Christmas Party tax issues

At this time of the year business owners and their employees are thinking about celebrating. The article that follows explains how to organise a well deserved works party this Christmas and make the most of the tax reliefs available.   The cost of a staff party or other annual entertainment is allowed as a deduction…

Self Assessment penalties

In the past as long as you paid your tax liabilities on time and cleared any self-assessment tax due by 31 January, no late filing penalties were due. Even if you failed to pay your tax on time, late filing penalties were capped at £100 or nil if you were due a tax refund. The…

New fuel rates

HMRC have published revised Company Car advisory fuel rates to use from 1 September 2011. These rates can be used to calculate private fuel costs reimbursed by employees on a mileage basis, or to calculate the amount of VAT input tax that employers can recover on company car mileage claims that are attributable to fuel…

Charities and VAT

Charities only need to account for VAT on those parts of its activities that are within the scope of VAT. A quick checklist follows: * Sale of donated goods from a charity shop – zero rated supply * Investment income, bank interest etc – outside the scope of VAT * Donations from general public –…

Employers costs to increase by 3%

The Pensions Regulator has published information about proposed workplace pension changes that are due to be phased in from next year. Workers who will need to enrol in the new workplace pension arrangements unless they expressly choose to opt out are: * Employees who earn more than the minimum earnings threshold (to be announced), and…

New pension rules

Another set of regulations is set to fall on the shoulders of all employers. This time it’s a compulsory pension scheme for all employees. This new pensions law is due to be introduced over four years from October 2012. The largest employers (120,000 or more employees) will be forced to sign up first. Those who…

Annual Investment Allowance is reducing

From April 2012 the amount of capital expenditure that qualifies for 100% year one write off is reducing from £100,000 to £25,000. Business owners might want to bring forward plans to invest in machinery, before the qualifying amount is reduced. This allowance is called the Annual Investment Allowance (AIA). It enables all businesses to reduce…

VAT on salary sacrifice schemes

Due to a recent European Court of Justice ruling, HMRC now consider that the provision of a benefit via salary sacrifice to employees constitutes a supply of services for consideration and is therefore subject to VAT. Benefits that will be affected include: * Cycle to work schemes. * Face value vouchers. * Childcare vouchers. *…

VAT clampdown

HMRC believe that there are a number of businesses that should be registered for VAT, and so far, they have not registered. They are in the process of sending out 40,000 letters to traders who they believe may be in this category. HMRC are offering businesses that “come clean” and notify HMRC of an intention…

Tribunal criticises HMRC for delay in issuing penalties

In a recent case, HMRC have been criticised for deliberately issuing penalties for late forms P35 (Payroll end of year forms) several months late, generating higher penalties than were necessary. A summary of the case is reported below. This case has potentially wide ranging implications for other employers. Please do get in touch if you…