This edition includes articles on the new rules for capital gains tax on property and the shake-up to IR35 rules.
The Summer edition leads on changes to VAT for the construction sector and an article on the potential advantages of deferring your state pension.
The May edition details the changes to Entrepreneurs' Relief and the potential pitfalls when claiming Capital Allowances on some assets.
The Spring edition of the newsletter highlights changes to IR35 and capital allowances
This edition looks at VAT in the food sector and features an article on Inheritance Tax.
Making Tax Digital is on the horizon and this edition gives an overview of the changes.
New company car advisory fuel rates have been published which took effect from 1 December 2019. The guidance states: 'You can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 December 2019 are:
|1400cc or less||12p|
|1401cc - 2000cc||14p|
|1400cc or less||8p|
|1401cc - 2000cc||9p|
|1600cc or less||9p|
|1601cc - 2000cc||11p|
HMRC guidance states that the rates only apply when you either:
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
If you would like to discuss your car policy, please contact us.
Internet link: GOV.UK AFR
HMRC is giving information to taxpayers to help them avoid scams ahead of the Self Assessment deadline.
HMRC is warning millions of Self Assessment taxpayers to be aware of fraudsters in the run up to the 31 January deadline.
Over the last year, HMRC received almost 900,000 reports from the taxpayers about suspicious HMRC contact, in the form of phone calls, texts or emails. Of these more than 100,000 were phone scams and over 620,000 reports related to bogus tax rebates.
According to HMRC the most common techniques fraudsters use include phoning taxpayers offering a fake tax refund, or pretending to be HMRC by texting or emailing a link to a false page, where their bank details and money will be stolen. Fraudsters are also known to threaten victims with arrest or imprisonment if a bogus tax bill is not paid immediately.
HMRC's Customer Protection team identify and close down scams but taxpayers should recognise the signs to avoid becoming victims. HMRC does not contact taxpayers asking for their PIN, password or bank details. Taxpayers are warned that they should never give out private information, reply to text messages, download attachments or click on links in texts or emails which they are not expecting.
Internet link: GOV.UK news
HMRC has issued an update to the Check employment status tool (CEST) in advance of the introduction of new tax rules proposed for individuals who provide their personal services via an 'intermediary' to a medium or large business. The tool is designed to give HMRC's view of the status of contracts and has received criticism.
The new rules are expected to apply from 6 April 2020, similar rules were introduced in 2017 for public sector organisations receiving services from intermediaries, typically Personal Services Companies (PSC).
Please contact us for help and advice on whether you are caught by the new rules or should be applying the new rules to someone your business engages via a PSC.
Internet link: GOV.UK CEST
In a letter in November 2019, the Secretary of State for Health and Social Care, Matt Hancock, has agreed to a temporary commitment to make payments to certain clinical staff outside of the NHS pension schemes to restore the value of their pension benefits package. These rules apply if they have elected to use the scheme pays facility to settle an annual allowance tax charge arising from their pension saving in the NHS schemes in 2019/20.
Meanwhile, under a temporary measure the Scottish government is introducing, between 1 December 2019 and 31 March 2020, NHS staff in Scotland who can show they are likely to breach the pensions annual allowance for 2019/20 will be able to receive pay in lieu of employer pension contributions.
The announcements follow reports that senior NHS clinicians pension tax charges are making them retire early or change their working habits. The Department of Health and Social Care estimates that a third of consultants and GPs may be turning down extra shifts because of how the NHS Pension Scheme interacts with the wider pension tax rules.
HMRC has published guidance for people who hold cryptoassets, typically cryptocurrency or Bitcoin, explaining what taxes they may need to pay and what records they need to keep. HMRC has also published further information for businesses and companies about the tax treatment of cryptoasset transactions.
HMRC advises that these papers set out HMRC's view of the appropriate tax treatment of cryptoassets, based on the law as it stands on the date of publication and that the tax policy in this area may develop as the sector develops.
Internet link: GOV.UK tax on cryptoassets
HMRC has issued the latest Employer Bulletin. This issue includes articles on a number of areas including:
Contact us for help with payroll matters.
Internet link: HMRC Employer Bulletin
The Office for National Statistics (ONS) has revealed that UK businesses spent £25 billion on Research and Development (R&D) in 2018.
Data from the ONS showed that total R&D expenditure increased from £23.7 billion in 2017 to £25 billion in 2018.
The report showed:
According to the ONS, the government's funding of R&D amounted to £1.7 billion in 2018, which accounted for 6.9% of all R&D expenditure. The data revealed that machinery, equipment and shipbuilding were the biggest beneficiaries from government funding.
Internet link: ONS reports
Former BBC presenter Christa Ackroyd has lost her appeal against a ruling that she was an employee, not a freelance contractor, when she worked for the BBC via a personal service company.
The IR35 rules in broad terms mean that those working via a personal service company have to consider whether, if the services were provided by the individual contractor directly to the client, there would be a contract of employment.
Judges in the Upper Tier Tribunal upheld last year's First Tier Tribunal ruling that she was a BBC employee when she presented Look North in Yorkshire and was therefore liable to pay income tax and national insurance contributions.
The case related to the tax years 2006/07 to 2012/13, while she worked for the public broadcaster through her personal service company, Christa Ackroyd Media (CAM).
HMRC argued that she owed almost £420,000 in income tax and national insurance contributions, before corporation tax deductions. An HMRC spokesperson said they welcomed the judgment that the presenter was within the intermediary rules.
'Employment status is never a matter of choice; it is always dictated by the facts and when the wrong tax is being paid, we put things right.
It is right that an individual who works through a company, but would have been an employee if they were taken on directly, pays broadly the same amount of tax and national insurance contributions as employees.'
The IR35 rules were amended for Public Bodies (including the BBC) from April 2017 and the government will make similar changes for the private sector from April 2020.
HMRC says it is clamping down on the promoters and enablers of tax avoidance schemes in the wake of the loan charge controversy.
Penny Ciniewicz, Director General of Customer Compliance at HMRC, told the Treasury Select Committee that HMRC is 'doubling the resources' to tackle those in the 'avoidance supply chain'.
In response to questions about the loan charge, Ms Ciniewicz said:
'We have more than 100 current investigations into promoters [and enablers], and we're keeping a very close eye on the market for avoidance. We are spotting schemes as they emerge and we're tackling them.'
The loan charge policy is currently subject to an independent review. It came into effect on 6 April this year, and applies to anyone who used 'disguised remuneration' schemes. The legislation added a 45% non-refundable charge on all loans advanced through the schemes, unless the individual had agreed with HMRC to settle their tax affairs.
Internet link: ICAEW news