fpdteam, Author at Bennetts Accountancy

Tax Diary October/November 2022

21st September 2022 by fpdteam

1 October 2022 – Due date for Corporation Tax due for the year ended 31 December 2021.

19 October 2022 – PAYE and NIC deductions due for month ended 5 October 2022. (If you pay your tax electronically the due date is 22 October 2022.)

19 October 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2022.

19 October 2022 – CIS tax deducted for the month ended 5 October 2022 is payable by today.

31 October 2022 – Latest date you can file a paper version of your 2021-22 self-assessment tax return.

1 November 2022 – Due date for Corporation Tax due for the year ended 31 January 2022.

19 November 2022 – PAYE and NIC deductions due for month ended 5 November 2022. (If you pay your tax electronically the due date is 22 November 2022.)

19 November 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2022.

19 November 2022 – CIS tax deducted for the month ended 5 November 2022 is payable by today.

Source:HM Revenue & Customs| 20-09-2022

Taxable and tax-free State Benefits

15th September 2022 by fpdteam

Whilst there are a large number of state benefits available, it is not clear which of these benefits are taxable and which are tax-free.

HMRC’s guidance provides the following list of the most common state benefits that are taxable i.e., Income Tax is potentially payable, subject to the usual allowances and reliefs:

Bereavement Allowance (previously Widow’s pension)
Carer’s Allowance
contribution-based Employment and Support Allowance (ESA)
Incapacity Benefit (from the 29th week you get it)
Jobseeker’s Allowance (JSA)
pensions paid by the Industrial Death Benefit scheme
the State Pension
Widowed Parent’s Allowance

The most common state benefits you do not have to pay Income Tax on are:

Attendance Allowance
Bereavement support payment
Child Benefit (income-based – use the Child Benefit tax calculator to see if you’ll have to pay tax)
Child Tax Credit
Disability Living Allowance (DLA)
free TV licence for over-75s
Guardian’s Allowance
Housing Benefit
Income Support – though you may have to pay tax on Income Support if you’re involved in a strike
income-related Employment and Support Allowance (ESA)
Industrial Injuries Benefit
lump-sum bereavement payments
Maternity Allowance
Pension Credit
Personal Independence Payment (PIP)
Severe Disablement Allowance
Universal Credit
War Widow’s Pension
Winter Fuel Payments and Christmas Bonus
Working Tax Credit

Source:HM Revenue & Customs| 12-09-2022

HMRC’s shared workspace

15th September 2022 by fpdteam

HMRC’s Shared Workspace is a service that allows businesses and tax agents to share sensitive data, for example, accounts or employee information, with HMRC.

According to HMRC, the service allows members to ‘share’ information in a ‘space’ where they can work together in real time. More than one person can view or edit material at the same time, with all amended versions being automatically saved and organised.

In order to use the Shared Workspace users must be invited by HMRC or request HMRC online service. Shared Workspace is available to qualifying businesses and agents, not individuals.

Shared Workspace is very versatile and can be designed to meet the needs of customers who may deal with the different parts of HMRC. This also includes more complex and specialist work involving HMRC.

Before requesting to use this service, HMRC recommends contacting your local HMRC office and they will see whether the service is suitable for your needs.

Source:HM Revenue & Customs| 12-09-2022

The pension savings annual allowance

15th September 2022 by fpdteam

The pension savings annual allowance for tax relief on pensions has been fixed at £40,000 since 6 April 2014. The annual allowance is further reduced for high earners. Since 6 April 2020, the tapered annual allowance increased from £150,000 to £240,000.

This means that anyone with income below £240,000 is not affected by the tapered annual allowance rules. Those earning over £240,000 will begin to see their £40,000 annual allowance tapered. For every complete £2 income exceeds £240,000 the annual allowance is reduced by £1. The annual allowance cannot be reduced to be less than £4,000. The annual allowance can also be affected if the taxpayer flexibly accessed their pension pot.

