Tax Insider

The employment-related securities legislation deals with arrangements involving shares and securities provided by reason of employment where the full value of the employment reward provided to the employee is not included in the salary package and is charged to tax.  

Jennifer Adams considers the tax implications of shares in a family company being awarded or gifted to family members of employees. 

A sole trader looking to expand their business might be weighing up the ‘pros’ and ‘cons’ of a partnership or a limited company. They are very different, with not only very different tax consequences, but functions as well. 

Chris Thorpe looks at partnerships and companies and considers which business model might be best.  

Employers complete PAYE form P45 for the leaving employee. In HMRC’s ideal world, a new employee presents their P45; the tax code, previous pay and tax and pay are then brought forward from the previous employment. P45 purpose fulfilled! 

Ian Holloway outlines limitations of the form P45 and suggests that HMRC should consign it to the legacy form dustbin.  

Under the loan relationships rules for companies, debits on loan arrangements are not deductible for corporation tax purposes in some circumstances.

Kevin Read highlights a recent case concerning the loan relationship rules for companies. 

Business-to-customer (‘B2C’) sales of goods to the EU can be dealt with in one of two ways, which are at the choice of the supplier.  

Andrew Needham looks at the Import One-Stop Shop system introduced by the EU from July 2021. 

When HM Revenue and Customs (HMRC) opens a tax return enquiry, the natural reaction of most taxpayers is to speculate about the reason why their tax return has been selected. In fact, HMRC does not need an excuse to open a tax return enquiry; a small proportion of tax returns are simply selected at random. . 

Mark McLaughlin looks at whether a taxpayer can find out if an HMRC enquiry has been opened as the result of an accusation made by a third party. 

Change in the basis of income tax assessment for self-employed individuals

When considering the tricky matter of remuneration planning, there are two things to consider; the amount of remuneration, and what form it takes. 

Chris Thorpe looks at what to watch out for with regard to paying employees and directors.

Despite the reduction in National Insurance contributions (NICs) in Spring Budget 2024, more employees are paying tax at higher rates on their earnings due to the freezing of tax thresholds. Some may find that any pay rise or bonus attracts additional tax and NICs such that the net pay increase is minimal.  

Jennifer Adams looks at some alternatives to rewarding an employee with a pay rise or a bonus. 

In the Chancellor's recent budget, he announced an increase in the VAT registration threshold on 1 April 2024 from £85,000 per annum to £90,000 per annum. The deregistration threshold has also increased from £83,000 per annum to £88,000 per annum. These thresholds have remained frozen since 1 April 2017 and are among the highest worldwide with an average of £44,000 in the EU, therefore keeping many small businesses out of the ‘VAT club’.

Andrew Needham looks at the effects of the increases in the VAT registration and deregistration thresholds. 

When HMRC talks of payrolling benefits and expenses (‘payrolling’), it refers to putting the taxable value through the payroll when the employee is paid, thereby avoiding declaring items on form P11D. The benefit is removed from the tax code, but a taxable non-payable value is processed in the payroll. 

Ian Holloway worries whether employers, agents, accountants or bookkeepers will be ready to payroll benefits and expenses from April 2026.  

The UK government supports households with children by paying a childcare amount to the parents or guardians. 

Moneeza Siddiqui looks at the system of childcare benefit and the possible tax charge associated with it. 

Mark McLaughlin looks at company purchases of own shares and warns not to become too focused on the more difficult rules for capital treatment. 

A company purchase of its own shares from a shareholder is a popular ‘exit’ strategy when an individual shareholder is retiring, or a dissenting shareholder is departing.

The concept of the limited liability partnership (LLP) was introduced a little more than 20 years ago, and is governed by the Limited Liability Partnerships Act 2000. 

Richard Curtis summarises the process and considerations when converting an ordinary partnership to a limited liability partnership. 

Attractive tax reliefs are available on contributions to a personal pension plan and to the plan itself, but the focus here is on the basic income tax implications when the saver wishes to draw money from that pension.  

Richard Curtis looks at income tax implications of withdrawals from a personal pension plan.  

It is quite common for building projects to attract more than one rate of VAT on different elements of the development. 

Andrew Needham looks at how businesses can simplify accounting using composite VAT rates when making supplies of different VAT rates, particularly in the construction industry. 

Share loss relief (SLR) applies to ‘qualifying shares’; shares to which income tax relief under the enterprise investment scheme (EIS) is ‘attributable’ are automatically qualifying shares.   

Mark McLaughlin looks at the importance of making a will, and some inheritance tax and other implications of intestacy. 

Under the construction industry scheme (CIS), contractors and deemed contractors must withhold deductions from payments made to subcontractors who do not hold gross payment status (GPS), at either: 20% (the standard rate) or 30% (if the recipient is not registered for CIS or cannot be verified). 

Kevin Read outlines the changes to the CIS rules in Finance Act 2024 and also looks at a recent tribunal case. 

Given this challenging economic environment, many employers are looking to see how they can help employees financially. Pay increases may not be an option, bearing in mind the additional tax and National Insurance contributions (NICs) implications for employers and employees.  

Jennifer Adams considers various ways employers can help employees through the cost of living crisis.  

Accounts depreciation is not allowed within tax calculations; it’s too subjective, so instead of that capital allowances generally apply for tax purposes. These allowances have been in place for ‘wear and tear’ to plant and machinery since 1878, with a factory and mills allowance allowing for economic depreciation within a trading business.    

Chris Thorpe looks at where we are with capital allowances. 

Businesses are generally obliged to pay at least the national minimum wage (NMW) to their workers. Most UK workers over compulsory school age who ordinarily work in the UK are entitled to be paid the NMW.

Mark McLaughlin looks at the national minimum wage for householders, families, and family businesses.