Married couples tend to pool their resources and share fiscal burdens, but the UK tax system treats every individual as an independent person. This can lead to families paying more tax overall. Where one person earns the majority of the family income, he or she may pay more tax than if both individuals each earned approximately half of the same total, and hence use their full personal allowance and basic rate bands. Such inequality can be eased by the lower earner transferring 10% of their...

When you cash in a life assurance policy or bond, the taxable amount you receive is treated as the highest slice of your income. The taxable portion won’t be the full proceeds, but it can increase your marginal tax rate so you pay more tax in one year than you would have if you’d made regular withdrawals over the life of the bond. Top-slicing relief attempts to put you in the position you would have been in, had the lump sum been paid in equal amounts in each year of the bond’s life. It...

People who complete a Self-assessment tax return and owe more than £1,000 of tax, generally have to make two payments on account of tax due for the 2018/19 year, by 31 January 2019 and 31 July 2019. Those on account bills are based on the total amount of tax calculated as payable for 2017/18 in the tax return submitted by 31 January 2019. The HMRC computer should send taxpayers demands for those on account payments in good time to allow you to find the money before January and July 2019, but...

But forgiveness is not the HMRC way. Taxpayers are expected to get their tax returns right first time, and to diligently preserve all records relevant to their tax affairs for at least six years. However, HMRC has been shown to make systematic mistakes in tax computations, to provide incomplete information to taxpayers, and to have a lower standard of record retention than the courts would normally expect. Examples of all these HMRC short comings are included in this newsletter. If you feel...

There are three ways to reduce the tax payable by an employee or director who is provided with a company car: choose electric or hybrid, a ‘clean’ diesel, or take a van. Electric and hybrid cars with CO2 emissions of up to 50g/km currently attract a taxable benefit of 16% of their list price, which doesn’t encourage companies to buy the more expensive electric models. However, from 6 April 2020 the taxable benefit of having a purely electric car will be 0% of its list price. This is scheduled to...

A business must register for VAT when its turnover for the last 12 months exceeds £85,000. It must also look forward and judge if its turnover in the next 30 days alone will exceed £85,000. This threshold has been frozen since 1 April 2017, and it will remain at that level until at least 1 April 2022. This means that more businesses will be drawn into the VAT net simply by increasing their prices by inflation every year. If you don’t want to register for VAT, you either have to keep your total...

When you sell some or all of the shares in your company, you should expect to pay Capital Gains Tax (CGT) on any profits you make. This tax is normally charged at 20% for higher rate taxpayers, but Entrepreneurs’ Relief can reduce the CGT payable to 10%. To qualify for Entrepreneurs’ Relief you need to be a director or employee of the company and own at least 5% of the ordinary share capital and the related voting rights. New additional conditions require the investor to have a right to...

The Making Tax Digital (MTD) regulations came into force for periods starting from 1 April 2019 for most businesses which are required to be VAT registered because their annual turnover is £85,000 or more. They must keep their VAT records in a digital format and send VAT returns directly from MTD-compliant software to HMRC.If you use accounting software which automatically sends your VAT return to HMRC, you are 90% ready for the MTD regime. Ask your software provider when you will receive the...

If you allow your staff to pick a tax-free benefit, such as a parking space near work, a bicycle, or employer pension contributions, you would think that everyone would be happy. But where the employees have given up some of their salary to receive the benefit, some may be taxed on the benefit provided and others won’t. This is because of the tricky rules called optional remuneration arrangements (OpRA). These broadly impose tax on the employee according to the amount of salary sacrificed rather...

Stamp Duty Land Tax (SDLT) is payable when you buy land or property in England or Northern Ireland. Buyers of property in Scotland pay Land and Buildings Transaction Tax (LBTT) and, for purchases in Wales, Land Transaction Tax (LTT) is due. Until recently all of these taxes were payable within 30 days of the completion date, but the deadline for SDLT has been halved to 14 calendar days from 1 March 2019. This is also the period for submitting the land transaction return which reports the SDLT...

