Welcome…

Speaking to many of you this week the result of the referendum has been a hot topic!

Whilst the details or potential impact of Brexit are still unclear and any impact will be a minimum of two years away, you can rest assured our expert team is poised to make sure you make the best of any future changes. In the meantime here’s our tax tips and news for this month.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

Please contact us for advice on your own specific circumstances.

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Trivial benefits

Employers will be aware that various changes have been made to the reporting requirements for employee benefits and expenses from April 2016, which mean that some employers will no longer have to complete annual return forms P11D. The three main changes are:

  • The dispensations regime has been replaced with an expenses exemption – broadly, where an employee would have been entitled to tax relief in full for a benefit or expense, the employer does not need to deduct tax or NICs, and they do not need to report it to HMRC

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HMRC guidance on senior accounting officers

HMRC have published Brief 12(2016), which contains information on changes to their senior accounting officer guidance (SAOG). The Brief aims to clarify HMRC practice and reflects administrative changes to their operational procedures. These include:

  • A change of practice allowing submission of certificates by electronic means in addition to the currently accepted methods;
  • Extensive updates to reflect organisational change within HMRC and the role of Wealthy and Mid-Size Business Compliance (WMBC);

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Help-to-save consultation launched

HMRC have launched a consultation on the government’s proposed ‘Help-to-Save’ scheme, which is designed to encourage people on low incomes to build up their savings.

Broadly, the scheme will be open to some 3.5 million adults in receipt of universal credit with minimum weekly household earnings equivalent to 16 hours at the National Living Wage, or those in receipt of working tax credit. It will work by providing a 50% government bonus on up to £50 of monthly savings into a Help-to-Save account. The bonus will be paid after two years with an option to save for a further two years, meaning that people can save up to £2,400 and benefit from government bonuses worth up to £1,200. Savers will be able to use the funds in any way they wish. HMRC say that Help-to-Save accounts will be available ‘no later than April 2018’.

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FRS 102 guidance on directors’ loans revised

HMRC have recently updated their online toolkit on directors’ loan accounts to help tax advisers and agents preparing 2015/16 company tax returns. The update reflects the changes to reporting requirements under UK GAAP, as taxing debt will now be largely driven by FRS 102 requirements for financial instruments.

If an entity makes loans to/from directors/employees where there is no explicit interest rate or the interest rate charged is not at a market rate, then the prescribed accounting treatment will depend on which accounting framework the entity has adopted.

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July 2016 Questions and Answers

Q1. My mother died last year and left my brother and me a commercial business unit. Probate is nearly complete now. If we sell the property in the future, what are the capital gains tax implications on the sale?
Answer

Q2. I have recently registered for VAT. I am not very good when it comes to administration and I have heard that the flat rate scheme might help me. How does the scheme work? Answer

Q3. I have a part time job and I earn about £8,000 a year. As my earnings are less than the tax-free personal allowance, can I transfer the unused amount to my husband?
Answer

July 2016 Key Tax Dates

5 – Deadline for PAYE settlement agreement for 2015/16

6 – Deadline for 2015/16 forms P11Db, P11D and P9D to be submitted and copies of P11D and P9D to be issued to relevant employees

Deadline for employers to report share incentives for 2015/16 – form 42

14 – Return and Payment of CT61 tax due for quarter to 30 June 2016

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/7/2016 or quarter 1 of 2016/17 for small employers

Class 1A NIC due in respect of the tax year 2015/16

31 – Second self assessment payment on account due for 2015/16

Second 5% penalty surcharge on any 2014/15 outstanding tax due on 31 January 2016 still unpaid

Deadline for Tax Credits to finalise claims for 2015/16 and renew claims for 2016/17

Half yearly Class 2 NIC payment due

Penalty of 5% of tax due or £300, whichever is greater for 2014/15 personal tax returns still not filed.

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