7 September 2017

Welcome to the Exceed monthly newsletter.

  • Landlords, what expenses can you claim?
  • Holiday lets occupancy rules
  • What is Form 17?
  • Running a business from home?
  • What qualifies for 10% Entrepreneurs’ Relief?
  • How to roll-over capital gains
  • Using your car for work and claiming for passengers
  • VAT – beware the default surcharge
  • Costs that qualify for Research & Development Relief
  • Who are people with significant control?
  • The end of disincorporation relief?
  • What are overlap profits?
  • Tax Diary September/October 2017
    Landlords, what expenses can you claim? Income Tax

    It is important that landlords are aware of the expenses that can be deducted from their rental income. As a rule, these expenses must be wholly and exclusively for the purposes of renting out the property in question.

    Since April 2017, tax relief on mortgage costs used to buy investment properties is being gradually restricted to the basic rate of tax. The reduction in the relief for finance costs for landlords will most affect higher rate and additional rate taxpayers with significant mortgages on their properties. The deductions from property income will be restricted to 75% for 2017-18,...

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    Holiday lets occupancy rules Income Tax

    The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes.

    In order to qualify as a furnished holiday letting, the following occupancy criteria need to be met:

    • The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify.
    • The property must be located in the UK, or in a country within the EEA.
    • The property must be available for commercial letting at commercial rates for at least 30...
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    What is Form 17? Income Tax

    As a general rule, the fall-back position for couples who live together with their spouse or civil partners is that property income held in joint names is divided 50:50. This is regardless of the actual ownership structure. However, where there is unequal ownership and the couple want the income taxed on that basis a notification must be sent to HMRC together with proof that the beneficial interests in the property are unequal. This is done using Form 17 published by HMRC.

    A Form 17 declaration can only be made by spouses or civil partners that are living together and who own property in...

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    Running a business from home? Income Tax

    Anyone running a business from home should check if they need permission to do so: from a mortgage provider or landlord. Your local council may also need to be notified, for example, if you need a licence to run a home-based business. Running a business from home may also create a charge to business rates and might affect property insurance costs.

    Other business costs you may need to consider include:

    • Home based business insurance to cover Employers and Public Liability and any business equipment, and
    • You may need professional indemnity cover.

    HMRC will have no problem if you claim a proportion of...

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    What qualifies for 10% Entrepreneurs’ Relief? Capital Gains Tax

    Entrepreneurs' Relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where Entrepreneurs' Relief is available CGT of 10% is payable rather than the normal main rate of 20%. This can significantly reduce the amount of CGT due.

    When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to a generous £10 million from 6 April 2011.

    The relief is available to individuals as well as to some trustees of settlements....

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    How to roll-over capital gains Capital Gains Tax

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

    Where only part of the proceeds from the sale of the old asset is used to buy a new asset a partial rollover claim can be made. It is also possible to claim for provisional rollover relief where...

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    Using your car for work and claiming for passengers Payroll

    Do you use your own car for business purposes? If so, you may be able to claim a tax-free allowance from your employer known as a Mileage Allowance Payment or MAP. The allowance is paid when employers use their own car, van, motorcycle or bike for work purposes. It is important to note that this tax-free allowance is not available for journeys to and from work, but is available to employees who use their own vehicles to do other business-related mileage.

    Employers usually make payments based on a set rate per mile depending on the mode of transport used. There are approved mileage rates...

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    VAT – beware the default surcharge Value Added Tax

    A default surcharge is a penalty levied on businesses that submit late VAT returns. VAT registered businesses are required by law to submit their returns and make sure that payment of the VAT due has cleared to HMRC’s bank account by the due date.

    There is no penalty for a first offence, however a business that submits a VAT return late is issued with a surcharge liability notice that begins on the date of the notice and ends twelve months from the end of the latest period in default.

    If further VAT returns are submitted late during this period, a penalty based on a 'specified percentage' is...

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    Costs that qualify for Research & Development Relief Tax credits

    Small and medium-sized companies can claim R&D tax credits of 230% of qualifying expenditure incurred on or after 1 April 2015. This article lists a summary of costs that can be considered for this relief, broadly, if they contribute directly to seeking an advance in science or technology. They are:

    • Employee costs - staff who are directly engaged in carrying out R&D.
    • Staff providers - paying a staff provider (agency) for staff directly engaged in R&D activities.
    • Materials - consumable or transformable materials used in carrying out R&D.
    • Payments to clinical trials volunteers.
    • Cost...
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    Who are people with significant control? Corporate Governance & Regulation

    The register of people with significant control (PSC register) lists individuals who exert significant control over UK companies and came into effect 6 April 2016.

    A PSC is anyone in a company or LLP who meets one or more of the conditions listed in the legislation. This is someone who:

    • Owns, directly or indirectly more than 25% of the company’s shares;
    • Holds, directly or indirectly more than 25% of the company’s voting rights;
    • Holds the right, directly or indirectly to appoint or remove the majority of directors;
    • Has the right to, or actually exercises significant influence or control over the...
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    The end of disincorporation relief? HMRC notices

    Disincorporation involves the transfer of a business from a private limited company to a sole trader or partnership. Disincorporation relief was introduced from 1 April 2013 and is effectively a form of roll-over or deferral relief. The relief is due to end on 31 March 2018.

    The relief allows a company to transfer certain types of assets to its shareholders without the company incurring a Corporation Tax charge on the disposal of the assets. The shareholders then continue to operate the business in an unincorporated form and use the reduced transfer value of any assets when calculating any...

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    What are overlap profits? HMRC notices

    The assessment of self-employed or partnership profits is relatively straight-forward if the accounting date, to which accounts are prepared, falls between 31 March and 5 April. However, year ends that fall outside these dates create overlap profits.

    Overlap profits can be created in the first 3 years of the business or in any year in which there is a change of basis period and accounting date.

    For example, if your business commences 1 January 2016, and your chosen year end date is 31 December 2016, your basis periods are:

    • 2015 to 2016, 1 January 2016 to 5 April 2016
    • 2016 to 2017, 1 January 2016...
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    Tax Diary September/October 2017 Tax Diary

    1 September 2017 - Due date for Corporation Tax due for the year ended 30 November 2016.

    19 September 2017 - PAYE and NIC deductions due for month ended 5 September 2017. (If you pay your tax electronically the due date is 22 September 2017)

    19 September 2017 - Filing deadline for the CIS300 monthly return for the month ended 5 September 2017.

    19 September 2017 - CIS tax deducted for the month ended 5 September 2017 is payable by today.

    1 October 2017 - Due date for Corporation Tax due for the year ended 31 December 2016.

    19 October 2017 - PAYE and NIC deductions due for month ended 5 October...

     Read more  



    Best wishes,

    The Exceed Team
    Exceed CA Limited     Bank House, 81 St Judes Road, Englefield Green, Surrey, TW20 0DF, United Kingdom
    Tel (UK): +44 (0) 1784 439 955  |  Tel (World): 0370 060 0996  |   |

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