Due a student loan refund?

Student Loans are part of the government's financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK. The Student Loans Company (SLC) is directly responsible for collecting the loans of borrowers outside the UK tax system.

The main finance package elements available to students include loans for tuition fees and maintenance loans (to help with living costs). The maximum loan amounts are capped with the maximum amount depending on a student’s circumstances. Maintenance grants are also available under certain circumstances. The grants do not have to be repaid but do reduce the amount of available maintenance loan a student can claim.

Students that have finished their studies and entered the workforce must begin to make loan repayments from the April after they have finished their studies or when their income exceeds an annual threshold.

Since 6 April 2023, the thresholds and rates are as follows: Plan 1 – £22,015, Plan 2 – £27,295 and Plan 4 (Scottish student loans) – £27,660. The terms of loan repayment for courses of study started before 01 September 2012 are referred to as 'Plan 1', and those started after 01 September 2012, are referred to as 'Plan 2'. Repayments will be deducted at a rate of 9% of income over the threshold. The threshold for postgraduate loans is £21,000 and repayments are deducted at a rate of 6%

Taxpayers that have made repayments but whose total annual income was less than the respective thresholds can apply for a student loan refund. An application cannot be made until after the relevant tax year has finished. Taxpayers can also apply for a refund from the Student Loans Company if the loan debt has been repaid in full.

The Student Loans Company repayment call waiting times are currently far longer than usual due to exceptionally high volumes of refund requests. Taxpayers should first check if they are due a refund by looking at https://www.gov.uk/repaying-your-student-loan/getting-a-refund

Source:Other| 06-11-2023

Help to Save bonus payments

The Help to Save scheme is intended to help those on low incomes to boost their savings. Eligible users of the scheme can save between £1 and £50 every calendar month and receive a 50% government bonus. The 50% bonus is payable at the end of the second and fourth years and is based on how much account holders have saved. The bonus is paid directly into the account holder’s chosen bank account.

This means that account holders on low incomes can receive a maximum bonus of up to £1,200 on savings of £2,400 for 4 years from the date the account is opened. The scheme is open to most working people who receive Working Tax Credits or Universal Credit.

Almost 450,000 people have opened Help to Save accounts since the scheme was launched in September 2018 and March 2023, with nearly £372.5 million paid into accounts during that time. This has seen the government award £146 million in bonus payments.

The scheme had been due to end in September 2023 but was extended by 18 months, until April 2025. The extension was announced at Spring Budget on 15 March 2023.

Source:HM Revenue & Customs| 06-11-2023

Trusts and Income Tax

A trust is an obligation that binds a trustee, an individual or a company to deal with the trust assets, such as land, money and shares, and which form part of 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 how the assets in the trust are to be managed, transferred or held back for the future use of the beneficiaries. They 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.

Different types of trust income have different rates of Income Tax. For example, in respect of accumulation or discretionary trusts the trustees are responsible for paying tax on income received. The first £1,000 is taxed at the standard rate. For trust income over £1,000, the rate is 39.35% for dividend-type income and 45% for all other income.

With reference to interest in possession trusts, the trustees are also responsible for paying tax on income received. The rate is 8.75% for dividend-type income and 20% for all other income.

There are also different rules for bare trusts, settlor-interested trusts and other types of trusts. It is therefore important that the Income Tax rules are considered at the outset as well as the CGT implications of the various types of trusts.

Source:HM Revenue & Customs| 30-10-2023

Replacement of domestic items relief

The replacement of domestic items relief enables landlords to claim tax relief when they replace movable furniture, furnishings, household appliances and kitchenware in a rental property. The allowance is available for the cost of domestic items such as free- standing wardrobes, curtains, carpets, televisions, fridges and crockery.

The amount of the deduction is based on:

  • the cost of the new replacement item, limited to the cost of an equivalent item if it represents an improvement on the old item (beyond the reasonable modern equivalent); plus
  • the incidental costs of disposing of the old item or acquiring the replacement; and
  • less any amounts received on disposal of the old item.

There is an important distinction between deciding whether or not a new item represents a replacement or an improvement. Where the new item is an improvement on the old item the allowable deduction is limited to the cost of purchasing an equivalent of the original item.

HMRC’s internal guidance provides an example highlighting the fact that a brand new budget washing machine costing circa £200 is not an improvement over a 5 year old washing machine that cost £200 at the time of purchase (or slightly less, taking inflation into account).

However, if a replacement item is for a reasonable modern equivalent for example a new energy efficient fridge replacing an old fridge this is not considered an improvement and the full cost of the new item is eligible for relief.

Source:HM Revenue & Customs| 23-10-2023

Who needs an EORI number?

