tag:blogger.com,1999:blog-17450203234586164002024-03-16T01:11:14.205+00:00TaxAssist AccountantsAll the tax news for the UK small business - Accountancy and Tax ServicesFranckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.comBlogger156125tag:blogger.com,1999:blog-1745020323458616400.post-9998119225388604112024-02-23T12:49:00.002+00:002024-02-23T12:53:09.245+00:00Holiday changes for Zero Hour Employees in April<div class="separator" style="clear: both; text-align: left;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpKgYY2wEjscLrirXqG3hOxNdVZGNeJrUdI0wqkNvMgYZPTQn5WqslvwBtvd2MWX4qmqWAvFjwzyxH8M7hrjKuubwP_IZpWHgPe67nYob4vVFTMRbir-BPAiTZmPCMavhdZC2xFUTgV4HGEcISdXzRcCUtZ9ERBMr8s8pdm4LMztAxEKty-2dTjQNcKIuv/s1024/_446a7414-b358-44b3-a426-00e710c7c0e6.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;">
<img border="0" data-original-height="1024" data-original-width="1024" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpKgYY2wEjscLrirXqG3hOxNdVZGNeJrUdI0wqkNvMgYZPTQn5WqslvwBtvd2MWX4qmqWAvFjwzyxH8M7hrjKuubwP_IZpWHgPe67nYob4vVFTMRbir-BPAiTZmPCMavhdZC2xFUTgV4HGEcISdXzRcCUtZ9ERBMr8s8pdm4LMztAxEKty-2dTjQNcKIuv/w242-h242/_446a7414-b358-44b3-a426-00e710c7c0e6.jpeg" width="242" /></a>In April 2024, significant changes to the holiday entitlement for zero hour and other irregular hours staff are set to take effect, altering the landscape of holiday pay and accrual for these workers. These changes, which amend the Working Time Regulations 1998, represent a departure from previous practices and aim to simplify the process for both employers and employees. <br /><br />You first need to confirm that your zero hours employees fall within the definition of irregular hours or part year workers. Irregular hours are those workers whose paid hours set out in their contract vary in each pay period; a zero hours contract would meet this definition as there is no guarantee of hours to be given each week. Part-year workers are those who are contractually only required to work for part of the year and for the remainder neither work nor receive pay. For example, a term time worker who only gets paid whilst their working would meet this definition.</div><div><div><br /></div><div>The second thing you need to confirm is when the holiday year runs from and to. The changes being brought in on 1 April 2024 will apply to all holiday years starting on or after that date. So, if you have a holiday year that runs April to March, the changes will apply immediately. If however you have a different holiday year, such as a calendar year (January – December), then the changes won’t need to apply until January 2025.</div><div><br /></div><h2 style="text-align: left;">What's New? </h2><div>The most notable change is the introduction of a new method for calculating holiday entitlement for part-year and irregular hours workers, which will be based on a percentage of the hours worked. Starting from April 1, 2024, holiday entitlement for these workers will accrue at a rate of 12.07% of the hours worked during the pay period. </div><div><br /></div><div>Additionally, employers will have the option to choose between two methods for paying holiday pay to these workers: </div><div><ol style="text-align: left;"><li><b>Holiday Accrual: </b>Holiday can be booked as usual and paid when it is taken. </li><li><b>Holiday Pay: </b>Alternatively, holiday pay can be rolled up with the normal pay, meaning an additional amount is included within every payslip to cover a worker’s holiday pay. </li></ol></div><div>This second option, known as "rolled-up" holiday pay, is a significant shift from the traditional method and is designed to simplify the process for employers who find it challenging to determine when a zero hour worker is actually on leave. <span><a name='more'></a></span></div><div><br /></div><h2 style="text-align: left;">How It's Different from the Past </h2><div>
Previously, the calculation of holiday pay for irregular hours and part-year workers was less straightforward and often required interpretation of complex case law. Before April 2024, the holiday entitlement for irregular hours and part-year workers was calculated based on the average hours worked in the previous 12 weeks. This method could result in fluctuations and inaccuracies in the holiday entitlement depending on the seasonality and variability of the work. </div><div><br /></div><div>The new method of 12.07% of actual hours worked in a pay period is intended to simplify and standardise the holiday entitlement calculation for these workers.
It provides a clear and consistent method for calculating holiday entitlement, which is expected to be easier for employers to apply and for workers to understand.</div><div><br /></div><div>The 12.07% accrual rate is based on the statutory minimum holiday entitlement of 5.6 weeks, with the total working weeks in a year being 46.4 (52 weeks minus 5.6 weeks of leave). This new approach replaces the previous method of calculating based on weeks and instead calculates entitlement in hours.</div><div><br /></div><h2 style="text-align: left;">Change in Carry Over Rules</h2><div>A other change coming in April 2024 is the revocation of the amendment made in 2020 to the Working Time Regulations 1998, which allowed for the carry-over of annual leave in certain circumstances, such as during the COVID-19 pandemic. This provision will be removed, meaning that leave can no longer be carried over under these circumstances. Any outstanding carried over leave must be taken before March 31, 2024.</div><div><div><br /></div><div>However, the right for workers to carry over annual leave in certain other circumstances, such as due to sickness or family-related absence, has been enshrined in the new regulations. This reflects existing case law and does not represent a change but rather a codification of current practices.</div></div><div><br /></div><h2 style="text-align: left;">Implications for Employers and Employees </h2><div>Employers need to review their holiday provisions to ensure compliance with the new law. They must accurately assess the status and working arrangements of their employees and adjust their systems and documents accordingly. It's crucial for employers to encourage workers to take their entitled annual leave, even if the rolled-up payment method is used, to ensure that workers have the opportunity to rest and maintain performance levels. </div><div><br /></div><div>For employees, particularly those on zero hour contracts, these changes could provide greater clarity and potentially more flexibility in how they receive holiday pay. It's important for workers to understand their rights under the new regulations and to ensure they are taking their full entitlement to annual leave. </div><div><br /></div><div>In summary, the changes coming in April 2024 for the holidays of zero hour and other irregular hours staff are designed to simplify the calculation and payment of holiday entitlement. By introducing a clear percentage-based accrual system and offering the option of rolled-up holiday pay, the new approach aims to benefit both employers and employees by providing clarity and reducing administrative burdens. </div></div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-45545350885092444832024-01-25T10:07:00.002+00:002024-01-25T10:14:08.991+00:00Crypto assets in the UK: When is a tax return due?<div class="separator" style="clear: both; text-align: left;"><div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKORnUB2QKCuDWOa1qEoJZPzXgdzIJLrUO-dTqO9azn9g6ixjArtbMIphwgrTxY5Px30iuzAcXf49p4pzIiJnP3sA4LRIUwg18SqPiZp-tmO0N31e9RkwYeqeBz30GIv2S0rci_P_PcgO1suv-mY-DXu-uGnRgioCEsMtyVHo-I3TnVs_uvgu7hvunkGz_/s1024/_0f1df20f-050a-4dd5-bc3d-0940773293ab.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1024" data-original-width="1024" height="219" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKORnUB2QKCuDWOa1qEoJZPzXgdzIJLrUO-dTqO9azn9g6ixjArtbMIphwgrTxY5Px30iuzAcXf49p4pzIiJnP3sA4LRIUwg18SqPiZp-tmO0N31e9RkwYeqeBz30GIv2S0rci_P_PcgO1suv-mY-DXu-uGnRgioCEsMtyVHo-I3TnVs_uvgu7hvunkGz_/w219-h219/_0f1df20f-050a-4dd5-bc3d-0940773293ab.jpeg" width="219" /></a></div>Crypto assets, such as Bitcoin, Ethereum and other cryptocurrencies, have become increasingly popular in recent years as a form of investment, payment and alternative asset class. However, many crypto investors may be unaware of their tax obligations in the UK, or may find the tax rules confusing and complex. <br /><br />In this blog post, we will try to provide a classification of the different types of crypto assets, how they are taxed in the UK and explain when a tax return is actually due as they are instances where you can avoid having to go through that if your profits and/or proceeds in the tax year are below certain allowances. </div><div><br /></div><h2 style="text-align: left;">What are crypto assets? </h2><div>Crypto assets are digital tokens that use cryptography to secure transactions and control the creation of new units. They are typically recorded on a distributed ledger, such as a blockchain, that is accessible to anyone on the network. Crypto assets can have different characteristics and functions, such as: </div><div><ul style="text-align: left;"><li>Exchange tokens: These are intended to be used as a method of exchange or payment, such as Bitcoin or Litecoin. They do not provide any rights or obligations to the holder, other than the ability to transfer or exchange them. </li><li>Utility tokens: These provide access to a current or future service or good, such as Ethereum or Filecoin. They may also have some exchange value, but their main purpose is to enable the use of a platform or network. </li><li>Security tokens: These provide rights and obligations similar to traditional securities, such as shares or bonds. They may entitle the holder to dividends, interest, voting rights or ownership of an underlying asset or business. </li><li>Stablecoins: These are designed to maintain a stable value relative to another asset, such as a fiat currency or a commodity. They may use various mechanisms to achieve this, such as backing by reserves, algorithmic adjustments or collateralisation. </li></ul></div><div><br /></div><h2 style="text-align: left;">How are crypto assets taxed in the UK? </h2><div>HMRC does not consider crypto assets to be equivalent to currency or money, and therefore treats them as a traditional asset for tax purposes. In addition, HMRC considers that investing in crypto assets is not analogous to gambling (such that any profits made on investments in crypto assets would not be taxable). </div><div><br /></div><div>Depending on the nature and purpose of the crypto transactions, they may be subject to either Capital Gains Tax (CGT) or Income Tax (IT). The general principles are as follows: </div><div><ul style="text-align: left;"><li><b>Capital Gains Tax (CGT): <br /></b>This applies when an individual disposes of crypto assets that they own as a personal investment. A disposal occurs when the individual sells, exchanges, transfers or gifts their crypto assets to another person. The taxable gain is calculated by deducting the allowable costs (such as the acquisition price and transaction fees) from the disposal proceeds (such as the sale price or market value). The gain is then taxed at either 10% or 20%, depending on the individual's total income and gains for the tax year. The individual can also utilise their annual CGT allowance (£6,000 for 2024/25), which means that any gains below this threshold are tax-free. <br /><br /></li><li><b>Income Tax (IT): <br /></b>This applies when an individual receives crypto assets as a form of income or reward. This may include situations where the individual: </li><ul><li><b>Mines crypto assets using their own equipment and resources.</b> Mining is the process of validating transactions and creating new units of crypto assets on a network. The taxable income is calculated by deducting any allowable expenses (such as electricity and depreciation) from the market value of the mined crypto assets at the time of receipt. </li><li><b>Stakes crypto assets on a network.</b> Staking is the process of locking up some crypto assets on a network to participate in its governance and security, and receiving rewards for doing so. The taxable income is calculated by deducting any allowable costs (such as transaction fees) from the market value of the staked crypto assets and rewards at the time of receipt.
- Receives crypto assets from their employer as a form of remuneration or benefit. The taxable income is calculated by using the market value of the crypto assets at the time of receipt. </li><li><b>Receives crypto assets from an airdrop. </b>An airdrop is when new units of crypto assets are distributed for free to existing or potential holders. The taxable income is calculated by using the market value of the airdropped crypto assets at the time of receipt. </li></ul></ul></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="text-align: left;">The income from crypto assets is then taxed at the individual's marginal rate of IT, which can range from 0% to 45%, depending on their total income for the tax year.<span><a name='more'></a></span></div></blockquote><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="text-align: left;"> </div></blockquote><h2 style="text-align: left;">When is a tax return due for crypto transactions? </h2><div style="text-align: left;">An individual who has made any taxable transactions involving crypto assets in a tax year must report them to HMRC by filing a Self Assessment tax return. The deadline for filing online is 31 January following the end of the tax year (which runs from 6 April to 5 April). For example, for the tax year 2022/23, the deadline is 31 January 2024. The individual must also pay any tax due by the same date. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">The individual must keep accurate and complete records of all their crypto transactions, including the dates, amounts, values, costs, fees and purposes of each transaction. They must also keep evidence of the transactions, such as receipts, invoices, wallet addresses, exchange rates and screenshots. These records must be kept for at least five years after the 31 January deadline. </div><div style="text-align: left;"><br /></div><h2 style="text-align: left;">Conclusion </h2><div style="text-align: left;">Taxation of crypto assets in the UK can be complex and challenging, especially given the volatility and diversity of the crypto market. It is important for crypto investors to understand their tax obligations and comply with them in a timely and accurate manner. Failure to do so may result in penalties, interest and enquiries from HMRC. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">In summary, a return will be needed if capital gains, including any arising from transactions in crypto assets, exceeded £12,300 (that's for the 22/23 tax year but keep in mind that this allowance is scheduled at the time of writing to decrease to £6,000 in 23/24 and further down to £3,000 in 24/25), or if aggregate disposal proceeds for the tax year exceed 4 times the allowance (even if you make no taxable gain). Obviously, if you made transactions that attract income tax you will need to do a tax return as well. </div><div> </div><div>HMRC also reminds us that it's not just selling that we need to monitor and that you should check if you have made any of the following type of transactions involving crypto assets:</div><div><ul style="text-align: left;"><li>selling crypto assets for money </li><li>exchanging one type of crypto asset for another </li><li>using crypto assets to make purchases </li><li>gifting crypto assets to another person </li><li>donating crypto assets to charity</li></ul></div><div style="text-align: left;">as any such transactions has a tax implication as well. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">If you are unsure about your tax position or need professional advice, please do not hesitate to contact us. </div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-26781338447141818642023-10-24T10:14:00.004+01:002023-10-24T10:14:43.503+01:00Breaking UK residence - what to watch out for?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRkyG0kRuBDCdNgLBM4gR-6Lqh8LJ_XgPWLkpy5gFsqY5xpiLWAVNhcQnd_MsMQefsn7OlOIjsHgTv56_I_z-xHfhdLOUtYYI94Mt8AOZtJkJ03zg7mpVmQsYDLv2Vl_hM1Do2MZcPli7Kvp1ADaeLTsY8Ad6GC1Ztaqlx-3xxafiTx265FhcPzw4_ItsO/s1024/_778d97a6-39b1-4bcd-9c08-e95c413b6e64.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1024" data-original-width="1024" height="302" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRkyG0kRuBDCdNgLBM4gR-6Lqh8LJ_XgPWLkpy5gFsqY5xpiLWAVNhcQnd_MsMQefsn7OlOIjsHgTv56_I_z-xHfhdLOUtYYI94Mt8AOZtJkJ03zg7mpVmQsYDLv2Vl_hM1Do2MZcPli7Kvp1ADaeLTsY8Ad6GC1Ztaqlx-3xxafiTx265FhcPzw4_ItsO/w302-h302/_778d97a6-39b1-4bcd-9c08-e95c413b6e64.jpeg" width="302" /></a></div>If you are planning to leave the UK and live abroad, you may be wondering how this will affect your tax situation. In particular, you may want to know how to stop being UK tax resident and what are the consequences of returning to the UK too early. <div><br /></div><div>There are a number of tax benefits available to new arrivers in the UK but the definition of a new arriver depends on the benefit you are considering. In order for those benefits to be reset properly, you need to have stayed outside of the UK for a sufficiently long period depends on the given benefit. <br /><div><br /></div><div>In this article, we will explain the main rules and concepts that you need to be aware of, such as the statutory residence test, the overseas workday relief, the remittance basis and the temporary non-residence rules. We will also give you some practical tips on how to plan your departure and potential return in a tax-efficient manner. </div><div><br /></div><h2 style="text-align: left;">The Statutory Residence Test </h2><div>The first thing you need to know is how to determine your UK residence status for tax purposes. This is done by applying the statutory residence test (SRT), which is a set of rules that came into effect from 6 April 2013.
