August

3 August 2017

Welcome to the Exceed monthly newsletter.

 
 
Directors may not have to file a tax return Income Tax

A recent First Tier Tribunal case examined whether a company director had an obligation to submit a Self Assessment tax return without receiving a notice to file. The taxpayer in question appealed against penalties totalling £1,300 relating to his 2014-15 Self Assessment return on the basis that he had a reasonable excuse for his appeal.

Part of the appeal was based on the interesting anomaly that there is no legislation stating that an individual must file a tax return on the sole basis that they are director of a company. The taxpayer also contested that he had never received a notice to...

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Online filing exclusions for 2016-17 Income Tax

HMRC’s list of exclusions from online filing for 2016-17 continues to multiply. The list of exclusions has been updated with the publication of version 4.0 of the document. There are now a total of 32 live exclusions on the list including 5 new additions to the list.

Many of these issues exist as HMRC has been unable to update its software to properly deal with all the various combinations arising from the changes to the dividend tax, personal allowance and savings allowances from April 2016. It is thought that a relatively small number of taxpayers will be affected by these issues. However,...

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Future changes to Corporation Tax? Corporation Tax

The Office of Tax Simplification (OTS) provides independent advice to the government on simplifying the UK tax system, with the objective of reducing compliance burdens on both businesses and individual taxpayers. The OTS operates on a permanent, statutory footing and seeks to draw together expertise from across the tax and legal professions, the business community and other interested parties.

A new report was published by the OTS on 3 July 2017, that examines a number of ideas to help make the calculation of Corporation Tax simpler. The report which runs to over 120 pages focuses on...

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Taxman and the shed Capital Gains Tax

One of the most often used and valuable of the Capital Gains Tax (CGT) exemptions covers the sale of the family home. In general, there is no CGT payable on the sale of a property which has been used as the main family residence. An investment property which has never been used will not qualify. This relief from CGT is commonly known as private residence relief (PRR).

One of the conditions for the relief is that the garden or grounds (including the buildings on them) are not greater than the permitted area: defined as less than 0.5 hectares (just over an acre) in total. In a recent Tribunal...

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Class 1 NICs zero rate band National Insurance

Many director shareholders take a minimum salary and any balance of remuneration as dividends. This tends to reduce National Insurance Contributions (NICs), and in some cases Income Tax. The planning strategy is to pay a salary at a level that qualifies the director for State benefits, including the State Pension, but does not involve payment of any NICs.

For 2017/18, the NIC rate is set at 0% for annual earnings in the range of £5,876 to £8,164 inclusive. Earnings in this band range qualify for NIC credit for State benefit purposes. At £112.99 per week (£5,875 p.a.) no NI credit is obtained...

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The new State Pension Pension

The new State Pension is payable to those that reach the State Pension age on or after 6 April 2016. The full new State Pension is currently £159.55 per week and is payable to eligible women born on or after 6 April 1953 and eligible men born on or after 6 April 1951. Retirees that reached the State Pension age before 6 April 2016 will continue to receive the State Pension (not the New State Pension) under the old rules.

Claimants require 35 qualifying years of National Insurance Contributions in order to receive the full new State Pension. Individuals that have fewer than 35 qualifying years...

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Rangers EBT kicked into touch Employee Benefits

The Supreme Court has ruled in favour of HMRC over a long running tax avoidance case against a former incarnation of Rangers football club (now in liquidation). The case concerned a tax avoidance scheme under which the club paid remuneration to their employees through a complex employee benefit trusts and sub-trusts structure in the hope that the scheme would avoid liability to Income Tax and Class 1 National Insurance contributions. This involved the payments of over £47m to players, managers and directors of the football club between 2001 and 2010.

HMRC has always argued that these payments...

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Directors, beware minimum wage legislation Employment Law

We have recently considered some of the issues surrounding various tax efficient strategies for paying director shareholders. One aspect of this complex area that we have not yet examined is whether company directors need to be concerned with employment legislation in relation to the minimum wage.

At the most basic level, company directors who do not have a contract of employment are defined as office holders. Office holders are neither employees nor workers. Directors who are considered to be office holders do not qualify to receive the National Minimum or Living Wage.

However, company...

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New Finance Bill to be published General

The government has confirmed that a new Finance Bill will be introduced as soon as possible after the summer recess. The House of Commons returns to Westminster on 5 September 2017.

In a joint press release from HMRC and HM Treasury we are told that the new Finance Bill will legislate for all policies that were included in the pre-election Finance Bill but not included in the Act that was rushed through Parliament before the snap election.

It has also been confirmed that all policies originally announced to start from April 2017 will be effective from that date. This includes the corporate...

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Making Tax Digital – common sense prevails General

A new timetable for the introduction of Making Tax Digital (MTD) has been announced. The new regime was due to start from April 2018, but was delayed by the snap general election earlier this year. The government now appears to have listened to concerns that the roll-out of the MTD was moving too fast. The original proposals would have required most businesses to upload quarterly figures to HMRC.

Under the new implementation plan these obligations have been substantially changed. They are:

  • Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital...

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Credit card transaction charges to be banned General

The EU second Payment Services Directive (PSDII) was approved by the European Parliament and European Council in December 2015 and seeks to widen the scope of the existing EU Payment Service Directive (PSD) that defines the information that consumers and businesses must receive when making payments. This includes making reforms to the way payments by debit and credit cards, direct debit, credit transfers, standing orders and other digital payments are transacted.

The UK government is required to implement the PSDII into UK law by 13 January 2018 to meet its legal obligations and avoid the...

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Tax Diary August/September 2017 Tax Diary

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

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

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

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

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...

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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  |   |  www.exceedca.com

In preparing and maintaining this newsletter every effort has been made to ensure the content is up to date and accurate. However, laws and regulations change continually and unintentional errors can occur and the information may be neither up to date or accurate. Exceed CA Limited makes no representation or warranty (including liability towards third parties), express or implied, as to the accuracy, reliability or completeness of the information published in this newsletter. The articles shared with you in this email are intended to inform rather than advise. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.