The Economic Operators' Registration and Identification System (EORI) was setup as a European Union (EU) wide initiative that helps businesses communicate with customs officials when they are importing and exporting goods. The EORI allows businesses to provide pre-arrival/pre-departure information for goods.

Businesses in the UK are still usually required to hold an EORI number for the movement of goods in the following scenarios:

  • between Great Britain (England, Scotland and Wales) or the Isle of Man and any other country (including the EU);
  • between Great Britain and Northern Ireland;
  • between Great Britain and the Channel Islands; and
  • between Northern Ireland and countries outside the EU.

Which type of EORI number you need and where you get it from depends on where you are moving goods to and from. You may need more than one. If you move goods to or from Great Britain, you must get an EORI number that starts with GB. Most are then followed by a 12-digit number based on the businesses VAT number. 

You may also need an EORI number starting with XI if you move goods to or from Northern Ireland. If a business is making declarations or applying for a customs decision in the EU, then they may need an EU EORI number from an EU country.

You do not need an EORI number if you are moving goods that are both:

  • not controlled goods; or
  • for personal use only.
Source:HM Revenue & Customs| 16-10-2023

Paying tax by Certificate of Tax Deposit

The Certificate of Tax Deposit scheme allowed users to deposit money with HMRC and use it later to pay tax liabilities. The date that the certificate was purchased was known as the effective date of payment. The scheme closed for new purchases on 23 November 2017.

However, at the time, HMRC had committed to honour existing certificates until 23 November 2023. As this date approaches, it is important that holders of an existing certificate take appropriate action. 

There are a number of options, including contacting the Certificate of Tax Deposit team before the scheme closes to tell HMRC how you want to use the certificate. Users who think they will still have certificates open after 23 November 2023, can contact HMRC to arrange a refund.

After 23 November 2023 HMRC will try to repay the balance of any certificate that remain unpaid and unclaimed. If they cannot (for example, because they were unable to contact the current certificate holder after reasonable effort) they will consider the balance as forfeited.

Until 23 November 2023, users can use their deposits to pay liabilities for:

  • Income Tax (Self-Assessment)
  • Class 4 National Insurance contributions
  • Capital Gains Tax — not including Annual Tax on Enveloped Dwellings-related Capital Gains Tax
  • Corporation Tax — only Series 6 certificates bought in 1993 or earlier can be used
  • Petroleum Revenue Tax
  • Inheritance Tax
Source:HM Revenue & Customs| 02-10-2023

Replacement of domestic items relief

The replacement of domestic items relief enables landlords to claim tax relief when they replace movable furniture, furnishings, household appliances and kitchenware in a rental property. The allowance is available for the replacement cost of domestic items such as free-standing wardrobes, curtains, carpets, televisions, fridges and crockery.

The amount of the deduction is based on:

  • the cost of the new replacement item, limited to the cost of an equivalent item if it represents an improvement on the old item (beyond the reasonable modern equivalent); plus
  • the incidental costs of disposing of the old item or acquiring the replacement; and
  • less any amounts received on disposal of the old item.

There is an important distinction between deciding whether or not a new item represents a replacement or an improvement. Where the new item is an improvement on the old item the allowable deduction is limited to the cost of purchasing an equivalent of the original item.

HMRC’s internal guidance provides an example highlighting that a brand new budget washing machine costing circa £200 is not an improvement over a 5 year old washing machine that cost around £200 at the time of purchase (or slightly less considering inflation).

However, if a replacement item is for a reasonable modern equivalent, for example, a new energy efficient fridge replacing an old fridge, this is not considered an improvement and the full cost of the new item is eligible for relief.

Source:HM Revenue & Customs| 25-09-2023

Accommodation that qualifies as Holiday Lets

The furnished holiday lettings (FHL) rules allow holiday letting of properties that meet certain conditions to be treated as a trade for specific tax purposes.

In order to qualify as an FHL, the following criteria need to be met:

  • The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify.
  • The property must be located in the UK, or in a country within the EEA.
  • The property must be furnished. This means that there must be sufficient furniture provided for normal occupation and your visitors must be entitled to use the furniture.

In addition, the property must pass the following three occupancy conditions.

  1. Pattern of occupation condition. The property must not be used, in total, for more than 155 days a year of longer term occupation (i.e., continuous periods of more than 31 days).
  2. The availability condition. The property must be available for commercial letting at commercial rates for at least 210 days per year.
  3. The letting condition. The property must be let for at least 105 days per year and property owners should be able to demonstrate the income from these lettings. 

Where there are a number of FHL properties in a business, it is possible to average the days of lettings for the purposes of qualifying for the 105 days threshold. This is called an averaging election.