The SRT consists of three parts: an automatic non-resident test, an automatic resident test and a sufficient ties test. You need to consider them in that order and stop as soon as you meet one of them. </div><div><br /></div><h3 style="text-align: left;">The automatic non-resident test </h3><div><br /></div><div>You will be automatically non-resident for a tax year if you meet any of the following conditions: </div><div><ul style="text-align: left;"><li>You spent less than 16 days in the UK in that tax year and you were UK resident for one or more of the previous three tax years</li><li>You spent less than 46 days in the UK in that tax year and you were not UK resident for any of the previous three tax years</li><li>You worked abroad full-time (averaging at least 35 hours a week) for that tax year, without any significant breaks (more than 30 days), and you spent less than 91 days in the UK, of which no more than 30 were spent working </li></ul></div><div>If none of these apply, you need to move on to the automatic resident test. </div><div><br /></div><h3 style="text-align: left;">The automatic resident test </h3><div><br /></div><div>You will be automatically resident for a tax year if you meet any of the following conditions: <br /><ul style="text-align: left;"><li>You spent 183 days or more in the UK in that tax year</li><li>You had a home in the UK for at least 91 consecutive days (including at least 30 days in that tax year), and either you had no home overseas or you spent less than 30 days at each of your overseas homes in that tax year</li><li>You worked full-time in the UK for at least 365 days (including at least one day in that tax year), without any significant breaks, and more than 75% of your working days were in the UK </li></ul></div><div>If none of these conditions apply, you need to move on to the sufficient ties test. <span><a name='more'></a></span></div><div><br /></div><h3 style="text-align: left;">The sufficient ties test </h3><div><br /></div><div>This is the most complex part of the SRT, as it involves counting how many ties or connections you have with the UK and comparing them with how many days you spend in the UK.
There are five possible ties: </div><div><ul style="text-align: left;"><li>Family tie: You have a spouse, civil partner, common-law partner or minor child who is resident in the UK (unless they are only there temporarily)</li><li>Accommodation tie: You have a place to live in the UK that is available to you for at least 91 consecutive days (including at least one day in that tax year) and you spend at least one night there in that tax year (or 16 nights if it belongs to a close relative)</li><li>Work tie: You work in the UK for at least 40 days in that tax year (a day counts as a work day if you do more than three hours of work)</li><li>90-day tie: You spent more than 90 days in the UK in either or both of the previous two tax years</li><li>Country tie: The UK is the country where you spent the most days in that tax year (only applicable if you were UK resident for one or more of the previous three tax years) </li></ul></div><div>Depending on how many ties you have and whether or not you were UK resident for any of the previous three tax years, there is a different threshold of days that will make you resident or non-resident. You can find the details on <a href="https://www.taxtrends.org/2012/11/the-new-statutory-residency-test-srt.html">our specific article</a>. </div><div><br /></div><h2 style="text-align: left;">The Remittance Basis </h2><div>One of the tax benefits one gets when they arrive in the UK is the ability to use the Remittance Basis of Taxation. This is an alternative way of taxing your foreign income and gains that allows you to only pay UK tax on what you bring (remit) to the UK, rather than on what you earn or realise abroad.
However, there are preconditions and tax implications to being able to use the remittance basis, such as: </div><div><ul style="text-align: left;"><li>You will lose your personal allowance and capital gains annual exempt amount, which means you will pay more tax on your UK income and gains </li><li>You may have to pay an annual charge of £30,000 or £60,000 (called the Remittance Basis Charge) if you have been resident in the UK for at least 7 out of the previous 9 years or at least 12 out of the previous 14 years, respectively. </li><li>You will not be able to claim certain reliefs and exemptions, such as double taxation relief or business investment relief </li><li>You will have to keep detailed records of your foreign income and gains and your remittances to the UK </li><li>You will have to file a Self Assessment tax return and complete additional pages (form SA109 and form SA106) </li></ul></div><div><br /></div><div>The remittance basis is not available to everyone. It is only applicable if you are either: </div><div><br /></div><div><ul style="text-align: left;"><li>Not domiciled in the UK (meaning that your permanent home is outside the UK) </li><li>Not deemed domiciled in the UK (meaning that you have not been resident in the UK for at least 15 out of the previous 20 years) </li></ul></div><div><br /></div><div>Your domicile is a complex concept that depends on various factors, such as your place of birth, your father's domicile, your intentions and your connections with different countries. It is not necessarily the same as your nationality or residence. </div><div><br /></div><div>From the above description, it's easy to understand that if you were UK resident, left the UK and they came back less than 3 full tax years later, you would most probably fail the RBC test if you had been UK resident for a while before you left and you might have to pay the RBC much sooner than expected. Similarly, if you came back to the UK less than 5 full tax years later, you would fail the deemed domicile test much sooner than the 15 years that most first arrivers enjoy. </div><div><br /></div><div><h2>The Overseas Workday Relief </h2><div>Another benefit attached to the remittance basis is what's called the Overseas Workday relief. This relief allows you to exclude from UK tax any income from your overseas employment that relates to the days you work outside the UK, as long as you meet certain conditions. The main conditions are: </div><div><ul><li>You were not UK resident for any of the previous three tax years before the year you start working abroad </li><li>Your overseas employment income is paid into a bank account outside the UK </li><li>You do not remit (bring) any of your overseas employment income to the UK </li></ul></div><div>The OWR can apply for up to three tax years, starting from the year you become UK resident again. This means that if you work abroad for a short period of time (less than three full tax years) and then return to the UK, this won't be enough to reset the clock and this relief won't be available for you. </div><div><br /></div></div><h2 style="text-align: left;">The Temporary Non-Residence Rules </h2><div>And finally, another thing to be aware of is a set of rules called the temporary non-residence rules. If you leave the UK and become non-resident for less than five years, you may be caught by those rules.
These rules are designed to prevent people from avoiding UK tax by moving abroad temporarily and realising income or gains while they are non UK tax resident.</div><div><br /></div><div>These rules applies if you were solely UK resident for at least four out of the seven tax years before you left the UK, and you resume sole UK residence within five years of leaving (not tax years but calendar years).
The types of gains and income that are subject to this rule are: </div><div><ul style="text-align: left;"><li>Foreign income and gains that would have been taxable in the UK if the individual had remained resident.</li><li>Gains on assets that were held before leaving the UK and disposed of during the period of temporary non-residence. This does not include gains on UK land and property, which are subject to separate rules and would have been taxed already as those are taxed on all non-residents anyway.</li><li>Income from offshore trusts or companies that are not taxed in the UK on the arising basis. </li></ul></div><div><br /></div><div><div>The income and gains that are subject to the rules are taxed in the year of return to the UK, as if they had arisen in that year. This means that the individual may have to pay tax at a higher rate than they would have if they had remained resident. However, they can also claim relief for any foreign tax paid on the same income or gains. The individual has to report the income and gains that are subject to the rules on their Self Assessment tax return for the year of return. </div></div><div><br /></div><div>As you can see becoming non UK tax resident is not as straightforward as it sounds and even if you manage to do it, coming back to the UK too quickly will have tax implications that someone coming into the UK for the first time might not have. It's therefore important to understand how all the different tax reliefs and anti-avoidance rules might affect you if it is your intention to break your UK residence for a short period of time. </div></div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-71304783751533452612023-07-25T16:09:00.007+01:002023-07-25T16:30:18.328+01:00Can a director provide services to his own company?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifmdYVszCFeL6yyY4acc25Hk9_xFE95YPqvSNou21Q2b7pxloVgQnaYUGq8Ggc80WRQU3ToukD8MBHeNRRXz35-naQr7TOTGO6c1H68IGpohXVGI_XlWG9wlXVcT2iwYV3V_xSqBL4boiOVXqrQEqoxSF80avtSpJl1ML6_o3byqtuARCHl1rfS36vPmkK/s6000/pexels-tima-miroshnichenko-5717268.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="6000" data-original-width="4000" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifmdYVszCFeL6yyY4acc25Hk9_xFE95YPqvSNou21Q2b7pxloVgQnaYUGq8Ggc80WRQU3ToukD8MBHeNRRXz35-naQr7TOTGO6c1H68IGpohXVGI_XlWG9wlXVcT2iwYV3V_xSqBL4boiOVXqrQEqoxSF80avtSpJl1ML6_o3byqtuARCHl1rfS36vPmkK/s320/pexels-tima-miroshnichenko-5717268.jpg" width="213" /></a></div>If you are the director of a limited company, you may be tempted to provide yourself some services to your company rather than hire a third-party freelancer and then bill the company for those services. However, this practice can have legal and tax implications that you should be aware of. Let's go over the potential pitfalls and the steps that can be taken to avoid them. <h2 style="text-align: left;"><br />Conflict of Interest</h2><div>The first issue you need to be aware of is the potential conflict of interest you might create between your duties as a director and your interests as a self-employed contractor. As a director, you have a fiduciary duty to act in the best interests of your company and its shareholders, which means that you should not enter into transactions that are detrimental to the company or that give you an unfair advantage over other shareholders. However, as self-employed contractor, you may have an incentive to charge your company more than the market rate for your services or to provide substandard services that do not meet the company's needs. This could expose you to legal action from the company or other shareholders for breach of fiduciary duty or unfair prejudice. </div><div><br /></div><div>To avoid any conflict of interest, you should make sure that the terms and conditions of your invoices are fair and reasonable and reflect the market value of your services. You should also document the nature and scope of your services and keep records of the time spent and the expenses incurred. And then you should make sure that you obtain the consent of other company directors as well as other shareholders, if any, before billing your company. You disclose any potential conflicts of interest. Your objective is to prevent HMRC from challenging the validity of your invoices and tax your self-employment income as disguised payments for your work as a director. Which means that you would have to pay income tax and National Insurance contributions (NICs) at higher rates and that your company would have to pay employer's NICs as well. <span><a name='more'></a></span></div><div><br /></div><h2 style="text-align: left;">Director's Duties are always Employment</h2><div>Another pitfall you might run into is due to the fact that director's duties are always considered to be employment. Therefore, you cannot bill the company for any work related to your duties as a director of that company. If you decide to bill the company for services that you provide, you need to ensure that those services are distinct from your duties as a director and that they are not part of your employment contract with the company, be it explicit or implicit since a director does not have to have an employment contract. For example, if you are a director and an accountant, you should not bill your company for accounting services that are within your director's role, but only for additional services that are outside your role.</div><div><br /></div><div>And again, as stated above, the more documentation you have the better. Having an employment contract with a very specific scope will help as well as making sure that any service you provide are not only outside of that scope but also approved by another director or shareholder. </div><div><br /></div><div>Finally, and this is valid for any business but even more so in this case, make sure that bookkeeping is kept tidy and bank accounts kept separate.</div><div><br /></div><h2 style="text-align: left;">Conclusion</h2><div>As we have seen it can be difficult to segregate duties and billing your own business might leave you vulnerable to challenges from HMRC. But if you have to do it, you can still mitigate the risks by following the guidance mentioned above. Don't hesitate to call us if you have any questions or concerns. </div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-38362765550260343222023-07-18T11:18:00.001+01:002023-07-18T11:19:42.804+01:00Private Residence Relief and deemed occupation<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinsK4ACasubixx7noboNs0ypOxU9g-OcFD0ysEtqfvtqeLa3eGNnnX27PxLBcWCLHQ9CVY3_uC5VrmREZS6iDfzGmk3PhtnkI_o0uwbCxbfX8PoN2urr_X1QBz4h2JG9wL7UWZFamgK1qrIeV0pts-NtSSJdPIAZwWPZ80IC5cgSiW67w_Kt9KruY4WRgV/s1920/elegant-g4aded4db4_1920.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1280" data-original-width="1920" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinsK4ACasubixx7noboNs0ypOxU9g-OcFD0ysEtqfvtqeLa3eGNnnX27PxLBcWCLHQ9CVY3_uC5VrmREZS6iDfzGmk3PhtnkI_o0uwbCxbfX8PoN2urr_X1QBz4h2JG9wL7UWZFamgK1qrIeV0pts-NtSSJdPIAZwWPZ80IC5cgSiW67w_Kt9KruY4WRgV/s320/elegant-g4aded4db4_1920.jpg" width="320" /></a></div>If you sell a property that was your main residence at some point during your ownership, you may be eligible for private residence relief (PRR) which can reduce or eliminate your capital gains tax liability. However, there may be periods when you were not living in the property, such as when you moved out before selling it, or when you let it out to tenants. In this blog post, we will explain how you can claim PRR for periods of non-occupation and what conditions you need to meet.<p></p><p>The basic rule is that you can claim PRR for the period of your actual occupation, plus the last 9 months of ownership, regardless of whether you were living there or not. This is to allow for some flexibility in case you have difficulties selling your property or buying a new one. However, there are additional reliefs that can extend the PRR period beyond the 9 months. Previously that period of 9 months was 36 months. You could also claim letting relief if you had rented the property during a certain period. Those benefits have been curtailed now but you still can claim relief in some cases where you did not occupy the property. It's called deemed occupation and here are the different scenarii where it's available. </p><h2 style="text-align: left;">Final period of ownership</h2><p>That's the one we just talked about and it is the most common scenario where relief is available despite not being in occupation of a property. Since April 2020 the final period is nine months and those are always available if you have lived in the property as some point (to exclude the buy-to-let properties where no such relief is available). The intention of the exemption is to aid sellers who are having difficulties finding a buyer. This is regardless of having difficulties finding a buyer or the use of the property during that period. </p><h2 style="text-align: left;">Delayed occupation</h2><p>Another scenario where a period of non-occupation will be treated as a period of occupation is where there is a delay in taking up residence of a dwelling. The following conditions must be satisfied:</p><p></p><ul style="text-align: left;"><li>occupation of the property happens within two years of purchase;</li><li>the property was not another person’s residence during the period of non-occupation; and</li><li>a qualifying event happens during that period of non-occupation. A qualifying event can be a delay due to the completion of construction, renovation, redecoration of the property, or because the individual can't move in until he disposes of his previous residence.