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Southside Accountants Wimbledon

Travel and Subsistence Expenses

Jan28

PThere are two ways to deal with Travel and Subsistence expenses for business travel:

  • An employer pays their employee for the Travel and Subsistence expense incurred, tax-free
  • The employee claims reimbursement via their tax return for any tax relief due

Claiming expenses for a business journey On a normal working day, mileage from home to office cannot be claimed.   An example of a business journey is if an employee travels from home to see a client, in this case 40 miles away. Even if they travel near to their office location, the full distance of 40 miles can be claimed…. Continue Reading

Diversity in the workplace

Mar23

Diversity in the workplaceDiversity in the workplace has long been seen as a myth the further up the management chain you go.  In recent years, more and more women are moving further up the economic chain, which is making for a new wave of businesses, the majority being women-led companies, sometimes founded out of frustration that their skills were not being utilised in the best way…. Continue Reading

Why You Should File Your Tax Return Early

Sep7

Self employment tax formHere at Southside Accountants in Wimbledon SW19, we like to think of ourselves as proactive business partners to all our clients. That is why we are sharing some ideas and tips to save you money.

 

This particular one will also leave you feeling organised and just a little smug:

 

File your tax return early – do not  wait until the end of January.… Continue Reading

Cash is King – Accountants in Wimbledon

Aug31

Cash is king Southside AccountantsHealthy cash flow is a very important aspect of running a successful business. Too many business owners focus on profit rather than liquid cash, all too often resulting in an inability to pay suppliers and staff at the end of the month.

 

Southside Accountants in Wimbledon offer cash flow advice tailored to each client. For some initial help though, take a look at the tips below and see if you can improve the flow of cash through your business. … Continue Reading

VAT on Sale of Commercial Buildings

Mar24

When purchasing or selling a commercial property one of the first things to establish is whether VAT will be applied to the price of the property. Land and buildings are generally exempt from VAT, but ‘new‘ commercial property (i.e. less than three years old) will have VAT applied. Otherwise VAT should only be charged on the sale of a commercial property where the seller has previously elected to apply VAT to the property. This election is known as the ‘option to tax‘. There are circumstances where the option to tax may be disapplied by the seller, such as where the purchaser is going to use the building solely for charitable purposes or the building will be converted into residential use. If there is any question that VAT should not be applied to the sale, the seller must ask the purchaser for written confirmation of the intended use of the building. When the purchaser plans to convert the building to residential use it must provide the seller with a VAT certificate (form VAT1614D) to confirm their intentions for the building. In other circumstances a written instruction from the purchaser should be sufficient. Where VAT is applied to the price of the building, the stamp duty land tax (SDLT) charge will inevitably be higher, as SDLT is charged on the gross consideration paid, including the VAT charged. If you are planning to purchase a commercial property, or sell one, ask us to check the VAT implications before the price is agreed.

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If you would like any further information, please do not hesitate to contact Southside Accountants Wimbledon & London.

Child Benefit if Your Child is 16 or Over

Mar19

If you have a child aged 16, check whether you are still receiving all the child benefit and child tax credits you expect to.

Child benefit and child tax credit both stop automatically on 31st August on or after the child’s 16th birthday, but where the child is in approved education or training, the parent who claims the child benefit is entitled to extend that claim until the child reaches their 20th birthday. ‘Approved education’ means at least 12 hours of supervised study per week, and the training can include an apprenticeship.

From September 2013 children who live in England (the rules are different in Wales, Northern Ireland and Scotland) are required by law to remain in education or training until the end of the academic year in which they turn 17. So there are a lot of families out there with 16 years olds who are in approved education, but who have lost their child benefit.

If you are one of those parents, and you want to continue to receive the child benefit, you need to contact the Child Benefit office at HMRC, to inform them that your child is still in approved education or training.

Similar rules apply for child tax credit. In that case the claimant must contact the Tax Credit office.

Although child benefit and child tax credit are both administered by HMRC, you need to inform them twice, as one section of HMRC cannot pass the relevant information to another part!

You may prefer not to receive the child benefit if you or your partner/spouse earns £50,000 or more, because in that case all or part of the child benefit paid to your family is clawed-back through the operation of the high income child benefit charge (HICBC). HMRC has written to some of the parents who may be due to pay the HICBC, but not all, as they cannot correctly identify every person who may be liable to pay the charge.

If you are the highest earner in a family that has claimed child benefit since 7 January 2013, and your total income is £50,000 or more, you need to declare that child benefit on your tax return form. If you don’t normally complete a self-assessment tax return form, you need to ask HMRC to set you up on the self-assessment tax return system. We can help you with that, but don’t delay, as if you fail to complete the tax return form on time there will be automatic penalties to pay.

 

Disclaimer

If you would like any further information, please do not hesitate to contact Southside Accountants Wimbledon & London.

Contractor Loan Schemes

Mar17

Have you taken part in a contractor loan scheme? This is a tax saving scheme which was widely sold to workers in personal service industries, such as IT contractors. To use the scheme the individual would sign an employment contract with an offshore employer, but work for customers in the UK. The individual would often receive a large proportion of their fee for that work as a loan from the offshore employer. They were told the loan was not taxable, except for a small benefit in kind charge on the unpaid interest on the loan, but that’s not what the Taxman thinks. The Taxman has publicly announced that he is opening tax enquires into individuals’ tax returns for periods during which they have used such loan schemes. In some cases the individual will receive a tax bill for the years 2008/09 to 2010/11, to collect the tax they think was avoided. There will be penalties and interest to pay on any tax found to be avoided.
If you would like any further information, please do not hesitate to contact Southside Accountants Wimbledon & London.

 

New Employee Shareholder Status

Mar12

The Government thinks that employees who own shares in their employing company feel more involved in that business and hence are happy and loyal employees. So it has introduced a new share scheme from 1st September 2013 which allows you, as an employer, to give your employees tax-free shares in your company, but in return the employees must give up some key employment rights. How does this work? The employee must sign a fresh employment contract called an ’employee shareholder’ contract, then they must be issued with shares worth at least £2,000 (and up to £50,000) in their employing company. When the individual sells those shares any gain arising on that disposal is completely exempt from capital gains tax. However, any gain up to £10,900 (for 2013/14) would be tax free anyway. Normally where shares are awarded to an employee their value is treated as taxable income for that employee, unless the shares are issued under an approved share scheme. In this case the first £2,000 worth of shares awarded will be free of income tax and NIC, but not any further shares. The downside is the employee must surrender all of following rights to take up employee shareholder status and receive the free shares:

  • compensation for unfair dismissal, apart from when this is automatically unfair or relates to anti-discrimination law;
  • request for time off for studying or training;
  • request for flexible working; and
  • statutory redundancy pay.

Also the employee must give 16 weeks’ notice (instead of 8 weeks) when returning from maternity or adoption leave. This sounds like an attractive deal for an entrepreneur who doesn’t care about his own employment rights. However, any person who holds 25% or more of the company (alone or with associates) can’t take up employee shareholder status and enjoy the tax-free shares. So this share scheme can only be used to give shares to employees who don’t already have a significant share in the company. Before implementing this scheme you should take employment law advice, and specialist advice on how to value your company’s shares. The employees should also take independent advice before signing away their employment rights, but you, as their employer, can pay for that advice with no tax consequences.

If you would like any further information, please do not hesitate to contact Southside Accountants Wimbledon & London.

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