insolvent at the time that the shares are issued, no capital loss will arise and HMRC are likely to challenge the loss claim, as they have done successfully in two recent tax cases.

      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.

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        By Katie Business Advice • Tax Advice • Tax News 0 Comments

        Working from home HMRC guidlines

        Whether or not an employee’s home is a workplace does not affect the availability of tax relief for travel expenses. Travel expenses from home to a permanent workplace will only qualify for tax relief if the journey qualifies as travel in the performance of the duties of the employment.

        Even though it may have been accepted that the employee’s home is a workplace, it does not necessarily follow that they’ll be entitled to tax relief for the cost of travel between their home and a permanent workplace.

        This is because the place where an employee lives will ordinarily be down to their personal choice. The expense of travelling from their home to any other place is a consequence of that personal choice; not an objective requirement of the job.

        HMRC guidance states that where an employee performs substantive duties of their employment at home as an objective requirement of the job, they may accept their home as a workplace for the purposes of the ‘travelling in the performance of the duties’ rule. Where this is the case, the employee will be entitled to tax relief for the expenses of travelling from home to other workplaces, as their travel is in the performance of their duties.

        HMRC will usually only accept that working at home is an objective requirement of the job if the employee needs certain facilities to perform those duties, and those facilities are only practically available to the employee at their home.

        HMRC state that they will not accept that working at home is an objective requirement of the job if the employer provides appropriate facilities in another location that could be practically used by the employee, or the employee works from home as a matter of choice.

        Even where the employee works at home as an objective requirement of the employment, tax relief for the cost of travel between their home and their permanent workplace will only be due for travel made on days where the employee’s home is a workplace.

        Only on those days is the employee travelling between 2 workplaces. On other days the employee is travelling between their home and a permanent workplace, which is ordinary commuting.

        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.

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          By Katie Business Advice • Tax Advice • Tax News 0 Comments

          Diary of main tax events April/May 2024

          Please see below the diary of main tax events for March/April 2024. Please contact our team if you wish to discuss any of these deadlines further.

          Date What’s Due
          1/04 Corporation tax payment for year to 30/6/23 (unless quarterly instalments apply)
          5/04 End of 2023/24 tax year.

          2024/25 tax year starts on 6 April
          19/04 PAYE & NIC deductions, and CIS return and tax, for month to 5/04/24 (due 22/04 if you pay electronically)
           

          1/05

          		 Corporation tax payment for year to 31/7/23 (unless quarterly instalments apply)
           

          19/05

          		 PAYE & NIC deductions, and CIS return and tax, for month to 5/05/24 (due 22/05 if you pay electronically)

          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.

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            By Katie Business Advice • Business News • Tax News 0 Comments

            Diary of main tax events March/April 2024

            Please see below the diary of main tax events for March/April 2024. 

            As we move into 2024/25, there are a lot of tax changes on the horizon, with more likely to come alongside the general election. Where the government gives with one hand (e.g. NIC cuts for workers) they make take with the other hand (e.g. frozen income tax thresholds) and it can be hard to keep up.

            We are here to work alongside you and help you prosper so please do get in touch at any time.

            Date What’s Due
            19 March Employer PAYE & NIC deductions, and CIS return and tax, for the month to 5/3/24 (due 22/3 if you pay electronically)
            1 April Corporation tax payment for the year to 30/6/23 (unless quarterly instalments apply)
            5 April End of the 2023/24 tax year – many tax planning actions need to have been taken by this date
            6 April Start of the 2024/25 tax year
            19 April Employer PAYE & NIC deductions, and CIS return and tax, for the month to 5/4/24 (due 22/4 if you pay electronically)
            30 April Annual Tax on Enveloped Dwellings (ATED) returns and payment for the chargeable period starting on 1 April 2024

            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.

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              By Katie Business Advice • Business News 0 Comments

              Order your double cab pick-up now before rules change 1 July 2024

              From 1 July 2024, HMRC is going to reclassify double cab pick-ups as ‘cars’ for employment benefit and capital allowance purposes. Pick-ups acquired or ordered before 1 July will benefit from a transition period.

              What is a double cab pick-up?

              Typically, a double cab pick-up has:

              • A front passenger cab containing two rows of seats capable of seating three or four passengers, plus the driver.
              • Four doors in addition to any rear door that are capable of being opened independently.
              • A load-bearing pickup area behind the cab.

