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 Tax Advice 0 Comments

    Late night taxis paid by employers

    Payments by the employer for taxis to take employees home late or at night are exempt from tax if:

    • the failure of car sharing arrangements conditions are satisfied (see below); or
    • all 4 late night working conditions are satisfied; and
    • the number of such journeys for which a taxi has been provided for that employee in the tax year is no more than 60.

    There are 4 late working conditions, all of which must be satisfied.

    1. The employee is required to work later than usual and until at least 9pm.
    2. This occurs irregularly.
    3. By the time the employee ceases work, either:
      1. public transport has ceased, or
      2. it would not be reasonable to expect the employee to use public transport.
    4. The transport is by taxi or similar road transport – this condition is not contentious and is not referred to again in this guidance.

    The 60 journeys is a single limit that applies to late night journeys and failure of car sharing arrangements together. This means that journeys under both headings must be added together when working out whether or not the 60 journeys limit has been reached.

    Need more information?

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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 Tax Advice • Tax News 0 Comments

        Get ready for more research and development changes

        Get ready for more R&D changes

        On top of the major changes to research and development (R&D) tax relief that took effect from 1 April 2023 there are yet more changes that take effect from 1 April 2024.

        For accounting periods commencing on or after 1 April 2024, companies carrying out qualifying R&D will be entitled to a 20% expenditure credit. The 20% is calculated on the amount of qualifying expenditure. Qualifying expenditure is extended to include subsidised expenditure from 1 April 2024, although R&D carried out overseas will no longer qualify unless the work cannot be undertaken in the UK.

        “R&D intensive” companies that make trading losses will continue to be entitled to a tax refund instead of the expenditure credit. The definition of “R&D intensive” is reduced from 40% to 30% from 1 April 2024 which means a company that spends at least 30% of total expenditure on qualifying R&D will now be entitled to the more generous tax refund.

        R&D tax relief continues to be a complex area and we can work with you to help you prepare a valid claim as HMRC are now scrutinising and rejecting an increasing number of claims.

        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 Tax Advice • Tax News 0 Comments

          HMRC publish more details for MTD for income tax reports

          HMRC publish more details for MTD for income tax reports

          Making Tax Digital for income tax self-assessment is scheduled to commence in 2026/27 for sole traders and property landlords with gross income of £50,000 or more, and the threshold then reduces to £30,000 from 2027/28.

          The government have now confirmed that the four quarterly returns that will need to be submitted will report cumulative income and expenses and that there will be no longer be an end of period statement. HMRC have published the detailed income and expenditure headings that need to be reported and have also confirmed that those businesses with turnover below the VAT registration threshold will be able to merely submit three line accounts, i.e. total sales, total expenses and profit or loss for the period.

          There still remain a number of issues to be resolved before the new reporting obligation commences and we will work with you to ensure that your accounting system is compliant.

          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?

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              By Katie Tax • Tax Advice 0 Comments

              Changes to the basis of Assessment

              The method of taxing the profits of unincorporated businesses changed significantly in 2023/24 and will also change from 2024/25 onwards. This was originally intended to align with the introduction of Making Tax Digital for Income Tax Self-Assessment (MTDITSA), which will now start to be phased in from 2026/27.

              Under the old basis of taxing profits, a sole trader or member of a partnership was taxed on their share of profits of the business’s accounting period ending in the tax year. For 2022/23, the last tax year when that basis applied, profits of year ended 31 December 2022 would have been taxed that tax year. Unless that business changes its accounting date, the profits assessed in 2024/25 would be the profits arising between 6 April 2024 and 5 April 2025 i.e. 9 months of the profits from year ended 31 December 2024 plus 3 months of the profits for year ended 31 December 2025. As the 2024/25 self-assessment tax return needs to be filed by 31 January 2026, it is highly likely that the profits for the later period would need to be estimated and subsequently revised. As a result of this complication, many businesses decided to change their accounting year end to 31 March or 5 April so that it corresponds with the tax year.

              The Transitional Year 2023/24

              A further complication with the change in the basis of assessment is the calculation of profits in 2023/24, the “transitional year”, which seeks to transition from the old ‘current year’ basis to the new tax year basis. The rules in 2023/24, where the business has a year end that doesn’t correspond with the tax year, seek to tax the profits from the day after the end of the period taxed in 2022/23 until 5 April 2024. A business preparing accounts to 31 December each year would have a 15 month period from 1 January 2023 to 5 April 2024 potentially taxable in 2023/24. However, the 3 months’ profits in the period 1 January 2024 to 5 April 2024, less any overlap relief, is not all taxed in 2023/24 but spread over 5 years, unless the taxpayer elects to be taxed on a higher amount.

              If, in the above example, the sole trader makes profits of £120,000 in year ended 31 December 2024 then £30,000 less any overlap relief (typically from the early years when some profits were taxed twice) would be spread over 5 years. Assuming no overlap relief, an extra £6,000 profits would be added to the profits assessable from 2023/24 to 2027/28 unless the individual elects to be assessed on a higher amount, in which case the balance of the £30,000 would then be spread over the remaining years to 2027/28. This is not at all straightforward and we can work with you to calculate the transitional profits and advise you of your tax liabilities going forward.

              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 Tax Advice • Tax News 0 Comments

                Many couples may need to restart child benefit claims

                Many couples may need to restart child benefit claims

                The changes to the High Income Child Benefit Charge (HICBC) announced in the Spring Budget have now been incorporated into the latest Finance Bill and are scheduled to take effect from 6 April 2024. The increase in the threshold for the tax charge was good news, although many were lobbying for the charge to be removed completely. HICBC is intended to claw back child benefit where the higher earner in a relationship has adjusted income in excess of £60,000 (£50,000 up to 2023/24). The claw back rate will then be 1% for every £200 of net income in excess of £60,000 with full recovery of child benefit where net income is £80,000 or more.

                Rather than pay the tax charge, many couples have chosen not to claim child benefit in recent years. It is estimated that some 180,000 couples eligible for child benefit will no longer be caught by the HICBC and should restart their claims from 6 April 2024. This can be done by using an online claim form.

                Example

                Fred and Wilma have 2 children for whom they are eligible for child benefit. Fred is the higher earner and his income was £68,000 in 2023/24, which is scheduled to increase to £70,000 in 2024/25. In 2023/24 the HICBC would have been 100% of the child benefit received. Their child benefit for 2024/25 is £25.60 for the first child, then £16.95 for each additional child = £42.55 x 52 = £2,212.60 p.a.

                Based on Fred’s £70,000 net income there would be a 50% HICBC for 2024/25 of £1,106.30.

                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 Tax Advice 0 Comments

                  Tell HMRC about unpaid tax on cryptoassets

                  Make a voluntary disclosure of any unpaid tax if you have income or gains from cryptoassets, including exchange tokens, NFT’s and utility tokens.

                  Use this service if you have identified that you have any unpaid tax on cryptoassets (also known as tokens or cryptocurrencies), for example:

                  • exchange tokens (for example, bitcoin)
                  • NFTs (non-fungible tokens)
                  • utility tokens

                  If you do not contact us to declare your unpaid tax, you could be liable to additional interest and penalties.

                  If you need to declare any income or gains from the current or previous tax year, you will need to do this on your Self Assessment tax return.

                  Find out how to make a voluntary disclosure for unpaid tax if it is not from cryptoassets.

                  If you want an agent to submit a disclosure on your behalf, you will need to give them temporary authorisation to deal with your tax.

                  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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