There is a three-year carry forward rule that allows taxpayers to carry forward unused annual allowance from the last three tax years if they have made pension savings in those years. The calculation of the exact amount of unused annual allowance that can be carried forward can be complicated especially if subject to the tapered annual allowance.

There is also a pensions lifetime allowance that needs to be considered. The limit is currently £1,073,100.

Source:HM Revenue & Customs| 12-09-2022

Goods sent from abroad

15th September 2022 by fpdteam

There are special rules to help ensure that goods sent from abroad are taxed appropriately and do 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 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 engage in facilitating the sale of goods are usually responsible for collecting and accounting for the VAT. If the VAT has not been collected, VAT will have to be paid to the delivery company either before the goods are delivered or when goods are collected. 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 Duties 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| 12-09-2022

Sponsoring a charity

15th September 2022 by fpdteam

There are special rules in place when a limited company gives to charity. This can include Corporation Tax relief for qualifying donations made to registered charities or community amateur sports clubs (CASC) as including capital allowances for giving away equipment that has been used by a donor company.

However, the rules are different if the company is given something in return for donating, such as tickets for an event.

Donation amount	Maximum value of benefit
Up to £100	25% of the donation
£101 – £1,000	£25
£1,001 and over	5% of the donation (up to a maximum of £2,500)

These rules apply to benefits given to any person or company connected with a company, including close relatives.

Charity sponsorship payments are different from donations because the company gets something related to the business in return. A company can deduct sponsorship payments from its business profits before it pays tax by treating them as business expenses.

Payments qualify as business expenses if the charity:

publicly supports the company's goods or services;
allows the company to use their logo in company’s printed material;
permits the company to sell their goods or services at the charity's events or premises; or
has links from their website to the company's website.

Source:HM Revenue & Customs| 12-09-2022

Her Majesty Queen Elizabeth II’s State Funeral

15th September 2022 by fpdteam

It has been confirmed that the date of Her Majesty Queen Elizabeth II’s State Funeral will be Monday, 19 September 2022 following 10-days of national mourning. King Charles III approved an order that the day of the Queen’s funeral will be a national bank holiday across the UK.

A press release from the Department for Business, Energy & Industrial Strategy (BEIS) stated that this will allow individuals, businesses and other organisations to pay their respects to Her Majesty and commemorate Her reign, while marking the final day of the period of national mourning.

The government has confirmed that the bank holiday will work in the same way as other bank holidays, and that there would be no statutory entitlement to time off. Employers may include bank holidays as part of a worker’s leave entitlement.

It is expected that many places of businesses will be closed on the day. The press release also said the BEIS “expects employers to respond sensitively to requests from workers who wish to take the day of the funeral off work”. Schools will also be closed.

The government also stated that no decision has yet been made on whether King Charles' Coronation Day will be a bank holiday. A date for the Coronation is unlikely to be announced until after the mourning period for the Queen has ended.

Source:HM Government| 12-09-2022

Tackling the cost-of-living crisis

8th September 2022 by fpdteam

The new Prime Minister, Liz Truss has, as promised, sought to tackle the cost-of-living crisis in her first few days in office. She is the fourth Conservative Prime Minister to govern the UK in a little over six years. The government has seen many major changes over this time including Brexit, the corona pandemic and now a cost-of-living crisis exacerbated by Russia’s invasion of Ukraine and volatile energy markets.

One of the Prime Minister’s first moves after her appointment was to appoint her new cabinet. This included the widely expected appointment of Kwasi Kwarteng as her new Chancellor after he previously held the position of Secretary of State for Business, Energy and Industrial Strategy. The previous Chancellor, Nadhim Zahawi, spent only two months in the job.

As expected, the Prime Minister announced to a packed House of Commons that the government will introduce an energy price guarantee from 1 October 2022 to help tackle the continually increasing energy costs. This will see the average household have their energy bills capped at £2,500. The Prime Minister also confirmed that the £400 energy rebate for UK households announced by the former Chancellor and fellow leadership contender, Rishi Sunak, would be rolled out next month as planned.

