Q. My company has been trading since 1 March 2013, but my first sales invoices haven't been paid yet, so there is no cash available to reimburse me for the expenses I've incurred personally. Do I have to complete a P11D for 2012/13?A. The annual form P11D reports expenses reimbursed to, and benefits in kind made available to the employees and...

If you are uncertain about whether you can make a claim for VAT you have incurred, or how to treat a certain transaction for VAT purposes, you could try searching the HMRC website for a solution to your query. Alternatively you may ring the HMRC VAT helpline but the adviser is likely to send you a copy of a VAT leaflet which is available on th...

Have you been approached by firms that promise you instant cash from your pension fund? This known as pension liberation, and involves taking cash from your pension fund before you reach the retirement age set by your pension scheme. Unscrupulous firms persuade individuals to apply to move their pension funds out of their current scheme, in or...

In the past sleeping partners and inactive partners didn't have to pay NI contributions on their partnership profits. However, HMRC changed its view on this in April 2013 and it now considers that all partners are liable to pay NICs in respect of their taxable profits, whatever their level of activity within the business. The implications for ...

Real time information (RTI) has had a bumpy start. In brief these are the major problems and work-arounds discovered so far. Annual PAYE Schemes If you expect to pay all of your employees just once in the tax year, and all on the same date, you can register your PAYE scheme with the Tax Office as an annual scheme. HMRC's official guidance was tha...

Q. I have put my hairdressing salon up for sale as I can't face the hassle and cost of RTI. I am self-employed and not VAT registered, but the proceeds from the business sale will take me over the VAT threshold. Do I have to register for VAT and charge VAT on the sale of the business?A. If you sell the business assets and goodwill together, so ...

The cash basis was also mentioned in the 2013 Budget announcements, but now we have some more details. In an attempt to simplify accounting and tax reporting for the smallest businesses, from 6 April 2013 small businesses can choose to calculate profits/losses on the basis of the cash received and expenses paid out. This is known as the cash bas...

The Budget also included an announcement of the extension of capital gains tax (CGT) relief, where the gain is reinvested in new shares issued under the Seed Enterprise Investment Scheme (SEIS). This scheme started on 6 April 2012 and is due to run to 5 April 2017, but the CGT relief was due to apply only for investments made in 2012/13. The l...

The 2013 Budget announcements included a brief outline of how the law will be changed to tax loans taken out of owner-managed companies by the shareholders/directors (known as participators). We have now seen the draft legislation so we can give you further details of how the tax law will apply for loans or repayments made on and after 20 Marc...

The real time information (RTI) system for submitting PAYE information to HMRC must be used by small employers for all pay days on and after 6 April 2013. However, at the last minute the Government has agreed to a temporary relaxation of one of the RTI reporting requirements for employers with fewer than 50 employees. If you fall into that cat...

Rates The VAT rates remain unchanged at... Lower rate: 0% Reduced rate: 5% Standard rate: 20% The registration and deregistration limits from 1 April 2013 are... Registration turnover: £79,000 (1 April 2012 - £77,000) Deregistration turnover: £77,000 (1 April 2012 - £75,000)...

Capital Gains Tax The thresholds for capital gains tax (CGT) have increased slightly for 2013/14: Annual exemption: £10,900 (2012/13: £10,600) Annual exemption for most trustees and personal representatives: £5,450 (2012/13: £5,300) Rate for gains within the basic rate band: 18% (no change) Rate for gains above the basic rat...

Personal Allowances The standard personal allowance will rise to £10,000 from 6 April 2014, a year earlier than expected. The age related allowances are frozen until 2015. The allowances as they have been announced for 2013/14 are: Personal allowance (born after 5 April 1948): £9,440 Personal allowance (born between 6 April 1938 and 5...

Cash Basis Unincorporated businesses will be permitted to calculated profits and losses for tax purposes using the cash accounting basis, rather than the standard accruals accounting basis. The cash basis ignores all creditors, debtors, prepayments and accruals, and includes flat rate amounts for certain expenses such as a motoring or use of ho...

Company Car Benefit The taxable benefit of having the private use of a company car is based on a percentage of the original list price for the vehicle. For 2013/14 the percentage varies from 5% for vehicles with CO2 emissions up to 75g/km, 10% from 75 to 95g/km, and increases by 1% for every 5g/km of CO2 emissions, up to a maximum of 35%. This...

Employment Allowance The big news for employers is a new Employment Allowance of £2,000 per year for all businesses and charities to offset against the cost of employer's class 1 NI contributions. This should provide a real reduction in the cost of employing workers by all types of businesses - not just new employees taken on by new busin...

Q. The Taxman has sent me a new PAYE code for 2013/14, which includes about £1000 of savings income taxed at 40%. I don't know how he got that figure as I don't have any savings, and I only draw dividends from my company up to the limit of the 20% tax band.A. The Taxman has looked at the income reported on your tax return for 2011/12, of...

If you are self-employed you may have a number of customers you go to regularly to work at their premises. This could apply to mobile hairdressers, cleaners, gardeners, and even medical professionals who work at private clinics. The miles you drive to reach each of your customers from your business base are used to calculate the amount of trav...

The letting of land is exempt from VAT unless it falls into one of the many exemptions from the exemption for VAT. One of those exemptions to the exemption is where accommodation is provided in hotels, inns, boarding houses and similar establishments, including rooms provided for the purpose of catering, i.e. an eating and drinking occasion. ...

The value of shares quoted on the stock market has risen recently. This may encourage you to sell some investments before the end of this tax year (5 April 2013) in order to use your annual capital gains exemption and to soak up any capital losses. Any gains covered by the exemption (currently £10,600 per person) or capital losses are fr...

Under real time information (RTI) PAYE reporting, a Full Payment Submission (FPS) report is required to be made to HMRC every time an employee is paid, not just once after the end of the tax year as is currently the case. RTI will be compulsory for most employers from the first pay date following 6 April 2013. Many one-person companies may wish...

Q. My company designs websites. If my customer is a business in the Republic of Ireland can I apply zero rate VAT to the sales invoice? Do I need their VAT number before I can do this? Is the situation different if my customer is a private individual?A. Website design is a service, so the VAT treatment depends on whether your customer is a bus...

Please don't be taken in by a scheme which claims to reduce the taxable benefit of your company cars. The taxman has specifically warned taxpayers about this scheme on the spotlights page of his website. The scheme promoters persuade employers to buy carbon credits to off-set against the carbon dioxide (CO2) emissions of company cars. This is ...

The Seed Enterprise Investment Scheme (SEIS) will have a limited life - only five years to 5 April 2017. It allows investors to receive 50% income tax relief on the amount invested and up to 28% capital gains tax relief for a limited period. Also if you make a loss on the SEIS shares you can get further income tax relief for that loss. This sound...

If you have let a property which was once your main home, or was treated as your main home as you lived in job related accommodation, letting relief can help reduce the tax you pay on the eventual sale. This tax relief cannot apply to a buy-to-let property that has never been occupied by the owner. The property must be let as residential accom...