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

Car benefit reduced where unavailable

Company car benefit update: P11d forms reporting benefits in kind provided to employees and directors need to be submitted to HMRC by 6 July. Where a company car is “unavailable” for private use for 30 or more consecutive days the benefit is proportionately reduced.

During the various lockdown periods many employees and directors have not been using their company cars and it may have been sitting on their driveway. Unfortunately, that does not count as being unavailable.

HMRC have confirmed that they would continue to regard the car as available to the employee unless the keys or fobs are returned to the employer or to a third party such as the leasing or disposal company as instructed by the employer.

Note that where the employee is provided with a motor car with zero CO2 emissions there is no taxable benefit in kind for 2020/21 although the charge increases to 1% of original list price for 2021/22.

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

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    By Katie Business Advice • Tax Advice 0 Comments

    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.

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

      EU VAT changes from 1 July 2021: The IOSS (Import One-Stop Shop) Scheme

      On July 1 2021, the European Union (EU) will introduce the Import One-Stop Shop (IOSS) scheme. The new system simplifies current VAT registration requirements for selling into the EU, making it easier for businesses to grow, stay compliant and protect your bottom line. Businesses will be able to sell to all 27 EU member states with just one VAT return.

      What is the IOSS?
      The Import One-Stop Shop is the electronic portal businesses can use from 1 July 2021 to comply with their VAT e-commerce obligations on distance sales of imported goods. The IOSS allows suppliers and electronic interfaces selling imported goods to buyers in the EU to collect, declare and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are imported.

      Why is the IOSS being introduced?
      Both new schemes OSS and IOSS will help in Simplifying the VAT invoicing process while at the same time combating VAT fraud. This ensures fair competition for EU companies and the EU consumers will appreciate knowing that when buying goods online from outside or inside the EU, the VAT rate will be the same as for goods acquired in their home country.

      How does the IOSS work?
      The IOSS will be used for the importation of goods valued less than EUR 150 and it will simplify the declaration as well as payment of VAT of goods sold by distance sellers or electronic marketplace facilitating sales of goods. When registering to the IOSS, online sellers or online marketplaces/platforms receive an IOSS VAT number. This IOSS VAT number is used by postal operators and courier services to declare goods upon importation to the customs authorities. They can do so in any Member State regardless of the destination of the goods. Customs authorities verify the validity of the IOSS VAT number and then the package can be delivered to the customer. If a consignment consists of more than one item the total number of goods is being taken under consideration as the value of the consignment. The IOSS does not cover sales of goods that are subject to excise duties.

      From 1 April 2021, you can register businesses on the IOSS portal of any EU Member State. If businesses are not based in the EU, they will normally need to appoint an EU-established intermediary to fulfill their VAT obligations under IOSS.

      Is IOSS for you?

      By registering for IOSS your business could benefit from:
      • Access to all 27 EU member states
      • Improve your cash flow by removing import VAT payments
      • Enhance customer experience with reliable, transparent and accurate pricing at checkout
      You do not need to charge VAT on sales if:
      • The consignment is more than 150 EUR. Your sales are facilitated by an electronic marketplace.
      • In this case the marketplace needs to collect and remit VAT.
      The new rules could impact how you do business in the EU. The European Commission has published more information about these changes here.

      Need more information?

      Do you need help with the Import One-Stop Shop (IOSS) scheme. We work with Businesses who sell to all 27 EU member states and we offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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        By Katie Business News • Tax Advice 0 Comments

        Super-deduction and Hire Purchase

        Super-deduction and Hire Purchase

        In March 2021, the Chancellor announced in the budget a new “Super Deduction” Annual Investment Allowance. This means that from April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim: a 130% super-deduction capital allowance on qualifying plant and machinery investments a 50% first-year allowance for qualifying special rate assets.

        Example of “Super Deduction”
        • Equipment cost of £50,000 x
        • Super Deduction of 130% x
        • Corporation tax rate of 19% =
        • Tax Saving of £12,350

        Hire Purchase
        The use of a Hire Purchase facility enables businesses to spread the initial cost of purchasing new equipment over several years with fixed monthly payments. A Hire Purchase facility qualifies as eligible to claim under the Annual Investment Allowance. This means that a business utilising a Hire Purchase Facility can spread the initial cost of investment and free up cashflow, whilst also allowing the business the benefit from tax allowances and also benefiting from offsetting the interest charges on the finance facility against their corporation tax bill.
        Therefore the combination of the new Super Deduction Annual Investment Allowance, alongside the use of a Hire Purchase facility, will benefit a business hugely for tax purposes as well as cashflow retention.

