Government has implemented a new `National Living Wage` , this is in addition to National Minimium Wage.
For people over 25 year of age – National Living Wage applies for individuals under 25 years National Minimium Wage applies.
Government has launched a calculator to check if staff is being paid the minimium wage,
link given below:
As 31st Jan approcahes panic sets in especially for first time user of Self Assessement.
Please note quickest way to get UTR is over the telephone – 0300 200 3310.
But after getting the UTR one has to wait for 72 hours before one can register for online services.
Good Luck !
This is one of the most common questions asked of us.
HMRC has created a simple webpage about it. Answer a few questions about yourself and your will know.
Link to the page:
https://www.gov.uk/check-if-you-need-a-tax-return
This is a simple topic for most of the businesses but has been presented by HMRC in a complex way.
Basically it’s about loans.
These rules covers the usual loans and also cases which are `deemed`. Whenever word `deemed` is used it means special cases specifically mentioned in legislation.
Recently I came across and very helpful webinar from BKL Tax (a tax consultancy), link below and I thought I should share it.
Some key points from the webinar:
• If a trade debt is released its taxable income. E.g. A Ltd sold £100 apples to B Ltd and later A Ltd forgave the trade debt for say bad debt. £100 will be taxable income for B Ltd.
• Interest expense deduction is taken on accrual basis not on paid basis. But there are some anti-avoidance rules around these – related parties beware!
• International accounting standard 23 and Loan relationships: Capitalised interest MUST be claimed in year interest arises (on accrual basis). CTA09 S 320
• Loan release not taxable in specific cases CTA09 S 322 :
1) Release is part of corporate insolvency
2) Consideration is inform of ordinary shares (debt re-structure in case lenders taking over a business)
3) Debtor company in insolvency/administration/liquidation etc.
• Pre trading LR rules also exist
Connected parties (CTA09 S466)
If companies are under the control of the same person – waivers among them are generally ignored for tax purposes i.e. for creditor company it will not be a tax deductible expenses and for debtor company it will not be a taxable income.
Webinar also mentions of a case where companies controlled by husband and wife are NOT connected. E.g. A ltd is 100% owned by Mr A and B Ltd is 100% owned by his wife Mrs B. A ltd and B Ltd are not connected. I think HMRC may challenge this.
Speakers also briefly mention Interpretation Act 1978 and its use in interpreting the term “same person”.
I recommend that you are interested please go to the webinar mentioned among above.
Another good thing that have come out of EU.
EU issued a directive no. 2012/6/EU as of 14 March 2012 to be implemented all over EU for micro entities.
UK government to comply with the above directive put in place: The Small Companies (Micro-Entities’ Accounts) Regulations 2013.
Main aim- To reduce administrative burden for small business to boost economy.
What is a micro entity?
If a company meets two of the following three conditions, it is classified as a micro entity:
• Turnover : not more than £632,000
• Balance sheet total : not more than £316,000
• Employees : not more than 10
What its use?
Mainly your accountant’s year end work is reduced thus the fee you pay is reduced.
How do we file annual accounts at Companies house ?
In the same way as you use to file, just select “Micro entity” while filing.
What is the impact for HMRC accounts and tax return?
HMRC accepts these accounts. There is no material impact on your corporation tax.
Roy Accountants 