<span><a name='more'></a></span></li></ul><p></p><h2 style="text-align: left;">Period of absence up to 3 years for any reason</h2><p>Any period of non-occupation for any reason of up to 3 years can be claimed as deemed occupation as long as there is a period of actual occupation both before and after the period of absence.</p><h2 style="text-align: left;">Period of absence due to work outside the UK</h2><p>Where an individual works in an employment outside of the UK, a period of absence of any length will be treated as a deemed occupation. The relief also extends to an individual who lives with a spouse who has an office or employment overseas. While holidays in the UK can be ignored, one should be careful not to work UK during that period even occasionally. Where an individual is prevented from returning to a property because of their employer requiring them to reside elsewhere, the requirement to occupy the property after the period of absence is relaxed.</p><h2 style="text-align: left;">Period of absence up to 4 years due to work in the UK</h2><p>Finally, if an individual is prevented from residing in a property due to working elsewhere in the UK (or because of a condition imposed by their employer requiring them to reside elsewhere) a period of absence not exceeding four years will be treated as a period of deemed occupation. Again, the requirement to occupy the property after a spell of UK working is relaxed if the individual is prevented from doing so by reason of their employment.</p><p>It is important to note that the periods of absence are cumulative and can be applied in the way which is most beneficial to the taxpayer. Claiming periods of absence in a PPR claim can help you save a lot of money on CGT when you sell your home. However, you must make sure that you meet the conditions and keep records of your absences and their reasons. If you are unsure about how to claim periods of absence in a PPR claim, it is advisable to seek professional advice from a tax expert.</p><p><br /></p><p><br /></p><p><br /></p>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-56158273332680846392023-05-14T10:07:00.000+01:002023-05-14T10:07:55.243+01:00What is Gift Aid and how does it work for Corporations?<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6S6-Ol1fh8wf9f9tyPvse24SoF6SfAHd-54VRNb5QbrV3AbA5m4fdZUWAA-r25mJz1Xi5VC5R0Q7cW2iXSh_3kDFOBc2YFxvC216qZKBgB0JtC88EXjd1ZfRjDY5_8crvBgG_21rqVRFluUJTwFbD8kReQImiiUHooRGSzU41byTD3pNs_CiQxJT9lA/s6446/pexels-rdne-stock-project-6646914.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="4297" data-original-width="6446" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6S6-Ol1fh8wf9f9tyPvse24SoF6SfAHd-54VRNb5QbrV3AbA5m4fdZUWAA-r25mJz1Xi5VC5R0Q7cW2iXSh_3kDFOBc2YFxvC216qZKBgB0JtC88EXjd1ZfRjDY5_8crvBgG_21rqVRFluUJTwFbD8kReQImiiUHooRGSzU41byTD3pNs_CiQxJT9lA/s320/pexels-rdne-stock-project-6646914.jpg" width="320" /></a></div>Gift Aid is a UK government scheme that allows for tax relief on donations to UK registered charities. For individuals, the scheme allows the charity to receive an extra 20p for every £1 donated. When an individual donates money to a UK registered charity, it can claim back the basic rate of income tax on the donation. This is done by completing a Gift Aid declaration form and sending it to the charity which then allows the charity to claim back the 20% tax paid by the taxpayer. If the taxpayer is a higher rate or additional rate taxpayer, he can get relief for the additional tax paid above the 20% by doing a tax return or by calling HMRC and requesting that they change their tax code. This additional tax relief goes to the taxpayer instead of the charity. <p></p><h2 style="text-align: left;">Gift Aid for Corporations</h2><p>Gift Aid for corporations is different from Gift Aid for individuals in terms of eligibility and benefits. As seen above, individuals who are UK taxpayers can use Gift Aid to increase the value of their donations to charity. For corporations, there is no such thing and the whole tax relief goes to the corporation that gives money to charity. </p><p>To be eligible for Gift Aid, corporations must be UK taxpayers and must make a donation to a charity that is registered with HM Revenue and Customs (HMRC). The donation must be made without any conditions attached, and the charity must not provide any significant benefit to the corporation in return for the donation.</p><p>There is no limit on the amount that can be given by a company to a charity under gift aid, as long as the company has enough taxable profits to cover the donation and the charity is recognised by HMRC. In particular a donation cannot create a loss for the business. However, as mentioned above, there are some limits on the value of benefits that the company can receive from the charity in return for the donation. The value of the benefits must not exceed 5% of the donation, up to a maximum of £2,500 per donation. Additionally, the total benefit that can be received by a close company or connected persons from the same charity in the same tax year is £250. If benefits exceed these values, the payments will not qualify for relief under gift aid.</p><p><span></span></p><a name='more'></a><p></p><h2 style="text-align: left;">What's Allowed</h2><p></p><ol style="text-align: left;"><li>Cash donations - Corporations can make cash donations to eligible charities and claim tax relief on the full amount donated.</li><li>Donating trading stock or land - Corporations can donate trading stock or land to eligible charities and claim tax relief on the full market value of the donation.</li><li>Payroll giving - Corporations can offer a payroll giving scheme to their employees, allowing them to donate to charity directly from their pay before tax is deducted. The corporation can claim tax relief on the total amount donated by employees through the scheme.</li><li>Sponsorship - Sponsorship payments can be eligible for Gift Aid, but only if they meet certain conditions. The payment must be made without any conditions attached, and the charity must not provide any benefit to the corporation in return for the payment. The payment must also be for a specific event or project, and not a general donation.</li></ol><p></p><h2 style="text-align: left;">What's Disallowed</h2><p></p><ol style="text-align: left;"><li>Donations with conditions - If a corporation makes a donation with conditions attached, such as a requirement for the donation to be used for a specific purpose, then it is not eligible for Gift Aid.</li><li>Providing benefits to corporations - If a charity provides any benefit to a corporation in return for a donation, such as advertising or publicity, then the donation is not eligible for Gift Aid.</li><li>Political donations - Donations made to political parties or election candidates are not eligible for Gift Aid.</li></ol><p></p><h2 style="text-align: left;">Sponsorship</h2><p>As mentioned earlier, sponsorship payments can be eligible for Gift Aid if they meet certain conditions. In addition to the conditions mentioned above, there are a few specific requirements for sponsorship payments to be eligible for Gift Aid:</p><p></p><ol style="text-align: left;"><li>The sponsorship must be for a specific event or project, such as a charity run or fundraising challenge.</li><li>The sponsorship must be made by the corporation as a business, rather than as an individual employee.</li><li>The sponsorship must be for the benefit of the charity, and not for the benefit of the corporation or any of its employees.</li></ol><p></p><p>Gift Aid is a valuable tax relief that can help charities raise more money, but it's not limited to Individuals. Corporations can also play a vital role in supporting charities by donating money and claiming Gift Aid.</p>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-48154938365489272372023-04-22T12:27:00.001+01:002023-04-22T12:29:03.084+01:00A Fine Balance between Salary and Dividends<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ-Hl0kwcFYrfb6KpARFkUv_eZZsSEdHLN3OV7SRlAq19xDD8GBBjiriyO4997s4ALZRdyq0pSFHTCqLFg25YUNTUGPGaeODTYyhUbz_NG4RxdFlyBz2WDzWXXokJ8Opfcoyx7w4hf8jsjG0YxNDvZZMQj-aCVmHQ-U21lrybqkr4gfb3E0jkT2lzqyA/s6000/pexels-liza-summer-6348126.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="6000" data-original-width="4000" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ-Hl0kwcFYrfb6KpARFkUv_eZZsSEdHLN3OV7SRlAq19xDD8GBBjiriyO4997s4ALZRdyq0pSFHTCqLFg25YUNTUGPGaeODTYyhUbz_NG4RxdFlyBz2WDzWXXokJ8Opfcoyx7w4hf8jsjG0YxNDvZZMQj-aCVmHQ-U21lrybqkr4gfb3E0jkT2lzqyA/s320/pexels-liza-summer-6348126.jpg" width="213" /></a></div>The tax code changes that have been announced by the UK government will have an impact on the way a company owner pays himself. One of the main changes is the increase of the corporation tax rate, which is the tax paid on company profits. The corporation tax rate will rise from 19% to a maximum of 25% from April 2023 for companies whose profits are above £50k. That means that company owners who pay themselves dividends will have less profits left in their company after having paid corporation tax. <div><br /></div><div>Another change is the reduction of the dividend allowance, which is the amount of dividend income that is tax-free. The dividend allowance will be cut from £2,000 to £1,000 from 6 April 2023 and then again to £500 from 6 April 2024. This means that company owners who pay themselves dividends above these thresholds will pay, again, more tax on their dividend income. </div><div><br /></div><div>If you add to that the fact that in contrast to salary, dividend rate increase was not overturned last year resulting in 1.25 percentage point across the board (8.75% for the basic rate, 33.75% for the higher rate and 39.35% for the additional rate) it's easy to understand why the tax situation has seriously worsen for the UK company owner. </div><div><br /></div><h2 style="text-align: left;">How Tax Code Changes Impact Company Owners </h2><div>One may wonder if these changes will affect the optimal split between salary and dividends for company owners who want to minimise their tax liability. Generally speaking, paying a low salary and high dividends has been a tax-efficient strategy for company owners, as dividends are not subject to National Insurance contributions and have lower tax rates than salary. However, with the increase of the corporation tax rate, the reduction of the dividend allowance and the increase of the dividend tax rates, this strategy may become less attractive. </div><div><br /></div><div>One thing is certain, the situation is now a lot more complex. In order to assess the optimum split between salary and dividends, one now needs to know the profit level of the company since it affects its corporation tax rate, the size of the payroll since it affects the availability of the employers allowance (the £5K NIC allowance), the overall level income of the company owner since it affects the availability of the personal allowance and many other factors. While in most situations it's still more tax efficient to take a salary of up to the personal allowance of £12,570 there are many cases where it's not necessarily true anymore. </div><div><br /></div><div>Because we now have effectively 3 different marginal corporation tax rates, let's look at the effective rates of taxation combining corporation tax, national insurance, and income tax in each different case. We assume that the dividend allowance has already been used. <span><a name='more'></a></span></div><div><br /></div><h2 style="text-align: left;">Corporation tax rate is 19% (profit below £50k)</h2><div>This situation is identical to that of last year. Depending on which band the taxpayer sits in, these are the effective rates when extracting profit either as a bonus (salary) or as a dividend:</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjtKzm-sfoFOfOzrVcBVhAFdAvaES-eD0AcamMkbzvRISeT5nFp3Gi_1brSOiMq32gapDtr_GSuZtilOq0dN3EzY3pHeIorKU5e3XUE8NrY0_gouBjfBVo0EgeEWQORCfUf7pfY1rE2KQXu35WON9PsS12fOP3Q8LCQJU55A8Q7p89EMhex5PvWLCtflw" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img data-original-height="65" data-original-width="314" height="83" src="https://blogger.googleusercontent.com/img/a/AVvXsEjtKzm-sfoFOfOzrVcBVhAFdAvaES-eD0AcamMkbzvRISeT5nFp3Gi_1brSOiMq32gapDtr_GSuZtilOq0dN3EzY3pHeIorKU5e3XUE8NrY0_gouBjfBVo0EgeEWQORCfUf7pfY1rE2KQXu35WON9PsS12fOP3Q8LCQJU55A8Q7p89EMhex5PvWLCtflw=w400-h83" width="400" /></a></div><br /><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>It is clear that using dividends is a better option across the board (even though the gap between the 2 options has significantly decreased over the years).</div><div><br /></div><h2 style="text-align: left;">Corporation tax rate is 25% (profit is above £250k)</h2><div>In this case here is the comparison:</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgBsKkcgELKMVUj3_G9qKVSWCWQ8WHTMF13p_W4KhRcFbFACYDxfzOh8ztmXLG1tKkVHeUoePFcf6v7gbSD7my0P6gN2Y3dlE939IMO_D5pHEPVTIf4rm7sQOk6bU1DUiKgtdwZ2uEXWiOYcbLsZZ8HV28OKg93-EUc5LmbC_EzShqD2UHeCXItYa0cbw" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img data-original-height="65" data-original-width="314" height="83" src="https://blogger.googleusercontent.com/img/a/AVvXsEgBsKkcgELKMVUj3_G9qKVSWCWQ8WHTMF13p_W4KhRcFbFACYDxfzOh8ztmXLG1tKkVHeUoePFcf6v7gbSD7my0P6gN2Y3dlE939IMO_D5pHEPVTIf4rm7sQOk6bU1DUiKgtdwZ2uEXWiOYcbLsZZ8HV28OKg93-EUc5LmbC_EzShqD2UHeCXItYa0cbw=w400-h83" width="400" /></a></div><br /><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>We can see that now the tax advantage of using dividends has evaporated for higher rate taxpayers. Not by a huge margin but enough to make you wonder why you incorporated in the first place. Obviously, tax is not the only reason you would want to incorporate (see <a href="https://www.taxtrends.org/2016/05/10-reasons-why-its-still-worth-going.html">10 Reasons why it's still worth going Limited</a> for a list of reasons) but still...</div><div><br /></div><div><h2>Corporation tax rate is 26.5% </h2></div><div>Now if your company profit falls between £50lk and £250k, the marginal tax rate for profits above the £50k threshold is actually 26.5%. The reason for that being that companies where the profit is above £250k have a tax rate of 25% on all of their profits, not just the highest band. This behaviour is quite different from the one with income tax (if we ignore the whopping 64% marginal band between £100k and £125k). It means that in order to catch up you need a marginal rate above 25% between £50k and £250k. Here is the split in that case:</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiMdMPsw43QUXDjcjybNnsH1XJmBlFnpgNCeLz3OZkin6C2g1rnfKz-Dr_AEOS2R93TA1jMtaPQmDkzyJBykdd325yXctqx1D5ykVQOK5tFO5s0EOFi5KTrhuyUwbKFCtlOdC4G1ldZ_5pgEJj_hEEf75FRBrmTrlVqfgsXQkblDUfG-tmfRZ2rpkR6RQ" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img data-original-height="65" data-original-width="314" height="83" src="https://blogger.googleusercontent.com/img/a/AVvXsEiMdMPsw43QUXDjcjybNnsH1XJmBlFnpgNCeLz3OZkin6C2g1rnfKz-Dr_AEOS2R93TA1jMtaPQmDkzyJBykdd325yXctqx1D5ykVQOK5tFO5s0EOFi5KTrhuyUwbKFCtlOdC4G1ldZ_5pgEJj_hEEf75FRBrmTrlVqfgsXQkblDUfG-tmfRZ2rpkR6RQ=w400-h83" width="400" /></a></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div>As expected, dividends are even less tax efficient than when you are in the 25% bracket. <br /><br /></div><h2 style="text-align: left;">Conclusion </h2><div>The recent changes to the tax code have made it increasingly important for company owners to carefully consider the balance between salary and dividends when deciding how to pay themselves. While it's essential to take into account individual circumstances and seek professional advice, it's clear that the reduction in the dividend allowance and the rise in the corporate tax rate have shifted the financial landscape for company owners, potentially making it more advantageous to pay a higher salary and rely less on dividends. </div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-6897364808757346962023-02-22T15:31:00.000+00:002023-02-22T15:31:06.726+00:00Major UK Corporation Tax Changes in April<div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgC_8t69M8GrTGVY9CjIq6wnLypw_zZsewgbImacaN3Yf4DikHqyKpuZHBQ58ADrfW435DJ4WAnTN1tiExOG5qeHEwT0RVB69kWSsd3LInXtIaHWpdor2FdQMbcdq4eXXwHOh_H2bH0zTxOaiRiFKCyWhCK6Jr9zqSYnnE46J1fKh1Ch18w6z3Da1UQSQ/s1024/_cd661125-eb28-409a-a6e3-ed685aeedfd9.