The new cap will stay in place for two years and should help to offset the previously announced 80% increase to the energy price cap to £3,549 that was set to come into effect from 1 October 2022. This will save the average household at least £1,000 a year before considering further predicted increases. The savings, for all households, will be delivered through a new ‘Energy Price Guarantee’ which limits the price suppliers can charge customers for units of gas. There will also be equivalent support for homes that do not pay direct for mains gas and electricity – such as those living in park homes or on heat networks.

The Prime Minister also announced help for businesses and public sector organisations, many of whom are facing crippling energy costs. Initially this help will be made available for six months with the possibility of further help for vulnerable businesses and industries to be announced at a later date. At the time of writing, no further details had been published.

The new Prime Minister also revealed that the ban on fracking in England will end and that up to 100 licences for drilling and fracking will be issued to help combat the energy crisis and make the UK more energy self-sufficient. This should help to ease future problems with energy supplies. A new commitment for the UK to become a net-energy importer by 2040 was also announced.

There had been calls for the government to introduce a windfall tax on energy firms to help pay for these measures, which will be at an enormous cost to the exchequer. However, there was no announcement of such a windfall tax with the Prime Minister saying such a move ‘would discourage the very investment we need to secure a homegrown energy supply’.

Hopefully these measures will reduce predicted inflation and support families and businesses across the country. It remains to be seen if any further support measures will be announced and, if and when, we will be notified of a date for the forthcoming, September emergency financial statement.

Source:HM Government| 07-09-2022

Accommodation expenses and benefits

8th September 2022 by fpdteam

There are special rules for the provision of living accommodation to employees under certain circumstances. In most cases, employees will pay tax on any living accommodation provided by an employer unless they qualify for an exception. However, where an employee qualifies for an exception, there is no tax to pay on the provision of living accommodation. The definition of living accommodation includes houses, flats, houseboats, holiday homes and apartments. It does not include hotel rooms or board and lodgings.

An exception for living accommodation will usually apply in cases where:

the accommodation is necessary for an employee to do their job properly;
it’s customary to have living accommodation with the job and it means the employee can perform their job better; and
the employee faces a special threat to their security because of their job, and the living accommodation is in place to help protect them.

HMRC publishes a list of some of the main occupations that typically provide living accommodation. This includes agricultural workers living on farms or estates, pub and off-license managers living on premises, police officers and prison governors.

Employees provided with living accommodation can also be provided with other related benefits such as:

heating and lighting the accommodation;
the repair, maintenance and decoration of the interior;
the cost of servants, gardeners etc; and
provision of furniture, domestic appliances and other equipment.

Source:HM Revenue & Customs| 05-09-2022

VAT Capital Goods Scheme

8th September 2022 by fpdteam

The VAT Capital Goods Scheme (CGS) is a means of adjusting the initial VAT recovery in respect of certain assets over either 5 or 10 years. The scheme seeks to agree a fair and reasonable attribution of VAT to taxable supplies and non-taxable supplies relating to the use of an asset over its lifetime.

The adjustment period for land and buildings is 10 years and for other CGS assets, 5 years. This adjustment period also considers any non-business use of the asset. The CGS is intended primarily for partly exempt businesses. However, businesses can change direction over the adjustment period and be subject to making CGS adjustments some years after an asset was purchased.

The CGS currently applies to:

Land and building (including extensions, alterations and refurbishments) with a cost (net of VAT) of £250k or more.
Computers, or computer equipment, with a cost (net of VAT) or £50k or more.
Ships and boats with a cost (net of VAT) of £50k or more.
Aircraft with a cost (net of VAT) of £50k or more.

The scheme does not apply if:

the assets are acquired solely for resale;
you spend money on assets which are solely for resale; and
assets are acquired, or you spend money on assets, which are wholly used for non-business purposes.

Source:HM Revenue & Customs| 05-09-2022