Accountancy Blog

Making Tax Digital – obligations from 1st April 2019

Obligations from 1 April 2019 onwards.

Although the Making Tax Digital (MTD) regime has suffered several setbacks and delays, MTD for VAT remains on course to take effect from its planned implementation date of 1 April 2019.

Under the scheme, VAT-registered businesses are required to maintain digital records, complete the VAT return from the digital records and send it electronically to HMRC. More…

Letting holiday accommodation – the good and bad

The pros and cons of letting furnished holiday accommodation.

When furnished holiday property is let on a commercial basis for short periods, the owner can benefit from certain tax reliefs which wouldn’t otherwise be available to residential landlords, providing certain conditions are met.

However, there are also several disadvantages associated with letting property as holiday accommodation whether or not the furnished holiday letting conditions are met. More…

Working pensioners pay £8.6bn in income tax

Working pensioners are on course to pay £8.6 billion in income tax in 2018/19, according to Aegon.

The number of pensioner households containing at least one person working beyond their state pension age increased from 12% in 1997/98 to an estimated 17% in 2018/19.

Aegon estimates there are around 12.8 million people living in 8.7 million pensioner households in the UK, with around 1.4 million homes containing a working pensioner. More…

SME’s missing out on balance interest

Small business owners could alleviate pressure on their cashflow by paying more attention to business savings interest, according to a report.

Aldermore polled 950 SME owners and sole traders and found that 62% are earning no interest on their business savings at all.

Over half (53%) are earning less than £300 a year in interest on their business savings, while 65% had the same business bank account as their personal account provider.

While consistently low interest rates offer little incentive to save, 33% of respondents said they were spending their cash too quickly each month. More…

VAT – raise or lower the threshold?

The Association of Independent Professionals and the Self-Employed (IPSE) has called for the VAT threshold to be increased, in response to a government consultation.

The current £85,000 threshold at which businesses must register for VAT has been frozen until 2020, while the government deliberates on its approach to the tax.

Chancellor Philip Hammond considered lowering the VAT-registration threshold before Autumn Budget 2017 to bring the threshold closer to global standards and the EU average of £20,000.

Estimates suggested that reducing the threshold from £85,000 to £43,000 would net the Treasury an extra £1.5 billion a year, while decreasing the threshold to £25,000 could fetch up to £2 billion. More…

Apprenticeships levy – flawed system?

Pressure is mounting on the government to reform the apprenticeships system, following recent apprenticeship levy statistics.

The Institute of Directors (IoD) has joined the British Chambers of Commerce (BCC) in urging the government to address ongoing problems with the levy.

Apprenticeship starts were down 25% for the seven months to February 2018 compared with the previous year, according to statistics from the Department for Education.

The apprenticeship levy, which has been in place since 6 April 2017, means businesses with an annual wage bill of more than £3 million must pay the levy towards apprenticeship funding. More…

IR35 – what you need to know

A brief guide to the tax implications of IR35.

IR35 is the shorthand name for tax rules concerning the provision of personal services through intermediaries.

These rules came into effect on 6 April 2000, but they were significantly amended from 6 April 2017 for contracts involving public sector bodies.

There are now two different applications of IR35 – for the private sector, and for the public sector. HMRC also refers to circumstances which may fall within IR35 as “off-payroll working”.

The Revenue is currently consulting on how to change the way IR35 is applied in the private sector, to align with the public sector rules.

These changes are likely to take effect from 6 April 2019, but that commencement date is not certain. More…

Travel & subsistence – it’s quite complicated

Your obligations for reporting travel expenses.

Many employees need to travel as part of their job for various reasons, whether it’s acquiring new customers, working with current ones or attending conferences and events.

The system of benefits and taxation surrounding this essential economic activity is classed as ‘travel and subsistence’ in the eyes of the taxman.

This involves a business reimbursing its employees, directors or partners for meals, accommodation or other general expenses, and claiming back tax where there is a valid receipt. More…

Entrepreneurs say they need more support

Four out of five entrepreneurs in the UK believe the government could do more to support their small business, research claims.

Aldermore surveyed 1,799 people, including 642 small business owners, and found 79% of respondents believed existing initiatives did not provide enough support to SMEs.

Apprenticeship levy funds go towards the training of apprentices, but only 36% of SMEs polled were aware of the funding and only 4% had accessed this form of government support.

A similar pattern emerged with capital allowances, with 27% of respondents aware of the scheme and only 5% utilising it to support their business. More…

Deadline for reporting benefits in kind nears

Most employers are currently getting their houses in order when it comes to reporting employee benefits and expenses ahead of the 6 July 2018 deadline.

At the end of the tax year, employers may need to inform HMRC if any taxable benefits were handed out to members of staff over the previous 12 months.

These include company cars, health insurance, non-business travel or entertainment expenses, and assets provided by an employer that have significant personal use.

Each taxable employee benefit is calculated differently, depending on the type of expense or benefit provided. More…