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1024" data-original-width="1024" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgC_8t69M8GrTGVY9CjIq6wnLypw_zZsewgbImacaN3Yf4DikHqyKpuZHBQ58ADrfW435DJ4WAnTN1tiExOG5qeHEwT0RVB69kWSsd3LInXtIaHWpdor2FdQMbcdq4eXXwHOh_H2bH0zTxOaiRiFKCyWhCK6Jr9zqSYnnE46J1fKh1Ch18w6z3Da1UQSQ/s320/_cd661125-eb28-409a-a6e3-ed685aeedfd9.jpeg" width="320" /></a></div>Corporation tax is a tax that companies pay on their UK profits. The current rate of corporation tax for all companies in the UK is 19%, regardless of how much profit they make. </div><div><br /></div><div>However, this was not always the case. Corporation tax was introduced in 1965 as part of the Finance Act 1965. </div><div><br /></div><div>The rate has changed over time, from 28% in 2010 to 19% in 2017 and it will change again from 1 April 2023, when new rules will come into effect. Here are the details.</div><div><br /></div><h2 style="text-align: left;">The New UK Corporation Tax Rates</h2><div><br /></div><div>From 1 April 2023, there will be two different rates of corporation tax, depending on the level of profits:</div><div><br /></div><div><ul style="text-align: left;"><li>A small profits rate (SPR) of 19% for companies with profits up to £50,000</li><li>A main rate of 25% for companies with profits over £250,000</li></ul></div><div><br /></div><div>There will also be a marginal relief for companies with profits between £50,000 and £250,000, which will reduce their effective tax rate gradually from 25% to 19%.</div><div><br /></div><div>The new rates will apply to financial years starting on or after 1 April 2023. For example, if your company's accounting year ends on 31 December, you will pay corporation tax at the new rates for the year ending 31 December 2023.</div><div><br /></div><h2 style="text-align: left;">How to Calculate Your Corporation Tax</h2><div><br /></div><div>To calculate your corporation tax liability, you need to work out your taxable profits. This is done by deducting your allowable expenses from your income. Some examples of allowable expenses are:</div><div><br /></div><div><ul style="text-align: left;"><li>Staff salaries and wages</li><li>Rent and utility bills</li><li>Business travel and subsistence</li><li>Advertising and marketing costs</li><li>Interest on business loans</li><li>Research and development costs<span><a name='more'></a></span></li></ul></div><div><br /></div><div>Some examples of expenses that are not allowable are:</div><div><br /></div><div><ul style="text-align: left;"><li>Entertainment</li><li>Depreciation</li><li>Amortisation (except for some goodwill)</li><li>Some business gifts</li><li>Some legal fees</li></ul></div><div><br /></div><div>Once you have calculated your taxable profits, you need to apply the relevant corporation tax rate depending on how much profit you have made.</div><div><br /></div><div>For example, if your company has made £100,000 of taxable profit in the year ending 31 December 2023, you will pay corporation tax at:</div><div><br /></div><div><ul style="text-align: left;"><li>The SPR of 19% on the first £50,000 = £9,500</li><li>The marginal relief on the next £50,000 = £11,375 (calculated as (£100,000 - £50,000) x ((25% - (19% + ((£250k - £100k) / (£250k - £50k)) x (25% -19%)))))</li><li>The total corporation tax liability = £20,875</li></ul></div><div><br /></div><h2 style="text-align: left;">The Implication for Associated Companies</h2><div><br /></div><div>If your company has any associated companies, you need to take them into account when calculating your corporation tax liability. An associated company is a company that is under the control of another company or person(s), or shares control with another company or person(s).</div><div><br /></div><div>For example,</div><div><br /></div><div><ul style="text-align: left;"><li>A Ltd owns B Ltd -> A Ltd and B Ltd are associated companies</li><li>C Ltd owns D Ltd and E Ltd -> C Ltd , D Ltd , E Ltd are associated companies </li><li>F Ltd owns G Ltd , H Ltd owns I Ltd , F Ltd and H Ltd are owned by J -> F Ltd , G Lt d , H Lt d , I Lt d are associated companies </li></ul></div><div><br /></div><div>The implication of having associated companies is that you need to divide the corporation tax thresholds by the number of associated companies plus one.</div><div><br /></div><div>For example,</div><div><br /></div><div><ul style="text-align: left;"><li>If A Ltd has no associated companies -> It can use the full thresholds o f £50k an d £250k </li><li>If A Ltd has one associated company (B Ltd) -> It can use half of t he thresholds of (£50k/2)=£25k and (£250k/2)=£125k </li><li>If A Ltd has two associated companies (B Ltd an d C Ltd) -> It can use a third of the thresholds of (£50k/3)=£16.67k and (£250 k/3)=£83.33k </li></ul></div><div><br /></div><div>This means that having more associated companies reduces your eligibility for paying corporation tax at lower rates.</div><div><br /></div><h2 style="text-align: left;">Conclusion</h2><div><br /></div><div>The new corporation tax changes will affect how much tax you pay on your company's profits from 1 April 2023. Depending on how much profit you make and whether you have any associated companies, you may pay more or less than before. While you can't really reduce profits just to pay less tax, you might be able to reorganise company ownership in order to reduce the number of associated companies and therefore reduce your taxes. For example if a husband and wife have separate businesses but with cross ownership, it makes sense to if their profits are below £250k to change the ownership structure so that each one owns its business and there is no more associated companies. </div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-69156292821814575922023-02-07T14:46:00.009+00:002024-02-16T16:13:56.902+00:0060-day Capital Gains Tax Reporting<div class="separator" style="clear: both; text-align: left;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhflRcDPMqDokWMwitS1QH4ugijPJqH1vSsM54BLgV-ct4DFEVK1hGmvtYZOqq67RT56-_iKkZYmvp6cNJno7bFcbVgRTNrNc56A-TIHFfKP7cp1ov26m9HVnJTAlYS13czYkP1RopGaRWWWujywTuXL542fb976zHca4POpKbVzfAtoNsmrOoBASbDJQ/s1153/Screenshot%202023-02-07%20at%2014.43.08.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="895" data-original-width="1153" height="248" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhflRcDPMqDokWMwitS1QH4ugijPJqH1vSsM54BLgV-ct4DFEVK1hGmvtYZOqq67RT56-_iKkZYmvp6cNJno7bFcbVgRTNrNc56A-TIHFfKP7cp1ov26m9HVnJTAlYS13czYkP1RopGaRWWWujywTuXL542fb976zHca4POpKbVzfAtoNsmrOoBASbDJQ/s320/Screenshot%202023-02-07%20at%2014.43.08.png" width="320" /></a>As a property owner, it is important to be aware of the tax implications of disposing of your residential property. <br /><br />The 60-day capital gains tax reporting requirement for residential property disposals is a crucial aspect of the tax system that all property owners should understand. It was implemented in 2020 (initially as a 30-day rule later relaxed to 60-day) and most people are not aware of this requirement. <br /><br />In this article, we will provide a comprehensive overview of the 60-day capital gains tax reporting requirement and how it applies to residential property disposals. </div><div><br /></div><h2 style="text-align: left;">What is the 60-day Capital Gains Tax Reporting Requirement? </h2><div>The 60-day capital gains tax reporting requirement is a regulation that requires property owners to report the sale of any residential property <b>situated in the UK</b> to the HMRC within 60 days of the sale completion. They also need to pay the tax (or an estimate of that tax since in many instances the exact calculation can only be done after the tax is finished in April) at the end of this 60-Day period. This requirement applies to all individuals or trustees who sell UK residential property for a gain, regardless of the amount of the gain. If the sellers are <b>non-UK residents they have the obligation to report even if they haven't made a gain</b> <b>and for every disposal of of UK land</b> not just residential property -- which is not the case for UK residents. </div><div><span><a name='more'></a></span> </div><div><br /></div><h2 style="text-align: left;">Why is important to be diligent with this New Reporting? </h2><div>Because there is very little time to prepare the return and do the calculation of the tax, it is important to approach an accountant as soon as possible and not wait until the sale completion. For most returns in the UK, taxpayers are given ample time to prepare. This is not the case with this new reporting requirement. Please note that a specific registration process is required in order to file the return and unless you plan ahead, you will most probably miss the deadline and face fines. It's actually a good idea to have created a gateway ID ahead of time to speed up the registration process as this would be a prerequisite. </div><div><br /></div><h2 style="text-align: left;">Key Factors to Consider When Reporting a Disposal </h2><div>When reporting a residential property disposal under the 60-day capital gains tax reporting requirement, there are several key factors that property owners should consider. These include the following: </div><div><ol style="text-align: left;"><li>The cost basis of the property, which is the original purchase price plus any capital improvements made to the property.</li><li>The sales price of the property, including any commissions or closing costs paid. </li><li>Any deductions available such as the annual allowance or the Principal Private Residence (PPR) Relief if you have lived in the property.</li></ol></div><h2 style="text-align: left;">Exceptions</h2><div>They are very few exceptions but it worth noting that in case a SA100 tax return is filed before the deadline for a 60-day capital gains tax return then this return does not have to be filed. Nor the tax to be paid (until the deadline for the tax payment in January the following year). </div><div><br /></div><div>So for someone who is disposing of property and who may be able to submit their tax return before a 60 day return is due, the benefit is to not only to avoid submitting a 60 day return but also to defer payment of heir CGT until January the following year. </div><div><br /></div><h2 style="text-align: left;">Conclusion </h2><div>The 60-day capital gains tax reporting requirement for residential property disposals is a crucial aspect of the tax system that all property owners should understand. By accurately reporting the sale of a residential property within 60 days, property owners can ensure that they are in compliance with the law and avoid significant fines and penalties. Taxpayers should also understand that this new reporting is not a replacement for the annual tax return but an addition. You need to do both the 60-day Capital Gains Tax Report but also a tax return at the end of the year where you report again the gain and do a proper calculation that takes into account all of the income for year (even if you would not have been required to do at tax return).</div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-61452920483833395002021-01-14T12:36:00.004+00:002021-03-25T11:43:09.597+00:00Brexit VAT changes: a practical step by step guide<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-0tz5cVUKT1Y/YAA5iDzTcBI/AAAAAAADNVI/LgSpuu2PP2khiAkdhySRHzZd_kzATmhvQCLcBGAsYHQ/s580/1531835334_VAT%2Bchanges.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="340" data-original-width="580" src="https://1.bp.blogspot.com/-0tz5cVUKT1Y/YAA5iDzTcBI/AAAAAAADNVI/LgSpuu2PP2khiAkdhySRHzZd_kzATmhvQCLcBGAsYHQ/s320/1531835334_VAT%2Bchanges.jpg" width="320" /></a></div>The Brexit transition period ended at 11pm on 31st December 2020, and there are changes that you need to be aware of when preparing your VAT return. <div><br /></div><div>Some of the key changes relating to businesses in Great Britain and their implications on the running of their business are outlined below. Please note however that businesses in Northern Ireland are subject to a new NI protocol and that the rules below don't apply to them. </div><div><div><br /></div><h2 style="text-align: left;">VAT Returns </h2><div>Boxes 8 and 9 were used for reporting sales of goods to, and purchases from the EU, so those will no longer be required for transactions from 1st January 2021 onwards. You will however need to report any transactions which took place prior to 1st January. These boxes will eventually be removed from the VAT return format. </div><div><br /></div><div>Box 2 was used for reporting ‘acquisition tax’ on goods bought from EU VAT registered businesses. From 1st January this box will only be used by businesses in Northern Ireland who buy goods from the EU. </div><div><br /></div><h2 style="text-align: left;">Service supplies</h2><div><h3 style="text-align: left;">Business to Business (B2B) supplies of services</h3><div>The general rule is that the place of supply is where customer belongs and that does not change. So treatment of these sales will remain the same.</div><div><ul style="text-align: left;"><li>EU customers will continue to account for local VAT in their own countries via the Reverse Charge.</li><li>EU suppliers will continue to supply their services to UK businesses free of any VAT. UK businesses must continue to account for reverse charge VAT on receipt of these services.<br /> </li></ul></div><h3 style="text-align: left;">Business to Consumer (B2C) supplies of services</h3><div>The general rule is that the place of supply is where the supplier belongs and that does not change either. So UK VAT will continue to apply (note there are <a href="https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec12" target="_blank">some exceptions to the general rule</a>).</div><div> </div><div>There is an another exception for businesses making B2C supplies of digital services as the current threshold of £8,818 no longer applies from 1st January (see below for more details).</div></div><div><br /></div><h2 style="text-align: left;">Goods sold to the EU </h2><div>Goods sold to a EU customer will now be reported as zero rated sales - regardless of whether the customer has an EU VAT registration number or not. </div><div><br /></div><div>UK businesses who sell to non-VAT registered EU individuals will need to consider whether they or their customer will be responsible for paying EU VAT when the goods arrive in the EU. This must be made clear to the purchaser in the terms and conditions of sale. If the UK business is responsible then it will need to register in the relevant EU countries. <span><a name='more'></a></span></div><div><br /></div><div><div><ul style="text-align: left;"><li>Purchaser responsible – known as Delivered at Place (DAP):</li></ul></div><div><ul style="text-align: left;"><ul><li>UK Seller zero rates the sale in the UK</li><li>EU purchaser incurs and pays their local VAT/duty – if goods are sent by post, it is likely the package will be held by the postal service/post offices in the EU country until the relevant duty and VAT is paid</li><li>UK seller does not have to register in the EU country</li><li>This option may not be available in some EU countries, if the goods are sold via an online marketplace</li><li>Likely to cause inconvenience to the purchaser and hold up delivery – increases risk of losing the customer</li></ul></ul></div><div><ul style="text-align: left;"><li>Seller responsible – known as Delivered Duty Paid (DDP):</li></ul></div><div><ul style="text-align: left;"><ul><li>Seller must register for VAT in the EU country of arrival</li><li>Seller incurs the import VAT – recovers this import VAT on their EU VAT return</li><li>Seller charges VAT at the appropriate rate for the EU country, and accounts for this on the VAT return for that country</li></ul></ul></div></div><div>Businesses will still need to retain evidence that the goods left the UK, in order to support the zero rating.
