Andrew Parker Associates Ltd

Are you an Accounts Assistant looking for a new exciting opportunity, to progress your accountancy career as a part of a small and friendly team. Then please get in touch.

Spring budget, here are a few of the headlines ;)

- National Insurance was cut for workers by another 2p, from 10% to 8% – having already fallen by 2p in last year's Autumn Statement

- The earnings threshold for child benefit was raised to £60,000, from £50,000

- The windfall tax on the profits of oil and gas companies was extended until 2029

- Capital gains tax was reduced for the higher rate of property from 28% to 24%

- The non-dom tax break, claimed by wealthy foreign residents in the UK, was abolished

- The Household Support Fund was extended for six months, falling short of charities’ hopes of a two-year extension

- Alcohol duty was frozen and the 5p cut in fuel duty was extended

- The chancellor announced a new British ISA to encourage more people to invest in UK assets

- The VAT threshold for small businesses was increased, from £85,000 to £90,000

- And there will be new taxes on vapes, and higher taxes for business class flights.

We would like to wish all our clients, friends and networks a very Merry Christmas and a Happy New Year. From Andrew and the team :)

Always nice to receive feedback from clients.

"Thank you so much for your time and hard work resolving our tax situation which had been ongoing for some time without success. We are extremely grateful and relieved you took on our case.

Everyone was most pleasant, helpful and always available. It was an absolute pleasure to work with you, we wish we had come to you sooner."

Gloria

Practice Update – October 2023 As the nights continue to draw in and my walking trips for 2023 are now a fading memory, we felt a practice update was overdue. Below are some of the key issues we hope you are already aware of, but if you’d like to discuss further, please do get in touch. Making Tax Digital (MTD)…

Would you like to work with a small, friendly team of accountants, that take pride in the service they offer, and feel they really make a difference to their clients?

We are looking for an enthusiastic individual, willing to learn, who will receive training and great experience in bookkeeping, accounts production, payroll and tax returns.

Some experience would be beneficial. If you would like to find out more about this opportunity, please message for further info :)

The new Chancellor, Nadhim Zahawi, has visited a school holiday club in London where he committed to continuing to help families with increases in the cost of living. The visit shone a light on the government’s Help for Households Campaign after a further series of cost-of-living deals were announced. These deals will help provide extra support to families as children return to school.

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Business Asset Rollover Relief, usually referred to as ‘rollover relief’, is a valuable relief that allows for deferral of Capital Gains Tax (CGT) on gains made when taxpayers sell or dispose of certain assets and use all or part of the proceeds to buy new business assets. The relief means that the tax on the gain of the old asset is postponed. The amount of the gain is effectively rolled over into the cost of the new asset and any CGT liability is deferred until the new asset is sold.

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The Employment Allowance reduces an employer's NIC liability. The current allowance is £5,000. An employer can claim less than the maximum if this covers or eliminates their total Class 1 NIC bill.

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The definition of a connected person for tax purposes can be complex and varies depending on the circumstances at hand. A statutory definition of “connected persons” for Capital Gains Tax purposes is set out in Section 286 of the Taxation of Chargeable Gains Act (TCGA) 1992. The legislation states:

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Contacting HMRC by email HMRC has published a new guidance titled ‘Corresponding with HMRC by email’. The guidance was published on 9 August 2022 and explains some of the risk factors associated with contacting HMRC in this way. HMRC suggests that the information contained in the new guidance should help taxpayers decide whether or not they want to communicate with HMRC by email. Further, HMRC will not deal with taxpayers by email unless they confirm in writing that they accept the risks of doing so.

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VAT Flat Rate Scheme and limited cost traders The VAT Flat Rate Scheme (FRS) has been designed to simplify the way a business accounts for VAT and in so doing reduce the administration costs of complying with the VAT legislation. The scheme is open to businesses that expect their annual taxable turnover in the next 12 months to be no more than £150,000.

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VAT and food supplies HMRC’s VAT Notice 701/14: food explains what types of foods are zero rated and standard rated for VAT. The notice includes many examples of different food categories. The notice covers some general VAT liability rules. For example, food supplied in the course of catering is standard rated for VAT. This includes hot take-away food. Most basic food stuffs intended for human consumption and not supplied in the course of catering are zero rated for VAT. However, the definition of 'basic' is not straightforward.

