Archive for the ‘Uncategorized’ Category

Government backtracks on Double Cabs Pickups

Thursday, February 29th, 2024

This update is only with reference to DCPUs with a payload of one tonne or more. DCPUs with a payload of less than one tonne continue to be treated as cars.

On Monday 12 February 2024 HMRC updated its guidance on the tax treatment of Double Cab Pick Ups (DCPUs), following a 2020 Court of Appeal judgment. The guidance had confirmed that, from 1 July 2024, DCPUs with a payload of one tonne or more would be treated as cars rather than goods vehicles for both capital allowances and benefit-in-kind purposes.

Since then, the government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax-treatment. The government has acknowledged that the 2020 court decision and resultant guidance update could have an impact on businesses and individuals in a way that is not consistent with the government’s wider aims to support businesses, including vital motoring and farming industries.

HMRC have today announced that its existing guidance will be withdrawn, meaning that DCPUs will continue to be treated as goods vehicles rather than cars, and businesses and individuals can continue to benefit from its historic tax treatment.

This move is resultant of the government making clear that it will be legislating to ensure that DCPU vehicles continue to be treated as goods vehicles for tax purposes.

The government will consult on the draft legislation to ensure that it achieves that outcome before introducing it in the next available Finance Bill.

This is great news as businesses that make use of DCPUs in their businesses will, in most cases, have the ability to write off the full cost of their investment.

 

The following notes explain the detail:

  • The tax on the benefit-in-kind will now not increase when employers provide these vehicles to their employees; and the capital allowances available in the first year of use will now not be reduced when a business purchases this vehicle for use in their trade.
  • This will ensure a continued generous and consistent treatment of DCPUs for capital allowances, benefit in kind, and VAT purposes, maintaining simplicity in the tax system.
  • HMRC will withdraw its updated guidance during the afternoon of Monday 19 February 2024.

Arrangements that HMRC announced on 12 February 2024 to help DCPU owners adapt to the updated guidance are now redundant because the tax-treatment is not changing.

Skills Bootcamps

Tuesday, February 27th, 2024

Skills Bootcamps help you develop new skills that employers are looking for. They are a great opportunity to train in a new industry or progress in your current career.

 

Types of Skills Bootcamps

There are hundreds of Skills Bootcamps available across many areas, for example:

  • digital, including data engineering, software development and marketing;
  • technical, including construction and engineering;
  • green, including electric vehicle maintenance and heat pump technology;
  • health and social care, including care management and well-being;
  • HGV driving, including if you’re new to HGV driving or want to return;
  • business and administration, including project management and insurance.

Skills Bootcamps take up to 16 weeks to complete. They are flexible, so you can fit learning around your family or other commitments.

 

Entry requirements for Skills Bootcamps

You need to be 19 or over to do a Skills Bootcamp. For most Skills Bootcamps, you do not need to have any previous knowledge in the subject. You just need to speak a good level of English and have a willingness to learn.

Some courses may have additional entry requirements, such as needing you to have a certain qualification or experience. If there are any, they will be listed in the relevant course details.

 

Qualification you will earn

You might get a qualification from your Skills Bootcamp but not all will offer you one. If you are offered one, the level of qualification you will get will depend on the provider and the course you’re doing.

You can read the details for each individual Skills Bootcamp to check if you’ll get a qualification at the end.

While you might not get a qualification, Skills Bootcamps will help you get a job or get a place on a different course that will give you a qualification at the end.

 

Find a Skills Bootcamp

Skills Bootcamps can take place at a college, another training provider or online.

You can find the right Skills Bootcamp for you on GOV.UK, then apply directly through the training provider’s website.

Self-Assessment tax returns 2023-24

Thursday, February 22nd, 2024

We have just passed the filing deadline for the 2022-23 tax year, and any 2022-23 returns filed after 31 January 2024 will be subject to late filing penalties.

However, this post is focussed on processing your returns for 2023-24 and the message is, lets get your returns processed as soon as possible after 5 April 2024.

What could delay this process?

  • Salary earners - employers have a legal obligation to let you have a form P60 (that includes all your salary, tax and NIC details, by the 31 May following the end of the tax year. And shortly after this date, details of any taxable benefits (form P11D).
  • Self-employed persons should have their accounts computerised, and with our support, accounts should be available for 2023-24 during the summer period.
  • Company owners/directors – again, accounts should be computerised and up-to-date, which means information regarding any dividends, benefits or salaries for 2023-24 should be available during the summer 2024.
  • Investment income from bank and building society deposits should be sent to you by post or be available from banking apps.
  • Pensions income from non-State sources should by sent to you as a P60 form.
  • You should be able to calculate the amount you have received as State Pension by totting up the receipts deposited to your bank statements.

