Profile cover photo
Profile photo
Whitefield Tax - Chartered Certified Accountants
46 followers
46 followers
About
Posts

All change for intangibles fixed assets | Jessica Garbett | Tue, 24 Apr 2018 09:20:05 +0000

Changes in the pipeline for the corporate intangibles fixed assets regime

As announced in the Autumn Budget, HMRC has launched a consultation document on a review of the corporate intangibles fixed assets regime (19 February 2018).

Background

The Intangible Fixed Assets regime (IFA regime) was introduced from 1 April 2002 and this fundamentally changed the way the UK corporation tax system treats intangible fixed assets (such as copyrights, patents and trademarks) and goodwill.

Prior to the introduction of the IFA regime the tax system did not allow tax relief for amortisation or impairment of IFAs. The 2002 changes provided companies with relief for the cost of acquiring intangible fixed assets and goodwill by allowing a deduction from income for the amortisation and impairment debits recognised in a company’s accounts. It also taxes receipts in respect of IFAs, including disposal proceeds, as income.

There have been some recent changes (see below) in the criteria for tax deductibility and now the government has decided the time is right for a more comprehensive review of the overall regime. This is seen as relevant in light of the growing importance of intellectual property (IP) to the productivity of modern businesses, and the restructuring of IP ownership within multinational groups in response to recent international tax changes.

Recent changes and the effect on small companies

In the Finance Act 2015 the government introduced a new restriction to the IFA regime denying relief for ‘relevant assets’, which include goodwill and those assets that would typically be subsumed within, or closely associated with, the business goodwill:

customer information

customer relationships

unregistered marks or signs

a licence in respect of any of these things.

The changes took effect from 8 July 2015 and apply to relevant assets acquired on or after that date. The changes mean that, instead of giving a deduction for expenditure on these relevant assets when the cost is recognised for accounting purposes as amortisation or impairment losses, the IFA regime now only gives a deduction at the time of disposal. Many small companies have taken advantage of the tax deductibility of the amortisation of goodwill which is now not available.

The government made the changes in 2015 as it saw the deductions for amortisation of goodwill as an expensive relief. It also wanted to remove a tax incentive to structure an acquisition of a business as a trade and asset (including goodwill) purchase rather than a share purchase. Again this affected many small companies.

The consultation

The review is asking for comments on a number of issues including the effect on the 2015 changes. The closing date is 11 May 2018.

The full consultation can be found here.

Article from ACCA In Practice

Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists - Chartered Certified Accountants specialising in IR35 and contractors

Preparing and filing FRS 105 accounts | Jessica Garbett | Thu, 19 Apr 2018 15:29:10 +0000

A look at the most common errors and misunderstandings.

Accounts prepared under FRS 105 are now an accepted and popular option for micro-entities. However, there are a number of important points about their preparation and how the information is filed at Companies House that accountants and directors can easily miss.

This guidance gives a recap on some of the problem areas and how to address them.

1          Accounts for the members

Issue

Considerations to remember

 

 

The ‘full’ accounts have a different format to the information filed at Companies House

The ‘full’ accounts are for the members and these have to comply with the ‘complete accounts’ format as laid out in FRS 105.  This may be in a different format to the information filed at Companies House due to the option of filleting.

Do I need to prepare both accounts for the members and accounts for filing?

A company cannot save time and merely prepare the filleted information for Companies House without first preparing the ‘full’ accounts

What is a ‘full’ set of accounts?

A complete set of financial statements of a micro-entity shall include the following:

(a) a statement of financial position as at the reporting date with notes included at the foot of the statement; and

(b) an income statement for the reporting period.

In accordance with section 414(3) of the Act, financial statements prepared in accordance with the micro-entity provisions shall on the statement of financial position, in a prominent position above the signature, contain a  statement that the financial statements are prepared in accordance with the micro-entity provisions.

 

Note therefore that the major difference to the information filed at Companies House is that an income statement is needed in the correct format

 

Is a Directors report needed?