Please note that sales between GB and NI will remain subject to UK VAT. </div><div><br /></div><div><div>On should note that the EU will be bringing in new rules in July 2021, which will apply to goods sold to EU consumers with a value of under €150. Online marketplaces (such as Amazon) will become liable for collecting and paying the VAT on these sales and the Mini One Stop Shop (MOSS) will be extended to these sales. The seller can use MOSS to report their sales to EU consumers in one return, instead of having to register in multiple EU countries. These sales will also be exempt from Import VAT when they arrive in the EU. UK businesses will need to pick which EU country they wish to register for MOSS in – only one registration is required.</div></div><div><br /></div><h2 style="text-align: left;">Goods arriving from outside the UK (both EU and non-EU) </h2><h3 style="text-align: left;">Consignments with a value under £135 </h3><div>GB has introduced a £135 threshold for goods coming from overseas sold to GB consumers via a third party Online Marketplace (OMP). Here the OMP is responsible for accounting for the UK VAT on the sale and there are no import implications for the supplier. If the goods are sold direct by the supplier to the consumer, the supplier will have to VAT register in GB and account for VAT.</div><div><br /></div><div>UK VAT will NOT be charged by the seller if the UK purchaser provides them with their UK VAT number. Where no UK VAT is incurred, then the purchaser will need to account for VAT on their return using a reverse charge: the business will charge itself the VAT in Box 1, and then recovers it in Box 4 (where entitled to recover VAT on the item imported). The net value of the goods will then be entered in Box 7.</div><div><br /></div><h3 style="text-align: left;">Consignments with a value over £135 </h3><div>These will be subject to customs procedures, and import VAT charged on arrival. Where a UK VAT registered purchaser is responsible for the import (i.e. where their VAT details are on the import documentation), then they can use the new Postponed Import VAT (PIVA) scheme. Under this scheme, instead of having to pay Import VAT upfront and then recovering it later, the VAT registered business can account for the Import VAT on their UK VAT return. There is no need to apply for PIVA but the importer or their agent will have to indicate on the Customs declaration that PIVA will be used in order that no VAT is charged at the point of entry.<span></span></div><div><br /></div><h3 style="text-align: left;">Reporting on the VAT return </h3><div>The receipt of the goods is reported on the VAT return as follows: </div><div><ul style="text-align: left;"><li>Box 1 – VAT on consignment (based on consignment value, at the appropriate VAT rate) </li><li>Box 4 – Recovery of the VAT in Box 1 (where the business is entitled to recover this VAT) </li><li>Box 7 – Consignment value
The above reporting applies to consignments both over and under £135. </li></ul></div><div>It’s important to note that a business can only recover the VAT in Box 4 if entitled to do so. i.e. it’s an allowable expense for VAT purposes. </div><div><br /></div><h2 style="text-align: left;">VAT codes to use in your software </h2><h3 style="text-align: left;">Sales to EU </h3><div>Sales to EU countries are now treated as Exports, so there is no requirement to use any of the EU-specific VAT codes when goods are sold to EU customers. These will be treated as normal zero rated sales, you should use the appropriate zero rated VAT code ('0.0% Z' in QBO, 'Zero rated income' in Xero). </div><div><br /></div><h3 style="text-align: left;">Purchases from EU </h3><div>Per the above advice, purchases from the EU will be reported slightly differently on the VAT return.</div><div><ul style="text-align: left;"><li>Quickbooks – PVA Import 20%
This code will need to be activated in the software as follows: </li></ul></div><div><ol style="text-align: left;"><li>Go to Taxes and select Edit Settings. </li><li>Select Edit VAT rates, and on the smaller gear icon select Show Inactive. </li><li>Switch it on using the toggle. </li></ol></div><div><ul style="text-align: left;"><li>Xero – their website states that clients on MTD will be able to enter the imports manually when generating a VAT return, using a ‘PVA option’ button. There is an alternative work-round which will populate the correct boxes on the return, using one of the reverse charge VAT codes. In order to use this code: </li></ul></div><div><ol style="text-align: left;"><li>Select ‘Accounting’ and then ‘Advanced’ </li><li>Select ‘Tax Rates’, scroll down and click on ‘Add Domestic Reverse Charge Tax Rates’ </li><li>When entering an import in expenses, select the VAT code called ‘Domestic Reverse Charge @ 20% (VAT on Expenses)’. You may wish to make a note on the expense entry, stating that it is an import. <br /><br /></li></ol></div><h2 style="text-align: left;">New VAT number checker</h2><div>UK businesses would have previously used the EU VIES service to check the validity of a UK VAT number. A new UK VAT number checker is now available on the GOV.UK site here: </div><div><br /></div><div><a href="https://www.gov.uk/check-uk-vat-number" target="_blank">Check a UK VAT number</a></div><div><br /></div><h2 style="text-align: left;">Flat Rate VAT </h2><div>If your UK client was selling goods to non-VAT registered EU individuals (B2C) prior to 1st January 2021, then normal UK VAT would have been applied to these sales. The only exception would have been where sales to an EU country exceeded it's distance selling threshold, in which case VAT registration would have been triggered in that country and local VAT applied to the sales. </div><div><br /></div><div>From 1st January 2021 B2C sales of goods to EU customers are zero rated in the UK.
The flat rate percentage is applied to all zero rated sales. Therefore businesses who make EU B2C sales of goods, and use the flat rate scheme, need to consider whether to leave this scheme. </div><div><br /></div><div>A business can leave the flat rate scheme at any time, but must write to HMRC. If this needs to be backdated, then HMRC will allow it as long the date isn't in a VAT return which has already been submitted under the Flat Rate Scheme. </div><div><br /></div><h2 style="text-align: left;">Digital Services to EU consumers </h2><div>UK Businesses who sell Digital Services to non-VAT registered EU consumers (B2C) will no longer be able to use the UK's MOSS service from 1st January 2021. The final UK MOSS return will be for the period ended 31st December 2020, and the deadline for submission is 20th January 2021.
From 1st January, UK businesses who sell B2C digital services to the EU will need to register for MOSS in an EU country (any EU country, and only one registration is required). </div><div><br /></div><h2 style="text-align: left;">EC Sales lists </h2><div>These will no longer be required for EU sales that take place from 1st January 2021. Sales before this date will need to be reported, and the deadline for submitting this final EC Sales List is 21st January 2021.</div><div><br /></div><h2 style="text-align: left;">Intrastat </h2><div>UK businesses were required to submit Intrastat returns where sales to or purchases from EU VAT registered businesses exceeded the following thresholds: </div><div><ul style="text-align: left;"><li>Despatches (sales) - £250,000 </li><li>Acquisitions (purchases) - £1,500,000 </li></ul></div><div>From 1st January 2021 intrastat returns will only be required if purchases from the EU are over the £1,500,000 threshold above. This requirement will remain in place in 2021 only.
If a business was only submitting intrastat returns because of the £250,000 sales threshold being breached, then Intrastat reporting will no longer be needed.
</div></div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-50361999673115853132020-10-23T13:04:00.001+01:002024-02-29T16:33:47.003+00:00How to put Bitcoin in your ISA or in your SIPP<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-U1rVER1eYRc/X5GOyw5pPgI/AAAAAAAC_pc/BTn2xx5jrxA4lqq5VZg1ijvweA26x8IIQCLcBGAsYHQ/s745/BTC%2Bmoon.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="481" data-original-width="745" src="https://1.bp.blogspot.com/-U1rVER1eYRc/X5GOyw5pPgI/AAAAAAAC_pc/BTn2xx5jrxA4lqq5VZg1ijvweA26x8IIQCLcBGAsYHQ/s320/BTC%2Bmoon.jpg" width="320" /></a></div>With the recent run-up in Bitcoin price, a number a people in the UK have been wondering how to get some Bitcoin exposure inside their pension or their ISA. <div><br /></div><div>While in many jurisdictions such as the US or Canada, it's possible to get exposure to Bitcoin in tax wrappers such as pension funds, the UK financial conduct authority, in its great wisdom, decided that it was way too risky for the average Joe. <div><br /></div><div>The way most people get Bitcoin exposure in tax wrappers is by buying exchange listed trackers such as the <a href="https://grayscale.co/bitcoin-trust/" target="_blank">Grayscale Bitcoin Trust (GBTC)</a> in the US, the <a href="https://3iq.ca/the-bitcoin-fund/" target="_blank">Bitcoin Fund (QBTC.U)</a> in Canada or <a href="https://coinshares.com/etps/xbt-provider/bitcoin-tracker-euro" target="_blank">XBT Provider</a> and <a href="https://www.hanetf.com/product/8/fund/btcetc-bitcoin-exchange-traded-crypto-btce" target="_blank">BTCetc</a> in Europe. While it was possible to buy such trackers into SIPPs in the past, the FCA made it illegal in early 2020. And the situation will actually get even worse next year since sale of such trackers will be altogether forbidden to all private investors in the UK. </div><div><p></p><p>While it's still possible to get Bitcoin exposure directly by buying the cryptocurrency on exchanges such as Coinbase, Kraken or Gemini (and soon Paypal), some people would rather do that into a tax friendly container such as an ISA or a SIPP. And in such containers you cannot buy cryptocurrencies nor any of the available listed trackers. </p><p>But a recent development that we talked about in <a href="https://www.taxtrends.org/2020/10/how-to-put-bitcoin-on-your-balance-sheet.html" target="_blank">our previous post</a> is providing an alternative way to achieve that goal in a stealth way. Indeed, as more and more listed companies put Bitcoin on their balance sheet, and as the price of Bitcoin increases, those companies in effect are becoming virtual Bitcoin ETFs, allowing shareholders to get indirect exposure to Bitcoin if they buy the stock. </p><p><span></span></p><a name='more'></a><p></p><p>If you buy today shares of Microstrategy, you actually get a 28% Bitcoin exposure as well. And if you buy shares of Galaxy Digital Holdings you get a whopping 69% exposure. You can find the growing list of such companies <a href="https://bitcointreasuries.org/index.html" target="_blank">there</a>. As their number increases in the next few months, so will your options. We can also imagine that some companies will eventually get an exposure above 100% if they start leveraging their balance sheet by borrowing fiat against their Bitcoins holdings (this is what Hut 8 Mining has started to do already). </p><p>Until the regulator changes the rules again, those shares are available today in most ISAs and SIPPs (such as the ones from <a href="https://www.home.saxo/en-gb" target="_blank">Saxo Bank</a> and <a href="https://www.ii.co.uk/" target="_blank">Interactive Investor</a>). One needs to be careful however because some providers such as <a href="https://www.youinvest.co.uk/" target="_blank">AJ Bell</a> only provide access to a subset of the foreign equity markets for cost savings reasons (typically only those shares that settle through Crest).</p><p>So if you believe, like more and more investors, that a portion of your savings should be in a hard asset such as Bitcoin, you now have plenty of options, even in those places where the regulator would want you to avoid doing it. And if you're still on the fence, the best place to start is by following the short journey of Microstrategy CEO Michael Saylor at <a href="http://hope.com" target="_blank">hope.com</a>!</p></div></div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com2tag:blogger.com,1999:blog-1745020323458616400.post-1108860636825469342020-10-16T13:15:00.004+01:002021-02-15T17:35:37.205+00:00How to put Bitcoin on your Balance Sheet<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-Fpd9M61K_kE/X4lfgRVqmDI/AAAAAAAC_OA/2gBZJq15f7AGvUfNgLKf53i6uj2g1xDfgCLcBGAsYHQ/s2048/elena-mozhvilo-nhYK4qIv9Pg-unsplash.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1509" data-original-width="2048" src="https://1.bp.blogspot.com/-Fpd9M61K_kE/X4lfgRVqmDI/AAAAAAAC_OA/2gBZJq15f7AGvUfNgLKf53i6uj2g1xDfgCLcBGAsYHQ/s320/elena-mozhvilo-nhYK4qIv9Pg-unsplash.jpg" width="320" /></a></div>The COVID-19 pandemic and the resulting economic crisis has pushed all governments around the world to print money like never before resulting in a global devaluation of cash assets. People and companies sitting on large piles of cash have struggled to invest that cash into harder assets such as gold, real estate or equities (in particular big techs that have been perceived as less immune to the COVID-19 dislocation event). <div><br /></div><div>But more and more people have been turning to Bitcoin as well. Indeed the cryptocurrency has all the characteristics of a hard currency (the supply is limited by a hard cap of 21 million coins) without the downside of existing options (lack of convenience, low liquidity, elastic inflation -- as prices increase, inflation rate increases as well along with economic incentives). As fears that government might outlaw the cryptocurrency fade away, more and more corporates are taking the plunge. This is a virtuous circle: as more and more companies hold the cryptocurrency on their balance sheet, and as governments acknowledge and regulate that behaviour, the legal risk evaporates. </div><div><br /><div><a href="https://www.microstrategy.com/en/bitcoin" target="_blank">Microstrategy</a> was the first public company to announce that they converted the majority of their Treasury into Bitcoin, a total of $425 million. Since then a number of businesses have disclosed that they had done or intended to do that as well. Coldcard creator, Rodolfo Novak, has even put up a <a href="https://bitcointreasuries.org/index.html" target="_blank">web page listing those businesses</a>. </div></div><div><br /></div><div>Converting part of your Treasury into Bitcoin is more complex than converting it into another currency, especially if you don't have the resources of a large public company. But if you're ready to protect your funds with a swarm of cyber hornets, here are some of the issues and how to deal with them:</div><div><br /></div><h2 style="text-align: left;">Security</h2><div>As most people know, holding Bitcoin is hard. Everyone has heard of hacks or mistakes that have cost Bitcoin owners their savings. As a company putting a significant amount of your Treasury in Bitcoin, you have a fiduciary responsibility to ensure that those funds are secured properly. You have basically 3 options. <span><a name='more'></a></span></div><div><br /></div><div>The first option is to use a custodian. Major custodians such Bitgo, Coinbase or Gemini will not be interested by small businesses. But more and more banks are now able to custody your Bitcoins. One such bank is <a href="https://en.swissquote.com/crypto-assets" target="_blank">Swissquote</a> based in Switzerland that will happily open a bank account for your UK business. </div><div><br /></div><div>Another option is to open an account at a bank or a broker and invest the cash into a tracker fund. There are a number of exchange listed funds now available in Europe that track Bitcoin performance such as those from <a href="https://coinshares.com/etps/xbt-provider" target="_blank">XBT provider</a> or <a href="https://etcm.ltd/product/" target="_blank">ETC Group</a>. While you don't hold the asset directly, those funds will replicate the performance of Bitcoin with very little counterparty risk. </div><div><br /></div><div>The last option is to self-custody. It is the preferred option for hardcore bitcoiners but it's the riskiest one as securing cryptocurrencies is very difficult especially for a novice user. Unless you know what you're doing I would not venture there. But if you really want to go this route, you should go for a multisig setup and vendors such as <a href="https://keys.casa/" target="_blank">Casa</a> or <a href="https://unchained-capital.com/collaborative-custody/" target="_blank">Unchained Capital</a> provide products that make as painless as possible today. </div><div><br /></div><h2 style="text-align: left;">Accounting and Tax</h2><div>Last year HMRC <a href="https://www.taxtrends.org/2019/11/uk-tax-treatment-of-crypto-assets-for.html" target="_blank">gave some clarity when it comes to accounting</a> of cryptocurrencies. Like in most jurisdictions, the UK tax office considers cryptocurrencies in general and Bitcoin in particular to be assets and not currencies. It makes cryptocurrencies a very poor choice as a payment rail but a good option as a store of value as it makes holding volatile cryptocurrencies less risky from a tax standpoint (since there is no revaluation at year end but only upon sale). It also means that the tax treatment will be identical whether you choose to hold Bitcoin itself or a tracker fund. </div><div><br /></div><div>Unless you sell, the only thing that you need to do is to mark-to-market your Bitcoin position at the end of the year (your accountant will know how to do that). It has no tax impact. </div><div><br /></div><div>If you buy some more at some point, it will change your average purchase price and if you sell, you will realise a gain or loss that is taxed at the corporation tax rate. </div><div><br /></div><h2 style="text-align: left;">Conclusion</h2><div>Converting part of your available cash into Bitcoin won't make your company profitable if it's not already profitable but it will allow you to preserve your capital as the UK government continues to print money. And you don't have to be a multinational to do it!