Posts Tagged ‘Tax advisors Worcestershire’

Reporting share & security transactions to HMRC

Thursday, June 6th, 2019

Reporting share & security transactions to HMRC

If you’re an employer operating share schemes on behalf of your employees, you’ll need to notify HMRC and submit an ERS return.

The Employment Related Securities (ERS) return should be submitted online by 6th July following the end of the tax year and can be done by either the employer or an agent (typically an accountant).

There are late filing penalties for returns filed after 6th July and potential penalties for errors.

You’ll still need to submit a return if there are no share or security transactions during the tax year, and for as long as you operate share schemes.  Also, even if HMRC doesn’t issue you with a reminder, you should submit a return if you’re still operating employee share schemes.

We can advise and help you with your HMRC reporting requirements, including ERS forms and all other employer tax issues. Please get in touch to discuss your requirements by calling 01527 558539 or emailing [email protected] or [email protected]

More info on our services can be found here.

share & security transactions

share & security transactions

Tax and the gig economy

Thursday, June 14th, 2018

Technological advancements have meant we have more options when it comes to where and when we work and our attitudes towards our working lives has contributed to a growth in the  ‘gig economy’. Gone are the days of a ‘job for life’ and the expectation that we will retire in the same job or even industry that we started in.

Those in the gig economy can hold down multiple self-employment roles on a regular, organised basis and with a view to earning a living. This shift in the way we work has been encouraged by the government in a bid to stimulate ‘micro entrepreneurship’ and has successfully encouraged people to start new ventures. One area which needs addressing however is that of taxation – how does the gig economy tax itself?

Who is part of the gig economy?

The list isn’t exhaustive and includes:

  • Online sellers such as ebay and Etsy
  • Homeowners renting out through Airbnb
  • Casual work through sites such as Uber, Deliveroo, Task Rabbit
  • Bloggers and digital influencers on platforms such as Instagram, Pinterest etc
  • Digital nomads, freelancers and potentially non-UK resident workers

What many in the gig economy don’t realise is that their activities fall under the realms of self-employment and that by law, they are required to notify HMRC of their income sources.

Even one-off activities or very casual work can be taxable, with HMRC requiring a self-assessment tax return disclosing all relevant income and expenses.

What action should be taken?

If you have income as described above, you are likely to need to notify HMRC. This should be done within 6 months following the end of the tax year in which the income arose (i.e. by 5th October). If HMRC requests you complete a tax return, you should file it by 31 January (if done online) following the tax year end in which the income arose. You may need to pay taxes and National Insurance depending on your calculations. HMRC can impose penalties on those who fail to notify in time, who fail to submit a return by the deadline and has the power to impose tax-geared penalties for those who pay insufficient tax.

Tax reliefs available and ways to earn income tax-free

There are upsides to working in the gig economy and whilst workers have an obligation to manage their own tax affairs (employees have their tax deducted at source by employers under PAYE), here are some tax reliefs to consider:

  • Rent a room relief – earn up to £7,500 tax-free by renting out a room in your home
  • Sell your unwanted stuff on sites such as ebay; some gains might be offset by the capital gains tax exemption
  • Rent out your driveway or garage storage – earn up to £1,000 tax-free
  • Personal allowance – up to £11,850 of income can be earned tax-free in the current tax year; this can’t be carried forward so it’s a case of ‘use it or lose it’
  • Dividends – business owners can take advantage of the dividend allowance currently available

We’re here to help you understand your tax obligations. Please get in touch to find out how we can help you. [email protected] or call 01527 558539.

gig economy

The gig economy in action

 

Year end tax planning tips – March 2014

Tuesday, March 18th, 2014

With the end of the tax year almost upon us, here are some tax planning tips to consider:

Tax Rates

Income over £150,000 per annum is taxed at 45% but adding in the loss of the personal allowance can result in a top rate of tax of up to 60% for some. Individuals with income close to the thresholds could reduce their tax liabilities considerably by making gift aid payments or pension payments. Salary sacrifice can also be a useful way of keeping income below important thresholds including those for personal allowances and child benefit.

Tax Free Savings

Individual savings accounts (ISAs) provide an income tax and capital gains tax free investment. To take advantage of the limits available for 2013/14 investment must be made by 5 April 2014. The current limits are £11,520 in 2013/14. This can be made up of up to £5,760 in cash with the balance from stocks and shares.