For most self-assessment taxpayers this should cover the majority of the figures that need to be declared on their tax returns. And if this data is processed before the end of July 2024, you will have advanced notice of any taxes payable January and July 2025 in good time to consider how you will fund the payments.

 

Sooner rather than later

Access to information is best organised so that conclusions can be drawn well in advance of any filing or decision making deadlines. In which case, aim to have a comprehensive draft of your 2023-24 self-assessment tax return before August 2024. In this way there may still be time to consider any residual planning options and you will have six months to consider how you will fund any 31 January 2025 tax payments.

Timing in business is everything

Tuesday, February 20th, 2024

In a previous blog post we outlined the importance of reviewing your income before the end of the current tax year. The message was a simple one, any meaningful planning has to be implemented - for 2023-24 – before 6 April 2024, the end of the tax year.

A similar deadline applies to business planning, but the deadline is not focussed on the 6 April – unless your accounts year end is the end of March or the 5 April – but on the last day of your accounting year end.

Action, you take (or do not take) before the end of your accounting year end can have dramatic effects on your published accounts and any resulting tax liability.

For example, imagine you are a building tradesperson and need to buy a replacement van. Do you buy before the end of your accounts year, which is the 31 March 2024, or afterwards? Some of the issues you should be considering are:

  • If you are self-employed, will you be able to offset the full cost of the van, say £20,000, if you buy before the 31 March 2024 or would you be advised to defer the expenditure to April 2024 as you estimate that the 2024-25 trading year will be more profitable?

Incorporated businesses, where the owners are paid directors and receive the bulk of their earnings as salaries and dividends, face more planning choices. For example:

  • What options are on the table regarding the payment of year end bonuses? Should they be paid before or after the year end and as salary, dividends or some form of salary sacrifice (including pension top-ups)?

And don’t forget your bank manager. How will business funders react to your planning arrangements?

If your business year end is 31 March 2024 or during the spring/summer 2024, now is the time to consider your options. Pick up the phone. We can help you consider your options and arrive at a business plan for the current and following trading years.

Support for thousands of pubs

Thursday, February 15th, 2024

More than 38,000 pubs will benefit from the six-month freeze on alcohol duty from 1 February 2024. According to HM Treasury:

  • The great British pub receives further boost from I February as a six-month alcohol duty freeze to 1 August 2024 takes effect.
  • This tax saving will help support around 38,175 pubs to face rising costs.
  • Duty freeze comes in addition to £4.3 billion in business rates cuts and duty protection for pints sold in pubs.

“British pubs are a significant part of the fabric of communities across the UK and a further freeze on alcohol duty will help to support the sector while the government continues to bring down inflation while driving growth and investment.

“This will impact around 38,175 pubs across the country and was announced as part of a multi-billion support package by Chancellor Jeremy Hunt in his Autumn Statement which also included £4.3 billion business rates relief.

“The six-month duty freeze, from 1 February to 1 August 2024, follows the biggest reform of alcohol duties taking effect last August, where, for the first time in over 140 years the UK’s alcohol duty system simplified so the duty paid reflects the amount of alcohol in it.

These reforms cut duty on pints in pubs by up to 11p when compared to the same product sold in supermarkets. Not increasing alcohol duty in line with inflation has now saved a further 3p to the duty on a typical pint of beer, 2p to a pint of cider, 4p to a glass of whisky, or 18p to a bottle of wine.

 

Keep an eye on your income for 2023-24

Tuesday, February 13th, 2024

As you are probably aware the 2023-24 tax year ends on 5 April 2024. After this date, most of the opportunities to arrange your tax affairs in the most advantageous way end and action to reduce your tax payments must be taken before this date.

Accordingly, we have less than two months to get organised.

We have listed below a few of the trigger points that you need to keep your eye on to maximise the use of legitimate tax allowances and reliefs and keep your tax footprint for 2023-24 to a minimum.

  • If you or your partner have claimed Child Benefits and either of your income’s are likely to exceed £50,000 this tax year, you may become subject to the High Income Child Benefit Charge. Effectively, for every £100 your income exceeds £50,000 you will be asked to repay 1% of the Child Benefits received. Which means when your highest income reaches £60,000 all of the Child Benefit received will be clawed back. The claw back will be made via self-assessment. If you are not registered for self-assessment, you will need register.
  • Once your combined income sources exceed £50,270, you will become subject to income tax at 40%. Also, if you receive significant dividend income, dividends that form part of any excess income above £50,270 will be taxed at 33.75% not 8.75%.
  • If your income exceeds £100,000, for every £2 your income exceeds this amount your £12,570 personal allowance will be reduced by £1. Which means when your income reaches £125,140, you will no longer be entitled to as personal tax allowance for income tax purposes. And, as you are paying income tax at 40% and reducing your personal allowance between £100,000 and £125,140, your effective rate of tax in this band is an eye watering 60%.