There is also a special period of grace election which allows homeowners to treat a year as a qualifying year for the purposes of the FHL rules where they genuinely intended to meet the occupancy threshold but were unable to do so subject to a number of qualifying conditions.

Source:HM Revenue & Customs| 25-09-2023

Searching for details about property

There are a number of online tools available to help find information about a property in England or Wales, even if you do not own it. The service is available on GOV.UK and allows users to search for property by postcode, map, title number or INSPIRE ID.

Once a property has been located, users can download copies of the property summary, title plan and title register for a property in the service. To get details of any ‘restrictive covenants’ or ‘easements’ users will need to purchase the title register.

The property summary is free of charge. There is a £3 charge for the title plan and title register when purchased online. If the title cannot be downloaded online, then a copy will be sent by post at a charge of £7 per document.

A separate flood risk report for properties in England can be obtained from the Environment Agency.

There are different registers that need to be used if the property is in Scotland or Northern Ireland.

Source:HM Government| 04-08-2023

Business records if self-employed

If you are self-employed as a sole trader or as a partner in a business partnership, then you must keep suitable business records as well as separate personal records of your income. 

For tax purposes, the business records must be held for at least 5 years from the 31 January submission deadline for the relevant tax year. For example, for the 2021-22 tax year, when online filing was due by 31 January 2023, you must keep your records until at least the end of January 2028. In certain situations, such as when a return is submitted late, the records must be held for longer. 

If you are self-employed, you should also keep a record of:

  • all sales and income
  • all business expenses
  • VAT records if you’re registered for VAT
  • PAYE records if you employ people
  • records about your personal income
  • grant details if you claimed through the Self-Employment Income Support Scheme because of coronavirus.

You don't need to keep the vast majority of your records in their original form. If you prefer, you can keep a copy of most of them in an alternative format as long as they can be recovered in a readable and uncorrupted format. For example, a scanned PDF document. 

If your records are no longer available for any reason, you must try and recreate them letting HMRC know if the figures are estimated or provisional. There are penalties for failing to keep proper records or for keeping inaccurate records. 

Source:HM Revenue & Customs| 17-07-2023

Changes to Scottish Bankruptcy law

The bankruptcy process applies to individuals living in England, Wales or Northern Ireland. There is a separate bankruptcy process sometimes known as sequestration in Scotland. Bankruptcy is a form of insolvency and is normally suitable for those who are unable to pay back their debts in a reasonable time. Most applications for bankruptcy are made by the individuals in debt, but it is also possible for a person to be made bankrupt. 

A new Scottish Bill is currently making its way through the Scottish Parliament and will make the following changes to the Scottish bankruptcy laws:

  • Give powers to the Scottish Ministers to establish a pause on debt recovery action against people who are in debt and who also have a mental illness.
  • Make technical changes to the law on bankruptcy.
  • Update the law on diligence. Diligence is the legal processes that creditors can take to enforce repayment of overdue debts.

These changes are part of a wide-ranging policy review of Scotland’s statutory debt solutions, specifically moratorium protection, bankruptcy, Protected Trust Deeds (PTDs) and the Debt Arrangement Scheme that was launched back in 2019. Part of the work was delayed as a result of the Coronavirus pandemic. The Bill aims to help and improve the lives of people who are struggling with problem debt and serious mental health issues.

Source:The Scottish Government| 03-07-2023
hmrc deadlines july and august 2023; london accountant; wimbledon accountant

Key HMRC Deadlines for July and August 2023 You Need to Know

Key HMRC Deadlines for July and August 2023

As we step into July and August 2023, it’s essential to stay updated with the upcoming deadlines from HM Revenue and Customs (HMRC). Here’s a comprehensive guide to help you navigate these crucial dates and ensure that your business remains tax compliant.

1 July 2023 – Corporation Tax
The due date for corporation tax for the fiscal year ending 30 September 2022 is 1st July 2023. This deadline applies to corporations and businesses operating within the UK, and it pertains to the tax owed on all profits from your trading, investments, and chargeable gains. Ensure your business has calculated and prepared to pay its tax liability by this date.

 

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6 July 2023Forms P11D and P11D(b)
By 6th July 2023, businesses should complete and submit the P11D and P11D(b) forms. These forms concern the return of benefits and expenses (P11D) and the return of Class 1A National Insurance Contributions (NICs) (P11D(b)). This obligation primarily concerns employers who have provided certain benefits to their directors or employees.

19 July 2023 – Class 1A NICs
The payment for Class 1A NICs is due by 19 July 2023. However, if you plan to pay electronically, the deadline extends to 22 July 2023. This payment pertains to employers who have provided benefits such as company cars to their employees.