When you sell your main home the profit you make is normally exempt from tax, but that depends on whether you occupied the property (or were deemed to occupy it) throughout your entire period of ownership. When you acquire a property before it has been fully constructed, you will own it for a period before it is habitable. This can apply where a property is purchased ‘off-plan’, but it will depend on the precise terms of the purchase contract. For Capital Gains Tax purposes, your ownership...

You can check how much State Pension you will receive by accessing your online personal tax account. It will tell you how many years of National Insurance Contributions (NIC) you have made and if there are any gaps in your NIC record. You need 35 full years to get the full State Pension, but will get some State Pension if you have 10 complete NIC years. You can make up gaps in your NIC record over the last six years by paying voluntary class 3 NIC at £15 per week. If you are self-employed you can pay...

There was a time when you couldn’t turn on the radio, or your phone, without getting an advert for PPI (Payment Protection Insurance) refund claims. If you made a successful claim, you may have banked the money thinking it was tax free. That is not entirely true. Each PPI settlement includes interest calculated at 8% on the refunded premiums, which is taxable. Some banks deducted 20% tax from the interest, but other lenders didn’t. The interest portion of the PPI settlement needs to be...

It’s easy to estimate your business mileage, but HMRC wants to see accurate figures recorded as close to the time of the journey as possible. There are a number of apps which can help you with this. To achieve the precision HMRC is looking for, you need to know where your business journey starts and finishes. That is not necessarily at your home if you are self-employed. HMRC will argue your work starts when you reach your customer’s site, and any activities performed at your home-office are...

Families who receive Child Benefit may have that money clawed back as tax where the higher earner in the family has a total net income of £50,000 or more. The full Child Benefit must be repaid where one of the parents has a total income of £60,000 or more. It is the responsibility of the higher earner to tell HMRC that they need to complete a tax return in order to self-assess their tax charges. Although HMRC manages claims for Child Benefit, it doesn’t know which claimants have a higher earning...

Businesses are constantly evolving to adapt to changing markets. The tax system similarly changes to keep up with new business structures and innovative ways to avoid tax. One such tax avoidance trick, which is perceived to be a particular problem in the construction industry, is when firms charge and collect VAT, but disappear before they pay that VAT over to HMRC. The solution is a ‘reverse charge’ mechanism that will apply to builders, contractors and other trades associated with the...

The VAT registration threshold has been fixed at £85,000 from 1 April 2017 until at least 31 March 2022. This may bring more businesses into the VAT fold, if they increase their prices with the rate of inflation. This threshold can be a cliff edge for many businesses as, once VATable turnover exceeds it, the business must charge VAT on all eligible sales. For your UK sales, you must check the cumulative total of your VATable sales (including zero-rated items) for every 12-month period and...

The Annual Tax on Enveloped Dwellings (ATED) applies when a company (and certain other bodies) owns a UK residential property worth over £500,000. The charge applies for the year from 1 April, but the ATED return, and any payment due, must reach HMRC by 30 April within that period (i.e., by 30 April 2019 for 2019/20). This annual charge starts at £3,650 and increases, through valuation bands, up to £232,350 for 2019/20. The charge is based on the property’s value as at 1 April 2017, or the...

The end of the accounting period for your business is a key point for tax planning. You can save or delay tax by moving income and expenditure between accounting periods. For instance, advancing the acquisition of assets to just within your current accounting period will mean the capital allowances associated with those assets can be claimed earlier. The cost of qualifying assets which fall within the Annual Investment Allowance (AIA) is given in full as a capital allowance in the year of...

Events don’t always turn out as expected. For example, you may need to wait for a later profit or loss to arise before you can judge whether it’s right to elect to change the tax treatment of an earlier transaction. This is why the law allows you extra time, after you have submitted your tax return, to submit a tax election or claim. The elections you may need to make by 31 January 2020 for the 2017/18 tax year include: • to set trading losses against your other income• to average the profits made...