Junior ISAs enable parents or grandparents to save up to £3,720 a year, tax-free for their children or grandchildren.

Pensions

The annual contribution limit for an individual is currently £50,000 however this will drop to £40,000 from 6 April 2014. Contributions attract tax relief at your marginal rate of tax. There is an option to use unused relief from the previous three tax years.

It’s also possible to make pension contributions of up to £2,880 (effectively, £3,600 gross) each year for members of your family, even for those who do not have any earnings.

Capital Gains

Each individual has a Capital Gains Tax allowance and in 2013-14 this is £10,900. It’s worth considering whether  assets can be sold before 6 April 2014 if you haven’t used up your allowance. If you have used up your allowance, consider deferring selling assets until the new tax year or transferring them to a partner if they pay tax at a lower rate. Assets can be transferred CGT free between spouses.

Principal Private Residence Relief

From 6 April 2014, the final period exemption for private residence relief will be reduced from 36 months to 18 months. If you are in the process of selling a second home, it could be well worth doing before April if you want to take full advantage of this relief.

Business Owners

Business owners can take advantage of having a tax efficient mix of salary, dividends and bonuses. To achieve the maximum tax savings the timing of dividends and bonuses either side of the tax year end can be crucial..

Budget 2014 – What we know already #2

Tuesday, March 18th, 2014

Abolition of Employers NI for Under 21s

Employers’ (Class 1 secondary) National Insurance contributions will be abolished for employees under the age of 21. This will be effective from 6 April 2015 and applies to earnings paid up to the Upper Earning Limit.

Employment Allowance

The Employment Allowance can be claimed from 6 April 2014 in a move which will see employers cut their NI bills by up to £2,000. The claims will be made through payroll software and it is hoped the move will stimulate further employment.

Corporation Tax

Due to fall from 23% to 21% from April 2014 and to align with the small companies rate of 20% from April 2015.

Transfer of Personal Allowance between spouses

In a nod to supporting marriage within the tax system, from April 2015, a spouse not liable to income tax or not liable beyond the basic rate is able to transfer up to £1,000 of personal tax allowance to his/her spouse or civil partner providing the recipient of the transfer is not liable to tax at the higher rate. This means that up to £200 in tax can be saved by effecting the transfer. Business leaders have suggested the maximum transfer be raised in line with the new allowance of £10,000 to have any real impact on a couples’ finances.

Extension of Help to Buy Scheme

The Help to Buy scheme was a surprise announcement at last year’s Budget with the measure designed to encourage first time buyers and those struggling to secure loans  onto and up the housing ladder.  There are two parts to the scheme; the first provides an interest free loan on new build properties and is open to first time buyers as well as existing homeowners. The second part of the scheme has proved to be more controversial, offering a taxpayer-backed loan on mortgages of up to 95% loan to value. It has been difficult to measure the impact of Help to Buy as increased movement in the housing market has coincided with the wider economic recovery. It was announced last weekend that the Help to Buy scheme would be extended by four years to 2020.

Pension relief

From April 2014, tax relief on pension contributions will be capped at £40,000 p.a. and lifetime pension savings capped at £1,250,000 with rumours circulating that lump sum drawdowns will become taxable.

Capital Gains Tax ‘Holiday’ to be halved

From April 2014, gains on the sale of a main residence will be exempt for up to 18 months after the owners have moved out. The current exemption period is 3 years.

Tax free childcare scheme

From September 2015 working parents can receive up to £2,000 per year per child on qualifying childcare costs. The scheme will include children of up to 12 years of age within a year of commencing.

Personal

From 6 April 2014, the personal tax allowance will rise to £10,000. There is speculation that this amount could increase further from April 2015 to £10,500. The higher rate threshold will rise to £41,865, representing a 1% increase. It will be interesting to see how Chancellor Osborne reacts to calls to increase this amount more in line with inflation as it is estimated that an additional 1 million taxpayers will be dragged into the 40% tax net.

Salaried partners will be taxed in line with employees for income and corporation tax, where certain conditions are met. There are also changes surrounding the allocation of profits within partnerships.

From 6 April, tax advantaged share schemes will be subject to self-certification with HMRC and the rules around this have been simplified.

We will be sending out our Budget highlights on the afternoon of the Budget. This will also be on our website.

