Archive for September, 2014

Autumn Statement 3 December 2014

Thursday, September 11th, 2014

The Chancellor of the Exchequer George Osborne has announced that he will give his annual Autumn Statement to Parliament on 3 December 2014.

The statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility. These forecasts will be published alongside the Autumn Statement on 3 December.

Full details of the announcements will be available following the Chancellor’s statement to Parliament.

This year the government is seeking your views on what you would like to see in Autumn Statement 2014. If you would like to make a suggestion here’s the instructions released on the GOV.UK website:

“In the interest of open and transparent policy-making, the government welcomes original and innovative ideas, which will be considered by HM Treasury as part of the policy-making process. Business, charities and members of the public can submit these views via email to autumnstatementrepresentations@hmtreasury.gsi.gov.uk

In order to inform policy development for the Budget or Autumn Statement, your representation should contain policy suggestions for the upcoming fiscal event and explain the policy rationale, costs, benefits and deliverability of proposals. It should also be evidence based, providing clear arguments on how it contributes to the aims of the Budget or Autumn Statement.

You may wish to consider:

  • likely effectiveness and value for money
  • revenue implications for the Exchequer
  • wider macroeconomic implications (for economic stability and growth)

Such as:

  • sectoral impacts
  • distributional impacts
  • administrative and compliance costs and issues
  • legislative and operational requirements
  • environmental impact

HM Treasury will not consider representations which are not practicable and/or that violate HM Treasury’s legal obligations, including but not limited to State aid, human rights and diversity. HM Treasury will delete representations which are inappropriate or offensive.

To allow for full consideration in advance of the Autumn Statement, any submission should be sent to HM Treasury by 17 October.”

New e-Exporting programme to boost exports

Tuesday, September 9th, 2014

UK Businesses will have access to a new suite of services to help boost their international trade through UKTI’s new e-Exporting Programme.

  • new suite of services and support to help UK companies take advantage of online selling, forecast to reach £60 billion by 2018
  • UK Trade and Investment (UKTI) is working with the world’s leading e-marketplaces to help UK companies fast-track international sales
  • UKTI has detailed information for more than 400 of the world’s e-marketplaces, to help companies plan their sales strategies

Businesses of all sizes from across the UK will have access to a new suite of services to help boost their international trade through online channels.

Trade Minister Lord Livingston will launch the government support package on Monday 8 September 2014 at the Autumn Fair at the NEC in Birmingham.

UKTI’s new e-Exporting Programme has been created to ensure UK companies are best placed to tap into the huge opportunities that exist online. The growth of technology has dramatically changed consumers’ purchasing habits with Britons now spending approximately £91 billion a year online making the UK one of the world’s leading e-commerce countries.

UKTI is working with a number of international e-marketplaces including Tmall China, Amazon China, Japanese e-commerce platform Rakuten and Harper’s Bazaar. Operating through these e-marketplaces presents a cost-effective way for companies – particularly small and medium-sized businesses – to increase their reach in terms of both numbers and geography. The programme encourages UK exporters to reach out to the generation of digitally-capable consumers who are increasingly influenced through online channels.

The programme is the first of its kind in the world – UKTI is the only organisation to hold the operational information of global B2C and B2B e-marketplaces with the central aim of using the information to revolutionise exporting.

Car tax changes 1 October 2014

Friday, September 5th, 2014

 

Car tax changes 1 October 2014

From 1 October 2014, the paper tax disc will no longer need to be displayed on a vehicle windscreen. If you have a tax disc with any months left to run after this date, then it can be removed from the vehicle windscreen and destroyed. Car owners with a Northern Ireland address will still need to display their MoT disc.

You can apply online to tax or SORN your vehicle using your 16 digit reference number from your vehicle tax renewal reminder (V11) or 11 digit reference number from your log book

What this means to you

To drive or keep a vehicle on the road you will still need to get vehicle tax and DVLA will still send you a renewal reminder when your vehicle tax is due to expire. This applies to all types of vehicles including those that are exempt from payment of vehicle tax.

Buying a vehicle

From 1 October, when you buy a vehicle, the vehicle tax will no longer be transferred with the vehicle. You will need to get new vehicle tax before you can use the vehicle.