For VAT periods beginning on and after 1 April 2019, most VAT-registered businesses will have to submit their VAT returns directly from some form of software, with no manual retyping of figures. All the VAT records also need to be kept in a digital format. This new approach to filing VAT returns and keeping records is part of the making tax digital (MTD) project, which will be expanded to include returns for all the main taxes in future years. For certain businesses, such as those that use the...

If you use your own car for a business journey, perhaps to travel to a customer, you can claim mileage expenses for that journey. Many employers pay the full tax-free amount of 45p per mile, which drops to 25p for miles in excess of 10,000 in one tax year. If your employer doesn’t pay the full rate, you can claim tax relief on the shortfall, either on your tax return or on form P87. You need to submit your claim within four years of the end of the tax year in which you made the business...

Most employees, with very limited exceptions, must be paid the National Minimum Wage (NMW) or the National Living Wage (NLW). These hourly rates vary according to the age of the worker, so it’s crucial to keep a sharp eye on the birthdays of your younger workers to ensure they are paid at the right rate for their age band. The second trap you can fall into is to ignore some of the hours worked. All overtime hours, time spent training, or standing in line for security checks, must be counted....

The 2019 Stockport Business Awards, organised and founded by Clarke Nicklin, are now officially open for entry. This year there are 13 categories for businesses in the borough to apply for, businesses can apply for as many as they like and its free to enter. See below the full list of categories. Business of the Year (over £5m) Sponsored by Handelsbanken (Headline Sponsor) Business of the Year (£1-5m) Sponsored by Gorvins Solicitors (Headline Sponsor) Business of the Year (up to £1m) Sponsored by...

If you are considering acquiring a new company car, take account of the changing tax incentives for electrics.The taxable benefit for having an electric company car is currently calculated at 13% of its list price when new, but this will rise to 16% on 6 April 2019. Strangely, from 6 April 2020 the taxable benefit for driving an electric company car will drop to 2% of its list price. Where a business buys a new electric car it can claim 100% of the cost as a capital allowance in the year of...

Companies which invent new production methods or products can claim enhanced tax relief for the Research and Development (R&D) costs. Small and medium sized companies can claim 230% of qualifying R&D costs, and a 14.5% payable tax credit if this extra deduction results in a loss! This is a very attractive relief and it’s really quite easy to claim. You can ask HMRC for an advance assurance that your company, and its R&D projects, will meet the requirements for R&D tax relief. We can help you...

The Government encourages individuals to make high-risk investments in small trading companies or charities byproviding Income Tax relief for investors in the following schemes (limits for 2018/19): • Social Investment Tax Relief (SITR): 30% relief on up to £1 million• Enterprise Investment Scheme (EIS): 30% relief on up to £2 million• Seed Enterprise Investment Scheme (SEIS): 50% relief on up to £100,000• Venture Capital Trust (VCT): 30% relief on up to £200,000 If you invest above £1 million...

Everyone has an annual exemption for Capital Gains Tax (CGT) of £11,700 for 2018/19. This is wasted if you don’t make capital gains in the tax year. You can’t carry forward any unused exemption to a different tax year, or transfer the exemption to another person. If you are planning to dispose of assets which will create capital gains, you can save tax if the disposals are spread over several tax years. This is easy to do if your assets can be split into separate chunks, like shares. Each sale...

What you need to know about the Spring Statement Economy The government’s efforts to build a stronger, fairer economy are paying off. The economy remains resilient, and is forecast to continue growing: • there have been nine consecutive years of growth, and the OBR has forecast further growth every year for the next 5 years• since 2010, the economy has grown faster than France, Italy and Japan• the OBR expects inflation to stay close to or on target for the duration of the forecast• business...

For many people the New Year prompts a review of their life goals. If you are wondering whether, or when, you should sell your business, a sensible first step is to form an outline plan for its disposal. The sale of a successful trading company will generate a capital gain, which would normally be taxed at 20% after deduction of your annual exemption (currently £11,700, increasing to £12,000 for 2019/20). Entrepreneurs’ Relief can reduce your tax rate to 10% on a gain of up to £10m. But there...