19 July 2023 – PAYE and NIC deductions
PAYE and NIC deductions for the month ending 5 July 2023 must be made by 19 July 2023. If you opt to make your payment electronically, the due date extends to 22 July 2023. This deadline applies to all employers who deduct PAYE and NICs from their employees’ wages.

19 July 2023 – CIS300 monthly return and CIS tax
The deadline for filing the CIS300 monthly return for the month ending 5 July 2023, and payment of the CIS tax deducted for the same period, is 19 July 2023. This applies to contractors operating under the Construction Industry Scheme (CIS).

1 August 2023 – Corporation Tax
For the fiscal year ended 31 October 2022, the due date for corporation tax is 1 August 2023. All corporations and businesses operating within the UK need to ensure they’ve prepared to meet this deadline.

19 August 2023 – PAYE and NIC deductions
For the month ending 5 August 2023, the PAYE and NIC deductions are due by 19 August 2023. Electronic payments can be made until 22 August 2023. All employers deducting PAYE and NICs from their employees’ wages need to take note of this deadline.

19 August 2023 – CIS300 monthly return and CIS tax
The filing deadline for the CIS300 monthly return and payment for the CIS tax deducted for the month ending 5 August 2023 is 19 August 2023. This is crucial for contractors operating under the CIS.

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Regulated businesses hit with Anti-Money Laundering fines

The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists.

HMRC has named 240 supervised businesses that have been fined a total of £3.2 million for not complying with the anti-money laundering rules. The fines were issued between 1 July and 31 December 2022 for breaches of the regulations designed to stop criminals laundering money from illegal activity.

One of the businesses, based in London, was hit with a large fine of £1.4 million for failing to carry out risk assessments, not having appropriate anti-money laundering controls, and failing to conduct proper due diligence checks.

This crackdown on money service businesses has resulted in a significant reduction in these types of firms over the last number of years.

HMRC is clear that money service businesses provide vital services to the community, offering currency exchange, money transmission and cheque cashing. However, criminals can exploit them to launder the proceeds of crime and so must have a robust risk assessment and policies, controls, and procedures to prevent this.

Source:HM Revenue & Customs| 19-06-2023

HMRC’s Self-Assessment line summer closure

HMRC Self-Assessment Helpline closes for the summer

In a surprising move, the UK’s HM Revenue & Customs (HMRC) announced the summer closure of its Self-Assessment helpline from 12 June to 4 September 2023. This action forms part of a trial to encourage the redirection of Self-Assessment queries to HMRC’s robust digital services including online guidance, a digital assistant, and webchat services.

Scheduled during a quieter period for Self-Assessment inquiries, the helpline will reopen on 4 September 2023, five months before the Self-Assessment deadline on 31 January 2024. Historically, the volume of calls decreases by about 50% during the summer months compared to the period between January and April.

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However, this closure is expected to cause some disruption for taxpayers. The Chair of the Treasury Committee is seeking clarification that HMRC has thoroughly evaluated the costs and benefits of this decision. The short notice of the closure is also a point of concern, emphasising the need for transparency from HMRC in decision-making processes that impact numerous individuals.

In defense of the closure, HMRC highlights that this trial will reallocate 350 advisers (full-time equivalent) to handle urgent calls on other lines and respond to customer correspondence. Furthermore, HMRC points out that a significant 97% of Self-Assessment taxpayers prefer using its online services, with the same percentage filing their assessments online.

Need Assistance from an Accountant?

The change will undoubtedly influence how taxpayers interact with HMRC over the summer. If you are one of the affected individuals with Self-Assessment queries, don’t hesitate to reach out. We remain ready and happy to assist you during this transitional period.

Reach out to us by completing this form and one of our staff members will get in touch within one business day. 


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Gift Aid small donations scheme

The Gift Aid Small Donations Scheme (GASDS) allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on small donations of money made without a Gift Aid declaration. A small donation is defined as a donation of £30 or less made in cash or using contactless technology, such as a contactless credit or debit card. Donations made by other methods of payment such as cheque or bank transfer do not count.

The maximum annual amount of small donations that can be claimed through the GASDS is the lower of £8,000 or 10 times the amount the charity receives in Gift Aid donations – known as the matching rule. The £8,000 limit allows charities and CASCs to claim Gift Aid style top-up payments of up to £2,000 a year.

Usually, to claim gift aid the donor must have paid Income Tax or Capital Gains Tax at least equal to the amount the charity wants to claim and must complete a gift aid declaration. However, under the GASDS charities can claim tax relief on cash donations of £30 or less without a gift aid declaration or even knowing the identity of the donor.