For accounting periods beginning on or after 1 January 2016, there is no statutory requirement to prepare a Directors report for the ‘full’ accounts or for filing

This FRS permits, but does not require, a micro-entity to include information additional to the micro-entity minimum accounting items in its financial statements

A common misconception is that FRS 105 accounts for the members are restricted to only containing the few statutory notes.  The directors can in fact put in additional information if they want to.  The only stipulation is that if additional information is included then the company needs to refer to any requirement of section 1A Small Entities of FRS 102 that relates to that information.

 

Accounts preparation software often includes ‘traditional’ notes such as a breakdown of debtors and creditors – are these needed?

As above the accounts can include additional disclosures if required. However, the disclosures actually required by the Companies Act and Small Companies Accounting Registration Regulation  (Reg) which should be included at the foot of the balance sheet rather than a note are:

Details of any advances, credit and guarantees with directors (s413 CA2006)

Particulars of any charge of the assets to secure a liability (Reg Sch 1.57(1))

Information about contingent liability not provided for (Reg Sch 1.57(2))

The aggregate amount of contracts for capital expenditure not provided (Reg Sch 1.57(3))

Pension commitments (Reg Sch 1.57(4))

Any other financial commitment (Reg Sch 1.57(5))

 

The financial statements of a micro-entity that comply with FRS 105 are presumed in law to give a true and fair view of the financial position and profit or loss of the micro-entity in accordance with the micro-entities regime.

 

So what about going concern issues?

 

The concept is that, if the laid down format is followed and the statutory notes are included, the accounts automatically give a true and fair view.

However, many members have raised the issue of going concern and how this should be treated. Remember FRS 105 does not include accounting policies.

 

The standard answers the going concern issues by stating the following simple treatment:

 

When preparing financial statements using this FRS, the management of a micro-entity shall make an assessment of whether the going concern basis of accounting is appropriate. The going concern basis of accounting is appropriate unless management either intends to liquidate the micro-entity or to cease trading, or has no realistic alternative but to do so. In assessing whether the going concern basis of accounting is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, 12 months from the date when the financial statements are authorised for issue

FRS 105 does not require the accounts to show the accounting policies used.  Therefore the effects of  changes in accounting policies can be ignored

The FRS does require a specific treatment for prior year adjustments.  Section 8 states the fo…

Dissolving a small company | Jessica Garbett | Tue, 17 Apr 2018 09:20:04 +0000

Examining the good, bad and ugly issues which affect end of life companies.

There are many reasons why a company is dissolved, ranging from insolvency to simply having come to the end of its useful life.

Whatever the reason, it is essential that the correct advice is given by the company’s advisers and the correct decisions are taken by the directors. Get it wrong and it could mean the directors/shareholders lose money, incur unlimited fines and might need to restore the company.

This guidance gives some pointers to the good, bad and ugly issues which affect end of life companies.

Insolvency

Basically a company is insolvent when it can’t pay its debts. This usually means that it can’t pay its bills when they become due. It is very important that the directors monitor their company’s solvency and as soon as they realise that they are in this position the essential course of action is to seek advice from a qualified insolvency practitioner. A lack of action by the directors could lead to them personally being liable for some debts of the company. This might involve the allegation of ‘wrongful trading’ which refers to a company that continued to carry on their normal business trading when it was unable to pay its debts as they fell due. Directors must understand that ‘hoping for the best’ and carrying on trading is simply not an option.

Tax efficiency

Good tax advice is important where the company is solvent and the directors are looking for the most tax efficient way out. There are a number of issues to look at here:

since 2012, where the assets of the company are below £ 25,000 a pre-dissolution distribution can be treated as a capital gain. Entrepreneurs relief (ER) may also be available

where the assets are above this figure then the distribution will normally be treated as a dividend with no ER available.  This could make the extraction of the final shareholders’ funds far less tax efficient depending on the shareholders’ personal tax situation

if a liquidator is appointed on behalf of members or creditors, then the distributions made by the liquidator to the shareholders may still be subject to capital gains tax (and possibly benefit from ER) in the hands of the shareholders with no upper limit. Therefore directors will need to undertake some careful tax/operational planning if they are considering winding up the company and distributable reserves are more than £25,000. For instance they may consider reducing distributable reserves in the normal ways while the company is still carrying on business and they may consider having the company purchase its own shares from the shareholders.