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Overseas seller VAT check Since 2018, online marketplaces (such as eBay or Amazon) have been required to help tackle online VAT fraud. These measures, known as joint and several liability (JSL) for marketplaces aim to ensure that all businesses selling goods in the UK follow the same rules and pay the correct amount of VAT.

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Bona Vacantia – dissolved companies The final step in bringing a company to a legal end is dissolution. However, one if the important points to consider when doing so is that the dissolved company can no longer do or receive anything including receive a tax refund. It is the responsibility of the company directors to ensure that all of a company’s assets and liabilities are all dealt with before it is dissolved.

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Compensation limits for bank deposits The bank deposit guarantee limit is the amount of money that is guaranteed for savers in UK banks and building societies should the institution become insolvent. The Financial Services Compensation Scheme (FSCS) guaranteed amount is currently £85,000 per person, per authorised bank or building society.

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Reminder that the plug-in grant has ended The government plug-in grant was first introduced 11 years ago to help drivers make the move to owning an electric car. Since the scheme was introduced the amount of the grant available reduced significantly as did the range of cars to which the grant applied.

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Using the Customs Declaration Service The Customs Declaration Service (CDS) is a new customs IT platform that has been designed to modernise the process for completing customs declarations for businesses that import or export goods from the UK. A phased launch of the service started during August 2018. The CDS is used for making import and export declarations when moving goods into and out of the UK.

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Termination payments The tax treatment of termination payments has changed significantly over recent years. The changes have aligned the rules for tax and secondary National Insurance contributions (employer (NICs)) by making an employer liable to pay NICs on termination payments they make to their employees.

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Do you qualify for the marriage allowance? HMRC is using the wedding season to issue a reminder to married couples and those in civil partnerships to sign up for marriage allowance if they are eligible and haven’t yet done so.

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Using the Annual Investment Allowance The Annual Investment Allowance (AIA) is a generous tax relief that was first introduced in 2008. The AIA allows for the total amount of qualifying expenditure on plant and machinery to be deducted from profits before tax.

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Scope of Trade There is no statutory definition of ‘trade’. The only statutory reference to the term is that ‘trade’ includes a ‘venture in the nature of trade’. This absence of a formal definition decides if an activity is a trade more difficult. However, over time the courts have set some established guidance.

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Using Advisory Fuel rates The easiest way to ensure that no car-fuel benefit charge (for private journeys in a company car) is payable, is to use the advisory fuel rates published by HMRC to repay any private fuel costs to your employer. The advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly.

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Tax-free trivial benefits There is a benefit in kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a bouquet of flowers given occasionally to employees or any other BiK classed as 'trivial' that falls within the exemption. By taking advantage of the exemption employers can simplify the treatment of BiKs whilst at the same time offering a tax efficient way to give small gifts to employees.

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Miscellaneous income There are special rules known as the miscellaneous income sweep-up provisions that seek to charge tax on certain income. This unusual provision, which is broad in scope, catches income that would not otherwise be charged under specific provisions to Income Tax or Corporation Tax.

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Duty free limits if you are travelling abroad Here is a reminder of any duty payable and tax-free allowances if travelling abroad this summer.

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Settlement legislation – non-trust settlements The settlement legislation seeks to ensure that where a settlor has retained an interest in property that the income arising is treated as the settlor’s income for all tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner. In general, the settlements legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

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Construction services taxed at VAT zero or 5% rate Whilst most businesses in the UK charge VAT at the standard rate of 20%, there are a number of different VAT rates and exemptions that businesses should be aware of. In the UK, there are three separate VAT rates, the standard rate @ 20%, reduced rate @ 5% and the zero rate @ 0%. %or0%

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Business records if 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.

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Tax relief on replacement of domestic items The replacement of domestic items relief has been in place since April 2016. The relief allows landlords the ability to claim tax relief when they replace movable furniture, furnishings, household appliances and kitchenware in a rental property. The allowance is available for the cost of domestic items such as free- standing wardrobes, curtains, carpets, televisions, fridges and crockery.

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