              New policy from July 2024

              HMRC have revised both their Employment Income Manual and Capital Allowance Manual to state that from 1 July 2024, the meaning of ‘car’ will no longer be interpreted in line with the definition used for VAT purposes in respect of double cab pick-ups.

              You can read more about this on the Gov website here.

              If you require more information, please do not hesitate to contact us.

              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.

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                By Katie Business Advice • Business News 0 Comments

                Advisory fuel rate for company cars

                The table below sets out the HMRC advisory fuel rates from 1 March 2024. These are the suggested reimbursement rates for employees’ private mileage using their company car.

                Where the employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.

                Engine Size Petrol Diesel LPG
                1400cc or less 14p

                (14p)

                		 10p

                (10p)
                1600cc or less 13p

                (13p)
                1401cc to 2000cc 16p

                (16p)

                		 12p

                (12p)
                1601 to 2000cc 15p

                (15p)
                Over 2000cc 26p

                (26p)

                		 20p

                (20p)

                		 18p

                (18p)

                Where there has been a change the previous rate is shown in brackets.

                You can also continue to use the previous rates for up to 1 month from the date the new rates apply.

                Note that for hybrid cars you must use the petrol or diesel rate.

                For fully electric vehicles the rate is 9p per mile.

                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.

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                  By Katie Business Advice • Tax • Tax Advice 0 Comments

                  Our Year End Tax Planning ideas

                  It’s not too late to undertake some end of year tax planning. If you have some spare cash, an obvious tax planning point would be to maximise your ISA allowances for the 2023/24 tax year (currently £20,000 each). You might also want to consider increasing your pension savings before 5 April 2024.

                  USE A LIFETIME ISA (LISA) TO SAVE FOR YOUR FIRST HOME

                  Those aged between 18 and 40 can set up a Lifetime ISA (Individual Savings Account) to buy their first home or save for later life. You can put in up to £4,000 each year until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.  Note that the Lifetime ISA limit of £4,000 counts towards your £20,000 annual ISA limit.

                  You can withdraw money from your ISA if you’re:

                  • buying your first home,
                  • aged 60 or over, or
                  • terminally ill, with less than 12 months to live.

                  However, you’ll pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason (an unauthorised withdrawal). This recovers the government bonus you received on your original savings.

                  PENSION PLANNING

                  Under the current rules, the government adds to your pension contributions at the 20% basic rate. For instance, if you save £4,000 in a personal pension, the government tops this up to £5,000. If you are a higher rate taxpayer there is a further £1,000 tax relief when your tax liability is calculated, reducing the net cost to £3,000.

                  Additional pension contributions can be even more effective if your income is between £100,000 and £125,140 as the gross pension contribution reduces net income for the purposes of the reduction in the personal allowance. Note that for every £2 of income in excess of £100,000, the £12,570 personal allowance is reduced by £1, with reduction to nil where net income is £125,140 or more. This is effectively a 60% tax saving.

                  CAPITAL GAINS TAX PLANNING

                  You might wish to consider bringing forward capital gains to before 6 April 2024 where you haven’t used your £6,000 CGT annual exemption. This exempt amount reduces to just £3,000 for gains made in 2024/25.

                  CAPITAL EXPENDITURE PLANNING

                  Unless the business year end is 31 March or 5 April, the end of the tax year is not a significant date as far as capital allowances are concerned. In order for new equipment to attract capital allowances, the expenditure must be incurred on or before the end of the accounting period. Limited companies buying new (not second hand) equipment are entitled to fully expense the cost of most acquisitions against business profits. There is no financial limit on expenditure qualifying for this “full expensing” relief.

                  Unincorporated businesses are entitled to 100% write off for the first £1 million spent on new and used equipment in a 12 month period. This “annual investment allowance” (AIA) is also available to limited companies buying second hand equipment. The AIA does not apply to motor cars but there is a special 100% tax relief if you buy a new zero-emissions motor car.

                  Where equipment is bought under a hire purchase contract, the capital allowances outlined above are available on the full cost of the asset provided it has been brought into use by the end of the accounting period. This is despite the fact that the payments may be spread over a number of months.

                  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.

                  Contact us below

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