Get the legal procedure right

Many people are familiar with the strike off application . This might appear to be very straightforward but it’s important that the full legal procedure is observed. There is also some ‘small print’ on the application which needs to be considered.

The law relating to dissolving a company is found in part 31 of the Companies Act 2006 . Some of the issues are very important and sometimes overlooked:

1.         A company cannot apply for voluntary striking off if it has:

traded or otherwise carried on business

changed its name

engaged in any other activity except one which is necessary for the purpose of:

making an application for strike off or deciding whether to do so (for example, seeking professional advice on the application or paying the filing fee for the strike off application)

concluding the affairs of the company, such as settling trading or business debts

complying with any statutory requirement

made a disposal for value of property or rights that, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business

For example, a company in business to sell apples could not continue selling apples during that three month period but it could sell the truck it once used to deliver the apples or the warehouse where they were stored.

2. An application for voluntary striking off can only be made on the company’s behalf by its directors or a majority of them.

3. A company cannot apply to be struck off if it is the subject, or proposed subject, of:

any insolvency proceedings such as liquidation, including where a petition has been presented but has not yet been dealt with

a section 895 scheme (that is a compromise or arrangement between a company and its creditors or members)

The directors may commit an offence if they breach these restrictions and be liable for a fine on conviction.

4. If you are a director you should not resign before applying for strike off as you must be a director at the time the Registrar receives the application.

5. From the date of dissolution, the company’s bank account will be frozen and any credit balance in the account will pass to the Crown. Any as…

VAT registration threshold – significant changes ahead | Jessica Garbett | Thu, 12 Apr 2018 09:20:09 +0000

Have your say on proposed changes to the VAT threshold.

Practitioners and their clients may wish to consider the VAT threshold call for evidence. It examines the effect of the current VAT threshold on small businesses and attempts to identify whether or not the current threshold provides a disincentive to small businesses to grow or improve their productivity.

The call for evidence is split into three chapters:

the first explores in more detail how the threshold might currently affect business growth

the second looks in more detail at the burdens created by the VAT regime at the point of registration, and why businesses might manage their turnover to avoid registering

the third considers possible policy solutions, based on international and domestic examples.

It is clear that business growth and competition is a key element and covers both those registered and non-registered businesses. There is considerable discussion around ‘financial smoothing’.

Proposed solutions are also considered. This includes the EU SME proposals that consider the following:

VAT threshold that member states currently apply only to businesses established in that member state will be extended to small businesses established in other member states

the national threshold will be capped at €85,000 (approximately £75,000), so significantly below the current UK threshold of £85,000

there will be a EU-wide threshold of €100,000 (approximately £89,000),so that if a business’s total supplies in the EU reach this threshold, they will no longer be able to benefit from any national thresholds

small businesses up to a turnover of €2,000,000 (approximately £1,770,000) will benefit from simplification schemes targeted at removing interim payments and increasing the length of the return periods to a year.

The call for evidence is available here and is open until 5 June.

Article from ACCA In Practice

Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists - Chartered Certified Accountants specialising in IR35 and contractors

Stamp duty – multiple dwellings relief | Jessica Garbett | Tue, 10 Apr 2018 09:20:00 +0000

In England, Wales and Northern Ireland, land and property transfers attract Stamp Duty Land Tax (SDLT) over a certain SDLT threshold which is set discretely for residential and non-residential properties. SDLT no longer applies in Scotland. Instead a separate tax is payable called Land and Buildings Transaction Tax .

SDLT on residential properties

Further from 1 April 2016 an additional 3% Stamp Duty Land Tax (SDLT) applied when individuals and companies purchase an additional residential property . The higher rates apply even if the other residential properties are outside of England, Wales and Northern Ireland.