Source:HM Revenue & Customs| 11-06-2023
share scheme deadlines; london accountant

UK Share Scheme Filing Deadlines and Tax Advantages

UK Share Scheme Filing Deadlines and Tax Advantages

In this blog post, we’re going to delve into the world of UK share schemes, those exciting yet often perplexing plans that can offer some serious tax advantages to employees. We’ll unpack the four approved share schemes – Share Incentive Plans (SIPs), Save As You Earn (SAYE) schemes, Company Share Option Plans (CSOPs), and Enterprise Management Incentive (EMI) schemes. Most importantly, we’ll discuss their annual filing deadlines, with a focus on the tax year 2022-23.

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What are the approved share schemes?

Firstly, what are these approved share schemes? Let’s break them down:

  1. Share Incentive Plans (SIPs): SIPs allow employees to acquire shares in their employing company. The shares are usually held in a special trust and can offer significant tax and National Insurance contribution benefits if the shares are held in the plan for a certain period.

  2. Save As You Earn (SAYE) schemes: SAYE schemes, also known as Sharesave, allow employees to save between £5 and £500 per month over a set period (3, 5, or 7 years). At the end of the saving period, employees have the option to use their savings to buy shares in their company at a discount, or take the cash. You can read our full post on SAYE here.

  3. Company Share Option Plans (CSOPs): CSOPs offer employees the opportunity to acquire shares at a fixed price. The real advantage comes if the company’s share price rises above that fixed price, as the difference is not subject to Income Tax or National Insurance.

  4. Enterprise Management Incentive (EMI) schemes: EMI schemes are particularly suited for small, higher-risk companies. They offer selected employees the chance to acquire shares in the company. The tax advantages can be significant, especially if the company grows in value.

deadlines and penalties for share scheme filing

Now that we’ve defined these schemes, let’s talk about the important annual filing deadlines. For the tax year 2022-23, the deadline for submitting the online employment-related securities annual return is 6 July 2023. Failure to meet this deadline will result in an automatic late filing penalty of £100. Further penalties apply if the return remains outstanding after 6 October 2023 (£300) and 6 January 2024 (£300).

Even if a share scheme operator has received and paid the initial penalty, they must still submit an end-of-year or nil return to meet their filing obligations. Employers that don’t submit annual returns on-time run the risk that they and /or their employees may lose any tax advantages from the scheme.

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What you must tell HMRC

If your personal details change you may be required to notify HMRC as this can affect your entitlement to certain tax breaks and or benefits.

For example, you need to tell HMRC if:

  • you get married or form a civil partnership; or
  • you divorce, separate or stop living with your husband, wife or partner.

The sooner you advise HMRC the better as the change could result in you paying too much tax or paying too little and owing HMRC more money.

If you receive tax credits or Child Benefit you also need to tell HMRC separately about changes to your relationship or family.

In the sad event that your spouse or civil partner dies, it is also a requirement to report the death to HMRC as well as notifying of changes to your income. For example, the death of a spouse would mean that the surviving spouse was no longer entitled to claim the Married Couple's Allowance.

If you move home, it is advisable to let HMRC know as soon as possible so they can update your contact details. HMRC should also be informed if you change gender although the process is usually automatic when you change gender legally by applying for a Gender Recognition Certificate.

You must also notify HMRC about certain changes to your income such as when you start or stop receiving:

  • income from a new source, such as money from self-employment or rent from property;
  • taxable benefits, such as State Pension, Jobseeker’s Allowance and Carer’s Allowance;
  • benefits from your job, such as a company car;
  • income above your Personal Allowance;
  • money over £85,000 from self-employment (you must register for VAT over this amount);
  • lump sums from selling things you pay Capital Gains Tax on, such as shares or property that’s not your main home; and
  • income from property, money or shares you inherit, such as dividends from shares or rent from property.
Source:HM Revenue & Customs| 04-06-2023

Can a charity claim Gift Aid?

Charities can claim Gift Aid on donations made by eligible taxpayers. This can boost donations by an extra 25% if the donor makes a Gift Aid Declaration (GAD).

To claim Gift Aid, charities need to obtain a Gift Aid declaration from the donor. It should state that the donor:

  • has paid the same amount or more in Income Tax or Capital Gains Tax in that tax year; and
  • agrees to Gift Aid being claimed.

Charities must keep a record of Gift Aid declarations for 6 years after the most recent donations they claimed.

The Gift Aid Small Donations Scheme can be used on small donations of £30 or less and no GAD is required. The Gift Aid Small Donations Scheme (GASDS) scheme allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on small donations of money made without a Gift Aid declaration. A small donation is defined as a donation of £30 or less made in cash or using contactless technology, such as a contactless credit or debit card. Donations made by other methods of payments such as cheque or bank transfer do not count. 

