By Katie Business Advice • Tax 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 help and guidance with reference pay? 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 0 Comments

    Claim your “furlough” grant by 14th December 2020

    We now have further details of the operation of the extension of Coronavirus Job Retention Scheme “furlough” grant that will apply from 1 November 2020 through to the end of March 2021. The government support will initially be at the rate of 80% of an employee’s reference pay for hours they are furloughed, subject to a maximum of £2,500 a month.

    Claims must be made by the 14th of the following month although they can be made up to 14 days in advance. Another key difference from the previous versions of CJRS is that there is no requirement that the employee was on the payroll at 19 March 2020 or has been previously furloughed. They do however need to be on the payroll and subject to an RTI submission prior to midnight on 30 October 2020.

    Need more information?

    We have helped all our clients claim the furlough grant. Do you need help too? We are here to support you and your business through this difficult time 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.

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

    Contact us below

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      By Katie COVID-19 • Covid-19 Hub • Tax Advice • Tax News 0 Comments

      COVID-19: HMRC confirms virtual Christmas party exemption

      Have you thought about a virtual Christmas party for your business? This year, all face to face meetings and events have been replaced by virtual meetings and events, and we have seen huge levels of creativity to achieve successful delivery. HMRC has now confirmed, where all normal conditions are met, virtual events can be included when considering the £150 exemption.

      HMRC have updated their manuals to include virtual events within the annual party exemption when assessing Benefits In Kind.

      Tax and staff parties

      A staff party or an annual function qualify as a tax-free benefit for your employees providing that you meet the following conditions:

      • It must be a recurring annual event, not a one-off.
      • The total cost must not exceed £150 per head, per year.
      • £150 includes VAT together with any extra costs such as transport and accommodation.
      • The £150 is a limit and not an allowance: if the cost is £151, the whole benefit is taxable.
      • The event must be primarily for entertaining staff.
      • The event must be open to all staff (in that location, if you have several branches or departments).
      • The event is not just to be for directors unless all your staff are directors.
      • The cost of the whole event is an allowable expense for your business.
      • You can claim back input VAT but this may be restricted where you are also entertaining customers.

      An employer may spend up to £150 per head (inclusive of VAT) per year, in providing annual functions and events to entertain its staff.

      Provided the £150 limit is not exceeded, there can be any number of parties, for instance, three parties at a cost of £50 each at various times of the year.

      Virtual parties

      HMRC has updated their guidance to include virtual annual functions within this exemption, which includes a virtual Christmas party. Virtual parties cannot have all employees in a single location so would ordinarily fail to qualify. HMRC’s revised guidance allows these events to qualify, provided that all of the other criteria are met.

      A virtual party is defined as:

      • An annual function provided virtually using IT.

      An example of this:

      • A company holds it’s annual function virtually using IT.
      • All employees are invited.
      • A hamper of food and drink is provided to each employee to enjoy during the party.
      • The total cost is £100 per head.

      The cost is less than the £150 per head maximum and so the function is tax-exempt.

      Trivial benefits

      Since April 2016, as part of a package of simplification measures, a new definition of what would constitute as a trivial benefit was added to ITEPA 2003. Prior to this time guidance existed that was open to misinterpretation and challenge.

      The statutory exemption lays out certain criteria that must be met in order to be counted as a trivial benefit which ensure that:

      • The benefit is not cash or a cash voucher
      • The cost to provide does not exceed £50
      • The benefit is not provided as a contractual entitlement
      • The benefit is not provided in return for a normal service (or services) expected by the employee – eg hitting a pre-set performance target

      Common examples seen include a gift of flowers on a birthday, a turkey at Christmas, or a modest layette on the birth of a child. More than one trivial benefit can be provided during the year; however, where the employer is a close company and the trivial benefits are given to a director, office holder or members of their families or households, an annual limit of £300 exists.

      Need more information?

      We would love to hear from you about your ideas for a virtual Christmas Party. 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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        By Katie Tax Advice • Tax News 0 Comments

        Diary of main tax events November/December 2020

        Please see below for the diary of main tax events November/December 2020. As always, if you need help to reach these deadlines, do not hesitate to get in touch with our team.

        Date What’s Due
        1/11/20 Corporation tax for year to 31/01/2020 unless quarterly instalments apply
        19/11/20 PAYE & NIC deductions, and CIS return and tax, for month to 5/11/20 (due 22/11 if you pay electronically)
        1/12/20 Corporation tax for year to 28/02/2020 unless quarterly instalments apply
        19/12/20 PAYE & NIC deductions, and CIS return and tax, for month to 5/12/20 (due 22/12 if you pay electronically)
         

        30/12/20

        		 Deadline for filing 2019/20 tax return online in order to request that HMRC collect outstanding tax via the 2020/21 PAYE code

        Need more information?

        Do you need help with reaching any of the deadlines found in the diary of main tax events November/December 2020? 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.

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          By Katie Tax Advice • Tax News 0 Comments

          Changes to Capital Gains Tax

          Changes to capital gains tax:

          If you sold your property after 6 April 2020 you must report and pay Capital Gains Tax within 30 days of selling property in the UK. You may have to pay interest and a penalty if you do not report gains on property within the time limit.

          You can report Capital Gains Tax you need to pay:

          • using the Capital Gains Tax on UK property service within 30 days of selling UK property
          • straight away using the ‘real time’ Capital Gains Tax service
          • annually in a Self Assessment tax return

          If you have to send a Self Assessment return for another reason, you must include capital gains on your return, even if you’ve already reported and paid them.