Buying property is always complicated, but now you must think about the different taxes you will pay on the purchase of properties located in Wales, Scotland, or the rest of the UK. In Wales, you will pay Land Transaction Tax (LTT), which starts at 3.5% for residential properties costing over £180,000 and has a top rate of 12% on the portion of the property price which exceeds £1.5 million. In England or Northern Ireland you will pay Stamp Duty Land Tax (SDLT). This starts at 2% for...

Individual landlords of residential properties are subject to restrictions on how much interest and finance costs they can deduct from rental income. In 2018/19 individual landlords are permitted to deduct just 50% of their interest and finance charges for tax purposes. From 6 April 2019 it reduces to just 25% and from 6 April 2020 all such finance costs will be disallowed. In place of the blocked interest the landlord receives a 20% tax credit to set against his Income Tax bill. This...

When you die, your executors or relatives need to sort out your affairs. This stressful task can be made easier if you leave a clear and up-to-date Will which has been drafted with tax in mind. They also need to pay Inheritance Tax (IHT) if the net value of your assets, including your home and any insurance policies that pay out to your estate on death, exceeds £325,000. Any wealth above this threshold bears IHT at 40%, or at 36% if at least 10% of your net estate has been left to charity. The...

You can save for retirement in a number of ways. The traditional route is via a pension scheme, but you could also use an ISA. Savers aged under 40 can open a lifetime ISA, and contribute up to £4,000 per year which attracts a 25% bonus from the Government. This bonus is withdrawn if the savings are accessed in circumstances other than used as a deposit for the saver’s first home, diagnosis of a terminal illness, or from age 60 onwards. The lifetime ISA savings are counted as part of the...

In the UK, everyone is taxed as an individual, but social security benefits, including Tax Credits and Universal Credit, are awarded on the basis of the family’s total income. Child Benefit is also withdrawn based on the income of the higher earner of a couple, irrespective of who claimed it. Families with an unequal distribution of income will often pay more tax than couples who earn just enough each to cover their basic Personal Allowance (£11,850 for 2017/18) and the basic rate band. The...

When you let rooms in your own home as residential accommodation, you can receive the rent tax-free if it falls within the limits for rent-a-room relief. This relief is currently capped at rents of £7,500 per year. Where more than one person receives the rent from the property, each person has a tax-free exemption for rent of £3,750. The conditions for rent-a-room relief stipulate that you must occupy the property as your main home – this relief can’t cover income from a holiday home or...

Giving to charity under Gift Aid can result in a win/win for both the donor and the charity. Making a Gift Aid donation will reduce your tax bill for the year in which the donation is made if your total income is above the 40% threshold (£46,350 for 2018/19). Taxpayers resident in Scotland can save tax with Gift Aid donations if their total income, including earnings, is above the 21% threshold (£24,000 for 2018/19). Alternatively, you can shift the tax benefit of some or all of that gift back...

If you are yet to reach State Pension Age (SPA), you will need to have accrued 35 complete years of National Insurance Contributions (NIC) to receive the full state pension. To receive any UK state retirement pension, you need at least ten complete NIC years.You can check how much state pension you are due to receive through your personal tax account on gov.uk. We can help you with this. It is possible to plug gaps in your NIC record by paying voluntary class 2 or class 3 NIC. This payment...

All interest you receive is taxable, unless it is from an ISA, but banks and building societies no longer deduct tax from interest paid to individuals. However, for most taxpayers the rate of tax payable on that interest is 0%, so no tax is in fact due. This zero tax rate applies where your savings income falls within your Savings Rate Band (SRB), which is worth up to £5,000, or within your Personal Savings Allowance (PSA), which is worth £1,000 for basic rate taxpayers or £500 for higher rate...

As you may be aware from April 2019 businesses above the VAT threshold (£85,000) will need to submit their VAT return through commercial software to be compliant with new HMRC legislation. You may already have cloud/compliant accounting software and ready for the changes that Making Tax Digital will bring. However, whilst you may have the basics covered, are you aware of what making better use of your software can do for you and your business to help you run more effectively and more...

