Tax Insider Monthly Newsletter

HMRC has increased the amount of the existing flat rate tax deduction, which is available for employees who incur additional household costs because they work at home under homeworking arrangements.   

Sarah Laing looks at expenses that may be claimed by employees required to work from home, including a new temporary exemption due to the coronavirus (Covid-19) pandemic.

Whether it is a result of the Covid-19 pandemic or planned legislative changes, there have been a number of changes to taxing the self-employed (SE) since 6 April 2020. 

Meg Saksida reviews the most important changes that affect the self-employed in 2020.

There are two ways retailers can finance interest-free credit; self-finance (i.e. where the retailer simply collects payment over an agreed period of time) and finance provided by a third party finance house. 

Andrew Needham looks at the VAT implication of selling goods on interest-free credit.

A company with a large amount of cash on the balance sheet is obviously a ‘good thing’ for the company’s owners. The only problem is how to get it out, and in a tax-efficient manner?

Chris Thorpe explores some options available to owners who wish to extract profits out of their companies.

The coronavirus lockdown has caused serious financial distress for many businesses. Unfortunately, some of those businesses that closed will never open again. 

Jennifer Adams looks at the effect the coronavirus is having on some closed businesses. 

Some taxpayers seem to consider that HM Revenue and Customs (HMRC) does whatever it wants. Of course, that is not the case. For example, there are certain conditions and exceptions about when HMRC can request information and documents from taxpayers..  

Mark McLaughlin looks at whether proposed changes to HMRC’s Charter will make it better or worse for taxpayers.

It is common for director shareholders of owner-managed business to build up an overdrawn loan account during an accounting period, with a view to subsequently either clearing the loan by a dividend or getting the company to write off (waive) the loan. 

Kevin Read explains the different treatment for income tax and National Insurance contributions purposes when an overdrawn directors’ loan account is written off.

A proposal as part of the Finance Bill 2020 is to amend the capital gains tax (CGT) principal private residence (PPR) relief legislation to allow for a ‘back-dating’ effect. This is  where one spouse transfers an interest in a dwelling-house to the other spouse (or if such an interest passes on the death of a spouse) but only if at the time of transfer the dwelling-house is their only or main residence. 

Malcolm Finney looks at the often misunderstood and overlooked impact of inter-spouse  residence transfers. 

The employment allowance (EA) is a valuable relief, which currently benefits more than a million smaller businesses in the UK. Broadly, the relief works by allowing an employer to offset up to a pre-set annual threshold against their employer National Insurance contributions (NICs) liabilities. 

 Sarah Laing highlights three changes to the employment allowance (EA) of which employers need to be aware. 

As a business that deals with the public (e.g. a plumber or hairdresser) approaches the VAT registration threshold they realise that when they register for VAT they will either take a 20% pay cut in order to remain competitive, or increase their prices by 20% and lose customers.  

Andrew Needham looks at whether business splitting is a good idea and considers what needs to be done to make it effective. 

Prior to the budget in March 2020, the rumour mill about the future of entrepreneurs’ relief (ER) for capital gains tax (CGT) was red hot; talk of restrictions and even abolition in order to fulfil the government’s election spending promises.  

Chris Thorpe takes a look at the relief formerly known as entrepreneurs’ relief following the budget in March 2020.  

Had George Osborne got to complete his reform of pensions, there would probably no longer be any higher rate tax relief on pension contributions. However, the restrictions he introduced on top rate tax relief (i.e. via a tapering of the normal £40,000 annual allowance) are still with us and, in the context of defined benefit schemes for doctors, they received a lot of bad publicity in the months before the Budget. 

 Kevin Read discusses the recent changes to the tapering of the pension annual allowance and reminds readers of the importance of ‘scheme pays’ elections. 

HMRC has already announced the deferral of quarterly VAT payments due before 30 June 2020 until 31 March 2021, and a delay to self-assessment payments on account due by 31 July 2020 to 31 January 2021.  

Iain Rankin looks at how businesses and individuals may make use of ‘time to pay’ arrangements to defer payment of tax bills, in light of the current coronavirus crisis. 

It is said that inheritance tax (IHT) is the UK’s most hated tax. Nevertheless, the transferable nil rate band (TNRB) is a welcome facility for married couples or civil partners (references to spouses in this article include civil partners). 

Mark McLaughlin points out that inheritance tax nil rate bands can sometimes be multiplied - or lost inadvertently. 

It is said that inheritance tax (IHT) is the UK’s most hated tax. Nevertheless, the transferable nil rate band (TNRB) is a welcome facility for married couples or civil partners (references to spouses in this article include civil partners). Mark McLaughlin points out that inheritance tax nil rate bands can sometimes be multiplied - or lost inadvertently.

According to recent HMRC figures, some 163,000 people have already signed up for a ‘Help-to-Save’ account, depositing over £53 million to date. However, many more people may be missing out on a tax-free cash bonus currently on offer from the government. Sarah Laing examines a tax-efficient government scheme designed to encourage those on lower incomes to save.

Many small and medium sized retail businesses trade online through trading platforms such as Amazon and e-Bay. There are many advantages to this, as the set-up and maintenance costs of the online platform are not borne by the trader.  Andrew Needham highlights what to look out for when selling goods online.

It has been nearly 13 years since Jones v Garnett [2007] UKHL 35 (commonly known as the ‘Arctic Systems’ case) emerged from the House of Lords with defeat for HMRC. Chris Thorpe looks at where we are with the ‘settlements’ legislation 13 years after the ‘Arctic Systems’ case.

Advances in technology have affected our lives in many ways. We can now shop online, manage our money from our mobile devices, and connect to a plethora of services 24/7. Therefore, it should come as no surprise that HMRC is heading the same way by Making Tax Digital (MTD). Lynne Bell looks at the advantages and disadvantages of Making Tax Digital.

If you are a landlord situated either in the UK or overseas and let a residential property in the UK, you are liable to UK income tax on the profits generated from this activity. Meg Saksida outlines the advantages and details of an ongoing HMRC campaign.

The landlord of a furnished holiday letting (FHL) that satisfies certain conditions can potentially benefit from ‘special’ tax treatment and certain tax reliefs, which landlords of other properties cannot access. Mark McLaughlin highlights a potential advantage of furnished holiday lettings for capital gains tax purposes.