A 3% surcharge on stamp duty when some buy-to-let properties and second homes are bought will be levied from April 2016.
This means it will add £5,520 of tax to be paid when buying the average £184,000 buy-to-let property. The new charge would have hit 160,000 buyers if it had applied last year.
George Osborne said the new surcharge would raise £1bn extra for the Treasury by 2021.
But, commercial property investors, with more than 15 properties, are expected to be exempt from the new charges.
Stamp Duty on Selling Shares is 0.5% so why aren’t more investors buying property into companies and then selling the shares in the company!
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Slow payment is major issue for small business.
Research shows that British SMEs are having to wait an average of 41 days longer than their original agreed payment terms before invoices are paid. (source: BACS)
To get paid faster why not include a pay now button on your invoice
As much as £300 million worth of gift vouchers bought in 2014 were unspent according to research by the UK Gift Card and Voucher Association (UKGCVA).
Every year 6% of vouchers bought by consumers go unused as they lay forgotten in people’s wallets and drawers.
In 2013 some £2.5 billion worth of gift cards and vouchers were sold in UK retail stores as gifts and £2.25 billion were purchased by businesses as staff or customer rewards. Meanwhile a UKGCVA report shows that in the third quarter of 2014, the gift card and voucher industry grew by 10%. The UK industry as a whole is now worth £5 billion.
Modern technology may provide the answer as digital vouchers, such as those that can be loaded on to a mobile phone, are becoming more popular according to the UKGCVA, and may be more likely to be used because the recipient does not have to remember to take a physical piece of plastic or paper with them to the shops.
Unfortunately, vouchers are a taxable benefit in kind…
Vouchers that can be exchanged for cash
These vouchers count as earnings, regardless of who gives the voucher to your employee, so you’ll need to:
- add their value to the employee’s other earnings
- deduct and pay PAYE tax and NICs through your payroll
- report any NICs for the pay period when the last payment is made in the same period
Vouchers exchangeable for goods and services only (non-cash vouchers)
Add the cost of the vouchers to the employee’s earnings – unless they’re luncheon or childcare vouchers. For these, use the voucher’s face value.
Non-cash vouchers that are exempt from NICs
These include vouchers for:
- travel between home and work on a work bus
- social functions, such as a Christmas party, up to £150 per head
- childcare vouchers up to a certain amount
Click to access CWG2__2015_.pdf
Generally, there is no VAT on purchased gift vouchers as they are treated as cash equivalents, its only when they are used to purchase items that VAT needs to be accounted for.
But some vouchers can be subject to VAT as explained in this UKGVCA fact sheet
Many employees incur expenses doing their job that they don’t reclaim from their employer. You can reclaim these costs against tax going back up to 4 years.
Here are a few suggestions
- Flat Rate Expenses by Occupation – HMRC have a list EIM32712 for example Healthcare staff in the National Health Service, private hospitals and nursing homes – Uniformed ancillary staff: maintenance workers, grounds staff, drivers, parking attendants and security guards, receptionists and other uniformed staff – get a flat rate of £60 per year – this link explains how it works – Money Saving Expert
- Mileage in your own vehicle on business – the approved rates are list below if your employer pays you mileage already deduct the rate from the amounts below and claim the difference
Tax: rates per business mile
|Type of vehicle
||First 10,000 miles
||Above 10,000 miles
|Cars and vans
||45p (40p before 2011 to 2012)
3. Professional Subscriptions – if you personally pay for a professional subscription that you need for your work you can claim the cost against tax – here is a list of HMRC approved professional organisations
4. Traveling Costs – you may have business travel costs for hotels and meals that haven’t been reimbursed and these costs can be reclaimed against your tax
5. Working from Home – maximum of £4 per week
6. Uniform not covered by a Flat Rate – read this blog
7. Training – where training was an intrinsic contractual duty of the employment (see also EIM32535 & EIM32546) and where any personal benefit, unlike most CPE/CPD courses, would be incidental and not therefore give rise to a dual purpose of the expenditure.
8. Other costs – where the cost is wholly and exclusively for business
If you are an employee use this form to tell us about employment expenses you have had to pay during the year for which tax relief is due.
Only fill in this form if your allowable expenses are less than £2,500 for the year.
If your claim is more than £2,500 you will need to fill in a Self Assessment tax return. Please contact the Self Assessment Helpline on 0300 200 3310 or register at
You must fill in a separate P87 for each employment for which you are claiming.
If you have not paid any tax during the year no refund will be due.