</div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-52655708135813903012020-10-08T11:35:00.001+01:002020-10-08T11:35:23.512+01:00Remitting money from mixed funds: the ordering rules<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-thTz_J3q3OA/X37UOpAB9WI/AAAAAAAC-2M/9Odb1EW3-WcyeyTlFssjqLbHPofpF5LwgCLcBGAsYHQ/s2048/michael-longmire-lhltMGdohc8-unsplash.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1475" data-original-width="2048" src="https://1.bp.blogspot.com/-thTz_J3q3OA/X37UOpAB9WI/AAAAAAAC-2M/9Odb1EW3-WcyeyTlFssjqLbHPofpF5LwgCLcBGAsYHQ/s320/michael-longmire-lhltMGdohc8-unsplash.jpg" width="320" /></a></div>Most people who are UK resident, non domiciled and who use (or have used) the remittance basis of taxation know that they should only remit funds from a capital account if they don't want to pay taxes on the funds remitted. And most people who intend to benefit from this advantageous tax system will have created a capital account prior to coming to the UK that allows them to live in the UK without having to pay any tax on the funds they bring over. <div><br /></div><div>But sometimes, people will only have been made aware of those rules once they are in the UK. Or they might have created a capital account without enough funds to maintain their lifestyle. In those instances, they will have to bring revenue from what the HMRC calls mixed funds. A mixed fund account is an account that has capital and revenue mixed together. If they need to remit funds from such an account, they will have to pay some tax. But the calculation of that tax can very complex because of what the HMRC calls the ordering rules, and which have been in place since 2008.</div><div><br /></div><div>Each mixed fund account is actually a series of virtual buckets which are increased or decreased every time there is money coming in or out of the account. There are 8 buckets per tax year:<div><div><ol style="text-align: left;"><li>UK employment income </li><li>Foreign employment income not subject to a foreign tax </li><li>Other foreign income (ie. trade profits, rental income or investment income) not subject to a foreign tax </li><li>Foreign capital gains not subject to a foreign tax </li><li>Foreign employment income subject to a foreign tax </li><li>Other foreign income (ie. trade profits, rental income or investment income) subject to a foreign tax </li><li>Foreign capital gains subject to a foreign tax </li><li>Any funds not covered above (i.e. capital)</li></ol></div><div><span><a name='more'></a></span>Every time money comes into a given account, it goes into the corresponding bucket for that specific tax year. </div><div><br /></div><div>But when money is remitted to the UK, one needs to allocate those funds to one or multiple buckets using the ordering rules. First money is taken from funds of the current tax year in the order stated above (ie. out of UK employment income first, then foreign employment income not subject to a UK tax, etc). If the amounts relating to the current tax year have been fully used (or if there are no funds relating to the current tax year) then one starts using the funds of the previous tax year in the same order. The process is repeated for earlier years in reverse chronological order.</div><div><br /></div><div>If money is spent or transferred offshore rather than in the UK, those rules don't apply however. In that case the funds removed have to be taken out of each available bucket pro-rata of the contents of the initial source on the day of the transfer. </div><div><br /></div><div>It's easy to see that this calculation can be extremely fastidious, especially if the account goes back many years or if it's used for petty transactions throughout the year. This is why, once you know you might need to use a mixed fund for remittances in the future, one should avoid adding funds to it and reduce the outgoing transactions to a minimum. </div><div><br /></div><div><br /></div></div></div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-42664509414425898682020-06-26T17:59:00.001+01:002020-06-26T18:01:21.518+01:00Investing directly vs. through a holding company<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-QH7ZieBap_U/XvYodaePKSI/AAAAAAAC3u0/6yhebXaZy4c9nIz_4RcJF1WzTyKl1l_ugCK4BGAsYHg/s534/directors.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="315" data-original-width="534" src="https://1.bp.blogspot.com/-QH7ZieBap_U/XvYodaePKSI/AAAAAAAC3u0/6yhebXaZy4c9nIz_4RcJF1WzTyKl1l_ugCK4BGAsYHg/s320/directors.jpg" width="320" /></a></div>It's quite common in continental Europe for private equity investors or entrepreneurs to invest in projects through a holding company, either onshore of offshore. <div><br /></div><div>Not quite so in the UK, mostly because a number of tax benefits are not available in such a situation. And yet it might be a good idea nonetheless. Let's look at the pros and cons of each approach.<div><br /></div><h2 style="text-align: left;">Benefits of investing directly</h2><div>If you are investing in a company that has the EIS or SEIS status, you need to do the investment directly in order to benefit from the generous tax breaks. </div><div><br /></div><div>If you sell investments you will be taxed only once vs having the holding company pay tax on the gain first and pay tax again when you extract the profits from the holding company. </div><div><br /></div><div>And also, investing directly is cheaper because you don't need to maintain another structure. </div><div><br /></div><h2 style="text-align: left;">Benefits of investing through a holding company</h2><div>If your investment distributes surplus profits regularly to the holding company, no dividend tax is due since dividends are only taxed when they are distributed to the final shareholders. That allows you to ring-fence those profits as if the underlying investment were to go bankrupt, those profits are now protected one level up. </div><div><br /></div><div>Another benefit is that when you have multiple investors, they will probably have different time preference when it comes to profit extraction. Having a holding company allows you to be neutral to the timing of those distributions since the tax point is now decided by the extraction at the holding level.</div><div><br /></div><div>One of the benefit of direct investing is the avoidance of double taxation. However there are situations where those can be avoided. Such a case is the <a href="https://www.accaglobal.com/us/en/technical-activities/technical-resources-search/2014/july/substantial-shareholding-exemption.html" target="_blank">Substantial Shareholding Exemption</a> where the holding company owns more than 10% of an investment for the last 2 years. </div><div><br /></div><div>And finally, if you keep the profits in the holding company to be reinvested, you can delay the dividends tax forever. </div></div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-64969708447506478852020-03-17T17:14:00.001+00:002020-03-17T17:14:42.432+00:00Business as usual at TaxAssist AccountantsDuring the Covid19 outbreak we are following the government's advice to minimise face-to-face contact as part of our commitment to the health and well-being of our clients and employees. So while our shop is closed our team continues to operate as normal. We have access to secure remote IT systems which enable us to work from home and to continue to deliver our services to you.<br />
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<a href="https://1.bp.blogspot.com/-zXDbm3hzLwc/XnD-x1p4UvI/AAAAAAACt7o/bB0MNctlNiMeucnjx1ecU16xUs3QDWSWwCLcBGAsYHQ/s1600/We%2527re%2Bopen.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="974" data-original-width="1268" height="245" src="https://1.bp.blogspot.com/-zXDbm3hzLwc/XnD-x1p4UvI/AAAAAAACt7o/bB0MNctlNiMeucnjx1ecU16xUs3QDWSWwCLcBGAsYHQ/s320/We%2527re%2Bopen.png" width="320" /></a></div>
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If you need to meet with us, we can still communicate through video conferencing or over the phone. Our technology stack even allows us to share documents during our calls and therefore do remote training if need be. </div>
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If you wish to deliver your records, we can give you access to Receipt Bank, our document scanning facility already used by a great deal of our clients or we can make specific alternative arrangements. Just contact us at 020 3397 1520, our phone number remains unchanged!</div>
Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-31231395108812516792020-03-02T16:18:00.001+00:002020-03-02T16:18:50.746+00:00Major change: CGT on residential property sales<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-Epwiy3E5jvk/Xl0xSFOlmUI/AAAAAAACs68/kKSgnpKfb3kFk4Rx5ETGhZw58kc0fba-wCLcBGAsYHQ/s1600/landlords.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="342" data-original-width="580" height="187" src="https://1.bp.blogspot.com/-Epwiy3E5jvk/Xl0xSFOlmUI/AAAAAAACs68/kKSgnpKfb3kFk4Rx5ETGhZw58kc0fba-wCLcBGAsYHQ/s320/landlords.jpg" width="320" /></a></div>
There were many changes with capital gains tax in the past few years but most changes only applied to non-resident landlords.<br />
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From 6 April 2020, when CGT is due on the disposal of residential property a return must be filed and "notional CGT" paid within 30 days of completion. This is a major change!<br />
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<h2>
The changes</h2>
A number of fundamental changes in relation to capital gains tax are anticipated with effect from 6 April 2020 including:<br />
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<ul>
<li>Reduction in final period exemption from 18 to 9 months</li>
<li>Restriction of letting relief to periods of co-occupation between tenant and landlord</li>
<li>Extension of PPR relief for certain inter-spouse transfers</li>
<li>Reduced deadline for reporting capital gains and paying capital gains tax on sales of residential property</li>
</ul>
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This article concerns the last of these changes.<br />
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<h2>
What is the current position ?</h2>
Property owners will be used to having a minimum of 10 months and a maximum of 22 months between incurring a capital gain on the sale of a residential property and reporting the disposal to HMRC and paying the tax. This has been the case since self-assessment was introduced in 1997.<br />
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With effect from 6 April 2020, the deadline is shortened to just 30 days, which brings the regime into line with the deadlines which were introduced for non-residents selling residential property after 6 April 2015, and both residential and commercial property after 6 April 2019.<br />
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<h2>
Who does this affect ?</h2>
The new rules affect UK resident individuals, trustees and personal representatives who sell or otherwise dispose of residential property. This article concentrates on disposals by individuals. The rules do not extend to disposals by limited companies.<br />
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<h2>
<a name='more'></a>What is residential property ?</h2>
In most cases it will be clear that the property being disposed of is residential property. Where a property has both commercial and residential aspects, the gain arising must be apportioned on a just and reasonable basis, and only the residential part will be subject to the new reporting requirements.<br />
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The wider definition is taken from existing rules in place for disposals of UK residential property by non UK resident taxpayers. This includes land and property which has at any time in the period of ownership consisted of or included a dwelling. Off-plan purchases will also be caught as can the grant of an option to sell an interest in land or property.<br />
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<h2>
What is the relevant date under the new regime ?</h2>
The date of exchange of contacts for a sale of residential property remains as the tax point for capital gains tax purposes, however it is the date of completion which is relevant in determining the 30 day deadline for the purposes of the CGT return required under the new regime.<br />
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This raises the question for sales where the date of exchange of contracts is before 6 April 2020, however the date of completion is after 5 April 2020. In this case, the return will only need to be reported under self-assessment for the 2019/20 tax year.<br />
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Uncommonly, you might find that the date of completion for a residential property sale may occur after the deadline for the submission of a self-assessment return, in which case no 30 day return will be required under the new regime.<br />
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<h2>
What if the gain is covered by a relief ?</h2>
If the gain arising is fully covered by the annual exemption and other reliefs, then there is no requirement to make a return under the new regime.<br />
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Providing the conditions for the relief are met at the time of the claim for the relief, then the relief can be taken into account in the capital gains tax calculation for the purposes of the 30 day return. It is not sufficient to just have an intention to make a claim for relief dependent on future expenditure, for example an EIS subscription.<br />
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<h2>
What if losses have arisen on this or other disposals ?</h2>
Contention exists in relation to the new rules where losses arise on the sale of residential property and other assets. The rules are set to be introduced so that:<br />
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<ul>
<li>Any losses brought forward from a previous tax year, or arising in the current year prior to a residential property sale will be available to set against gains from that sale</li>
<li>A loss on residential property does not need to be reported, however if a previous residential property gain has arisen, then a subsequent loss can be reported under the new regime in order to generate a repayment of tax from the earlier disposal</li>
<li>A loss arising on the sale of any other asset after a residential property gain will not be available to offset against that gain until such time as the subsequent self-assessment has been completed.</li>
</ul>
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<h2>
Does the timing of disposals need to be considered ?</h2>
The complications which can be caused by losses arising on residential and other disposals during the same tax year mean consideration will need to be given to timing of disposals to ease cash-flow.<br />
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In most cases, there will be limited opportunities to change the timing of completion of a residential property sale, however where possible, non residential property sales at a loss can be made before the sale of residential property at a gain to ensure those losses are available for relief against that gain.<br />
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The availability of a repayment supplement in respect of tax paid under the new regime which is subsequently found not to be due as a result of the above is unlikely to mitigate the frustrations of taxpayers who are owed tax by HMRC which they are unable to access.<br />
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It is worth mentioning the residential property sales which complete on the same day will only require one return.<br />
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<h2>
What happens if the CGT rate at the time of disposal is not known ?</h2>
Under the new regime, the rules require the taxpayer to estimate the tax liability based on anticipated levels of income for the year. If the taxpayer anticipates paying higher rate tax on their income for a tax year during which they dispose of a property, the CGT rate will be 28%. However, if their circumstances change abruptly after a disposal, so that they no longer anticipate paying higher rate tax, they will need to wait until after they have submitted their self-assessment return to claim back any overpaid CGT.<br />