        For further guidance and reading on the Super Deduction Annual Investment Allowance, please visit the gov website here

        Need more information?

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

          Diary of main tax events May/June 2021

          Check out our table below for the diary of main tax events May/June 2021

          Date What’s Due
           

          01/05

          		 Corporation tax payment for year to 31/07/20 (unless quarterly instalments apply)
           

          19/05

          		 PAYE & NIC deductions, and CIS return and tax, for month to 5/05/21 (due 22/05 if you pay electronically)
          01/06 Corporation tax payment for year to 31/08/20 (unless quarterly instalments apply)
           

          19/06

          		 PAYE & NIC deductions, and CIS return and tax, for month to 5/06/21 (due 22/06 if you pay electronically)

          Need more information?

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

            No Employers NIC for a year when hiring ex-military staff

            Government have announced a one-year exemption from paying employers national insurance contributions (NICs) where military veterans are recruited by civilian employers.

            Employers can claim relief if they employ a veteran during the qualifying period. The qualifying period starts on the first day of the veteran’s first civilian job since leaving the regular armed forces and ends 12 months later. For 2021/22 employers will be required to pay the NICs and then claim back the amounts paid at the end of the tax year. From 6 April 2022 a new zero NIC rate will apply.

            Need more information?

            Are you keen to hire a military staff member? 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 and our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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

              Associated Companies now count for new corporation rates

              A 25% rate of corporation tax will apply to all of a company’s profits if they exceed £250,000 from 1 April 2023. The 19% rate will continue to apply where profits are below £50,000. The marginal rate that applies between those limits will be 26.5%.

              Those upper and lower limits are divided by the number of “associated companies” in the accounting period. This is not merely companies in the same 51% group but also includes companies under common control, for example where the same individual controls two standalone companies.

              So, if Fred controls Bloggs Trading Ltd and also Bloggs Lettings Ltd the limits become £125,000 and £25,000. If Bloggs Trading Ltd has profits of £200,000 in year ended 31 March 2024 then the 25% rate will apply to all of that company’s profits.

              In a group situation you may wish to consider restructuring the businesses by the transfer of trades to a single operating company, leaving the other companies dormant as those companies would not normally be counted as associates.

              Need more information?

              Are you an Associated Company? 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 and 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 Making Tax Digital • Tax Advice • Tax News 0 Comments

                Making tax digital now extended to more businesses

                Currently only VAT registered businesses making taxable supplies in excess of the £85,000 VAT registration threshold are mandated to comply with Making Tax Digital (MTD) rules. Those rules require the business to keep digital business records and send VAT returns using MTD-compatible software.

                MTD for VAT is now being rolled out to all VAT registered businesses from April 2022 which may cause some traders who are VAT registered but below the threshold to consider deregistering to avoid having to comply with MTD for VAT. If you decide to do so you will need to complete Form VAT7 and account for output VAT on the market value of stock and assets still owned at the date of deregistration. This is where input VAT has been reclaimed on those assets.

                There is however a £1,000 de-minimis which means that output VAT does not need to be accounted for where the combined market value of the assets is less than £6,000.

                Unfortunately, deregistering for VAT will not necessarily sidestep MTD as the requirement to keep business records digitally will be introduced for income tax from April 2023. From then MTD for income tax will apply to businesses with gross income in excess of £10,000 a year which will include property landlords as well as traders and professionals.

                Need more information?

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

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

                  Self-Employed Income Support Scheme (SEISS) extension

                  Like the CJRS scheme for employers the Self-Employed Income Support Scheme (SEISS) has been extended to September 2021and details of claims for the fourth grant have now been released. This fourth grant covers February, March and April 2021. There will then be a fifth grant covering May to September 2021.

                  The latest grant allows the self-employed to claim 80% of their average profits for the period up to 2019/20, and is again limited to £2,500 a month.

                  Like CJRS there are lots of conditions that need to be satisfied such as being self-employed in 2019/20 and continuing to trade in 2020/21 or would be doing so if it the business had not been impacted by coronavirus.

                  In order to be able to make a successful claim the self-employed profits in 2019/20 must not exceed £50,000 and must be more than 50% of the individual’s total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the four years (or shorter period) to 5 April 2020. This means that those who commenced trading in 2019/20 will now potentially be eligible for SEISS grants, having not previously qualified for the first three grants.

                  Although we cannot make the claim on your behalf we can help you determine whether you are eligible and assist you with your claim if required.

                  Conditions for the fifth grant will be linked to a reduction in business turnover.

                  Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. We are still awaiting further details of the fifth grant calculation.

                  Need more information?

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