The maximum annual amount of small donations that can be claimed through the GASDS is the lower of £8,000 or 10 times the amount the charity receives in Gift Aid donations – known as the matching rule. The £8,000 limit allows charities and CASCs to claim Gift Aid style top-up payments of up to £2,000 a year.

Source:HM Revenue & Customs| 29-05-2023

Selling all or part of your company

If you are selling your company, there are important actions you must take to properly finalise your affairs. Please note that this is not an exhaustive list, and it is important to check what else may be required.

We have summarised below some of the main steps you need to take if closing your business:

  • Your responsibilities when selling a limited company will depend on whether you’re selling your entire shareholding, or the company is selling part of its business. 
  • Keep staff informed about redundancy terms or relocation packages and be mindful not to breach your employees’ rights.
  • If you are selling your entire shareholding, you should appoint new directors before you resign as a director yourself.
  • Consider your liability to Capital Gains Tax and whether you can benefit from reliefs including Business Asset Disposal Relief, previously known as Entrepreneurs’ Relief.
  • If there are charges against your company, for example a mortgage on your house to secure a business loan, you must let the provider know within 21 days of the sale.
  • You may want to transfer your VAT registration to the new owner.
Source:HM Revenue & Customs| 29-05-2023

Gift aid tax benefits

The gift aid scheme, which was originally introduced in 1990, allows charities to reclaim from HMRC the basic rate of Income Tax deducted from qualifying donations by UK taxpayers. This means that when a basic rate taxpayer claims gift aid on a £10 donation, the charity can reclaim from HMRC the £2.50 of tax paid on that donation.

If you are a higher rate or additional rate taxpayer, you are eligible to claim additional tax relief on the difference between the basic rate and your highest rate of tax.

For example:

If you donated £5,000 to charity, the total value of the donation to the charity is £6,250. You can claim back additional tax of:

  • £1,250 if you pay tax at the higher rate of 40% (£6,250 × 20%),
  • £1,562.50 if you pay tax at the additional rate of 45% (£6,250 × 25%).

Taxpayers have the option to carry back charitable donations to the previous tax year. A request to carry back the donation must be made before or at the same time as the previous year’s Self-Assessment return is completed.

This means that if you made a gift to charity in the current 2023-24 tax year that ends on 5 April 2024, you can accelerate repayment of any tax associated with your charitable giving. This can be a useful strategy to maximise tax relief if you are not paying higher rate tax in the current tax year but did in the previous tax year. This should be done as part of the Self-Assessment tax return for 2022-23 which must be submitted by 31 January 2024.

You can only claim if your donations qualify for gift aid. This means that your donations from both tax years together must not be more than 4 times what you paid in tax in the previous year.

Source:HM Revenue & Customs| 22-05-2023

Consultation on taxation of cryptoasset loans

In April 2022, the government announced a package of measures intended to make the UK a global cryptoasset technology hub. One of the issues raised at the time concerned the tax treatment of Decentralised Finance (DeFi) and staking.

DeFi lending and staking encompasses a range of activities that reward users who deposit cryptoasset tokens into a pool or lend them to other individuals or platforms for a certain period to earn passive income returns often described as interest.

The government was interested in ascertaining whether the administrative burdens and costs could be reduced for taxpayers engaging in this activity, and whether the tax treatment can be better aligned with the underlying economics of the transactions involved.

As part of the process, the government ran a Call for Evidence from 5 July to 31 August 2022. Most respondents agreed that a change in the tax rules would be beneficial for the industry and users.

A new consultation seeking views on a potential new taxation framework for cryptoasset loans and ‘staking’ in the context of DeFi was published on 27 April 2023 and represents the next stage of the policy making process. The consultation closes on 22 June 2023.

Source:HM Government| 15-05-2023

Landlord responsibilities

There are a number of responsibilities that fall on a landlord that is renting out a property. 

These include the requirements to:

  • keep rented properties safe and free from health hazards;
  • make sure all gas equipment and electrical equipment is safely installed and maintained;
  • provide an Energy Performance Certificate for the property;
  • protect their tenant’s deposit in a government-approved scheme;
  • check their tenant has the right to rent your property if it’s in England; and
  • give their tenant a copy of the How to rent checklist when they start renting from you (you can email it to them).

There are different rules for landlords in Scotland and landlords in Northern Ireland.

There are also requirements relating to fire safety, health and safety inspections, financial responsibilities and special rules for regulated tenancies (usually private tenancies starting before 15 January 1989).

Source:HM Revenue & Customs| 01-05-2023

Retaining an interest in a gift

The settlements legislation is contained in s.624 ITTOIA 2005. The legislation seeks to ensure that where a settlor has retained an interest in property in a settlement that the income arising is treated as the settlor’s income for all tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner.

