Keep up to date with September's offering including high earners child benefit charges. It seems that there are a large number of people who don't even know they are required to complete a tax return form.
Parents on higher incomes who continued to receive Child Benefit in 2012/13 will need to register for self assessment by 5 October 2013 (unless they have already done so) and complete a tax return. Individuals who fail to register with HMRC may incur a penalty.
Tuesday, 3 September 2013
Wednesday, 21 August 2013
Car or Van?
When in the market for a new vehicle it is worth considering the tax implications of what can be a large purchase for a small business.
The current tax regime offers a generous 100% Annual Investment Allowance for qualifying capital expenditure up to £250,000. For most small businesses this will cover all of the annual capital expenditure but to qualify your new vehicle needs to be classed as a van not as a car.
HMRC provide us with the following on their website...
In deciding whether or not a particular vehicle counts as a car for car benefits purposes, the starting point is the definition in Section 115(1) Income Tax (Earnings and Pensions) Act 2003 (ITEPA). This works by exception: every mechanically propelled road vehicle is a “car” unless it is
(i) a goods vehicle (a vehicle of a construction primarily suited for the conveyance of goods or burden of any description),
(ii) a motor cycle (as defined in Section 185 Road Traffic Act 1988),
(iii) an invalid carriage (also as defined in that Act), or
(iv) a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.
The result of this is that the primary function of the vehicle must be for the conveyance of goods or burden. Therefore luxury off-road vehicles would not qualify but some (not all) pick-up trucks would qualify.
Where the vehicle doesn't qualify as a van the tax treatment will depend on the CO2 emissions resulting in annual allowances of 18% for a cleaner car (currently those with CO2 emissions over 130g/km) or 8% for a "dirty" car.
The result of this is very much delayed relief so worth considering when you are choosing your vehicle.
It is worth noting that Vehicle Excise Duty and VAT legislation are both different to tax legislation, so the same vehicle can be treated differently by the different agencies. For instance, VED is based on type approval at the time the vehicle is first registered, whereas VAT and the tax/NICs regimes consider the nature of the vehicle at the time of the transaction or in the relevant tax year.
If you are unsure please contact us before you buy!
For a helpful list from HMRC try here.
The current tax regime offers a generous 100% Annual Investment Allowance for qualifying capital expenditure up to £250,000. For most small businesses this will cover all of the annual capital expenditure but to qualify your new vehicle needs to be classed as a van not as a car.
HMRC provide us with the following on their website...
In deciding whether or not a particular vehicle counts as a car for car benefits purposes, the starting point is the definition in Section 115(1) Income Tax (Earnings and Pensions) Act 2003 (ITEPA). This works by exception: every mechanically propelled road vehicle is a “car” unless it is
(i) a goods vehicle (a vehicle of a construction primarily suited for the conveyance of goods or burden of any description),
(ii) a motor cycle (as defined in Section 185 Road Traffic Act 1988),
(iii) an invalid carriage (also as defined in that Act), or
(iv) a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.
The result of this is that the primary function of the vehicle must be for the conveyance of goods or burden. Therefore luxury off-road vehicles would not qualify but some (not all) pick-up trucks would qualify.
Where the vehicle doesn't qualify as a van the tax treatment will depend on the CO2 emissions resulting in annual allowances of 18% for a cleaner car (currently those with CO2 emissions over 130g/km) or 8% for a "dirty" car.
The result of this is very much delayed relief so worth considering when you are choosing your vehicle.
It is worth noting that Vehicle Excise Duty and VAT legislation are both different to tax legislation, so the same vehicle can be treated differently by the different agencies. For instance, VED is based on type approval at the time the vehicle is first registered, whereas VAT and the tax/NICs regimes consider the nature of the vehicle at the time of the transaction or in the relevant tax year.
If you are unsure please contact us before you buy!
For a helpful list from HMRC try here.
Friday, 2 August 2013
August Newsletter
Please check out our newsletter for the latest including.....
Small businesses 'generate more for local economies' - now there's a surprise!
Small businesses 'generate more for local economies' - now there's a surprise!
Tuesday, 9 July 2013
How long do I have to keep all this paperwork?
Personal Tax Records
If you're not running a business, you'll normally have to keep your tax records for at least 22 months from the end of the tax year to which they relate.
For example, if you gave a property to a charity in September 2012, you must keep any records relating to it until at least 31 January 2015.
Trade Records
If you're in business (as a sole trader or partnership) you must keep your tax records for at least five years and one month after the end of the tax year to which they relate.
For example, if you bought an asset in October 2012 you must keep your records until at least 30 April 2018.
HMRC Enquiry
If HM Revenue & Customs make any enquiries about your tax return you will need to keep your tax records until the enquiries are completed.
Don't throw it all!
There is certain information that you would be wise to keep for much longer than the statutory minimum as it may help mitigate future tax bills.
For example, the completion statement you receive on purchasing a second home may be needed to calculate the Capital Gain if the property is sold in the future. This could be many years down the line!
Find out more
More information can be found here, or contact us on 01395 516658.
If you're not running a business, you'll normally have to keep your tax records for at least 22 months from the end of the tax year to which they relate.
For example, if you gave a property to a charity in September 2012, you must keep any records relating to it until at least 31 January 2015.
Trade Records
If you're in business (as a sole trader or partnership) you must keep your tax records for at least five years and one month after the end of the tax year to which they relate.
For example, if you bought an asset in October 2012 you must keep your records until at least 30 April 2018.
HMRC Enquiry
If HM Revenue & Customs make any enquiries about your tax return you will need to keep your tax records until the enquiries are completed.
Don't throw it all!
There is certain information that you would be wise to keep for much longer than the statutory minimum as it may help mitigate future tax bills.
For example, the completion statement you receive on purchasing a second home may be needed to calculate the Capital Gain if the property is sold in the future. This could be many years down the line!
Find out more
More information can be found here, or contact us on 01395 516658.
Monday, 8 July 2013
July Newsletter
Tuesday, 4 June 2013
June Newsletter
Wednesday, 10 April 2013
RTI - HMRC make a small concession
HMRC has bowed to pressure and will allow some employers more time to submit their RTI reports.
PAYE Real Time Information (RTI) is mandatory for employers from April 6. Since this date, each time you pay an employee you must report their earnings and the corresponding tax and NI contributions to HMRC no later than when you pay your workers. However, it's now offering a little leeway.
HMRC's press release of March 19 is worded a little oddly; it says that employers with fewer than 50 employees can defer making their RTI reports until "the date of their regular payroll run but no later than the end of the tax month (5th)".
In practice. Tax months end on the 5th of the month. Therefore, HMRC is saying that if you pay your workers weekly, say on a Friday, then for the April tax month paydays will be the 12th, 19th, 26th plus May 3. You must make an RTI report for these by no later than May 3, but only where this is the date on which you work out the total tax and NI payable for the month for each employee. If you run a full payroll earlier, then a report will be required at that time.
The RTI reporting concession is short lived. Only payments to employees up to and including October 5 are covered. Thereafter, every time you make a payment you must submit an RTI report.
Under current rules employers, no matter how many workers they have, don't have to make an RTI report for certain one-off or unusual payments until they make their main payroll run.
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