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<h2>
What is the format of the return ?</h2>
At the time of writing, we do not know what the CGT return under the new regime will look like. It is anticipated that the return will be in much the same format as the returns currently required for non-resident CGT returns and real time CGT returns which are currently available for completion by individual taxpayers.<br />
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<h2>
Does the new return replace the self-assessment return ?</h2>
Where a return has been submitted under the new regime, there is still a requirement for the taxpayer to submit a self-assessment tax return within the normal deadline. The tax paid during the year, under the new regime is treated as “notional tax” by HMRC and will be taken as a credit towards the ultimate CGT liability arising as a result of the self-assessment return.<br />
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<br />Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-81590066342930234802020-01-31T09:57:00.000+00:002020-01-31T09:57:28.302+00:00Brexit done! Now what happens to VAT? <div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-YaXa7Vrwv3k/XjP52nkVLmI/AAAAAAACrlk/FqHXTl5dL-0Ec5sBSNb_UV3PShO6aRwKwCLcBGAsYHQ/s1600/Road_Signs_EU_BREXIT.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="460" data-original-width="779" height="188" src="https://1.bp.blogspot.com/-YaXa7Vrwv3k/XjP52nkVLmI/AAAAAAACrlk/FqHXTl5dL-0Ec5sBSNb_UV3PShO6aRwKwCLcBGAsYHQ/s320/Road_Signs_EU_BREXIT.jpg" width="320" /></a></div>
Today is the last day the UK is in the EU. Or is it? As the UK has agreed to leave the EU with a deal, there is now a transition period until 31 December 2020 (or later if both parties agree to extend that transition). What it means in terms of VAT, the most visible EU linked tax, is that nothing changes immediately. During the transition period, the UK will remain part of the single market and customs union meaning that we will continue to follow the rules regarding Intra-EU movement of goods set out in VAT Notice 725. In other words, that means one can continue to zero-rate their sale of goods, as long as they have their customers EU VAT number and the goods are sent or transported to another EU member state and that they keep valid commercial evidence that the goods have been removed from the UK within the relevant time limits. And it also means that one must continue to submit EC sales lists monthly or quarterly as appropriate.<br />
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Now some people might have been advised by HMRC to obtain an EORI number ahead of the EU exit, in case the UK left the EU with no deal. This reference while of no use for now should be kept as we are still likely to need this at the end of the transition period. Equally if one has registered for Transitional Simplified Procedures (TSP) for imports, one should keep this paperwork ready for the end of the transition period.<br />
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Lastly, during the transition period, businesses will still be able to submit valid EU refund claims via HMRC, and those businesses that are registered for VAT MOSS because they supply B2C supplies of digital services to EU consumers, may continue to submit VAT MOSS returns for the time being in the UK, rather than needing to register in an alternative EU member state.<br />
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In other words, no change for now!<br />
<br />Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-78935260213640301552019-11-14T10:31:00.001+00:002024-01-25T10:09:09.532+00:00UK Tax treatment of Crypto-Assets for Businesses<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-4T2cAW7lQ6k/Xc0o0JrJnvI/AAAAAAACndw/EJ-KlUn5iMoNjyGW1YtTA09kkuWnSSlPACLcBGAsYHQ/s1600/bitcoins-and-u-s-dollar-bills-730547.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1200" data-original-width="1600" height="240" src="https://1.bp.blogspot.com/-4T2cAW7lQ6k/Xc0o0JrJnvI/AAAAAAACndw/EJ-KlUn5iMoNjyGW1YtTA09kkuWnSSlPACLcBGAsYHQ/s320/bitcoins-and-u-s-dollar-bills-730547.jpg" width="320" /></a></div>
HMRC published a guidance note last year (<a href="https://www.taxtrends.org/2018/12/tax-treatment-of-cryptoassets-update.html" target="_blank">see our article</a>) on the taxation of cryptocurrencies for individuals. They have now produced a similar document for businesses (see <a href="https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-tax-for-businesses" target="_blank">gov.uk website</a>). The HMRC's approach in this policy paper is, as expected, conservative, and it stands in line with other countries’ tax treatment for cryptocurrencies. It's noteworthy however that the HMRC explicitly states that it does not consider crypto as a currency, and the policy paper is careful to use the term "crypto-asset" instead of "cryptocurrency" throughout.<br />
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<h2>
Corporation Tax</h2>
Where a token/crypto-asset is being used in a trading activity, companies are to be taxed on their trading profits. Profits need to be calculated in GBP therefore all transactions need to be converted into GBP at the time of the transaction.<br />
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Where a token/crypto-asset is used in a non-trading activity, it is be treated as an investment and so any gain on disposable is to be subject to CT on chargeable gains. Some but not all costs can be allowed as a deduction when calculating the gain. Cost of mining for example is not allowed unless the mining activity is done as a trade. The calculation method is following section 104 of the TCGA 1992 i.e. using a pool per asset class but with slightly different anti-bed-and-breakfast rules (a sale is matched against the pool unless a purchase happen in the next 10 days -- and not 30 as usual). And in case of a hard fork, cost base needs to be split on a "just and reasonable" basis.<br />
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<h2>
<a name='more'></a>VAT</h2>
As expected, most transactions involving crypto-assets won't attract VAT:<br />
<ul>
<li>Exchange tokens received by miners are out of scope</li>
<li>When exchange tokens are exchanged for goods or services not VAT is due on the supply of the token</li>
<li>Any charges or fees made over the value of the tokens are VAT exempt</li>
</ul>
The VAT treatments outlined above are provisional however pending further developments especially in respect of the regulatory and EU VAT positions.<div>
<br /><ul>
</ul>
<ul>
</ul>
<h2>
Paying employees in crypto-assets</h2>
Again, as expected, if an employer ‘pays’ exchange tokens as earnings to an employee, those exchange tokens count as ‘money’s worth’ and are subject to Income Tax and National Insurance contributions on the value of the asset.<br />
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<h2>
Stamp Duty and Stamp Duty Reserve Tax</h2>
At the date of publication of their paper, HMRC’s view is that existing exchange tokens would not be likely to meet the definition of ‘stock or marketable securities’ or ‘chargeable securities’ and therefore not subject to Stamp Duty.</div>
Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-45727974139404475822019-11-07T10:03:00.001+00:002019-12-16T15:47:24.679+00:00The different types of Pension in the UK<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-MxYfWx6suFY/XcPq9R7ppJI/AAAAAAACnLU/dimaLRYFkVwrimiJlQuZbeHPEfnyC6z1gCLcBGAsYHQ/s1600/1558427893_retirement.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="342" data-original-width="580" height="187" src="https://1.bp.blogspot.com/-MxYfWx6suFY/XcPq9R7ppJI/AAAAAAACnLU/dimaLRYFkVwrimiJlQuZbeHPEfnyC6z1gCLcBGAsYHQ/s320/1558427893_retirement.jpg" width="320" /></a></div>
Before 2012, Pension Contributions were optional and for a lot of people who had never contributed to private pensions, the State Pension paid by National Insurance Contributions (currently at £130 per week if you have 30 qualifying years) was not enough to live on. Automatic enrolment changed this, making it compulsory for employers to automatically enrol their eligible workers into a pension scheme. Currently employees need to contribute 5% of their qualifying earnings and employers 3% (at a minimum), the objective being to supplement (and potentially replace) a State Pension that cannot cope anymore with the changes in demographics.<br />
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But not every scheme behaves the same. And it's important to understand the difference between the different schemes because some of them require that you take an extra step to claim the full tax benefits you're entitled to as failure to do so means that you will leave significant tax savings on the table.<br />
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There are basically 3 schemes available:<br />
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<h2>
1. Tax relief at source</h2>
This is the most common scheme. It's used by the government owned Nest scheme as well as People's Pension. It works the same way as if you were paying yourself directly into a Private Pension: whatever is put in your pension, the HMRC adds 20% to it. In other words, only 80% of your pension contribution is deducted from your after tax salary on your payslip and it means that even if you don't pay tax (because your income is below the personal allowance), you get an pension relief of 20%. The downside however is you only get 20% relief even if you are entitled higher relief because you are a higher rate taxpayer and in order to get the full relief, you need to do a tax return.<br />
<a name='more'></a><br />
<h2>
2. Net pay arrangement</h2>
This scheme is also quite common and is used by many traditional occupational pensions (the pensions companies were using before it were compulsory). It's the one used by Now Pensions and Smart Pensions for example. The way it works is by having the payroll exempt from tax the amounts paid into your pension. The huge benefit from this scheme is that if you are taxed marginally at 40% or 45% you get full tax relief automatically without having to claim it in your tax return or by writing to HMRC (as you have to do in the tax relief at source). The downside however is that if you make less than the personal allowance and don't pay any tax as a consequence, you don't get any 20% relief from the government.<br />
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<h2>
3. Salary sacrifice</h2>
This scheme is the most tax efficient as it allows you not only to save on tax but on National Insurance (both employee and employer) as well. There were rumors it would be disallowed by the government at some point, but so far, it's still an option. Under a salary sacrifice arrangement, you agree to give up part of your salary in return for your employer making a larger contribution to your pension pot. This can save you money because the National Insurance you would be due to pay is calculated on the smaller salary. The employer would pay any employer’s NICs on the smaller salary too. However doing that means that you are in effect having a smaller salary and it has potential consequences on future pension calculations, redundancy pay or statutory maternity pay. I would also create a problem if you have employees paid at the National Minimum Wage as the sacrifice would bring them below the threshold which is illegal.Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-63963444098775545192019-09-30T18:12:00.002+01:002024-01-11T16:26:29.366+00:00Revolut firing on all cylinders<div class="separator" style="clear: both; text-align: center;">
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This week, Revolut announced a very bold deal with VISA that will bring the headcount at the UK Fintech from 1,500 to 3,000 and the number of countries it operates in to 24 (including the US, Japan and Singapore). It could also lead the challenger bank to triple it customers base, from 8 to 24 million in the span of a single year.<br />
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But expanding its retail reach is not the only thing Nik Storonsky has been doing. They have been hard at work filling the gaps in their business offering too. Recently, thanks to their recent banking license, they have been able to start silently rolling out Direct Debits in the UK. After unique IBANs, that was one of the most often requested feature from businesses in the UK. Indeed, as much as you can do without cheques or branches, you cannot without Direct Debits. Many suppliers (and insurances or pension providers are such suppliers) will insist on being paid using the UK Direct Debit system. And unless you can offer the feature you can never replace the incumbents.<br />
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It has also done something that legacy banks used to do and have since stopped for some reason: get partners on board to help grow their business. As an accountant we are at the right place to nudge customers to one bank or another when we create a company. Not for the money (the commission a bank can give is too tiny to make a difference) but for the client experience. And Revolut understanding that, they are now asking accountants to help the onboarding process and offering extra features to our clients in exchange.<br />
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So, as a client of TaxAssist Accountants, if you open an account with Revolut, you’ll get exclusive access to a global business current account for easy international payments, with prepaid business cards, easy integration with Xero and other tools. You'll be able to hold, receive, and exchange 28 currencies without unfair bank charges or hidden FX fees.<br />
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And on top of that you'll be entitled to the following if your signup through our referral link: <div><br /></div><div><ul style="text-align: left;"><li>
1 month free access to any of the premium plans (see all plans <a href="https://www.revolut.com/business/business-account-plans" target="_blank">here</a>) </li><li>Priority customer support: this means your are put into a priority support queue and your enquiries are answered first before regular customers. </li><li>Early access to new features (e.g. merchant acquiring to accept card payments online, FX forwards etc...) </li><li>Dedicated training video with the Revolut Business team account</li></ul></div><div><div>
<b><br />
</b> <b>So if you are a client of ours, and if you think that Revolut can provide an answer to your banking woes, do not hesitate to reach out! Alternatively, please use our <a href="https://revolutbusiness.ngih.net/c/1933928/1582434/9943">referral link</a> to open the account. </b></div>
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Granted, Revolut has been doing just fine as a specialised financial institution focussing on cheap Money Transfers and Foreign Exchange but the company wants a much bigger pie of the banking business and if current behaviour is any indication, it's well on its way...</div>Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-45996600948121038392019-09-09T13:26:00.002+01:002020-07-23T16:06:42.290+01:00Pensions: the Lifetime Allowance time bomb<div class="separator" style="clear: both; text-align: center;">
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With rates at historical lows, with $9.5 trillion worth of government debt carrying negative yields and with governments around the world addicted more than ever to Quantitative Easing, fiat money around the world is losing its value faster than ever. It means that the value of a pension fund invested in hard assets (and yes <a href="https://xbtprovider.com/products/bitcoin-tracker-euro" target="_blank">Bitcoins</a> are also an option...) is more susceptible than ever to go over the The Lifetime Allowance (LTA) at some point. Indeed, you just need an 8% annual return over 20 years to multiply the value of your pension by a factor of 5!<br />
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The Lifetime Allowance (LTA) is the overall limit a pension plan can reach before its owner is being penalised by a 55% tax upon withdrawal. The Lifetime Allowance after having reached £1,800,000 in 2011/2012 was reduced all the way down to £1,000,000 in 2016/2017 and stayed there for a couple of years before starting to increase again with the CPI (consumer price index) in 2018/2019. It is now at £1,055,000 (2019-2020).<br />
