fpdteam, Author at Bennetts Accountancy

The best and worst of British banks

21st August 2023 by fpdteam

Personal and small business current account holders were asked how likely they would be to recommend their provider to a friend, relative or other business. The survey also covered the quality of online and mobile provision, branch and overdraft services and, for small businesses, the quality of the relationship management they receive.

The results show customers how their bank is ranked on quality of service and make it easier for people to compare offers. They also promote competition between providers, resulting in better experiences for all account holders. Customers who find another bank offering a better deal can use the Current Account Switch Service to help make the process of switching much simpler. This free service is available to anyone with a personal or business current account in the UK.

Results are for the period July 2022 to June 2023.

Overall, the top-ranked personal current account providers in Great Britain are:

Monzo (1st)
Starling Bank (2nd)
First direct (3rd)

Overall, the bottom-ranked personal current providers in Great Britain are:

Virgin Money (=15th)
Royal Bank of Scotland (=15th)
TSB (14th)

Overall, the top-ranked business current account providers in Great Britain are:

Monzo (1st)
Starling Bank (2nd)
Handelsbanken (3rd)

Overall, the bottom-ranked business current account providers in Great Britain are:

HSBC UK (15th)
The Co-operative Bank (14th)
Virgin Money (13th)

Source:Other| 20-08-2023

Tax and duty on goods sent from abroad

17th August 2023 by fpdteam

There are special rules to help ensure that goods sent from abroad are taxed appropriately. The aim is to not disadvantage UK businesses supplying goods in the UK, for example, by having to compete with VAT free imports. This includes goods that are new or used and bought online, bought abroad and shipped to the UK, and goods received as gifts.

This means that in order to receive your goods you may have to pay VAT, Customs Duty or Excise Duty if they were sent to:

Great Britain (England, Wales and Scotland) from outside the UK.
Northern Ireland from countries outside the UK and the European Union (EU).

VAT is charged on all goods (except for gifts worth £39 or less) sent from:

outside the UK to Great Britain; and
outside the UK and the EU to Northern Ireland.

Online marketplaces that facilitate the sale of goods are usually responsible for collecting and accounting for the VAT. If the VAT has not been collected, then you will have to pay VAT to the delivery company either before the goods are delivered or when you collect them. If you have to pay VAT to the delivery company, it’s charged on the total package value which includes the value of the goods, postage, packing, insurance and any duty owed.

Generally, there are no Customs Duty payable on non-excise goods worth £135 or less. There are various rates payable above this level and on excise goods of any value.

Source:HM Revenue & Customs| 13-08-2023

Capital Gains Tax and trusts

17th August 2023 by fpdteam

A trust is an obligation that binds a trustee, an individual or a company, to deal with the assets – such as land, money and shares – held by the trust. The person who places assets into a trust is known as a settlor and the trust is for the benefit of one or more 'beneficiaries'.

The trustees make decisions about the assets in the trust. These assets are to be managed, transferred or held back for the future use of the beneficiaries. Trustees are also responsible for reporting and paying tax on behalf of the trust. A trust needs to be registered with HMRC if it pays or owes tax. CGT may be payable when assets are placed into or taken out of a trust.

If assets are placed into a trust, tax is paid by either the person selling the asset to the trust or the person transferring the asset (the 'settlor').

If assets are taken out of a trust, the trustees usually have to pay tax if they sell or transfer assets on behalf of the beneficiary. However, the rules are complex and there are different types of trusts that need to be considered, for example, bare trusts or non-UK resident trusts.

Most trusts have an annual exemption from CGT, currently £3,000 (2022-23: £6,150). There is a higher limit of £6,000 if the beneficiary is vulnerable, a disabled person or a child whose parent has died.

Source:HM Government| 13-08-2023

VAT recovery when leasing vehicles

17th August 2023 by fpdteam

The VAT treatment of motoring expenses is relevant to any business that incurs VAT on motor expenses.