In general, the settlements legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

These arrangements must be:

  • bounteous, or
  • not commercial, or
  • not at arm’s length, or
  • in the case of a gift between spouses or civil partners, wholly or substantially a right to income.

However, there are a number of everyday scenarios where the settlements legislation does not apply. In fact, after much case law in this area, HMRC has confirmed that if there is no 'bounty' if the gift to a spouse or civil partner is an outright gift which is not wholly, or substantially, a right to income, and the legislation will not apply.

Source:HM Revenue & Customs| 24-04-2023

The Let Property Campaign

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 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.

HMRC's guidance regarding the campaign has been updated for the current tax year.

Taxpayers that come forward will benefit from better terms and lower penalties for making a disclosure. Landlords that make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% – depending on the circumstances – plus any tax and interest due. There are higher penalties for offshore liabilities. 

There are three main stages to taking part in the 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. That includes landlords with multiple properties and single rentals as well as specialist landlords with student or workforce rentals.

HMRC’s guidance on making a disclosure has been updated. The sections titled ‘Income you should include in your disclosure’ and ‘How many years to include in your disclosure’ have been updated.

Source:HM Revenue & Customs| 17-04-2023
explaining returnerships and employer apprentice incentives; london accountant

Returnership incentives for over-50s

Are you over 50 and looking for a new career opportunity? A returnership may be right for you – a newly announced initiative from the UK government designed to help older workers get back into work.

Read on to find out exactly what a returnership is and how businesses can benefit through employer apprenticeship incentives.

What is a returnership?

‘Returnerships’ is a new initiative launched by the UK government to encourage adults over the age of 50 to get back into work and embark on new career ventures. The scheme brings together three programmes – Apprenticeships, Skills Bootcamps, and Sector-Based Work Academy Programmes (SWAPs) – to provide a clear route back into work and encourage employers to hire older workers.

Skills Bootcamps are free courses designed in partnership with local employers to help fill job vacancies in your area. These flexible courses last up to 16 weeks and allow you to gain the in-demand skills employers are looking for, with the offer of a job interview on completion. From courses in digital and green industries, to those in technical sectors such as construction or engineering, there are hundreds of bootcamps on offer.

An apprenticeship is a job with training that can be used by learners of all ages and all career stages to gain valuable skills, retrain or reskill. Lastly, Sector-based work academy programmes (SWAPs) are an opportunity to learn new skills and get experience of working in a particular industry, for example care, construction or warehouse work.

Who is a returnership for?

Returnerships are targeted at adults over the age of 50 who are returning to work or seeking a career change. Apprenticeships and most Skills Bootcamps are open to everyone, but SWAPs are specifically for jobseekers who are claiming either Universal Credit, Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA).

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What has the UK government announced about returnerships?

The UK government has announced additional funding of £63.2 million to increase the availability of Skills Bootcamps and SWAPs. This includes £34 million of additional funding for Skills Bootcamps, helping up to 8,000 more people to benefit from this transformational scheme, with an aim of delivering 64,000 training places from next year.

The increased funding will also allow the expansion of the Sector-Based Work Academy Programme (SWAPs) scheme to increase the number of places available and make the programme more accessible. This will create around 40,000 new SWAPs placements.

To further build on the adult learning offer, the government has also recently announced the Lifelong Learning Entitlement. From 2025, people will be able to access loans worth up to £37,000 to upskill or retrain no matter where they are in life.

Returnership UK

How do I get started with a returnership?

Your first port of call should be HMRC’s Returnership Toolkit. The comprehensive documents covers both the specifics of getting into returnships schemes like SWAPs and Skills Bootcamps, as well as the general advice about updating your CV and finding a career direction.

What are the employer apprentice incentives?

For employers, HMRC will fund between 95% and 100% of training costs for apprentices you hire. They also report that in the UK, the estimated yearly gain for employers is between £2,500 and £18,000 per apprentice during their training period.

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Spring Budget 2023 – Social investment tax relief to end

It was confirmed as part of the Spring Budget announcements that the Social investment tax relief (SITR) scheme will end as planned on 5 April 2023. New investments made on or after 6 April 2023 will no longer qualify for Income and Capital Gains Tax relief. The scheme was initially introduced to encourage individuals to support social enterprises and charities access new sources of finance.

For any investments made before 6 April 2023, the lifetime maximum amount of investment social enterprises can raise through the SITR is £1.5 million. This includes any money received by subsidiaries, former subsidiaries or businesses that have been acquired.

Individuals making an eligible investment in a SITR of up to £1,000,000 can deduct 30% of the cost of their investment from their Income Tax liability for the relevant later year in which the investment is made or the previous tax year. Qualifying investors can also benefit from Capital Gains Tax hold-over relief. To qualify for this relief, a Social enterprise must have been a community interest company, a community benefit society, with an asset lock or a charity. 