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The government tests your pension against the LTA when you take a benefit (eg you take a drawdown or an annuity) or when you reach the age of 75. It's called a benefit crystallisation event (BCE). Nowadays, the most popular way to extract money from a pension is through flexible drawdowns. When you take your benefit via a drawdown, 25% of the drawdown is tax free cash and the rest goes into drawdown mode where it can continue to be reinvested tax free (but still potentially subject to the second LTA test -- see below). The money can be taken at any point from the drawdown fund and is taxed as income on the taxpayer when it is taken. The tax free element and what is left in drawdown is compared to the LTA at the time of the crystallization and the corresponding percentage is added to the ones from the previous drawdowns. If you end up over 100% then the additional amount above the current LTA is either taxed at 55% if you take if out of the drawdown pot immediately or 25% if you leave it there (and it will be taxed a second time as income when you take the money out of the fund).<br />
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<a name='more'></a>There is a second test when you reach the age of 75. Any amounts not yet crystallised are crystallised at this point.The government then tests any increase in the value of drawdown funds since there were created, ignoring the tax-free cash. Where there is more than one drawdown plan, each plan is tested separately. The charge is based on the total of any increases in drawdown values, ignoring any plans that have decreased in value. There is no opportunity to mitigate any charge by offsetting a ‘loss’ on one drawdown plan with a ‘gain’ on another. Also, any funds that have not been crystallised yet are then crystallised. And the excess above the LTA is then taxed at 55%.<br />
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<h2>
An example</h2>
For most people the Benefit Crystallisation Events (BCE) that matter are the one that happen upon creation of a drawdown (BCE 1 using DWP terminology) and that measures the market value of what is transferred into drawdown as well as the one that happens when reaching 75 years of age (BCE 5A) and that measures the growth in the drawdown pension pot since the member originally entered drawdown. The growth in the value of the drawdown pot is measured against the individual’s remaining lifetime allowance and the excess if any is subject to the lifetime allowance charge.<br />
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To better understand how the LTC (lifetime charge) is calculated upon crystallisation, it's best to look at an example:<br />
<br />
<i>Sam entered into drawdown in 2010 when the lifetime allowance was £1,800,000. He took 25% of his £1,350,000 pension pot as a lump sum (£337,500) and the remaining 75% (£1,012,500) was invested in drawdown, this used up 75% (£1,350,000/£1,800,000) of his lifetime allowance.</i><br />
<i><br /></i>
<i>In 2018 Sam was 75 years old. In the period since 2010 Sam has not made any further payments into his pension scheme, he has made some withdrawals from the drawdown pension pot and the investments in the pot have grown in value so on his 75th birthday the drawdown pot is valued at £1,400,000. This is an increase in value of £387,500 from 2010 (£1,400,000 less £1,012,500).</i><br />
<i><br /></i>
<i>The lifetime allowance on Sam's 75th birthday is £1,030,000. As Sam still has 25% of his lifetime allowance which is still available £257,500 (£1,030,000 x 25%). The lifetime allowance charge is (£387,500 less £257,500) at 25% which is £32,500.</i><br />
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<h2>
So what are the options to avoid this surcharge?</h2>
If you are younger than 55, the only option really is to stop voluntary contributions and make sure you instead max out your ISA (and your partner's) every year. While the ISA provides no tax benefit upfront, it also provides tax free appreciation of your assets and there is no tax upon exit. The only downside of an ISA is that it does not allow you to invest in Bitcoin (yet).<br />
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If you are older than 55, you can start taking benefits from your pension. Since any income taken out of the drawdown pots decreases their value, extracting money progressively to avoid higher rate bands will allow you to also avoid the extra tax charge at 75.Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-3078016063647554192019-08-06T16:36:00.000+01:002019-08-08T11:23:02.795+01:00HMRC asking for records of Crypto Exchanges<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-UwoQzmIGj9g/XUmeH0bCgeI/AAAAAAACiZQ/m-x0jvC_0YU2DjYMOdmmii-zaL5orD8PgCLcBGAs/s1600/dhiva-krishna-ToMqxOtnFGc-unsplash.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1067" height="200" src="https://1.bp.blogspot.com/-UwoQzmIGj9g/XUmeH0bCgeI/AAAAAAACiZQ/m-x0jvC_0YU2DjYMOdmmii-zaL5orD8PgCLcBGAs/s200/dhiva-krishna-ToMqxOtnFGc-unsplash.jpg" width="132" /></a></div>
With Bitcoin looking like it's here to stay, HM Revenue & Customs, is now pressuring crypto-currency exchanges to reveal customers' names and transaction histories, in a bid to claw back unpaid taxes, industry sources said. Letters requesting lists of customers and transaction data have landed on the doorsteps of at least three exchanges doing business in the U.K. – Coinbase, eToro and CEX.IO – in the last week or so, the sources said.<br />
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The move is following a pattern set by the U.S. Internal Revenue Service (IRS) and other governments. Last month, the IRS began sending warning letters to over 10,000 Americans who it says participated in virtual currency transactions but did not report them properly.<br />
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HMRC is looking to get up to 10 years worth of historical data but that might prove difficult to achieve. Still, even if the administration manages to go back 3 years, it would mean serious tax bills for those who thought trading virtual currencies was a tax free endeavour! HMRC published in 2018 <a href="https://www.taxtrends.org/2018/12/tax-treatment-of-cryptoassets-update.html" target="_blank">a policy paper explaining the tax treatment of crypto-assets</a>. As described in the paper, for most people, capital gains tax will be due on any gains they might have realised. But doing the calculation of the gain might prove more complex than with other securities. Indeed, transferring bitcoins in or out of an exchange is not a taxable event per se. And conversely, buying something with Bitcoin or receiving income in crypto-currency is a taxable event!<br />
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This is why it's crucial to keep records or all transactions and refrain from using crypto-currencies as a payment currency, at least until there is a de minimis exemption like with other currencies. As, even if your gains are below the annual allowance of £12,000 (for 2019/20), you still need to declare the sales if they total more than 4 times the annual allowance, i.e. £48,000. For people who don't already do a tax return, it means registering for Self Assessment. And if you are aware of gains that you have failed to declare in the past, it's a good idea to come forward and call HMRC to avoid steeper penalties.Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-40130376858318083062019-06-19T10:26:00.001+01:002019-06-19T10:26:32.849+01:00Managing cash in your business<div class="separator" style="clear: both; text-align: center;">
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With interest rates at a record low in the UK, and with dividend tax rates now going up all to way to 38.1% for additional rate tax payers, many small businesses are reluctant to extract money from their limited company and are wondering how to make that cash left in the business produce significant income. Unfortunately there is not one single answer and each available options comes with its own benefits and drawbacks.<br />
<br />
<h2>
Savings Account</h2>
The simple answer is to open a savings account for the company. Most banks will allow for that but unfortunately the rates are ridiculously low. Major banks will typically pay between 0.5% and 1% depending on how long you are willing to lock your money for. And while it's possible to find slightly better rates at smaller banks or financial institutions, one has to be aware that the Financial Services Compensation Scheme (FSCS) that protects personal accounts up to £85,000 is not always available for Limited Companies.<br />
<a name='more'></a><br />
<h2>
Investment Account</h2>
For the more sophisticated entrepreneur, it is also possible to open a share and fund dealing account to invest the cash of the business. Not all brokers will allow for a company to open an account so you need to double check that service is offered to Limited Companies as well. For example, AJ Bell does not offer such a service but Interactive Investor does.<br />
<br />
But investing through a limited company brings a lot of problems of its own.<br />
<ol>
<li>One has to keep in mind that the capital gains allowance (currently £12,000) is only available for private investors not companies. Gains realised inside the company will therefore be taxed at 19% from the first pound. While in the past there was an indexation allowance available for companies it has been removed from 1 January 2018. </li>
<li>Also as a private investor, using an ISA you can invest tax free (currently up to 20,000 per year), something that again a company is not able to do. </li>
<li>Having an "investment business" alongside a "trading business" puts the "trading" qualifier at risk. While it's not a problem anymore from a corporation tax standpoint, it might be a problem down the road if one were to sell or liquidate the company. Being a trading business allows the shareholder to claim Entrepreneur's Relief (i.e. a reduced tax rate of 10% rather than the standard 20%). And unfortunately, it's quite easy to have a trading business disqualified since it's not just income the HMRC will look at but the size of the assets producing income (see <a href="https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64090#IDATKGTC" target="_blank">HMRC Capital Gains Manual</a>).</li>
</ol>
<h2>
Payment into SIPP</h2>
A very attractive option one can be sure that the cash will never be needed in the future and if one's pension plan has not been maxed out is for the company to pay directly into the director's pension plan. Pension plans held in a SIPP are extremely flexible when it comes to investment and it's the most tax efficient approach if it's possible.<br />
<br />
For most directors, it's possible to invest up to £40,000 directly into the pension, bypassing corporation tax, NIC contributions and income tax for the director. Once into the pension the money can be invested tax free but it's locked until one is 55.<br />
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<h2>
Extraction as dividend and re-investment into an EIS or VCT</h2>
Should one not want to lock money for a long period, it's also possible to extract money as dividends and invest it into tax efficient investments such as EIS, SEIS or VCT. While it means that dividends tax will have to be paid, because those investments offer a cash refund from HRMC of 30% to 50%, the dividend tax is in practice cancelled out. The downside is the holding period of those investments which, if it's in theory no longer than 3 to 5 years as per the regulatory requirements, it's in practice longer than that because of the nature of the investment.Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-21360528031705957272019-03-20T11:45:00.000+00:002019-03-20T11:45:47.471+00:00The Lifetime ISA aka LISA<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-kR6l3xuqg-w/XJIPO1_I1_I/AAAAAAACWlI/NNrl-TlzY-MKvWFD0FcqEy2y-jCaFgsYACLcBGAs/s1600/1542108124_tax-savings.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="343" data-original-width="580" height="188" src="https://3.bp.blogspot.com/-kR6l3xuqg-w/XJIPO1_I1_I/AAAAAAACWlI/NNrl-TlzY-MKvWFD0FcqEy2y-jCaFgsYACLcBGAs/s320/1542108124_tax-savings.jpg" width="320" /></a></div>
With just 2 weeks left until the end of the tax year, now is the time to look at all the options available to reduce your tax bill for the year 18/19.<br />
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We have written <a href="https://www.taxtrends.org/2017/02/pension-contributions-time-is-running.html" target="_blank">a detailed article on the subject</a> in the past and most taxpayers are aware of the more popular options such as pension contributions and investments into ISA or EIS.<br />
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One container however which is often overlooked is the Lifetime ISA aka LISA. It was introduced in 2017 and can be used in conjonction with the other vehicles (even though the total amount for both ISA and LISA remains capped at £20,000). As with a regular ISA, all income and gains inside the container are tax free. But as with a pension, money contributed up to £4,000 will receive a 25% top-up from the government. All the specifics are described in the article mentioned above so please refer to it for more details but here is a list of scenarios where investing in a LISA makes sense:<br />
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You plan on purchasing your first home in the near future</h2>
Obviously this is the main use case for that product and it therefore makes sense to use it in that case. The only constraint is that the house be less than £450,000.<br />
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You are a basic rate band tax payer</h2>
If you are basic rate band tax payer, i.e. you marginal tax rate is 20%, the tax benefit you get from the LISA is identical to the one you get from a pension. But with a LISA the money is blocked for a much shorter period since you can get the money out when you purchase your first home. If you don't have a property yet, this is therefore a great option for you to look at.<br />
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You have maxed out your pension</h2>
If you have already maxed out your lifetime pension allowance or your annual contributions, contributing to an LISA as well makes sense. Even if you don't need to purchase a home (because you already have one), this allows you to in effect increase your pensions contributions (albeit at a lower relief rate if you are in a higher tax band). Once you reach 60 -- or if you are terminally ill -- you can take the money out tax free and nothing prevents you at that point to contribute the proceeds into your pension to get a second relief (that is unless HMRC changes the rules...)!<br />
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You have kids that you intend to help them purchase their home</h2>
If you intend to gift money to your kids at some point to help them climb the property ladder, it makes sense to open a LISA for each one of them once they reach 18. You can then gift each one of them £4,000 per annum and it will be topped up by an additional £1,000 from the government. On top of that if those gifts come from disposable income (which is easier to achieve this way than when you give a house deposit in one go) those will remain outside the inheritance tax net.Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0tag:blogger.com,1999:blog-1745020323458616400.post-77543540333855231852019-02-02T16:51:00.002+00:002019-02-02T17:00:04.922+00:00KPMG small business accounting unit bites the dust<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-lVuiCCVh2qY/XFXGiRTDZ4I/AAAAAAACVY8/FT9TPadbwBwbjBmZQSwdcZvyvJKxQc_bQCLcBGAs/s1600/KOMG.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1200" height="320" src="https://3.bp.blogspot.com/-lVuiCCVh2qY/XFXGiRTDZ4I/AAAAAAACVY8/FT9TPadbwBwbjBmZQSwdcZvyvJKxQc_bQCLcBGAs/s320/KOMG.jpg" width="240" /></a></div>
After having decided in the wake of Carillion to stop non-audit services to the FTSE 350 clients they are auditing, KPMG has now decided as well to stop the small business offering that was launched in 2014. Clients of the accountancy firm have been receiving letters announcing the move and requesting that they find alternative arrangement for their accounting needs.<br />
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KPMG had vowed in 2014 to disrupt the SME market by saying at the time "you can pay us the same as your current accountant but we'll give you more". The market at the time had been skeptical that a big four firm like KPMG with the overheads they are famous for could be competitive in such a market. And it looks those pundits were right.<br />
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No one likes business disruption, but the good news if you have been receiving one of those letters is that we, at TaxAssist Accountants, a firm that focuses on small businesses, are ready to take over your accounting business. We do support Xero and Receipt Bank so your day to day will remain unchanged and your business undisrupted. We will also, in most instances, be able to match the existing KPMG pricing.<br />
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So if you are looking for an accountant to replace KPMG, don't hesitate to give us a call at 020 3397 1520 to discuss how TaxAssist can help your business. Our first consultation is always free!Franckhttp://www.blogger.com/profile/15202769424261269719noreply@blogger.com0