SDLT is a ‘stepped’ tax, meaning it is charged on the portion of the cost of a property that falls into various bands.

Band                          Normal SDLT rates   Additional residential property rates

£0 – £125k                             0%                                                      3%

£125k – £250k                       2%                                                      5%

£250k – £925k                       5%                                                      8%

£925k – £1.5m                       10%                                                    13%

£1.5m plus                            12%                                                    15%

Transactions under £40,000 do not require a tax return to be filed with HMRC and are not subject to the higher rates. HMRC SDLT calculator  is built in to take into account the amount of stamp duty payable on additional residential property.

SDLT on non-residential properties

SDLT is payable on increasing portions of the property price (or ‘consideration ’) when you pay £150,000 or more for non-residential or mixed-use land or property. You must still send an SDLT return for most transactions  under £150,000.

Non-residential property includes commercial properties, agricultural land, forests and six or more residential properties bought in a single transaction .

A ‘mixed use’ property is one that has both residential and non-residential elements, eg a flat connected to a shop.

Band                                                                                      SDLT rates

£0 – £150k                                                                                0%

£150k – £250k                                                                          2%

£250k plus                                                                               5%

SDLT reliefs and exemptions

There are certain Stamp Duty Land Tax (SDLT) reliefs available if you’re buying your first home and in certain other situations. These reliefs help to reduce the amount of tax payable. SDLT return must be completed irrespective of whether tax is payable or not. A full list of reliefs and HMRC guidance is available here .

Exemptions

In additions to SDLT reliefs, there are following exemptions available where buyers do not have to pay SDLT or file a return if:

no money or other payment changes hands for a land or property transfer

property is left to you in a will

property is transferred because of divorce or dissolution of a civil partnership

you buy a freehold property for less than £40,000

you buy a new or assigned lease of seven years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000

you buy a new or assigned lease of less than seven years, as long as the amount you pay is less than the residential or non-residential SDLT threshold

you use alternative property financial arrangements, eg to comply with Sharia law.

Relief on multiple dwellings transaction

Where two or more dwellings are purchased in a single or linked transaction multiple dwellings relief (FA2003/Schedule 6B) can be claimed. This relief allows the buyer to apply SDLT to the mean value of the purchased dwellings, as opposed to paying the SDLT on the actual value of each dwelling.

For the purposes of the relief a ‘dwelling’ means a building or part of a building which is suitable for use as a single dwelling or is in the process of being constructed or adapted for such use. SDLTM29955

Property investors who wish to invest in multiple properties may be able to limit their property tax bill due to the relief available.

Relevant transactions FA03/SCH6B/PARA2

a transaction, the main subject-matter of which includes interests in more than one dwelling, or

a transaction which is one of a number of linked transactions , the main subject-matter of which includes interests in at least one dwelling and where one or more transactions linked to it includes interests in at least one other dwelling.

In either case, the main subject-matter of the transaction may include interests in land other than dwellings. When this relief is claimed, in order to work out the rate of tax HMRC charges:

divide the total amount paid for the properties …

Tax treatment of termination payments | Jessica Garbett | Tue, 03 Apr 2018 09:08:45 +0000

New rules for the tax treatment of termination payments of PILON.

New rules for the tax treatment of termination payments of payments in lieu of notice (PILON) are being introduced from 6 April 2018.

General tax law for termination payments

In general, payments made to a director or employee by way of reward for services, past, present or future, is within the general earnings rules. In the case of Mairs v Haughey HL 1993, 66 TC 273 it was held that a non-statutory redundancy payment would not be within the general earnings charge, being compensation for the employee’s not being able to receive emoluments from the employment rather than emoluments from the employment itself.

HMRC Statement of Practice SP 1/94 provides further details on this matter:

Treatment before 6 April 2018

These ‘termination payment rules’ apply to payments and other benefits which are received directly or indirectly in consideration or in consequence of, or otherwise in connection with:

the termination of a person’s employment

a change in the duties of a person’s employment

a change in the earnings from a person’s employment.