If you would like to discuss anything surrounding Budget 2014, please contact Curo’s head of tax, Julia Whelan [email protected] or call Julia on 01527 558539..

Budget 2014 – What we know already

Wednesday, March 12th, 2014

Like businesses up and down the country (and beyond), we’re eagerly anticipating Chancellor Osborne’s Budget on 19 March and hoping that it contains measures to support and encourage continued growth throughout the economy. Here’s a reminder of some measures already announced:

Corporate

The main rate of corporation tax will fall to 21% in April 2014 before reducing further to 20% from April 2015 and in line with the small companies’ rate. This will help to simplify the compliance process as the rules identifying associated companies will cease to exist.

The rules governing the use of trading losses where there has been a change of ownership are to change and designed to ease current restrictions.

The Employment Allowance is introduced from 6 April 2014, reducing an employer’s National Insurance Contributions by up to £2,000 per annum.

Personal

From 6 April 2014, the personal tax allowance will rise to £10,000. There is speculation that this amount could increase further from April 2015 to £10,500. The higher rate threshold will rise to £41,865, representing a 1% increase. It will be interesting to see how Chancellor Osborne reacts to calls to increase this amount more in line with inflation as it is estimated that an additional 1 million taxpayers will be dragged into the 40% tax net.

Salaried partners will be taxed in line with employees for income and corporation tax, where certain conditions are met. There are also changes surrounding the allocation of profits within partnerships.

From 6 April, tax advantaged share schemes will be subject to self-certification with HMRC and the rules around this have been simplified.

We will be sending out our Budget highlights on the afternoon of the Budget. This will also be on our website.

If you would like to discuss anything surrounding Budget 2014, please contact Curo’s head of tax, Julia Whelan [email protected] or call Julia on 01527 558539..

New Partnership Tax Rules

Monday, February 24th, 2014

From 6 April 2014, the rules governing the taxation of partnerships will change significantly and could affect a large number of people working under such arrangements.

The two main areas of focus are:

Limited Liability Partnerships

From 6 April 2014, the automatic presumption of self-employment will be removed for partners of LLPs. The salaried member legislation is being amended so that those members who are effectively in the same position as employees will be taxed as employees. Partners will have to satisfy certain criteria to continue to be treated as self-employed partners for tax and national purposes.

All Partnerships

The second strand of the new legislation focuses on partnerships with corporate members and is targeted to prevent tax motivated allocation of partnership profits and losses. Legislation will include provisions to allow excess profits to be reallocated from a non-individual partner to an individual partner and also deny certain income tax loss reliefs and capital gains for a loss allocated to an individual partner.

We are currently reviewing the possible effect of these new rules on all of our partnership clients. If you would like further information, please contact Helen Sewell on 01527 558539 or email [email protected].

Statutory Residence Tests – the new rules

Monday, January 27th, 2014

Statutory Residence Tests – the new rules

From 6 April 2013 the rules determining if someone is resident in the UK for tax purposes have been put on a statutory basis known as the Statutory Residence Test (SRT).

The SRT is used to determine an individual’s status for income tax, capital gains tax and inheritance tax but not national insurance.

The SRT consists of a series of tests which include:

  • an automatic test to determine  non- residence; this looks at the position in the previous three years and the number of days present in the current year
  • an automatic test to determine residence; this looks at where homes are based and whether there is a UK presence of more than 183 days in the current tax year.

If individuals are not deemed to be automatically resident or automatically non- resident as a result of these initial tests, further testing comes into play as follows:

  • a test to determine sufficient UK ties which is split between ‘arrivers’ and ‘leavers’ and finally
  • a day counting test, again split between ‘arrivers’ and ‘leavers’.

Sufficient UK Ties

 If neither of the automatic tests determine the status, an individual’s UK residence status then depends on how many of the specified “UK ties” apply to them and how many days they spend in the UK in the tax year in question. The greater the number of UK ties that apply to the individual, the fewer the number of days they can spend in the UK without becoming UK resident.

The UK ties include:

–          having a UK resident family (i.e. a child under 18, spouse, civil partner or person with whom the individual is living as spouse or civil partner)

–          having substantive UK employment of more than 40 days in UK in a tax year

–          having accessible UK accommodation

–          being present in the UK  for more than 91 days in either of 2 previous tax years

–          country tie (applies to leavers only) – you spent more days in the UK than any other single country in the tax year.

