COMPANY CAR ADVISORY FUEL RATES

  These rates are the suggested reimbursement rates for employees’ private mileage in their company cars and are reviewed each quarter on 1 March, 1 June, 1 September and 1 December. In line with an increase in fuel prices, the rates that apply from 1 June 2016 are shown below: engine size                                ...

REPORTING BENEFITS IN KIND AND SHARES ISSUED TO EMPLOYEES AND DIRECTORS

It’s that time of year again when the annual return of benefits in kind and expenses paid on behalf of directors and employees needs to be made to HMRC. Unless the employer holds a dispensation, this includes expenses such as travel and subsistence that are reimbursed to employees and directors. Note however that from 2016/17...

THINKING ABOUT INCORPORATING YOUR BUSINESS?

Where a sole trader, partnership or LLP has established a significant value for the goodwill of their business it was possible up until 3 December 2014 to transfer that goodwill to a limited company and pay just 10% capital gains tax by claiming entrepreneurs’ relief. The former owner(s) could then draw down on the loan...

SHOULD I USE THE VAT FLAT RATE SCHEME FOR MY SMALL BUSINESS?

The VAT Flat Rate Scheme is intended to simplify VAT accounting and reporting for small businesses, and some may even find that they pay less VAT than using normal VAT accounting.   To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC to use the...

SUPPLYING DIGITAL SERVICES TO CUSTOMERS IN OTHER EU COUNTRIES?

The VAT place of supply rules changed on 1 January 2015 where digital services are supplied to non-business customers. The place of supply changed from where the supplier was based to where the customer is located as some companies were avoiding UK VAT. This rule change had serious implications for small businesses supplying digital services...

EMPLOYMENT ALLOWANCE

For the last two years there has been a £2,000 allowance available to employers to set against their employers National Insurance liability for the year. This increased to £3,000 from 6 April 2016 and no action is required if you claimed the allowance for 2015/16. However, from 6 April 2016, limited companies where the director...

INTEREST FREE LOANS & THE NEW ACCOUNTING RULES

  One of the areas where there may be a change in your company’s accounts is where you have received or made a loan that is interest free or at less than market rates. Unless the loan is repayable on demand the new accounting rules require the loan to be recorded in the accounts on...

Year End Pension Planning

Take advantage of the pension carry forward rules in order to benefit from any unused allowances from the previous three tax years.  This is generally the difference between the old £50,000 annual pension allowance and your pension input that year and can be added to your relief for 2015/16.  Note that the annual pension allowance...

Tax Charge on Annuity Sales to be Reduced from April 2017

The Government has confirmed that from 6 April 2017, tax restrictions for people looking to sell annuities will be removed, giving those with existing annuity, and anyone who purchases an annuity in the future, the freedom to sell their right to future income streams for an upfront cash sum. Currently, people wishing to sell their...

Single Director Companies Excluded From £3,000 NIC Employment Allowance

From 6 April 2016 the Employment Allowance increases from £2,000 to £3,000, but if you’re the only employee in a company, and also the director, your company will no longer be eligible for the NICs Employment Allowance. HMRC is currently consulting on the draft legislation for this change which will mean that the £3,000 allowance...