If you have received a lump sum payment from your pension fund you may have had excess tax deducted from it. This happens, for example, because the pension provider tends to use an emergency PAYE code for the first payment you take from your fund. If you have had tax incorrectly deducted from a lump sum payment, you will get it back from HMRC if the pension scheme doesn’t refund it. However, there are several different claim forms, depending on the circumstances. We can help you with those...

The Seed Enterprise Investment Scheme (SEIS) is specifically designed for young companies to raise relatively small amounts of start-up capital. The investors receive 50% income tax relief on the amount they subscribe for new shares, and those shares are exempt from capital gains tax (CGT) when they are sold after three years or more. There is no minimum amount the company may raise, and no minimum each equity investor is required to commit, but there are maximum limits. The company is...

The total amount of inheritance tax (IHT) paid to the UK Treasury increases by around 10% per year. This is largely due to rising residential property values and is frozen at £325,000 per person. IHT is payable at 40% above the nil band. If you have children (step or adopted children count) some IHT may be saved by leaving an interest in your family home to one or more of your direct descendants. Such bequests allow the residential nil rate band (RNRB) to come into play, which is currently...

The tax avoidance rules known as IR35 have been in force since April 2000. They are designed to prevent employers and workers from reducing their tax and NIC bills by placing a company structure between the worker and the employer. Unfortunately, it is difficult for HMRC to tell whether a small company has been inserted as an artificial step, or whether it is a genuine service business. If you operate through your own personal service company, you may need to prove to HMRC that your company is...

HMRC has long seen the construction industry as an area where tax avoidance is rife. The construction industry scheme (CIS) was imposed as a means to prevent labourers dodging tax on cash-in-hand payments. The latest dodge concerns VAT charged by labour suppliers to their customers, who are normally larger builders. The customer pays the VAT on the supply of labour, and reclaims the VAT as input tax on its VAT return. However, the labour supplier never pays the VAT over to HMRC, and often...

You don’t have to wait until the end of the tax year to reclaim any tax you have overpaid. It is now quite simple to do this through your online personal tax account (www.gov.uk/personal-tax-account). If you are still employed, your PAYE code should be adjusted so you receive your tax repayment as an addition to your next salary payment. However, young people who have worked during the summer to build up savings for university, may no longer have a job through which the tax repayment can be...

There is an overriding rule when claiming a deduction for the cost of clothing as a self-employed individual; the garment must be wholly and exclusively used for the purpose of your business. This is normally the sticking point with clothes – they are generally needed for warmth and decency, so the “exclusively” part of the condition fails. However, where the purpose of the clothing is to protect the individual or products, and the items are required to be worn in the work environment, the...

When you import from, or export to, countries in the EU, you generally don’t have to worry about VAT or customs duties. That may change when the UK leaves the EU at 11pm on 29 March 2019. It’s possible that the UK will leave the EU automatically by operation of the law (having triggered Article 50) with no withdrawal agreement in place. In that case the UK will immediately be treated as a third country in relation to the EU for all trading purposes, including for customs duties and VAT. For...

Businesses that sell digital services (eg, ebooks) to non-business customers in other EU countries need to account for the VAT due at the rate applicable in the country where the customer belongs. This rule currently applies to any amount of digital sales made, there is no de minimis threshold. The VAT charged to those overseas customers must be reported through the VAT MOSS system for each calendar quarter, unless the business is going to register for VAT in each separate jurisdiction that is...

Self-employed individuals pay two types of national insurance contributions (NIC); class 2 at a flat rate of £153.40 per year if annual profits are at least £6,205, and class 4 which is calculated as 9% of profits above £8,424, reducing to 2% of profits above £46,350. Class 2 NIC buys entitlement to the state pension and certain other benefits; class 4 NIC buys no such entitlements. The Government had proposed merging classes 2 and 4 NIC. The self-employed would pay one class of NIC, which...

