GIFTS TO CHARITY

Where possible higher rate taxpayers should “ Gift Aid ” any payments to charity to provide additional benefit to the charity and for the individual to obtain additional tax relief on the payment. For example where an individual makes a £20 cash donation to charity the charity is able to reclaim a further £5 from...

GIFTS OF UP TO £50 TO EMPLOYEES

From April 2016 new rules were introduced to allow employers to provide their directors and employees with certain “trivial” benefits in kind tax free. The new rules were brought in as a simplification measure so that certain benefits in kind do not now need to be reported to HMRC as well as being tax free...

CHRISTMAS IS THE TIME FOR GIVING: IHT EXEMPTIONS & CGT CONSEQUENCES

Those thinking about making gifts at Christmas should take advantage of the various inheritance tax, IHT exemptions and reliefs available to them. Note that certain gifts can also have capital gains tax (CGT) implications.   THE ANNUAL IHT EXEMPTION – USE IT OR LOSE IT! Although not particularly generous at £3,000 per donor per annum if...

ANNUAL INVESTMENT ALLOWANCE INCREASED TO £1m

The Annual Investment Allowance ( AIA ) which provides businesses with a 100% write off against profits when they acquire plant and machinery has been temporarily increased from £200,000 to £1 million for two years from 1 January 2019. This will again mean that the timing of expenditure will be critical. It may be advantageous...

CAPITAL GAINS ENTREPRENEURS’ RELIEF CHANGES

The Chancellor has announced that the minimum qualifying period for capital gains entrepreneurs’ relief will be increased from 12 months to 24 months for disposals on or after 6 April 2019. There are further changes affecting shareholdings in personal companies. In addition to the individual holding 5% or more of the ordinary share capital and...

IR35 “OFF-PAYROLL” RULES TO BE EXTENDED TO PRIVATE SECTOR

Very controversially, the Government have decided to extend the rules for personal service companies in the public sector to workers in the private sector from April 2020. This follows a consultation in Summer 2018 on how to tackle non-compliance with the intermediaries legislation (commonly known as IR35) in the private sector. The legislation which has...

PERSONAL ALLOWANCE AND HIGHER RATE LIMIT INCREASED EARLY

The Government’s manifesto pledge back in 2015 was that the personal allowance would rise to £12,500 in 2020 and the higher rate tax threshold to £50,000. However, the Chancellor has decided to bring forward these increases one year early from 2019/20, taking an estimated 1 million taxpayers out of higher rate tax. Note that up...

DON’T FORGET THERE MAY BE TAX TO PAY ON YOUR DIVIDENDS IN JANUARY

The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers that meant more tax to pay on those dividends on 31 January 2018. The same will also apply on 31 January 2019....

SEPTEMBER 2018 ADVISORY FUEL RATE FOR COMPANY CARS

These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2018.   Where there has been a change the previous rate is shown in brackets. You can continue to use the previous rates for up to 1 month from the date the new rates apply.   For hybrid...

CLASS 2 NICs CONTINUE FOR SELF-EMPLOYED

In 2016 the government consulted on a proposed abolition of Class 2 NICs (National Insurance Contributions) for the self-employed. This flat rate contribution (£2.95 / week) is payable by the self-employed. This is in addition to Class 4 contributions based on the level of profits. The flat rate contributions were due to cease on 5 April...