The payment or benefit may be received by the person, or the person’s spouse, civil partner, blood relative, dependant or personal representative, or provided on the employee’s behalf or to his order. A payment taxable under any other tax legislation is not within these provisions.

Termination payments which come within section 403 ITEPA 2003 are tax free up to £30,000 with the excess being subject to tax at the taxpayers’ marginal rate.

Amendments from 2018/19 onwards

Whether or not the employee is entitled to a contractual payment in lieu of notice, employees will pay tax and Class 1 NICs on the amount of basic pay that they would have received if they had worked their notice in full.

The new legislation in sections 402A to 402E ITEPA 2003 applies to termination payments and benefits that meet all of the following criteria.

the payments or benefits fall under section 401(1)(a) ITEPA 2003 (ie they are received directly, or indirectly in consideration or in consequence of, or otherwise in connection with the termination of a person’s employment)

the payment or benefits are made on or after 6 April 2018

the employment was terminated on or after 6 April 2018, and

the payments or benefits are not redundancy payments, or contractual payments, which are exempt under section 309 ITEPA 2003

Termination payments and benefits which meet all of the above criteria are ‘relevant termination awards’. These are split into two elements:

Post-employment notice pay (PENP)

This is chargeable to tax as general earnings and does not benefit from the £30,000 tax-free threshold in section 403 ITEPA 2003. Post-employment notice pay is calculated by applying the PENP formula to the total amount of all relevant termination awards received.

Termination awards subject to section 403 ITEPA 2003

These are chargeable to tax as specific employment income and benefit from the £30,000 tax-free threshold (EIM13505). These termination awards are calculated by subtracting the amount of PENP from the total amount of all relevant termination awards received.

Example 1

Step 1 is to calculate the employee’s basic pay ignoring overtime, commission and bonuses for the 12 months before the last day of employment (say £24,000 pa)

Step 2 is to calculate the number of days in the notice period which the employee should have worked if the employment was not terminated by the employer (say 20 days).

The taxable Payment in Lieu of Notice (PILON) is £24,000 x 20/365 = £1,315

This amount of £1,315 is treated as general earnings, in the normal way, and PAYE and employer’s and employee’s National Insurance is due on this amount.

If the actual compensation awarded to the employee by the employer was say £4,000, then the remainder of £2,685 (£4,000 – £1,315) is treated as a termination payment under section 403 ITEPA 2003. As this is less than £30,000 that amount of £2,685 would be paid tax free to the employee.

Some employee remuneration packages are more complex and may include salary sacrifice arrangements long notice periods etc. The new legislation includes a formula which is designed to cover all situations. This formula applies to the simple situations demonstrated in example 1 above and to the more complex situation illustrated in example 2 below.

Example 2

Mr Smith is a monthly paid employee on a salary of £90,000 per annum (£7,500 per month). On 7 June 2018 his employer tells Mr Smith that his employment will be terminated and he is given three months’ notice as required by his employment contract, and the employer agrees to pay Mr Smith £40,000 compensation. On 1 August 2018 the employer tells Mr Smith that his services will not be required with immediate effect and Mr Smith is paid £16,000 as a Payment in Lieu of Notice (PILON) whic…

Deemed domicile rules have changed for 2017/18 | Jessica Garbett | Thu, 29 Mar 2018 09:08:49 +0000

Why these changes are important

HMRC has updated its guidance on the deemed domicile rules and this includes the changes that came into force from 6 April 2017. You should be aware of the changes and how these might affect you in the current tax year.

The rules before 6 April 2017

Before 6 April 2017 if a person was resident but not domiciled in the UK under common law they:

were liable to UK tax on all income and capital gains which arose in the UK

could claim the remittance basis and only pay UK tax on their foreign income and capital gains when remitted to the UK

could claim tax relief on overseas workdays for the first three years they were resident in the UK

What are the changes?

From 6 April 2017 the rules for deemed domicile have been altered so that even if  they were not domiciled in the UK under common law they would still be deemed to be domiciled if either of two conditions are met:

Condition A

To meet this condition they must:

be born in the UK

have the UK as their domicile of origin

be resident in the UK for 2017 to 2018, or later years.