          Before you report

          You’ll need:

          • calculations for each capital gain or loss you report
          • information from your records about the costs and what you received (the ‘proceeds’) for each asset
          • any other relevant details, such as any reliefs you’re entitled to

          Report gains and pay straight away

          If you’re a UK resident you can use the ‘real time’ Capital Gains Tax service to report any gains that are not from selling UK residential property.

          You’ll need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you report and pay.

          When you use the service you’ll need to upload PDF or JPG files showing how your capital gains and Capital Gains Tax were calculated.

          When to report

          You can use the ‘real-time’ service as soon as you’ve calculated your gains and the tax you owe. You do not need to wait until the end of the tax year.

          You must report by 31 December after the tax year when you had the gains.

          The tax year runs from 6 April to 5 April the following year.

          After you’ve reported your gains, HMRC will send you a letter or email giving you a payment reference number and telling you ways to pay.

          Do not pay your Capital Gains Tax bill until you’ve received your payment reference number.

          You’ll need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you report and pay.

          If you sold the property before 6 April 2020, report the gain using the ‘real time’ Capital Gains Tax service or in your next Self Assessment tax return.

          If you’re not resident in the UK

          If you’re a non-resident and you’ve sold property or land in the UK, tell HM Revenue and Customs (HMRC) within 30 days, even if you have no tax to pay.

           

           

          Need more information?

          Do you need more guidance on the changes to capital gains tax? We offer a wide range of services and are here to help 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.

          Contact us below

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            By Katie Tax Advice • Tax News 0 Comments

            Bring your tax affairs up to date

            Bring your tax affairs up to date:

            2018/19 tax returns can be amended by the taxpayer up until 31 January 2021. Where the omitted property income or gain relates to earlier tax years the taxpayer should consider disclosing using HMRC’s let property campaign. If this affects you we can assist you in putting together the details that HMRC require.

            Need more information?

            Do you need guidance with your tax affairs? 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.

            Contact us below

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              By Katie Tax Advice • Tax News 0 Comments

              CGT business asset disposal relief lifetime limit just £1 million

              In the March 2021 Budget, it was announced that CGT Entrepreneurs’ relief (ER) was replaced by CGT Business Asset Disposal relief (BADR) for disposals on or after 11 March 2020.

              It was also announced that the 10% CGT rate would only apply to the first £1 million of qualifying gains in the taxpayer’s lifetime and many business owners have misinterpreted how this limit applies.  Unfortunately claims under the predecessor ER need to be taken into consideration so if £750,000 ER has already been claimed only the first £250,000 of qualifying gains after 11 March 2020 would qualify for BADR.

              Any gains in excess of that amount would be taxed at normal CGT rates, currently 20% for higher rate taxpayers.

               

              Need more information?

              Do you need guidance on the replaced by CGT Business Asset Disposal relief (BADR)? Feel free to contact our team today, who are here to help you and your business succeed.

              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.

              Contact us below

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                By Katie Tax Advice • Tax News 0 Comments

                Support for taxpayers: more time to pay tax

                Support for taxpayers: more time to pay tax

                Those taxpayers who may have difficulty paying the tax due under self-assessment on 31 January 2021 can agree more time to pay with HMRC provided the amount outstanding is no more than £30,000.

                The government have already agreed that amounts due under self-assessment on 31 July 2020 could be deferred until 31 January 2021, but this latest announcement generally allows a further 12 months to pay.

                A key condition is that the taxpayer does not have any outstanding tax returns, no other tax debts, or other HMRC payment plans set up. The payment plan needs to be set up no later than 60 days after the due date of a debt. Interest will accrue on the tax owed based on the outstanding balance at 1 February 2021.

                You can either set up a payment plan online by logging into your HMRC online personal tax account or call the HMRC Payment Support Service.

                Need more information?

                We are here to offer support for taxpayers and will ensure you do not miss any tax deadlines. We offer a wide range of services and our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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

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

                  Renting Income – HMRC to open enquiries

                  Renting Income – HMRC to open enquiries:

                  You may have seen in the newspapers that Airbnb will share data with HMRC about the earnings of hosts (those who let out property) on its UK platform in the years 2017/18 and 2018/19.

                  It is anticipated that HMRC will use this data to open enquiries into the tax affairs of individuals who have not declared letting income for 2017/18 and 2018/19. The deadline for opening an enquiry into a self-assessment return for 2018/19 is 31 January 2021, if the return was issued and submitted on time. The discovery rules allow HMRC to go back much further, potentially up to 20 years in some cases if the property income has not previously been reported.

                  RENT COVERED BY RENT A ROOM RELIEF

                  For many property owners the rental income will be tax free if it is within the £7,500 rent a room relief and will not even need to be reported. This applies where room(s) in the taxpayer’s main residence are rented out, typically to lodgers. Where the house is owned jointly, they would qualify for £3,750 each tax free.

                  This £7,500 exemption would also apply where the property owners are temporarily absent and rent out their property, for example a house in SW19 during the Wimbledon fortnight.

                  A few years ago it was proposed that such lettings would not qualify but the legislation was dropped and the CGT lettings relief restriction was introduced in the latest Finance Act instead.

                  Need more information?

                  We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience with property owners and rental properties. 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 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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