You can tax the vehicle using the New Keeper Supplement (V5C/2) part of the vehicle registration certificate (V5C) online or by using the DVLA automated phone service. Alternatively, you may wish to visit a Post Office branch.

Selling a vehicle

If you sell a vehicle after 1 October and you have notified DVLA, you will automatically get a refund for any full calendar months left on the vehicle tax.

Vehicle tax refunds

You will no longer need to make a separate application for a refund of vehicle tax. DVLA will automatically issue a refund when a notification is received from the person named on DVLA vehicle register that the:

  • vehicle has been sold or transferred
  • vehicle has been scrapped at an Authorised Treatment Facility
  • vehicle has been exported
  • vehicle has been removed from the road and the person on the vehicle register has made a Statutory Off Road Notification (SORN)
  • person on the vehicle register has changed the tax class on the vehicle to an exempt duty tax class

Paying vehicle tax by Direct Debit

From 1 October 2014 (5 October if setting up at a Post Office), Direct Debit will be offered as an additional way to pay for vehicle tax. This will be available for vehicle owners who need to tax their vehicle from 1 November 2014:

  • annually
  • 6 monthly
  • monthly (12 months tax paid for on a monthly basis)

Provided an MOT remains valid, the payments will continue automatically until you tell DVLA to stop taking them or you cancel the Direct Debit with your bank. Valid insurance should also be in place for vehicles registered in Northern Ireland.

The Direct Debit will be cancelled and payments automatically stopped when you tell DVLA that you no longer have the vehicle, or the vehicle has been taken off the road and a Statutory Off Road Notification (SORN) has been made.

What is HICBC?

Wednesday, September 3rd, 2014

The High Income Child Benefit Charge (HICBC) affects parents where one partner (or both) have income in excess of £50,000 and either:

  • you or your partner get Child Benefit or,
  • someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep.

It doesn’t matter if the child living with you is not your own child. ‘Partner’ means someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.

The HICBC is a progressive tax that effectively neutralises all or part of the Child Benefit you receive. If you or your partner have income over £50,000 a tax charge will be levied that recovers 1% of any child benefit you or your partner receive for every £100 your income exceeds £50,000. When your income exceeds £60,000 all of the Child Benefit will have been paid back. The charge will need to be declared and paid by the person with the highest income.

Parents whose income exceeded the £50,000 limit in the tax year to 5 April 2014, and one parent continued to receive Child Benefit, will need to submit a self assessment tax return to 5 April 2014 advising HMRC. If you find yourself in this position for the first time we can help you register for self assessment and submit a return online.

For parents with one or two incomes in excess of £60,000 it is possible to cancel your Child Benefit and thus avoid the HICBC. To do this file HMRC’s online request to not receive Child Benefit or call the Child Benefit Office – 0300 200 3100.

Tax Diary September/October 2014

Monday, September 1st, 2014

 1 September 2014 – Due date for Corporation Tax due for the year ended 30 November 2013.

 19 September 2014 – PAYE and NIC deductions due for month ended 5 September 2014. (If you pay your tax electronically the due date is 22 September 2014.)

 19 September 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 September 2014.

 19 September 2014 – CIS tax deducted for the month ended 5 September 2014 is payable by today.

 1 October 2014 – Due date for Corporation Tax due for the year ended 31 December 2013.

 19 October 2014 – PAYE and NIC deductions due for month ended 5 October 2014. (If you pay your tax electronically the due date is 22 October 2014.)

 19 October 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2014.

 19 October 2014 – CIS tax deducted for the month ended 5 October 2014 is payable by today.

 31 October 2014 – Latest date you can file a paper version of your 2014 Self Assessment tax return.

Treat you as honest

Monday, September 1st, 2014

Readers will be interested, and gratified to hear that HMRC will always treat you as honest. The following is an extract from HMRC’s “Your Charter” which states:

 Your rights – What you can expect from us:

  1. Respect you
  2. Help and support you to get things right
  3. Treat you as honest
  4. Treat you even-handedly
  5. Be professional and act with integrity
  6. Tackle people who deliberately break the rules and challenge those who bend the rules
  7. Protect your information and respect your privacy
  8. Accept that someone else can represent you
  9. Do all we can to keep the cost of dealing with us as low as possible

 Your obligations – What we expect from you:

  1. Be honest
  2. Respect our staff
  3. Take care to get things right.

Considering that we have one of the most complex tax systems, HMRC seems to have set itself and the nation’s tax payers a high bar to clear. Compliance with a known legal obligation is one thing, compliance with an unknown legal obligation is quite another.