Condition B

Condition B is met when they have been UK resident for at least 15 of the 20 tax years immediately before the relevant tax year. (There is detailed guidance on which years count in HMRC’s guidance, see above.)

Why is this important?

The changes affect domicile status for all taxes. The major issue this causes is that a client who meets the new deemed domicile rules will no longer be able to claim the remittance basis  of taxation and will be assessed on their worldwide income and gains on the arising basis.

This could result in higher taxes in the 2017/18 tax year and so as a planning issue taxpayers will need to be fully aware of the changes in good time. Detailed guidance on all residency and domicile issues from HMRC can be found here.

Article from ACCA In Practice

Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists - Chartered Certified Accountants specialising in IR35 and contractors

Whitefield Announce the Acquisition of N R Welch & Co | Jessica Garbett | Thu, 29 Mar 2018 07:00:22 +0000

We are very pleased to announce the completion today of a transaction to purchase N R Welch and Co of Shanklin.

Here is our News Release this morning:

Accountants Whitefield Tax have recently acquired Shanklin-based Neil Welch Accountants. Neil and Stephanie, his wife and business partner, have decided to retire after running the firm for 28 years. Both were pupils at Sandown Grammar School. Neil’s career began at AE Hook & Co in Ryde then Sandown and in 1990 he began his accountancy practice from his front room in Shanklin!

The team at Whitefield Tax will offer experience and expertise having worked together for almost 20 years. The office is based in Brading and works with clients across the Island and mainland.

Neil commented: ‘I would like to thank everyone for their support over the years. I am confident that Whitefield Tax are pleasant, efficient and professional, my former clients will be in good hands.’

Whitefield Tax can be contacted on 01983 614108 , via their website WhitefieldTax.co.uk , or you can follow them on social media.

 

 

 

Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists - Chartered Certified Accountants specialising in IR35 and contractors

The cost of pension contributions | Jessica Garbett | Wed, 28 Mar 2018 09:20:07 +0000

With various reliefs available, what is the true cost of pension contributions to individuals?

An individual under 75 years of age is entitled to tax relief on the contributions they make to a registered pension scheme during a tax year.

An individual is entitled to relief on contributions up to the total amount of their relevant UK earnings chargeable to income tax for the year. However, if the pension scheme operates tax relief at source, contributions of up to £3,600 gross will obtain tax relief even if total relevant UK earnings are less than that amount or even if they are £nil.

Tax relief at source

Most personal pension schemes operate relief at source arrangements, whereby tax relief at the basic rate is deducted from the amount of the contributions payable and the scheme administrator recovers the basic rate tax from HMRC. If the person is a higher rate taxpayer, they claim relief for the excess of the higher rate over the basic rate in their self-assessment tax return. The effect is that their basic rate limit for the year is increased by the gross amount of the contributions.

Example

Mr A is employed and his salary for 2017/18 is £90,000. During the year he paid £16,000 in cheques to his personal pension scheme.

The amounts paid of £16,000 are called the net contributions. The gross equivalent would be £16,000 x 100/80 = £20,000.

The pension scheme administrator will recover £4,000 from HMRC and this amount will be paid into the pension scheme by HMRC.

Mr A will enter £20,000 (the gross contributions) in his self-assessment tax return form SA100 in box for ‘payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider’.

Mr A’s basic rate band (which would normally be £33,500) is extended by £20,000 to £53,500 and he will pay tax on £53,500 of his taxable income at 20%.

Tax computation                            Pension                                No pension

contribution                        contribution

of £20,000 gross

Salary                                              £90,000                                 £90,000

Personal allowance                        £11,500                                   £11,500

Taxable income                               £78,500                                 £78,500

Tax liability

Basic rate      £53,500 @ 20%        £10,700

Higher rate    £25,000 @ 40%        £10,000

Basic rate      £33,500 @ 20%                                                          £6,700

Higher rate    £45,000 @ 40%                                                        £18,000

Total tax liability                                £20,700                                   £24,700

 

If a pension contribution of £16,000 net is paid the employee will receive £69,300 (£90,000 less tax of £20,700) less pension paid £16,000 being £53,300 ignoring National Insurance and have a pension pot of £20,000.

