Author Archive admin

Byadmin

Removing your home address from the public register

Since April 2018 company directors and other eligible people such as company secretaries, people with significant control (PSC) and LLP members can apply to remove their personal addresses from the UK’s official company register on Companies House.


Prior to the introduction of this law it was only possible for a director to ask for their personal address to be hidden from personal view if they could demonstrate that they were at a serious personal risk of violence or intimidation.


Company directors and others are still required to provide an alternative correspondence address if they are appointed to a live company. If they are no longer appointed to a company, then an alternative address is not required and only the first half of their postcode will be made available to the public.


Planning note


There is a charge of £55 per document where a director wants to suppress their home address. The option to remove your home address from the public register is not available if the home address is the same as the company’s registered office address.

Byadmin

What is a finance lease?

The definition of a finance lease can be difficult to pin down. In legal form a finance lease is just another lease – the legal ownership of the asset lies with the lessor and the lessee only has the right to use the asset.


However, in commercial terms a finance lease is often considered to be an alternative form of ‘purchase’ with a loan of money and with the asset as security. In substance the finance lessee buys the asset with a loan from the finance lessor.


It is important to be able to distinguish what type of lease is in place, i.e. whether the lease is actually an operating lease (usually a type of rental agreement) or whether it is a type of purchase agreement, usually known as a finance lease. There can be important differences between the accounting and tax treatment of different types of leases.


HMRC’s internal manual defines a finance lease as follows:


To put it another way, a finance lease may be viewed as an arrangement under which one person (the lessor) provides the money to buy an asset which is used by another (the lessee) in return for an interest charge. The lessor has security because they own the asset. The terms of the leasing arrangements aim to give the lessor a banker’s interest turn and no more or less – however good or bad the asset proves to be for the end user.

Byadmin

Changes to VAT IT systems if no-deal Brexit

In a letter being sent to businesses across the country, HMRC has published the following information on the effect a no-deal Brexit would have on changes to VAT IT systems.


We have reproduced below a summary from the letter of the main announcements made by HMRC on this issue.


Changes to VAT IT systems


If the UK leaves the EU without a deal you will no longer be able to use certain EU VAT IT systems. If you currently use any of these systems, you should be aware of the following:


EU VAT Refund Electronic System


To make EU VAT refund claims for 2018 using EU VAT Refund Electronic System, you should submit these before 29 March 2019, instead of the normal deadline of 30 September 2019. After we leave the EU, UK businesses will be able to reclaim VAT from EU countries, by using the existing processes for non-EU businesses.


EU’s VAT number validation service (VIES)


If you use VIES to check a customer or supplier’s VAT number, UK VAT numbers will no longer be part of this service after 29 March. A UK-only online VAT number checker will be available on GOV.UK from 29 March. You will still be able to use VIES to check the validity of EU VAT numbers.


UK VAT Mini One Stop Shop (MOSS)


If you currently use MOSS to declare and pay VAT on sales of digital services to EU consumers, you should submit your return for supplies made between 1 January 2019 and 29 March 2019 via the UK portal by the normal deadline of 20 April 2019. If you want to continue to use MOSS for sales you make after the UK leaves the EU, you will need to register for MOSS in an EU Member State. You should do this by 10 April 2019.


If you are affected by any of the above, you would be advised to take action ASAP.

Byadmin

Present tax-free company benefits

The list of company benefits that can be provided tax-free to employees is quite short. However, some of the benefits that can be provided include the following:



  • Meals: Free or subsidised meals in a staff canteen where meals are provided for all employees on a reasonable (not overly extravagant) scale. The exemption does not apply where free or subsidised meals are provided as part of salary sacrifice or flexible remuneration arrangements.

  • Hot drinks and water at work.

  • Mobile phone: There is generally no charge to tax where for a mobile phone is provided to an employee.

  • Workplace parking for an employee’s car or motorcycle, or facilities for parking bicycles at or near the employee’s place of work.

  • Annual / Christmas parties: These must be open to all employees and cost less than £150 per person.

  • Medical insurance or medical treatment for employees working abroad as well as one annual medical health check and / or health-screening assessment.

  • Long service and suggestion scheme awards, within certain limits.

There is no requirement to pay tax on benefits and expenses covered by concessions or exemptions and they do not need to be included on a tax return.

Byadmin

Keep abreast of Brexit news

As the Brexit date fast approaches, it seems the only thing we can say with any certainty is that uncertainty continues to plague the issue of our leaving the EU. The negotiations on the terms of the UK’s exit from the EU are unresolved and there are three possible outcomes: a delayed Brexit by extending Article 50, a no-deal Brexit or a modified Brexit.


HMRC has published a letter to help businesses prepare for a no-deal Brexit. The letter includes a reminder to ‘Make sure you find out about our EU Exit news as it happens’.


HMRC advises businesses to:



Action point


If the UK leaves the EU without a deal, then UK businesses will be responsible for making customs declarations. Businesses that trade with the EU should ensure they register for a UK Economic Operator Registration and Identification (EORI) number as soon as possible. In the event of a no deal Brexit, this identification number will be required even if the business appoints a customs agent to assist in making customs declarations.

