Pensions to lose IHT exemption At the Autumn Budget the Chancellor announced plans to remove the exemption which allows unused pension funds to be inherited tax free. Currently, if a pension holder dies before the age of 75 their beneficiaries can generally inherit the remaining funds tax-free, whether as a lump sum or as income. […]
RTI reporting changes delayed HMRC has delayed planned changes to real-time information (RTI) reporting requirements for employee hours worked. Draft legislation was published in May aimed at improving the range of data collected by HMRC. The proposed changes will require businesses to provide more detailed information to HMRC via self assessment (SA) and PAYE real-time […]
Cash basis by default From 6 April 2024 the cash basis has replaced accruals as the default method for preparing sole trader and partnership accounts for tax purposes. Previously, only unincorporated businesses with total receipts below £150,000 were entitled to opt out of accruals and file their accounts with HMRC using the cash basis. That […]
Tax Briefing Spring 2024 Student loans and basis period reform New guidance from HMRC confirms that profits used to assess student loan repayments and entitlement to student finance will include transitional profits from basis period reform. Student loan repayments for self-employed taxpayers are based on the profits reported in each tax year. For the tax […]
Tax Briefing Autumn 2023 Pensions update – changes to income tax for beneficiaries In Spring Budget 2023 the Chancellor announced a welcome change to the tax treatment of pensions – the scrapping of the Lifetime Allowance (LTA). The LTA stood at £1,073,100 when the process began on 5 April 2023 with the removal of the […]
Tax Briefing Summer 2023 Settle the tax with a PSA Occasionally you may reward your employees with something special such as a holiday or a hamper. If the value exceeds the tax-free amount permitted under the rules for say long service awards, trivial benefits or staff suggestions it will be taxable. To avoid your employees […]
Tax Briefing Spring 2023 Planning dividends in 2023 Owners and directors of family businesses often take a small salary from the company and any extra funds as dividends. Other family members may also hold shares in the company and receive a dividend each year. The first £2,000 of dividends received by each taxpayer is currently […]
Tax Briefing Winter 2022 Dividend tax Dividends are taxed at much lower rates than other forms of income and they are not subject to national insurance contributions (NIC). This can make taking income from your own company in the form of dividends far more attractive than paying yourself a bonus. All taxpayers are currently entitled […]
Cost of travelling to work Travelling to the workplace may now be unaffordable for some employees but employers who help by reimbursing travel expenses could be creating an extra tax burden for themselves and their employees. The journey between an employee’s home and their permanent workplace is treated as ordinary commuting and is not a […]
Changing NIC in July The rates for national insurance contributions (NIC) increased by 1.25 percentage points for everyone on 6 April 2022. From 6 July the NIC starting threshold will rise to £12,570 per year (£1,048 per month) for employees. This means that some lower paid employees will have more Class 1 NIC deducted from […]