Source:HM Treasury| 15-03-2023
Tax-Free Childcare scheme supports UK parents

Tax-Free Childcare scheme supports UK parents

Tax-Free Childcare scheme supports UK parents

HMRC has released a reminder to parents about the Tax-Free Childcare (TFC) scheme intended to help pay for February half-term holiday clubs and wraparound care during school terms.

The TFC scheme provides an account which parents can pay into regularly to later use to pay registered childcare providers. For every £8 contributed by parents an additional £2 top up payment will be funded by the Government up to a maximum total of £10,000 per child per year.

This will give parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the age of 17) in childcare costs.

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Who is eligible for the scheme?

The TFC scheme is open to all parents with children aged up to 11 (17 for those with certain disabilities), including those who are self-employed or on minimum wage. In order to be eligible, parents will have to be in work at least 16 hours per week. If either parent earns more than £100,000 neither parent can use the scheme.

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Properties not let at commercial rates

There are special rules where a property is let at less than a commercial rate or isn’t let on commercial terms. These rules also apply if a property is occupied rent free or at less than a commercial rate, for example, a property is occupied by a family member at a reduced or nil rent.

In these circumstances, HMRC can take the view that unless the landlord charges a full market rent for a property and imposes normal market lease conditions, it is unlikely that the expenses of the property are incurred ‘wholly and exclusively’ for business purposes.  Problems may also arise when considering the deduction of expenses during periods when the property is lived in by ‘house sitters’ who do not make any payment whilst staying at the property.

HMRC generally accepts that if a property is let at below the market rate (as opposed to providing it rent-free), the landlord can deduct the expenses of that property up to the rent they get from it. This means that the uncommercially let property produces neither a profit nor a loss, but the excess expenses cannot be carried forward to be used in a later year.

If the landlord is actively seeking a tenant and a relative house sits while it is empty, relief will not be restricted as long as the property remains genuinely available for letting. Relief for capital expenditure on uncommercial lettings may also be restricted.

Source:HM Revenue & Customs| 20-02-2023
These businesses must register for money laundering supervision HMRC

Register for money laundering supervision

Money laundering is the process of hiding or obscuring the fact that money was obtained through illegal activity. This means making money that has come from things like drug trafficking or extortion look as though it was made by some legal business, like a restaurant.

Many businesses are monitored by the Financial Conduct Authority (FCA) or belong to professional bodies like the Law Society, which are meant to look out for money laundering. However, some sectors are supervised by HMRC, and businesses in those sectors must register with HMRC to avoid penalties.

Our CIMA-registered accountants can help you with this process. Contact us here for a free quote.

which businesses need to register for money laundering uk

Does my business have to register for money laundering supervision?

You must register for HMRC money laundering supervision if you run the following kinds of business:

  • Money Service Businesses not supervised by the FCA
  • High Value Dealers 
  • Trust or Company Service Providers not supervised by the FCA or a professional body
  • Accountancy Service Providers not supervised by a professional body
  • Estate Agency Businesses 
  • Bill payment service providers not supervised by the FCA
  • Telecommunications, digital and IT payment service providers not supervised by the FCA
  • Art market participants
  • Letting agency businesses

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Avoid fines by registering as a child minder

Avoid fines, register as a childminder

Avoid fines, register as a childminder

The UK Government takes childcare seriously, and requires that those providing childcare services are registered for the safety of workers, parents, and children.

If you provide childcare services outside of a home, such as a creche, you will be subject to different rules. But for those providing care in the home, you must register as a childminder if all of the following apply:

  • the children are under the age of 8;
  • you look after them for more than 2 hours a day;
  • you look after them in your own home; and
  • you get paid to look after them – including payment in kind.

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Who doesn't need to register?

You do not need to register (though may still choose to) if you are:

  • a nanny
  • a tutor
  • a babysitter and you look after the children between 6pm and 2am
  • a family friend and you look after the children less than 3 hours a day.

What do I need to register as a childminder?

You can register through Ofsted or via a childminder agency. You will need:

  • an enhanced check with barred lists for home-based workers from the Disclosure and Barring Service (DBS);
  • first aid training for the age group they will look after;
  • childcare training;
  • a health declaration booklet;
  • contact details for 2 references; and
  • a certificate of good character from an embassy – if they lived abroad in the past 5 years.

 

If you need help registering with HMRC, our accountants at CIGMA Accounting would be happy to assist. You can contact us here for a free quote.

Wimbledon Accountant

165-167 The Broadway

Wimbledon

London

SW19 1NE

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London

EC1R 3DA