The new making tax digital (MTD) rules will require most VAT-registered businesses to keep all their VAT data as digital records, and submit VAT returns to HMRC using MTD-compliant software. This will apply for VAT periods starting on and after 1 April 2019. In theory there should be no human cutting and pasting, or retyping figures, at any stage between the initial recording of the transaction and the submission of the VAT return. All transfers of data between different software packages...

If you have owned your commercial building for 20 years or more, you should review its VAT status. Such older buildings won’t have VAT attached to their sale or rent, unless the owner or leaseholder has opted to apply VAT, the so-called “option to tax”. So ask yourself these questions about your commercial property: • Have you ever made an option to tax on this property?• If you opted to tax, can you prove that? The evidence would be a copy of form VAT1614 and acknowledgment from HMRC.• If you...

The tax-free Personal Allowance will rise to £12,500 - The Personal Allowance – the amount you earn before you have to start paying income tax– will increase by a further £650 in April 2019 to £12,500. This rise comes a year earlier than planned, and will be maintained in 2020. This means a basic rate taxpayer will pay £1,205 less tax in 2019-20 than in 2010-11. A 2% digital services tax on large digital firms - From April 2020, large social media platforms, search engines and online...

The intended purpose of real time information (RTI) reporting of payroll data is to update universal credit accounts with individuals’ actual pay within days of their pay date. RTI reporting also allows employees to view their latest tax position through their online personal tax accounts. However, those accounts won’t be up to date if employers don’t report payroll data on time. HMRC should receive the full payment submission (FPS) report on or before the employees’ pay date, and automatic...

Employees who drive electric company cars can feel short-changed, as they charge-up at home, but don’t get reimbursed for the power used on business journeys. Now employers can reimburse drivers of electric company cars up to 4p per mile for each business mile driven since 1 September 2018, with no tax implications. What’s more, the company can allow employees to charge company or privately owned electric vehicles at the company’s premises for free, without incurring a taxable benefit. The...

There are now less than six months until the UK leaves the EU, and we still don’t know the terms of the withdrawal agreement. It is possible that the UK will leave the EU without a deal, which would have wide implications for many UK businesses. Whichever side of the leave or remain fence you stand, it is now essential that businesses prepare for the potential disruption which Brexit could bring. The European Commission has published detailed notices to advise businesses of the effects of the UK...

Last Thursday Clarke Nicklin organised the seventh Stockport Business Awards held at the iconic Stockport Town Hall. Over 350 people attended the black tie awards dinner to celebrate the success and achievements of the region’s finest. TV presenter, Jenny Powell, hosted the awards for the second year running and did a fantastic job of keeping the excited crowd quiet and engaged for those all-important moments. SignPost Stockport for Carers were this year’s Charity Partner and raised over £4000 in...

If your family receives Child Benefit and you are a high earner (£50,000 or more per year), you need to pay a special tax charge to claw back some or all of the Child Benefit received. It is your responsibility to tell HMRC that you need to pay the High Income Child Benefit Charge (HICBC), as HMRC’s computer systems can’t match up claimants for Child Benefit and their high-earning partners or spouses. HMRC did write to a number of taxpayers in 2013 to tell them about the HICBC, but your...

You may have borrowed assets or money from your company with the intention of repaying or making good the cost to the company in the future. If you make this repayment by 6 July following the end of the tax year in which you received use of the asset or money, no benefit-in-kind tax charge will apply for that tax year. The taxable benefits which can be effectively cancelled by this repayment mechanism are: non-cash vouchers, cars, vans, fuel for cars or vans, accommodation, credit tokens, and...

The VAT annual accounting scheme seems like a good idea, as you don’t have to submit quarterly VAT returns. Instead you pay your VAT by monthly or quarterly instalments during the year, and make a final balancing payment with a single VAT return for the whole accounting year. If you choose to pay monthly instalments, these will be set at 1/10th of your previous year’s VAT liability. Nine monthly payments are made (starting in the fourth month of your VAT year), plus a balancing amount for the...