This has to be complete madness! but its absolutely correct under new accounting rules – FRS102.
Take a simple example of a £5,000 interest-free loan repayable in three years’ time:
if the market rate for such a loan was, say, 7% then the present value of the loan would be £4,081 (£5,000 x 1/(1.07)3).
Unfortunately, FRS 102 does not contain any requirements about how the above financing shortfall of £919 should be accounted for on initial recognition. It is therefore necessary to consider the particular facts in order to determine the accounting treatment.
In simple terms, the financing shortfall of £919 is either interest income or an interest expense when the loan is made. That then reverses as interest receivable or payable as the discounting unwinds.
– See more at: http://www.icaew.com/en/members/practice-resources/icaew-practice-support-services/practicewire/news/frs-102-and-interest-free-loans#sthash.tm8iReHG.dpuf
This is crazy, because we all know the value of the loan is £5,000, it’s not £4,081!
It will cause problems particularly with…
- Parent – Subsidiary Loans
- Subsidiary to Subsidiary Loans
- Loans with Directors and Shareholders
There are some special rules for Public benefit entities.
I wonder whether it’s easier to simply always charge interest, rather than get into complicated discounting rules!
The deadline of the 31st January 2016 is fast approaching for filing 2014/15 Self Assessments online, thousands will probably file late and 50% will leave filing until January.
Here are 10 of the most common problems, issues and errors that come up.
- Not leaving enough time to register for Self Assessment – It can take 20 working days (this is usually 4 weeks) to complete the registration process, then for online returns, allow 10 working days (21 if you’re abroad) to register because HM Revenue and Customs (HMRC) posts you an activation code.
- Lost Login details – Your account will be locked for 2 hours if you enter the wrong user ID or password 3 times.If you’ve lost both your user ID and password:
- Leaving it too late to get help – If you need help from an accountant don’t leave it too late as they will need to carryout AML and other checks before they can file your return, they will also need your UTR
- Failing to complete all the parts of the return – For example leaving out PAYE information
- Failing to press ‘submit’ – you would be surprised how many people complete the return and then stop without submitting or leave submission and then forget to do it
- Missing out details of your Pension Provider
- Failing to check the calculation – Most people do a rough calculation of what they owe but fail to check the HMRC calculation only to find out they have made a mistake
- Using invalid characters such as # ‘ ” in boxes where these are not allowed
- Not paying the tax they owe by 31st January
- Failing to explain where estimates and provisional sums have been used
If you have a Business and you want too borrow money, you will probably be asked to give a Personal or Directors Guarantee.
Most Directors don’t want to give guarantees as it makes them liable rather than their business and the purpose of having a limited company was to limit their personal liability.
So it’s a common dilemma.
What can you do to reduce your risk?
- Would you be prepared to pay a higher rate of interest? there are are lenders who for an increased rate will agree not to ask for PG’s or DG’s
- If you aren’t prepared to give a guarantee you should make this clear upfront with the potential lender, it will save time and money.
- Limit the terms of the Guarantee – don’t let the guarantee be unlimited or unconditional
- Agree terms for relief – for example when a % of the debt has been repaid
- Decrease the Guarantee if the business achieves specific goals, for example a target net worth
- Set rules for when the Guarantee can be called on for example when a set number of repayments are missed
- Avoid ‘Joint ans Several’ Guarantees as not all business owners may have equal shares
- Avoid co-signing by Spouses
- Avoid using your main residence in the guarantee
- Consider whether Personal Guarantee Insurance could be obtained and used
What are the benefits of Personal Guarantee Insurance in more detail?
It allows directors to balance their risk evenly, so that no one director is taking on all the uncertainty of guarantees being called upon in the future
It can provide the incentive needed to grow the company by borrowing essential monies
This type of insurance is flexible, and can be increased if necessary as your business grows
Personal Guarantee Insurance provides peace of mind to directors that the full value of their personal asset is not at risk
Start-up companies have access to funding that they might not otherwise be comfortable taking on
- 16.5 million People shopped in a small independent business on the day, representing a 20% increase in footfall on 2013 or 2.7 million more shoppers
- 64% of UK consumers were aware of the day, a 33% increase on 2013
- Over 3.5 million Facebook views and #SmallBizSatUK trending at number one all day on 6th December 2014
- 55% of Local Authorities and hundreds of MPs supported the campaign
If you have a small business register at https://www.smallbusinesssaturdayuk.com/
Local Chambers of Commerce are also supporting Small Business Saturday and many including Bournemouth Chamber of Trade and Commerce have Facebook campaigns.