Update on abolishment of tax relief on Travel & Subsistence via Employment Intermediaries

HMRC have now stopped accepting comments to the proposed removal of home to work travel and subsistence relief where an individual is engaged through a PSC or Umbrella Company and under Supervision, Direction or Control (SDC). Contracts which fall within IR35 will no longer be eligible to apply for tax relief for travel and subsistence on their ordinary commute.

Under proposed rules, HMRC will look at the extent to which SDC applies and whether in fact they should be on the payroll.

In our latest blog, we explore what HMRC means by 'Supervision,  Direction and Control'...

Supervision

Is there someone overseeing their work? And not only that they are doing it, but this is done to a certain standard?

Direction

Is someone making sure the work is done a certain way? Do they offer instruction, advice and guidance on how it should be done?

Control

Does someone dictate what work is done and how to go about doing it? Does someone have the power to move you on to a different task?

 

Any changes will be confirmed in the Autumn statement, and will come into effect from April 2016. If you are unsure whether you will be affected by these changes, we would recommend that you seek professional advice sooner rather than later. 

We would also recommend that you have PAYE investigation protection in place should HMRC open an enquiry into your tax and National Insurance affairs which will cover you for professional fees incurred whilst bringing the enquiry to a closure.

We can offer this from as little as a £5 per month offering you peace of mind. 

 

if you are unsure as to what the proposed changes will mean for you, please contact Brian or Caroline for further information on 0845 303 1144 or email info@coopercurtis.co.uk 

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Annual Investment Allowance - What's in it for your business?

The Government announced in the Budget that the AIA or 'Annual Investment Allowance' will be falling to £200,000 as of 1 January 2016 from a generous half a million in the current year.

We view this as a positive announcement for businesses and believe it will put a stop to 'panic buying' businesses looking to make use of the allowance before it's taken away. 

Any plant and machinery expenditure covered by 'AIA' gives a full deduction against profits whether you are Self Employed, a Limited company or Partnership. Anything after this, will be claimed under capital allowances as a yearly deduction (currently 18 or 8%).  

The 'AIA' Allowance includes business expenditure such as; 

  • Fire Alarm and CCTV units
  • Computer Hardware
  • Vans used in business (Not cars) 
  • Alterations to a building to install plant & machinery
  • Electric shutters (not manually operated)
  • Moveable flooring & walls
  • Fitted Kitchens & Bathroom Suites
  • Integral Features - Lifts, Stairs, Air conditioning and air cooling systems
  • Hot and cold water systems but not toilet and kitchen facilities
  • Electric systems including lighting systems

Examples of non-qualifying expenditure for 'AIA' include;

  • Cars
  • Anything on lease
  • Buildings including doors, doors, manual shutters, walls & floors
  • Mains water & gas

This is not an exhaustive list. Please contact us for a more detailed list. 

For a majority of businesses, it is rare that large amounts are spent on plant and machinery, but nevertheless being aware of the type of expenditure can be offset against profits may influence important business decisions.

We would always recommend you seek professional advice when considering timing of business purchases considered a large amount. 

The 'First Year Allowance' is also available in addition to the 'AIA' for some energy efficient expenditure. 

For further information on purchases for your businesses, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk to see how we can help you raise your game. 

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

 

 

Cooper Curtis Summer Budget Reflection and Highlights

There were some significant announcements following Wednesday's Summer Budget from the new non-coalition Government. It was a mixed week for companies, with the corporation tax rate falling to 18% by 2020 and a freeze on the Annual Investment Allowance at £200,000 encouraging business spending.

One of the biggest reforms announced in the budget will affect family companies paying themselves and spouses dividends up to the basic rate band. From April 2016, this may no longer be as tax advantageous with the abolishment of the notional tax credit and a dividend tax free allowance of only £5,000. We will wait to see how this will work once the draft legislation is released.

Buy to let landlords with large property portfolios will be stung with the restriction of higher rate tax relief on interest paid on mortgages. However, rent a room relief has been encouraged with a tax free amount rising from £4,250 to £7,500 in April 2016.

As expected, for high earners with income over £150,000, pension tax relief will be restricted and the Chancellor's war on Non-Domiciles means from 2017 they can no longer escape Inheritance Tax on UK held properties. 

Take a moment to read our full Budget Summary here

 

If you are concerned about anything covered in our Budget Summary or would like any further information, please contact Brian or Caroline on 0845 303 1144 or email info@coopercurtis.co.uk. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

Do you run a Recruitment Business and are looking to employ an apprentice?