If you receive a late filing penalty from HMRC, there is a one in three chance that it is wrong, and you can get it cancelled. We know that HMRC cancels more than a third of the penalties it issues each year; it says this is because the taxpayer has successfully claimed a reasonable excuse for late filing. However, a high proportion of the late filing penalties are issued incorrectly as the tax return was actually submitted by the set deadline. We are expecting the HMRC computer to issue a...

There is an important difference between expenses you incur while providing a service to your customer (e.g., travel costs), and costs known as ‘disbursements’, which you pay on behalf of your customer (e.g., MOT charge). If your business is VAT registered, you must add VAT to the amount of any expenses recharged to your customer, but you should not add VAT to genuine disbursements, where the customer remains responsible for the fee. There has been some confusion about whether the cost of online...

These are mileage rates which employers can use to work out how much to reimburse employees who use company cars for business journeys, but who have paid for the fuel used on those journeys out of their own pocket. The advisory fuel rates are reviewed by HMRC every quarter, with the new rates taking effect from the first of June, September, December and March. In view of the recent increases in the price of road fuel you would expect all the advisory fuel rates to rise, but they haven’t. The pence...

If you work on projects for larger businesses through your own Personal Service Company (PSC), both you and that larger business can save tax and National Insurance (NI) costs. Your savings arise if you extract funds from your PSC as dividends rather than as salary, and your customer saves employer’s NI by not paying you as an employee. The IR35 tax avoidance rules came into effect in April 2000 to prevent individuals from gaming the system and paying less tax by working through their own PSC,...

The institute of Chartered Accountants England and Wales have presented Graham Clarke with a certificate of recognition upon reaching 50 years membership. Graham Clarke, whose father was one of the original founders over 50 years ago is very much still an employee at Clarke Nicklin. Graham commented “I’m absolutely delighted to be awarded this certificate, being congratulated by the ICAEW wasn’t expected so a very welcomed surprise, my whole career has been with Clarke Nicklin, I’ve never even...

Convoluted tax avoidance methods are known as ‘tax schemes’. Back in 2000, a popular tax scheme was to receive pay from your job as a ‘loan’, on which there was no tax, and no National Insurance. The individuals who took part in these schemes were told they were 100% legal and the loan would be written-off on their death, so they would never have to pay tax on the loan. In reality, the money provided wasn’t a loan if it was never going to be repaid; it was a disguised form of remuneration.In...

Since 6 April 2017 you haven’t had to report income from trading or rents (property income) if the total amount received in each category is less than £1,000 per tax year, but there are conditions. The property income allowance can’t apply to rent from letting a room in your own home to a lodger. This source of rent falls under a different allowance called rent-a-room relief, which covers up to £7,500 of rent per year. The property income allowance is designed to cover letting of...

As a self-employed individual, you will be required to pay only one class of National Insurance Contributions (NIC) from 6 April 2019. Good news! But there is a catch. Currently, if your profits are below the small earnings threshold of £6,205 (for 2018/19), you don’t have to pay any NIC. But you can voluntarily pay Class 2 NIC of £153.40 (for 2018/19) to ensure the year counts towards your state retirement pension and other state benefits. Class 2 NIC is being abolished from 6 April 2019,...

We are pleased to announce we have further expanded our team with the appointment of Nathan Millar . Nathan, who joins the business as Accounts Senior, joins Clarke Nicklin having just moved back to the UK from Melbourne Australia. Nathan’s past experience included primarily looking after clients in the SME market space, ranging from individuals and sole traders up to corporate group structures. He also has experience in annual tax compliance and preparation of financial statements through to...

There are so many risks in business nowadays. You need to know your customer to check they aren’t trying to launder money through you, but you also need to know your suppliers to protect yourself from VAT fraud. If your supplier goes missing and deliberately fails to pay its VAT liability for taxable supplies in the UK, you could end up liable for the VAT. This can apply when you knew, or should have known, that a transaction was connected with VAT fraud. HMRC may refuse your claim for the VAT...