Smash and grab

Monday, September 1st, 2014

The government is considering the response to its consultation document on proposals to introduce powers allowing HMRC to dip into a tax payer’s bank account in order to recover arrears of tax. There will be safeguards:

  • The debt recovered would have to be £1,000 or more.
  • A minimum of £5,000 has to be left in an account after the debt has been recovered.

 Needless to say this proposal has created quite a stir.

The British Banking Association wants the Chancellor to take legal advice on the matter as they believe the legislation would contravene the Human Rights Act. Others believe that HMRC has proved itself incompetent in the past to accurately calculate the amount of tax arrears owed by an individual. HMRC would, in effect, become judge and jury, assessing and collecting tax without any initial remedy or intervention available to the tax payer.

Let’s hope that the firestorm this proposal has provoked will temper any future change in the law. At present it is likely that HMRC will be given these new powers as part of the Finance Act 2015.

On your bike

Monday, September 1st, 2014

The cycle to work scheme encourages employees to cycle to work and allows employers to reap the benefits of a healthier workforce.

Employers of all sizes can set up a tax exempt scheme. Basically, employers can loan a cycle and associated safety equipment to an employee without the employee suffering a taxable benefit-in-kind charge.

 In order to qualify for tax exempt status, a cycle loan scheme has to satisfy a number of criteria including:

  • Ownership of the equipment is not transferred to the employee during the loan period;
  • Employees use the equipment mainly for qualifying journeys; i.e. for journeys made between the employee’s home and workplace, or part of those journeys (for example, to the station), or for journeys between one workplace and another;
  • The offer of the use of a loaned or provided cycle (i.e. one for which ownership is not transferred to the employee) is available across the whole workforce, with no groups of employees being excluded. This does not necessarily have to be through a Cycle to Work salary sacrifice arrangement.

Employers’ expenditure on purchasing cycles and associated equipment is treated as capital expenditure and the usual tax and capital allowances are available including the Annual Investment Allowance.

In theory there are no limits to the amount that can be invested although there may be limits set by the OFT consumer credit license that regulates the loan of cycles under this scheme. The current OFT limit per loan is £1,000.

At the end of the agreed cycle loan period the employee can continue to use the cycle equipment for qualifying journeys with no tax consequences, or, the employer can sell the equipment to the employee. To avoid any tax charge the sale must be made at current market value.

New support for home based businesses

Monday, September 1st, 2014

It is estimated that seven out of ten small businesses are managed in the first instance from home. Home based entrepreneurs contribute £300 billion to the UK economy. It is not surprising, therefore, that the Government have woken up and realised that they should be supporting this sector.

 Recently, the Business Minister, Matthew Hancock, announced a package of additional support for home based business owners. They include:

  • The law will be changed so that landlords can be assured that agreeing to home working by tenants will not undermine their residential tenancy agreement. A new model tenancy agreement will also be made available shortly;
  • Updated planning guidance will make it clear that planning permission should not normally be needed to run a business from your home; and
  • New business rates guidance will clarify that in the majority of circumstances home based businesses will not attract business rates.

This is welcome news. It is a pity that the announcement did not include a relaxation in the complicated Capital Gains Tax rules that can affect individuals who claim for the use of a room at home to run their business.

Readers may be interested to know that there are already 2.9 million businesses being run from entrepreneurs’ homes. As mentioned above, these businesses contribute £300 billion in annual turnover to the UK economy. They also have a marked affect on employment.

If 1 in 10 home businesses took on just 1 extra employee it would create 300,000 jobs. Unemployment fell in June 2014 to just over two million so the 300,000 reduction would represent a significant 15% fall.

On the face of it, home based businesses can take encouragement from these announcements. Let’s hope that these will be the first of a number of initiatives to encourage entrepreneurs to take the plunge.

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