Tax Question of the Week: Amortisation Relief

Q – I have heard that we can now get corporation tax relief for the amortisation of goodwill, is this true?

A- Amortisation relief in respect of intangible assets appears to have experienced a bit of a rollercoaster ride throughout the various legislative amendments in recent years. CT relief was initially allowable for amortisation of goodwill until restrictions were made for connected company acquisitions of post-March 2002 goodwill after 2nd December 2014. Read More

HR Expert: Agency Workers Rules

Q- My client will be taking on an agency worker for the first time in a few weeks, what things do they need to be aware of?

A- Many employers regularly turn to agency workers to fill short term needs in their business, however as this will be your client’s first time using an agency worker there are some key things they should know.
First of all, it will be important for your client to have a clear understanding of the definition of an agency worker. This is an individual who is engaged in a contractual agreement with a temporary work agency to work temporarily for, and under the supervision and direction of, the hirer i.e. your client. Read More

Tax Question of the Week: The National Minimum Wage and National Living Wage

Q- Our pay period runs one week in arrears and we are due to pay employees on Friday 5th April for the work that they did during the week 25th – 31st March.  What rate of pay should they be paid at, as we are aware that the National Living Wage rate has increased?

A- The National Minimum Wage (NMW) and National Living Wage (NLW) rates increased with effect from 1st April 2019 to: Read More

VAT Question of the Week: Re-Registration

Q- My client runs a Café, and de-registered for VAT back in May 2018, on the grounds that they believed their turnover would not exceed the deregistration threshold of £83,000 over the following 12 months. This was due to a slump in trade following the opening of a popular competitor across the road. Prior to this, the client had been VAT registered since January 2015 (more than 12 months). As of December 2018, the clients turnover for the period June 2018 to December 2018 was £63,000, but their rolling 12 month turnover (January 2018 to December 2018) was back up to £93,000, as the shop across the road went out of business. Does this mean they have to re-register?

A- Under VAT registration rules, schedule 1, paragraph 1(4) of VAT Act 1994 specifies that when considering a person’s taxable turnover to determine whether registration is required, any turnover from a previous period of registration should normally be excluded.

The exception to this would be where a trader misled or withheld relevant information from HMRC at the time of cancellation – for example, a trader deregistered for VAT on the grounds that their turnover would fall below the £83,000 deregistration limit over the following 12 months because they told HMRC that they were going to close their shop for an extra day per week, however the shop never intended to do so. Read More

HR Expet: Change in NMW

Q- My client is wary of the new National Minimum Wage rates that will come into effect from 1st April. What things do they need to consider from an employment law perspective?

A- As we head into Spring the latest set of employment law changes are set to come thick and fast, with the first of these being a change in national minimum wage (NMW) rates.

From 1st April 2019, the national living wage (NLW) for those aged 25 years and over will increase to £8.21 per hour. Minimum wage rates will also increase across the various age categories, rising to £7.70 per hour for 21-24 year olds, £6.15 per hour for 18-20 year olds and £4.35 per hour for those over the compulsory school age but not yet 18. The apprenticeship rate for those under the age of 19, or 19 and over but in the first year of their apprenticeship, will also increase to £3.90 per hour. Read More

Tax Question of the Week: Tax Year end Planning

Q- One of my private clients realises the end of the tax year is rapidly approaching and is wondering if there is anything he should be considering in relation to his tax affairs?

A- There are various ways in which an individual can help reduce their tax liability and whilst they are generally considered more at this point in the tax year, can actually be considered at any time during the tax year. Thought should be given to the following areas – Read More

VAT Question of the Week: Charity Fundraising

Q- Over the last few years, my client and a couple of his friends have run a small local beer and cider festival; any profits they make are given to local charities. They sell a few tickets in advance and have sponsorship/advertising income, but most sales occur on the day of the event. In the last few years, they have been below the VAT registration threshold, but with the number of people attending increasing year on year and the wonderful summer we had in 2018, they did exceed the VAT registration threshold by £800. As all the profits are donated to charity, can the client benefit from the charity fundraising exemption?

A- Charities and some other non- profit making organisations, such as certain membership, sporting, and cultural organisations ** are able to benefit from the exemption for fundraising activities. The exemption covers supplies of goods or services made by a charity or Read More

Tax Question of the Week: Deemed Domicile & Automatic Remittance

Q- My client is a long-term resident of the UK for tax purposes. However, she is non-domiciled and has been using the remittance basis for her foreign income as it is below £2,000. As she will now have been here for 15 of the previous 20 tax years, will she be caught by the Deemed Domicile rules?

A- The short answer is no, she will not.

The Deemed Domicile rules only apply to certain claims such as people claiming the remittance basis as UK resident, non-domiciles with income or gains over £2,000.

The Deemed Domicile rules are contained in s835BA of the Income Tax Act 2007. In brief, they treat people who meet either of the conditions below as domiciled in the UK for tax purposes:

Condition A Read More

VAT Question of the Week: Supplies Spanning EDR

Q- My client is a planning consultant. He had a contract which began prior to his effective date of VAT registration and continued after. The agreement was for stage payments to be made. I understand that at least one invoice was issued prior to registration, but payment was not received until after he was registered. Does he have to account for VAT on that payment?

A- Where there is a supply of services in the course of construction where the contract is for stage payments, then Regulation 93 (VAT regulations 1995, SI 1995/2518) applies to determine the time of supply.  VATTOS9110 https://www.gov.uk/hmrc-internal-manuals/vat-time-of-supply/vattos9110 confirms that this regulation governing the time of supply applies to professional services such as architects, surveyors, consultants as well as the more obvious construction services. Read More

HR Expert: Dogs in Work

Q- My client has been asked by a couple of employees whether they can bring their dogs to work. What things do they need to consider?

A- Whilst it may not necessarily be widespread, there is a growing trend of businesses allowing employees to bring their dogs to work with them. Although your client is under no obligation to agree to this themselves, there are several points that are worth considering before they make a decision. Read More

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