HLAS

HM Revenue and Customs (HMRC) is reminding working families to give their childcare budget a boost by opening a Tax-Free Childcare account. Parents can use Tax-Free Childcare to help with childcare costs for school holiday clubs, breakfast or after school clubs, childminders or nurseries. You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year). If you get Tax-Free Childcare, you will have to set up an online childcare [...]

This is a question many business owners want answering. The truth is, it depends on a range of factors and any valuation is only useful as a guide for planning forward. The ultimate value of a business is the price a willing buyer is prepared to pay for it. The prevailing economic climate and state of the business’ sector can affect company valuation for better or worse, as can your reasons for selling. If you need a fast sale due to ill health, for instance, the value may be lower than if a sale was taking place under more favourable [...]

In recent years many accountants have advised their director/shareholder clients that the most tax efficient method of extracting profit from their family company was to pay themselves a low salary, at or around the £12,570 personal allowance, with the balance in dividends. This strategy may need to be revisited with the introduction of higher corporation tax rates from 1 April 2023 as company profits in excess of £50,000 are taxed at an effective 26.5% rate. Where company profits exceed £50,000 it may be more tax efficient to increase the salary or put a bonus through the company accounts. Other things [...]

It is always a good idea to set up a planning meeting with us a couple of months before your business year end so that we can advise you on the best actions to take to reduce your taxable profits. In addition to considering paying yourself a bonus from your company you might consider: Bringing forward expenditure on equipment to take advantage of the 100% annual investment allowance (AIA) – up to £1 million a year on new and used equipment; For limited companies, most new equipment qualifies for unlimited “full expensing” relief; Where equipment is bought on hire purchase, [...]

Since April 2014 members of a LLP are no longer automatically treated as self-employed for tax purposes. A recent case before the Upper Tax Tribunal has examined the tax status of 82 members of an LLP and found that most of them should be taxed as employees not self-employed. LLP members are treated as salaried members and taxed as employees where 3 conditions are present:- Condition A considers the manner in which the individual is rewarded for his or her performance of services to the LLP. A Salaried Member will have a reward package that is largely that which an [...]

HMRC have recently published Spotlight 63 which alerts taxpayers to a marketed tax avoidance scheme that claims to help taxpayers reduce the tax payable on their property rental profits. The HMRC view is that the “hybrid” structure involving an LLP with individual and corporate members does not have the tax savings that the scheme promoters claim. The scheme claims to enable buy to let landlords to transfer properties to the structure without paying capital gains tax (CGT) or stamp duty land tax (SDLT) and, once established, obtain a bigger deduction for their mortgage interest payments than they would have obtained [...]

HMRC have recently clarified their view of the tax treatment of the reimbursement of electricity costs where employees charge their electric company cars at home. HMRC now accepts that reimbursing part of a domestic energy bill, which is used to charge a company car or van, is exempt from income tax. Their previous view was that such reimbursements were taxable. Note that the exemption will only apply provided it can be demonstrated that the electricity was used to charge the company car or van, which may be difficult to determine in practice. Employers will need to make sure that any [...]

The sale of shares is an exempt supply for VAT purposes, which means that input VAT on professional fees in connection with the transaction cannot be claimed. However, a recent tax tribunal decision has determined that, under certain circumstances, the input VAT may be claimed. The case concerned the sale of a subsidiary company in order to provide additional funds to complete the building of a new hotel within a hotel group. The taxpayer successfully argued that the costs had been incurred as part of raising funds for the group’s downstream activities generating taxable supplies. HMRC may be appealing the [...]

The student loans company has issued the following information to help customers to contact them to discuss whether or not they are entitled to a repayment. They state that repayment call waiting times are currently ”longer than usual” and they are asking customers to first check if they’re due a refund using their dedicated page Repaying your student loan: Getting a refund - GOV.UK (www.gov.uk). Customers who think they might have made a repayment in a previous tax year, but earned below that tax year’s annual repayment threshold can check their previous year’s statements on their online account https://www.gov.uk/sign-in-to-manage-your-student-loan-balance. Repayment thresholds vary [...]

HM Revenue & Customs (HMRC) is urging Self-Assessment customers to be on the lookout for scam texts, emails, and phone calls from fraudsters. Scammers impersonating HMRC With a large number of people expected to submit a Self-Assessment tax return for the 2022-23 tax year before the 31 January 2024 deadline, fraudsters will prey on customers by impersonating HMRC. The scams take different approaches. Some offer a tax rebate; others tell customers that they need to update their tax details or threaten immediate arrest for tax evasion. What to do if you suspect a scam An unexpected contact claiming to be [...]