By Katie Business Advice • Business News • Tax 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 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

Fields marked with an * are required





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

    Increase in NICs and dividend tax to fund health and social care

    Increase in NICs and dividend tax to fund health and social care

    The Prime Minister announced on 7th September that the government will introduce a new 1.25% Levy to provide an extra £12 bn a year to support the NHS and social care.

    From April 2022 it is proposed that there will be a 1.25% rise in National Insurance Contributions (NICs) to be paid by both employers and workers. This will then become a separate Levy on earned income from 2023/24 – calculated in the same way as NIC and appearing on an employee’s payslip.

    Note that the 1.25% increase also applies to the Class 4 contributions paid by the self-employed on their profits. The Class 1 NI contributions paid by employees increase to 13.25% of earnings above £9,568 and the self-employed rate increases to 10.25%. The 3% differential remains for the time being, although there are rumours that the rates will align in the future. Above £50,270 earnings or profits the rate will be 3.25%.

    The employers Class 1 NIC rate will increase from 13.8% to 15.05% from 6 April 2022, however many small businesses are able to set off the £4,000 employment allowance against their employers NIC liability. Many workers operating through personal service companies to whom the new “off-payroll” working rules apply will also be caught by the proposed measures.

    DIVIDEND TAX RATES ALSO INCREASING FROM 2022/23

    It is also proposed that there will be a 1.25% increase in the rate of tax payable on dividends received by those who own shares in companies. This would mean that after the £2,000 tax free dividend allowance the rate of tax would be 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for those with income in excess of £150,000 a year. This will catch many family company director/shareholders who traditionally “pay” themselves by taking a low salary and larger dividends to minimise NICs.

    PLANNING ACTIONS BEFORE THE NEW RATES COMMENCE

    The announcement of the proposed changes more than six months before they take effect means that there is time to reduce the impact. Employees could consider agreeing a salary sacrifice arrangement with their employer, for example sacrificing their £5,000 annual bonus for an additional pension contribution paid by their employer. Such an arrangement would save 1.25% NICs for both employee and employer as well as £2,000 income tax where the employee is a higher rate taxpayer.

    Employees might also consider a salary sacrifice in favour of an electric company car.

    Shareholder/directors of family companies could consider bringing forward dividend payments to before 6 April 2022. Such a strategy needs careful planning as if the extra dividend takes the taxpayer’s income above £50,270 the excess would be taxable at the 32.5% rate instead of the 7.5% rate and the planning could backfire.

    Need more information?

    Do you need further guidance on the increase in NICs and dividend tax to fund health and social care? We offer a wide range of services which are unique to social care businesses. Our team of chartered accountants have a wealth of experience in this 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

    Fields marked with an * are required





      By Katie Tax Advice • Tax News 0 Comments

      Diary of main tax events September/October 2021

      Check out the diary of main tax events for September/October 2021 below. Any questions do not hesitate to get in touch with our team.

      Date What’s Due
      1 September Corporation tax for year to 30/11/20 unless pay by quarterly instalments
      19 September PAYE & NIC deductions, and CIS return and tax, for month to 5/9/21 (due 22 September if you pay electronically)
      1 October Corporation tax for year to 31/12/20 unless pay by quarterly instalments
      5 October Deadline for notifying HMRC of chargeability for 2020/21 if not within Self-Assessment and  receive income or gains on which tax is due
      14 October Final date for CJRS Furlough grant claims for September 2021
      19 October PAYE & NIC deductions, and CIS return and tax, for month to 5/10/21 (due 22 October if you pay electronically)

      Need more information?

      If you need guidance on the main tax events for September/October 2021, please do not hesitate to get in touch with our team.

      We offer a wide range of services which are unique to your business 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.

      Contact us below

      Fields marked with an * are required





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

        Notify option to tax land and buildings within 30 days

        If you are notifying HMRC of a decision to opt to tax land and buildings, you are normally required to notify HMRC within 30 days. The 30 day deadline was temporarily extended to 90 days to help businesses and agents during the pandemic, but that temporary extension has now ended for decisions made from 1 August 2021 onwards.

        Supplies of land and buildings, such leasing or renting out a property, are normally exempt from VAT. This means that no VAT is payable, but the person making the supply cannot normally recover any of the VAT incurred on property expenses.

        However it is possible to waive the exemption, or “opt to tax” the land. For the purposes of VAT, the term ‘land’ includes any buildings or structures permanently affixed to it.

        Once you have opted to tax all the supplies you make of your interest in the land or buildings will normally be standard-rated, and this will normally enable you to recover any VAT you incur in making those supplies.

        Need more information?

        If you are notifying HMRC of a decision to opt to tax land and buildings we can help.