Are you a recruitment business owner looking to take on more employees? Have you considered taking on an apprentice? You could be eligible for a grant of up to £1,500 from the government under the employer apprenticeship grant scheme and be paid up to 5 grants in total per apprentice.

What's more, the grant income is offset as your wages expense therefore you don't pay any tax on this. To see if you are eligible for the grant, fill out this online form but hurry as this only subject to availability until December 2015!

The grant is available for 16 to 24 year olds and you must pay your apprentice at least the minimum wage and they work for at least 16 hours per week. Apprentices must be offered the same conditions as other employees such as sick pay and benefit and be asked to sign an apprenticeship agreement.

Employer National Insurance break

If your apprentice happens to be between the ages of 16 and 21, you no longer pay secondary employer national insurance contributions on their earnings up to the upper earnings level (£42,380 for 2015/16). This came into effect from April this year.  

 

Due to our industry knowledge, Cooper Curtis help recruitment businesses with their accounting and tax requirements as well as providing ongoing business support because we understand the challenges you face.

For more information on how we can help you raise your game, visit our website or alternatively call 0845 303 1144 or email  info@coopercurtis.co.uk to arrange a free meeting.

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

Cooper Curtis Spring Budget Highlights

Read our Spring Budget Summary here

Cooper Curtis are Accountants based in the North West and Midlands. We offer you a full range of Accountancy and Tax services as well as other Added Value services such as Tax planning and Business Advisory.

For a free consultation to discuss how we can help you, call Brian or Caroline on 0845 303 1144 or email info@coopercurtis.co.uk 

 

Tax Advice for Employing a Spouse

At first, the idea of giving a role in your organization to your husband or wife might not seem particularly appealing. Working in such close proximity to your partner, could put a strain on your relationship.

When you begin to take a deeper look into the consequences of such an arrangement however, perhaps it isn’t the worst idea after-all…

Clearly, you know the person well, and therefore all the concerns about trust (should) go out the window – not to mention the, sometimes considerable, costs of a long, drawn-out recruitment process.

From a financial point-of-view, there are certain benefits that you can achieve through employing a spouse. Let’s take a look at some of them now;

 

Use up your Tax Allowance!

 

Almost everyone living in the UK is entitled to an Income Tax Allowance; “the amount of income you can receive each year, without having to pay tax on it” (Source: HMRC). For the majority of the working public, this figure currently stands at £10,000.

By employing a spouse, you can make sure that your partner is using up all of this non-taxable income. If they do a job for free, pay them! After-all, it’s money going into your household – that isn’t getting taxed. Just think; how much would it cost to employ a non-family member to do the same job?
 
Higher Rate Business – Split your profits

 On a similar note; directors of a business which pays a higher rate of tax can also benefit from taking on a spouse, by making them “more than just an employee.”

If your spouse were to become a shareholder in the company, for example, “you can pay yourselves a mixture of salary/bonuses, benefits, and dividends, thereby reducing your overall tax bills quite considerably” (Source: Tax Insider). Not only this, but once more this in more money going into your household.

However, employing a spouse is not as easy as this. Before doing so, you must make sure you are aware of all your duties with regards to the law.
 
Don’t get caught out!

It is important that your spouse is treated like a “normal” employee. Just because you are in a personal relationship with them, it doesn’t mean you can exploit them for your own gain.

The National Minimum Wage rules therefore still apply, and your spouse must actually be paid what they are owed (and are thus affordable to you). Just like with a normal employee, if your spouse is not involved in any other paid employment, a P46 form must be filled out.

To avoid any unwelcome visits/checks from HMRC; make sure that your spouse is employed to do a “proper” job within your organization. If your 59 year old wife is employed to operate heavy machinery, for example, it may rouse unwanted suspicion from the tax man.
 
Employing a spouse is a good idea

 All in all, employing a spouse can often be a worthwhile venture for your business. There are many tax benefits (some listed above), that can be realised from doing so.

However, it is essential that if you are thinking about taking on your husband/wife, you do things by-the-book. One quick tip; if you pay them in cash, you may struggle to justify your activities should HMRC come knocking.

If you would like to find out more information about employing a spouse – or employment in general – check out the PAYE + Payroll section of our website.

Alternatively, get in touch with us at Cooper Curtis today on 01926 333 243 and we’d be happy to help…

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.