We have covered below some important points to be aware of concerning the recovery of input tax (VAT) when leasing vehicles:

Leasing company recovering VAT on purchase of cars. A leasing company can usually recover the VAT incurred as long as the cars are leased at a commercial rate.
Business leasing a car and recovering the VAT. If a business leases a ‘qualifying car’ for business purposes, they can generally recover 50% of the VAT charged. The 50% disallowed covers any private use of the car. The business can reclaim the remaining 50% of the VAT charged, subject to the normal rules.
Cars leased primarily for taxi or driving instruction. A business can reclaim all of the VAT charged on the lease if the car is a qualifying car and the business intends to use it primarily for:
- hire with a driver for carrying passengers; or
- providing driving instruction.
The 50% block on VAT recovery also applies to self-drive hire (daily rental) as well as leasing. This restriction applies if the car is hired simply to replace an off the road ordinary company car.

Source:HM Revenue & Customs| 13-08-2023

Overview of private pension contributions

17th August 2023 by fpdteam

You can usually claim tax relief for your private pension contributions. There is an annual allowance for tax relief on pensions of £60,000 for the current 2023-24 tax year. The annual allowance was £40,000 in 2022-23.

There is a three year carry forward rule that allows you to carry forward any unused amount of your annual allowance from the last three tax years if you have made pension savings in those years. There also used to also be a lifetime limit for tax relief on pension contributions but this was removed with effect from 6 April 2023.

You can qualify for tax relief on private pension contributions amounting to 100% of your annual earnings, subject to the overriding limits. Tax relief is paid on pension contributions at the highest rate of Income Tax paid by the contributor.

This means that if you are:

A basic rate taxpayer you get 20% pension tax relief.
A higher rate taxpayer you can claim 40% pension tax relief.
An additional rate taxpayer you can claim 45% pension tax relief.

The first 20% of tax relief is usually applied by your employer with no further action required if you are a basic-rate taxpayer. If you are a higher rate or additional rate taxpayer, you can claim back any further reliefs on your Self-Assessment tax return.

The above applies for claiming tax relief in England, Wales or Northern Ireland. There are regional differences if you are resident for Income Tax in Scotland.

Source:HM Revenue & Customs| 13-08-2023

Let Property Campaign

17th August 2023 by fpdteam

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding of the tax rules or due to deliberate tax evasion. Participation in the campaign is open to all residential property landlords with undisclosed taxes. The campaign is not suitable for those letting out non-residential properties.

Landlords who do not avail of the opportunity and are targeted by HMRC can face penalties of up to 100% of the tax due together with possible criminal prosecution. Taxpayers that come forward will benefit from better terms and lower penalties. Landlords that make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% depending on the circumstances of their disclosure. The penalties would be in addition to the tax and interest due. There are higher penalties for offshore liabilities.

There are three main stages to taking part in The Let Property Campaign:

notifying HMRC that you wish to take part;
preparing an actual disclosure; and
making a formal offer together with payment.

The campaign is open to all individual landlords renting out residential property. This includes landlords with multiple properties and specialist landlords with student or workforce rentals. Once HMRC have been notified of the wish to take part in the campaign, landlords usually have 90 days to calculate and pay any tax owed.

Source:HM Revenue & Customs| 13-08-2023

Claiming tax relief on employment expenses

17th August 2023 by fpdteam

If you are an employee that needs to buy substantial equipment to use as part of your employment you may be able to claim tax relief. In most cases you can claim tax relief on the full cost of this type of equipment. Tax relief is reduced if your employer provides a financial contribution towards buying the item.

The way to claim tax relief depends on the amount you are claiming. HMRC provides the following information on making a claim:

Claims up to £2,500

You can make your claim:

Using a Self-Assessment tax return if you already file a return.
By using HMRC’s online service or by printing and posting form P87 if you do not file a tax return.
By phone if you have had a successful claim in a previous year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions).

Claims over £2,500

You can only claim using a Self-Assessment tax return. You need to register if you do not file a return.