These three pointers will give you some idea of the issues you may need to consider in order to review your income tax for 2023-24, but there are also a raft of issues that it may benefit you to look at to minimise capital gains tax, inheritance tax, corporation tax, VAT and National Insurance.

Don’t delay. If your tax affairs warrant a review, please pick up the phone so we can help you consider your options before the tax planning curtain closes, for most of us, on 5 April 2024.

Powers of Attorney Act receives Royal Assent

Thursday, February 8th, 2024

Reforms to simplify and streamline lasting powers of attorney are given Royal Assent.

These legal agreements enable a person to grant decision making powers about their care, treatment or financial affairs to another person if they lose mental capacity.

The Powers of Attorney Act fires the starting gun on bringing the existing paper-based process online for the first time. The changes, when introduced, will make the system quicker, easier to access and more secure for the thousands of people who make and rely on a lasting power of attorney every year.

The legislation, which was introduced by Stephen Metcalfe MP and supported by the government, will also strengthen existing fraud protection by allowing checks on the identity of those applying for a lasting power of attorney.

The new online system and the additional safeguards are now being developed by the Office of the Public Guardian. Extensive testing will need to be conducted to ensure the process is simple to use, works as intended and is secure. More information on when it will be available will be published in the coming months.

The number of registered lasting power of attorneys has increased drastically in recent years to more than 6 million but the process of making one retains many paper-based features that are over 30 years old. Every year, the Office of the Public Guardian manages more than 19 million pieces of paper as a result of their offline system.

The digitalisation will speed up registration time by picking up errors earlier and allowing them to be fixed online rather than having to wait for documents to be posted back and forth between the applicant and the Office of the Public Guardian as currently happens.

An improved paper process will also be introduced for those unable to use the internet.

These reforms build on the success of the ‘Use an LPA’ service which was launched in 2020 which allowed organisations like banks to digitally and securely check the registration of a lasting power of attorney instantaneously. This sped up a process that previously took weeks to conclude while paper copies were shared.

State Pension entitlement if you retire abroad

Tuesday, February 6th, 2024

You can claim State Pension abroad if you have paid enough UK National Insurance contributions to qualify.

To make a claim you must be within four months of your State Pension age.

You must choose which country you want your pension to be paid in. You cannot be paid in one country for part of the year and another for the rest of the year.

Your State Pension can be paid into:

  • a bank in the country you’re living in
  • a bank or building society in the UK

 

You can use:

  • an account in your name
  • a joint account
  • someone else’s account - if you have their permission and keep to the terms and conditions of the account

 

You will need the international bank account number (IBAN) and bank identification code (BIC) numbers if you have an overseas account. You will be paid in local currency - the amount you get may change due to exchange rates.

How your future pension may be affected

If you live outside certain designated areas, you may lose out on the annual increases in the UK State Pension.

Your State Pension will only increase each year if you live in:

  • the European Economic Area (EEA)
  • Gibraltar
  • Switzerland
  • countries that have a social security agreement with the UK (but you cannot get increases in Canada or New Zealand)

However, if you have not qualified for annual increases whilst abroad, your pension will go up to the current rate if you return to live in the UK.

Spring Budget 2024

Friday, February 2nd, 2024

The Chancellor of the Exchequer, Jeremy Hunt has confirmed that the next UK Budget will take place on Wednesday, 6 March 2024. This will be the Chancellor’s second Budget and will include the government's tax and spending plans as well as new growth and borrowing forecasts. Various pundits are suggesting that selecting a Budget date in early March leaves the possibility of a general election as early as May 2024. The next general election is required to take place by January 2025.

There may be a round of new tax-cuts and changes as the government works to attract voters and narrow the gap against Labour. Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s speech.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). This forecast will be in addition to that published for the Autumn Statement and fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.

The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

National Insurance and tax after State Pension Age

Friday, February 2nd, 2024

If you have reached the State Pension age and continue to work, in most cases, you no longer need to pay National Insurance Contributions (NICs).

At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you will remain liable to pay any NICs due to be paid to you before reaching the State Pension age. If you continue working, you need to provide your employer with proof of your age.

Your employer remains liable to pay secondary Class 1 employer NICs. If you would rather not provide proof of age to your employer, you can request a letter (known as an age exception certificate) from HMRC confirming you have reached State Pension age and are no longer required to pay NICs.

If you are self-employed you will need to pay Class 4 NICs for the remainder of the year in which you reach State Pension age but will be exempt from the following year.

HMRC provides the following example. Someone who reached the State Pension age on 6 September 2023 will stop making Class 4 contributions on 5 April 2024 and pay their final Class 4 bill by 31 January 2025, together with any Income Tax due.

If you have overpaid NICs you can claim the excess back from HMRC.

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