Insights

Still time to beat the axing of credit card tax payments

Question.   I normally pay my tax return liability with my credit card when my accountant completes and files my tax return during the last week in January. I have read that I will no longer to be able to use my credit card. Is this correct?   Answer.   Taxpayers who were planning to use a personal credit card to pay their 2016/17 tax bill (due by 31 January ...

A Christmas party can be both rewarding and tax efficient

Question. Can I give my staff a tax free cash bonus before Christmas to reward them for all their hard work this year? Answer.   If you decide to reward your staff with cash bonuses this Christmas, then this payment will need to be taxed at source through your payroll system as it will be subject to tax and national insurance. The same treatment also applies to gift vouchers. ...

What does last week’s Budget mean for my family business?

Question. Following Philip Hammond’s second Budget last Wednesday’s what are the main points that I need to be aware of for my family business?   Answer. The Chancellor noted that whilst there are lots of challenges in the economy, it is not all doom and gloom. Economic growth forecasts may have dropped, however there is no sign of a recession on the horizon. Annual borrowing is forecast to be ...

Tax sting on PPI claims

Question. I have received a cheque from my bank for being mis-sold PPI on a number of loans over a long number of years. I am delighted and surprised by the amount I have received. Do I have to complete a tax return to notify HMRC of the refund I have received?   Answer. The tax due will depend on the different components making up your cheque. Typically, ...

EMI Tax Schemes

Question. A senior manager has recently left my company to work for one of our competitors for an increased salary package. I have a number of other key staff who are vital to the success of my business and I don’t want to lose them also. We are currently expanding the business and have a significant capital investment plan in progress so it is a difficult ...

Don’t get caught out by the new Pension’s Annual Allowance Taper Charge

Question.   I am completing my annual tax return for 2016/17 and am surprised to find that I have a tax bill because of my pension contributions?   Answer.   Many unsuspecting higher earners have been caught by the new Pension’s Annual Allowance Taper Charge and could face substantial tax bills. From April 2016, higher earners have been subject to a reduced “tapered” annual pension allowance which restricts the amount of ...

Time is running out to file your paper tax return

Question:   I have always submitted my personal tax return on paper to HMRC. I have read that their move to a digital submission process may remove the paper filing option. Will HMRC accept my paper tax return if I file it before the 31st October 2017? Answer:   The days of the paper tax return could well be numbered as HMRC begins rolling out its Making Tax Digital initiative ...

Investment bonds transferred to children

Question. My wife, a non-tax-paying pensioner, holds some investment bonds in her name which she wants to cash in and gift the proceeds to our children. How do we calculate her tax liability and go about paying it? Answer.   Investment bonds are life insurance policies where you invest a lump sum in a variety of available funds. Some investment bonds run for a fixed term, others have no ...

Is it the end of the line for Disincorporation Relief?

Question.   Back in the early noughties, I changed my small plumbing business from operating as a sole-trader to operating as a limited company. I find the requirements of operating as a company onerous and I would prefer to be a sole-trader again. Can I use disincorporation relief to do this?   Answer.   Disincorporation relief was introduced on 1 April 2013 to help small companies, which no longer wanted ...

Paying Tax on an Inheritance

Question. I inherited a small property and some shares from an aunt who died recently. Do I have to pay tax on these assets?   Answer.   You don’t usually pay tax on anything you inherit at the time you inherit it. However, you may need to pay income tax on profit you later earn from your inheritance, eg dividends from shares or rental income from a property. You ...