With no pension contribution the employee will receive £65,300 (£90,000 less £24,700) ignoring national insurance.

Employer contributions

Employer contributions to an employee’s personal pension scheme would normally be paid gross. The employer would normally obtain tax relief in computing taxable profits for the period of account in which the contributions are made. The employee is not liable to income tax in respect of the contributions by their employer to the registered pension scheme. This exemption applies to contributions to the employee’s own registered pension scheme, as opposed to contributions paid to pension schemes set up for members of the employee’s family.

Annual allowance

Every member of a pension scheme may be liable to the Annual Allowance Charge. From 6 April 2014 the annual allowance has been £40,000. For 2013/14 it was £50,000.

A reduced annual allowance of £4,000 applies after 6 April 2015 when an individual has flexibly accessed their money purchase savings.

From 6 April 2016 for ‘high income individuals’ the amount of the annual allowance is tapered down to a minimum of £10,000. Broadly ‘high income individuals’ are those people with an ‘adjusted income over £150,000’. The annual allowance is then reduced by £1 for every £2 by which the ‘adjusted income’ exceeds £150,000 but it cannot be reduced to below £10,000. Therefore if the adjusted income is £210,000 or more the annual allowance for that year will be £10,000.

If the annual allowance is exceeded the individual will not receive tax relief on any contributions that exceed the limit and the individual will incur an annual allowance charge.

Broadly this annual allowance is compared to two figures each year. For ‘defined contribution schemes’ (DC schemes) the amount of contributions paid into the person’s DC schemes in the year. For ‘defined benefit schemes’ (DB schemes) and cash balance arrangements the value of the person’s pension rights at the end of the yea…

HMRC talking points | Jessica Garbett | Mon, 26 Mar 2018 15:19:24 +0000

Registration open for seven digital meetings hosted by HMRC .

The latest updates are:

What’s new for employers 2018: This meeting will give agents an overview of the employer payroll changes from 2018, including, the change to the Income Tax basic personal allowance and the rates of tax for the new tax year, the thresholds for Class 1 National Insurance, expenses and benefits for employees, fuel benefit charge for company cars, van and fuel benefit, the new rates for Statutory Payments, National Living and National Minimum wage rates and other changes that may affect your clients’ business.

Tu‌esd‌ay 27 M‌ar‌c‌h – 9a‌m to 10a‌m                               Register now

Complaints: We will share our approach to complaints handling and redress and outline the steps we are taking to improve the service we offer. We will also explain what we are doing to learn from the complaints we receive and how we are making our complaints service more accessible using digital solutions.

We‌dn‌esd‌ay 28 M‌ar‌c‌h – midday to 1p‌m                      Register now

Input tax recovery in relation to Option to Tax: This digital meeting will provide a general overview of how an Option to Tax can impact input tax recovery, dispelling some of the myths. We will cover belated notifications and your entitlement to claim input tax.

Thur‌sd‌ay 5 A‌pril – midday to  1p‌m                              Register now

HMRC’s Application Programming Interface (API) Strategy: This meeting will provide you with the latest updates on HMRC’s API Strategy.

Fri‌d‌ay 6 A‌pril – 11a‌m to midday                                 Register now

The role of HMRC as a creditor in Voluntary Arrangements: This digital meeting will provide a brief introduction to Voluntary Arrangements, both corporate and individual and HMRC’s policy as a creditor to either support or reject proposals received. It will also cover debts that may be claimed, post insolvency returns, interest and Crown set off.

Thur‌sd‌ay 12 A‌pril – midday to  1p‌m                             Register now

Article from ACCA In Practice

Whitefield Tax Limited - Isle of Wight Accountants - IR35 specialists - Chartered Certified Accountants specialising in IR35 and contractors
Wait while more posts are being loaded