Byadmin

Business record keeping for the self-employed

If you are self-employed as a sole trader or as a partner in a business partnership, then you must keep suitable business records as well as separate personal records of your income.

For tax purposes, the business records must be held for at least 5 years after the 31 January submission deadline for the relevant tax year. For example, for the 2017-18 tax year, when online filing was due by 31 January 2019, you must keep your records until at least the end of January 2024. In certain situations, such as when a return is submitted late, the records must be held for longer.

If you are self-employed you should keep a record of:

  • all sales and income
  • all business expenses
  • VAT records if you’re registered for VAT
  • PAYE records if you employ people
  • records about your personal income

You don't need to keep the vast majority of your records in their original form. If you prefer, you can keep a copy of most of them in an alternative format, as long as they can be recovered in a readable and uncorrupted format. For example, a scanned PDF document.

If records are no longer available for any reason you must try and recreate them letting HMRC know if the figures are estimated or provisional. There are penalties for failing to keep proper records or for keeping inaccurate records.

Byadmin

Cash basis and capital expenditure

The cash basis scheme helps many sole traders and other unincorporated businesses benefit from a simpler way of managing their financial affairs. The scheme is not open to limited companies and limited liability partnerships. The scheme allows qualifying businesses to use the cash basis when recording income and expenditure.

You must have a turnover of £150,000 or less to join the scheme and you can continue using the scheme until your turnover reaches £300,000. However, some small businesses are more suited to using the case basis than others.

If you are using the cash basis scheme, then capital expenditure is usually treated as an allowable business expense with the following exceptions:

  • The acquisition or disposal of a business or part of a business
  • Education or training
  • The provision, alteration or disposal of certain non-depreciating assets, assets not acquired or created for continuing use in the trade, land, non-qualifying intangible assets and certain financial assets.

In addition, if you buy a car you can claim the purchase as a Capital Allowance (but only if you’re not using simplified expenses to work out your business expenses for that vehicle).

Byadmin

2019 Spring Statement: employment implications

In the Spring Statement 2019, the Chancellor of the Exchequer has announced that the apprenticeship reforms set out in the Autumn Budget 2018 will now be introduced a year early. From 1 April 2019, the co-investment rate for non-levy employers will be cut by a half from 10% to 5%. In addition, from the same date, levy-paying employers will be able to share a greater portion of their levy funds across their supply chains, with the maximum amount rising from 10% to 25%.

The Chancellor also confirmed that the government has commissioned a review of the latest international evidence on the impact of minimum wages, to inform future national living wage policy after 2020.
 

Byadmin

Full EU Settlement Scheme roll-out

The government has laid a Statement of Changes to the Immigration Rules implementing the full opening of the EU Settlement Scheme from 30 March 2019. The scheme will apply regardless of whether there is a Brexit deal or not.

The scheme will allow EEA/Swiss citizens living in the UK by 31 December 2020 (or by 29 March 2019 if the UK leaves the EU without a deal) and their family members to apply for settled status once they have been continuously resident in the UK for five years. In the interim, they can apply for pre-settled status to cover the period until they have accumulated five years. Applications will need to be made by 30 June 2021 (or by 31 December 2020 if there is no deal).

The Statement of Changes confirms that:

  • EEA/Swiss citizens and their family members will be able to apply under the scheme from outside the UK, so that they can obtain settled status, without needing to travel here in order to make an online application, based on their previous residence in the UK. Their family members will also be able to do so where, if they are non-EEA/Swiss citizens, they hold a valid biometric residence card issued by the UK.
  • Applicants will be able to rely on a wider range of documents as proof of their identity and nationality (for EEA/Swiss citizens, valid national identity cards will be accepted in addition to passports and, for family members, passports and biometric residence permits will be accepted in addition to biometric residence cards).
  • As an alternative to using the identity verification app available on Android smartphones or tablets, or visiting one of the locations at which they can be helped to use the app, there will be scope for applicants to submit their identity document by post to the Home Office to be checked and returned to them quickly.
  • It will be possible for applications to be made on paper forms rather than through the online application process in very limited circumstances.
Byadmin

Employee tax codes 2019-20

The P9X form is used to notify employers of the tax codes to use for employees. The basic Personal Allowance for the tax year starting 6 April 2019 will be £12,500 and the tax code for emergency will be 1250L. The basic rate limit is £37,500 except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate.


As a result of the increase in the basic Personal Allowance, there will be a general uplift of tax codes with suffix ‘L’ which have increased by 65. Employers should add 65 to any tax code ending in L, for example 1185L will become 1250L. The new form P9X is available online on GOV.UK to download or print.


The P9X (2019) form also includes information to help employers in the new tax year. The document also reminds employers that have new employees starting work between 6 April and 24 May 2019 and who provide a P45, to follow the instructions at www.gov.uk/new-employee. HMRC’s guidance has recently been updated.