Which UK ties are relevant depends on whether or not the individual was UK resident for any of the three tax years before the tax year in question.

When applying these rules, each tax year must be considered separately and the tests must be done in order. Once you meet an automatic test you do not need to consider any later tests.

To discuss residence issues in more detail, please contact Julia Whelan on 01527 558539 or email [email protected].

How to avoid a fake accountant

Monday, January 20th, 2014

Accountants are all the same, right?

Wrong.

Just about anyone who deals with numbers could call themselves an accountant. They don’t have to be trained or qualified in anything or be subject to monitoring from any recognised professional body.

Being ‘chartered’ means someone is professionally qualified and includes not only accountants but also surveyors and engineers. Chartered professionals have had to train to the highest standards there are and maintain a high degree of ethics and professional conduct. We’re also obliged to undertake regular technical training to ensure we can offer the best and most timely advice to our clients.

When you first come across an ‘accountant’, the Institute of Chartered Accountants in England and Wales (ICAEW) suggests asking:

  1. Are you a qualified chartered accountant?
  2. Do you offer the services and have the experience I need?
  3. Are you authorised to do audit work?

Some of the areas we can help businesses with include:

  • Planning your business, so accessing finance, preparing a business plan and advice on self-employment and limited company status
  • Starting your business – Tax advice for owner-managers and the employer aspects too, VAT, record keeping, forms and legal issues
  • Managing your business – we can advise on cash flow, budgeting, management accounts and employing staff
  • Expansion of the business – access to different types of funding, restructuring issues, exit planning

We also offer personal tax services from tax compliance and capital gains tax to estate planning and trusts.

Curo Chartered Accountants is also part of the ICAEW’s Business Advice Service. Chartered accountant members of this service offer a free hour’s advice to businesses and help guide them in their plans.  If you are interested in speaking with a qualified chartered accountant, please either get in touch direct on [email protected] or try the Business Advice Service on www.businessadviceservice.com

We look forward to hearing from you!

Curo Chartered Accountants

January 2014.

Autumn Statement 2013 – what was missing?

Thursday, December 5th, 2013

What was missing?

After last year’s surprise announcement over the tenfold increase in the Annual Investment Allowance, open minds were the order of the day. Areas not announced in the Autumn Statement 2013 which we thought might get a mention included:

Seed Enterprise Investment Scheme – the threshold for the SEIS was predicted to increase from £150k to £500k but no announcement was made to this investment-boosting measure

Personal Allowance – this is due to increase to £10,000 from April 2014 but there was no announcement of the much championed increase to £10,500 from April 2015

Discretionary Trusts – It was predicted that the IHT nil band, currently £325,000 would be spread over multiple trusts of the same settlor, although this measure played no part in today’s statement

Stamp Duty – Suggestions that a decrease in the ‘mansion tax’ threshold from £2m to £1m did not come to light and calls to increase the threshold from £250k went unanswered

Buy to Let – We were expecting mortgage interest relief to be abolished although buy to let landlords will no doubt welcome the continued availability of this tax relief

ISAs – Millions of investors will breathe a collective sigh of relief as the feared lifetime cap on savings of £100,000 did not materialise

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Landlords in latest tax amnesty

Tuesday, September 24th, 2013

Landlords are the latest in HMRC’s tax amnesty drive. If you own and rent out a residential property, HMRC is urging you to bring your tax affairs up to date before an Inspector knocks on your door.

It’s estimated that up to 1.5m landlords are underpaying as much as £500m in tax every year in the UK and this sector is the latest to come under scrutiny from HMRC as it continues to focus on boosting its coffers by collecting underpaid taxes.

Landlords are being urged to come forward and tell HMRC about any unpaid tax or rental income and to settle any outstanding penalties or interest. Failure to approach HMRC first could mean harsher penalties, including even criminal prosecution.

HMRC is now using more sophisticated software (Connect) which is making it easier to identify individuals’ business interests.

If the latest crackdown is of relevance to you, the ‘HMRC Let Property Campaign’ hotline is 03000 514 479 and is open Monday to Friday between 9am and 5pm

If you need to bring your tax affairs up to date on any matter at all, we can help you achieve this quickly and efficiently whilst ensuring that your tax obligations are covered going forward.

Contact [email protected] or call Helen on 01527 558539.

Curo Chartered Accountants

Sep 2013.