        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

        Fields marked with an * are required





          By Katie Tax Advice • Tax News 0 Comments

          Accounting for import VAT on your VAT return

          Accounting for import VAT on your VAT return explained:

          HMRC have recently updated their guidance on accounting for VAT on goods imported from outside the UK which, since Brexit, includes the European Union.

          Businesses registered for VAT in the UK can account for import VAT on their VAT Return for goods imported into:

          • Great Britain (England, Scotland and Wales) from anywhere outside the UK
          • Northern Ireland from outside the UK and EU

          Businesses can also account for import VAT for goods moved between Great Britain and Northern Ireland that are declared into a customs special procedure, when they are removed from that special procedure.

          You do not need HMRC approval to account for import VAT on your VAT Return.

          Accounting for import VAT on your VAT Return has significant cash flow benefits as you declare and recover import VAT on the same VAT Return, rather than having to pay it upfront when the goods are imported and recover it later.

          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

          Fields marked with an * are required





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

            Big tax bills for the self-employed in 2022/23

            Big tax bills for the self-employed in 2022/23 explained:

            Last month we mentioned that draft legislation has been published to change the basis periods for the assessment of self-employed profits to coincide with the tax year. The proposed new rules provide that from 2023/24 onwards profits or losses will be apportioned to tax years where the period of account does not coincide with the tax year. This is intended to coincide with the start of Making Tax Digital for income tax.

            The transitional rules proposed for the previous 2022/23 tax year could result in large tax bills for some sole traders and partners, particularly those with an existing 30 April year end. The profits of year ended 30 April 2021 would be taxed in 2021/22 under the current rules with 2023/24 taxing profits arising between 6 April 2023 and 5 April 2024 under the new rules. But what about 2022/23?

            The profits taxed in 2022/23 would be those for year ended 30 April 2022 plus the period 1 May 2022 to 5 April 2023 – in total 23 months profits!

            The good news is that there would be a deduction for 11 months “overlap relief” which typically arose when profits were taxed twice at the start of the business – but those will often be much lower than the extra 11 months being taxed in 2022/23!

            The transitional provisions allow the taxpayer to elect to spread the excess profits over the next 5 tax years to smooth out the excessive tax bill.

            We can work with you to advise you on how much to set aside to cover these additional tax liabilities.

            Need more information?

            Are you self-employed? 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 self-employed sectors and our team work hard to ensure they create smart and effective tax-efficient solutions to help you 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

            Fields marked with an * are required





              By Katie Business News • Tax News 0 Comments

              tourism & hospitality – 5% VAT rate ends 30 September

              The temporary 5% VAT rate that has applied to supplies made in the tourism and hospitality sector since the start of the pandemic comes to an end at the end of September. The rate then increases to 12.5% from 1 October until 31 March 2022 when it reverts to the standard rate.

              For those businesses operating in this sector this will mean an amendment to their accounting software and possibly prices. Note that the 20% rate continues to apply to the sales of alcohol.

              Where deposits and other payments are taken before 30 September 2021 the 5% rate would apply to that supply as that would be the tax point for the supply.

              Need more information?

              Do you need further guidance on the 5% VAT rate. We offer a wide range of services which are unique to your tourism and hospitality business. Our team of chartered accountants have a wealth of experience in the tourism and hospitality 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

              Fields marked with an * are required





                By Katie Business News • Tax News 0 Comments

                September is the last month for CJRS “Furlough” grants

                September is the last month for CJRS “Furlough” grants

                The Government are pulling the plug on support to employers for furloughed staff at the end of September as they anticipate that the economy will be back to normal by October. The grant claims for employees furloughed in the month of September are 60% of the employee’s usual pay up to a maximum cap of £1,875.

                Make sure that you make your final claims for the month of September by 14 October and make any adjustments by 28 October 2021.

                The end of furlough may be the trigger for many businesses to assess their staffing levels going forward and many may be considering making the tough decision about which staff to make redundant.

                Need more information?

                September is the last month for CJRS “Furlough” grants. We have supported many businesses through this.

                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

                Fields marked with an * are required





                  By Katie Tax Advice • Tax News 0 Comments

                  Diary of main tax events August / September 2021

                  Please see below for the diary of main tax events August / September 2021. We are here to help you meet these deadlines.

                  Date What’s Due
                   

                  1/08

                  		 Corporation tax for year to 31/10/20 (unless pay quarterly)
                   

                  19/08

                  		 PAYE & NIC deductions, and CIS return and tax, for month to 5/8/21 (due 22/08 if you pay electronically)
                   

                  1/09

                  		 Corporation tax for year to 30/11/20 (unless pay quarterly)
                   

                  19/09

                  		 PAYE & NIC deductions, and CIS return and tax, for month to 5/9/21 (due 22/09 if you pay electronically)

                  Need more information?

                  Do you need more guidance with the main tax events August / September 2021. We are here to help you meet these deadlines.

                  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 self employed 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

                  Fields marked with an * are required