There are different rules if you are an employee using your own uniforms, work clothing and tools for work. You cannot claim relief on the initial cost of buying small tools or clothing for work. However, it is possible to claim for the cost of repairing or replacing small tools you need to provide as an employee (for example, scissors or an electric drill), or cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots). A claim for valid purchases can be made against receipts or as a 'flat rate deduction'.

You have four years from the end of the tax year to make a claim. For example, there is a deadline of 5 April 2024 for making a claim dating back to the 2019-20 tax year.

Source:HM Revenue & Customs| 13-08-2023

Who is your ideal customer?

14th August 2023 by fpdteam

If there is a particular type of customer that is ideally placed to benefit from the goods or services you sell it makes sense to target any marketing activity in their direction, rather than adopting a scatter gun approach.

Take a good look at your present customers and select those that buy from you on a regular basis and seem to appreciate your company’s supplies. For example, are they:

Easy to deal with.
Pay on time.
Reorder on a regular basis.
Approachable for cross-sales.

These will be your “A” clients/customers. Once you have your list look for similarities. Are they:

In a specific market sector.
Is location a feature, local to your base of operations.
Are they owner managed.

Once you have defined these characteristics you have a “prime avatar” of your ideal customer, and you can start to market to win more customers with similar characteristics.

To assist with these marketing efforts, approach your present “A” list and ask for testimonials. These are likely to resonate with prospects you approach.

As you are fishing for customers in a pond alive with many different types, many of which you may not want as customers, it makes sense to get clear on who your ideal customer is and concentrate your marketing activity in their direction.

Source:Other| 13-08-2023

Landlords’ obligation to repair property

14th August 2023 by fpdteam

Landlords have a legal obligation to keep their rented property in good condition, and any gas or electrical systems must meet specified safety standards.

There are different rules for making repairs in Scotland and making repairs in Northern Ireland.

When you can enter the property

You have a legal right to enter your property to inspect it or carry out repairs. You must give your tenants at least 24 hours’ notice, although immediate access may be possible in emergencies. Your tenants have the right to stay in the property during the repairs.

You are normally responsible for repairs to:

the structure of your property
basins, sinks, baths and other sanitary fittings
heating and hot water systems
anything you damage through attempting repairs

If your property is seriously damaged by a fire, flood or other similar incident, you do not have to rebuild or renovate it. However, if you do, you cannot charge your tenants for any repairs made.

Common areas

If you own a block of flats, you are usually responsible for repairing common areas, like staircases. Councils can ask landlords to fix problems in common areas, or to repair a tenant’s flat that’s been damaged by another tenant.

If the property is temporarily unfit to live in

You can ask tenants to move out during major repairs. Before this happens, you should agree in writing:

how long the works will last
the tenants’ right to return
details of any alternative accommodation

You cannot repossess a property to do repairs. However, if you’re planning substantial works or want to redevelop the property, you can apply to the courts for an order for your tenants to leave. The courts are more likely to grant this if you provide alternative accommodation.

Repairs and charging rent

If the repairs are very disruptive, your tenants may be able to claim a reduction on their rent known as a ‘rent abatement’. This will depend on how much of the property is unusable.

You may have the right to increase the rent after carrying out repairs and improvements, depending on the tenancy agreement.

Source:Other| 13-08-2023

Tax Diary September/October 2023

14th August 2023 by fpdteam

1 September 2023 – Due date for corporation tax due for the year ended 30 November 2022.

19 September 2023 – PAYE and NIC deductions due for month ended 5 September 2023. (If you pay your tax electronically the due date is 22 September 2023)

19 September 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2023.

19 September 2023 – CIS tax deducted for the month ended 5 September 2023 is payable by today.

1 October 2023 – Due date for Corporation Tax due for the year ended 31 December 2022.

19 October 2023 – PAYE and NIC deductions due for month ended 5 October 2023. (If you pay your tax electronically the due date is 22 October 2023.)

19 October 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2023.

19 October 2023 – CIS tax deducted for the month ended 5 October 2023 is payable by today.

31 October 2023 – Latest date you can file a paper version of your 2022-23 self-assessment tax return.

Source:HM Revenue & Customs| 13-08-2023