Tax Insider Monthly Newsletter

It is very common for employees to receive non-cash remuneration in addition to their salary. In a more competitive market, many employers will add ‘perks’ to an employee’s package (e.g., a company car, health insurance, gym membership, etc.). A pension is now a compulsory addition to most jobs, but none of these are taxed in quite the same way as the cash salary. 

Chris Thorpe looks at where we are with benefits-in-kind, particularly in relation to the salary sacrifice rules.

In most cases, businesses dealing in second-hand goods buy the goods or take them as trade-ins from private individuals and then sell them on, using the second-hand margin scheme. Only VAT on the profit margin can be accounted for if the second-hand margin scheme is used. If they use global accounting, even greater VAT savings can be achieved.

Andrew Needham looks at the VAT advantages of selling second-hand goods as an agent.

According to employment law, there are three kinds of workforce. The first is employed, the second is self-employed, and the third is ‘hybrid self-employed’ (i.e. self-employed but working as a part of a business carried on by someone else). 

Meg Saksida examines the outcome of the Uber taxi case and what has happened because of it.

"Retirement for a family company member can be an emotive event. Someone who has spent much of their working life building up that business now has to hand over the reins to another.

Jennifer Adams considers the main reasons why some shareholders of a family-owned company may consider a purchase of its shares and the tax implications of doing so.

Capital gains tax (CGT) and business asset disposal relief (BADR) may apply to a disposal of company shares provided that...

Ken Moody analyses what may be regarded as ‘substantial’ non-trading activity affecting a company’s status for various capital gains tax relief purposes in the light of recent case law and its effect of non-statutory clearance applications. 

On incorporation, a taxpayer will have a choice between the use of either gift relief (TCGA 1992, s 165), incorporation relief (TCGA 1992, s 162), or simply paying the capital gains tax (CGT) at the time of disposal.

Reshma Johar considers what options a sole trader or partner of a partnership have when their unincorporated business is transferred into a company.

Bank or building society accounts are often held in the joint names of two or more family members. As a general rule, the person liable for tax on the interest credited is the person receiving or entitled to the interest.

Mark McLaughlin outlines the income tax treatment of joint accounts between family members.

Another tax year end of 5 April comes and goes, and thoughts often turn to tax. Here is a selection of potential income tax savings ideas to consider, based on personal circumstances.

Meg Saksida highlights a selection of potential income tax savings to consider.

Anyone starting a new business needs to decide which legal structure is best suited to the particular type of business being created, taking into consideration all the issues involved for each type, including the potential liability for any future business debts and the tax implications of their chosen structure.

Jennifer Adams considers the advantages and disadvantages of incorporation.

Company cars are a nice perk to have with a job, but they are expensive. The income tax they attract for the availability of private use is calculated using a percentage based on the carbon dioxide (CO2) emissions and then applied to the car’s list price. Those percentages go up every year and diesel cars attract an extra special surcharge! Fuel is also taxed on the same percentages and applied to a fixed rate (i.e. £24,600 in 2021/22). Only cars with zero CO2 emissions and the most efficient hybrids attract zero tax. 

Chris Thorpe considers what might happen when giving employees a company van rather than a car.

The domestic reverse charge is a major change to the way VAT is collected in the building and construction industry.

Andrew Needham looks at the introduction of the new domestic reverse charge for the construction industry.

Introduced in April 2000, the intermediaries (or ‘IR35’) rules refer to two sets of tax legislation designed to combat a situation whereby services performed via a personal services company (PSC) would be classified as standard employment if the intermediary company was removed from the equation. If so, the contractor is liable to pay PAYE and National Insurance contributions (NICs) as if they were an employee.

Iain Rankin outlines the upcoming changes to the IR35 legislation and discusses what it means for those temporary workers in the private sector.

The chargeable gain arising from the gift (or transfer at undervalue) of an asset is reduced by the amount of held-over gain (which could wipe out either part or the entire gain). The recipient (or ‘donee’) will acquire the transferred asset with the held-over gain set against the base cost. 

Reshma Johar points out when emigration can cause a nasty surprise for business asset hold-over relief purposes, which could leave a person out of pocket when leaving the UK.

Business asset disposal relief (BADR) offers a capital gains tax (CGT) rate of 10% on net chargeable gains of up to £1 million. A claim for BADR is available on a material disposal of business assets, such as an individual’s company shares, where certain conditions are satisfied.

Mark McLaughlin looks at the ‘substantial’ test for capital gains tax business asset disposal relief purposes. 

Employing family members i.e. putting their wages through the books and claiming the tax deduction is a popular strategy for the vast majority of family businesses. This is  perfectly acceptable provided they are working as genuine employees, such that the expense is wholly and exclusively for business purposes.

Chris Thorpe looks at issues of involving members of the family in the business and the potential minefields.

For income tax purposes a partnership has no legal existence distinct from the partners themselves (this is not the case in Scotland where a partnership is a legal person) and as such each partner is taxed on their share of profit as an individual. The effect of this provision ensures that an individual is treated as commencing their business when they start to trade, even if that was before they became a member of the partnership. 

Jennifer Adams looks at some tax tips and traps that may arise when being a member of a business partnership. 

There are a large number of different loyalty schemes designed to increase turnover and maintain customer loyalty. They do this by linking purchases from a business to a reward, or reduction in price on subsequent purchases, by the issue of points. These schemes are commonly used not only by retail outlets, but also by manufacturers and other suppliers to encourage continued customer loyalty. 

Andrew Needham looks at the VAT consequences of customer loyalty schemes.

The government has several beneficial arrangements to help individuals avoid financial difficulty due to COVID-19. However, it is impossible to aid taxpayers who are not eligible for help. To be eligible for the SEISS grant, HMRC looks at whether the individual had taxable profits in the past, and then looks at the associated Income Tax and National Insurance Contributions (NICs) paid on it. They do this by looking at the taxpayer’s previous self-assessment tax returns, commencing with the 2018/19 tax year. 

Meg Saksida considers the traps to avoid.

Travel to and from temporary workplaces is allowable for tax purposes for an employee. In the last edition, I discussed the law in this area. Now let’s look at some recent cases on the subject.

Kevin Read reviews recent cases on temporary workplaces.

This article follows on from my previous one (‘Relief is at hand’), which reviewed the circumstances when a claim can be made to defer a capital gains tax (CGT) liability from arising (under TCGA 1992, s 165), including a handy checklist. 

Reshma Johar looks at how holdover relief and potential restrictions can apply.

Many individuals who are concerned about inheritance tax (IHT) being payable on their death estates will undertake IHT planning in their lifetimes. 

Mark McLaughlin looks at pre-owned assets tax and some possible let-outs from a charge.