Archive for December, 2019

Still time to file your tax returns

Tuesday, December 31st, 2019

The deadline to file your 2018-19 tax returns is fast approaching, the 31 January 2020. Most of our clients will have the reassurance that we have filed their returns online, but for those who still need to file their 2019 return, it’s time to get into action. If you file after 31 January 2020 late filing penalties will be applied.

In an uncharacteristic display of humour, HMRC’s press release published 27 December, was titled: “We've been Santa lot of Elf Assessments”.

Apparently, on Christmas Day and Boxing Day over 12,000 tax returns were filed online. To put this into context, HMRC are expecting over 11million returns to be filed for 2018-19.

Don’t forget to pay your self-assessment tax

The 31 January 2020 is also the time when any underpayment of tax for 2018-19 – and any first payment on account for 2019-20 – are payable.

Clients reading this post, and who may be unsure how much tax they need to pay, should call so we can confirm any amounts that may be due.

End of the 2019-20 tax year

Following fast on the heels of the tax return deadlines for 2018-19 is the end of the 2019-20 tax year.

We recommend that all business clients and high-income earners complete a review of their tax planning options before 6 April 2020. Once that particular Rubicon is passed 99% of tax planning options for the current tax year become ineffective.

The outlook for 2020-21

It is likely that the first Budget of the new government will be presented February 2020, this will no doubt set the tax scene for 2020-21.

Hopefully, the tax goal-posts will not be moved too far from their present position. We will post detailed of any changes as they are announced. During the election campaign the Conservatives did promise that they would not increase most taxes. However, it was suggested that the further planned reduction in corporation tax (from 19% to 17%) will not go ahead. We assume that the current 19% rate will therefore continue.

Happy New Year

Now that political uncertainties have been resolved, let’s hope that business owners across the UK can look forward to the resolution of the numerous challenges that our exit from the EU will likely create. The conclusion of the withdrawal process on 31 January 2020 is just the start of the process. UK businesses will be keen to see the details of the negotiated trade agreement with the EU that is timed to conclude 31 December 2020.

In the meantime, happy new year. And be sure to keep in touch. 



Too little, too late?

Thursday, December 19th, 2019

On 13th December, the Department for Business, Energy and Industrial Strategy in collaboration with Office for Product Safety and Standards, issued a cautionary warning to consumers buying toys this Christmas.

Leaving aside the late publication of this information – not all of us are last-minute shoppers – it is worth reproducing the twelve points that make up their press release. They are:

No one wants to take a risk with toy safety, so always bear in mind 12 tips when buying for children.

  1. Look for the CE symbol: This means the manufacturer has assessed the toy for safety. Find the symbol on the label or box.
  2. Check it’s for kids: Festive novelties can look like toys. Keep them away from kids.
  3. Reputation matters: Check the suppliers who have a good reputation for safe and reliable toys. They’ll have good safety standards and refund policies.
  4. Button battery safety: Christmas toys may have button batteries – which can prove lethal if ingested. Check they are screwed in safely before giving to a child.
  5. Check age restrictions: Toys must be clearly marked with age restrictions, which assess risks such as choking hazards. Always follow the age recommendations.
  6. Consider special needs: Remember that children with special needs might be more vulnerable, and make sure to shop accordingly.
  7. Choking hazards: Avoid toys with small parts or loose fabric – they can be a choking hazard.
  8. Loose parts: Loose ribbons on toys and costumes can be dangerous. Think before you buy.
  9. Inspect toy boxes: Wear and tear can make a toy unsafe. Check your children’s toys and get them repaired if necessary.
  10. Supervise when you need to: Some toys need an adult on hand during playtime. Read all the instructions so you can keep things under control.
  11. Tidy up: Boxes, plastic bags and wire can be a hazard. Clear away all packaging once everything’s unwrapped.
  12. Celebrate a safe Christmas: Completing these checks can save you a lot of stress later. Remember to get batteries (and dispose of these safely too)!


Readers who have concerns regarding any of their recent purchases for their children or younger relatives can access material from the consumer campaign page at

An end to uncertainty

Tuesday, December 17th, 2019

Whatever your political motivation most of us will be relieved that last week’s election has created a government with a working majority. At last, there is a light at the end of the uncertainty tunnel.


Business readers with any sort of trading platform with the EU need to dot the i’s and cross their t’s regarding post January 2020 changes that we are promised will now happen. At minimum, EU traders should complete their Brexit impact assessments and take steps to mitigate any apparent risks identified.

Please call if you would like our input into this process.

When will the next Budget be announced?

The new government will need to get it’s Budget act together. Our feeling is that parliamentary time will be fully committed to Brexit matters until we leave at the end of January 2020.

Once that process is out of the way we should see a Budget date announced at some time during the first two weeks of February. Ordinarily, we should have had a Budget last month, but other matters prevailed.

Budget issues do need to receive fairly urgent attention as there are a number of Income Tax reliefs that are still to be determined for 2020-21.

As details emerge we will be publishing details and advising clients of any new opportunities to trim their tax bills and take advantage of any new opportunities revealed by the Budget announcements.

Approaching the end of the tax year

Once the Budget changes are announced there should be enough time to consider tax planning options to action before the end of the current fiscal year, 5 April 2020. Please call if you have not yet booked a tax planning review for 2019-20.

It is worth underlining that once the tax year end date passes, 99% of your tax planning options for 2019-20 will cease to be effective.

Post uncertainty

Debate is a valuable tool to resolve what should be done next. Unfortunately, if debate does not lead to informed action then paralysing uncertainty is the likely result.

It will be interesting to see what our new government manages to achieve in the coming months and years now that they have a mandate to act.

Land Registry property alert service

Tuesday, December 10th, 2019

Property owners are potentially more at risk from the activities of fraudsters. They have more to lose and there are very real risks that the Land Registry property alert service is set up to counter.

Why consider this service?

Since 2009, HM Land Registry has prevented 254 fraudulent applications being registered by fraudsters. Common attempts to "steal" property Include selling or mortgaging your property without your knowledge.

How the service works

It Is possible to monitor up to ten properties already registered with the Land Registry or those of a relative – you don't have to be the owner of a property to set up an alert.

An example of the type of fraud that can be countered by this service – as published on the website – is reproduced below:

Mr Mills rented out his property in England while he lived overseas. He realised that absent landlords are more at risk of property fraud, so he signed up to our Property Alert service.

Sometime later he received an alert email informing him that someone had made an application to register a mortgage on his property worth over £300,000. As Mr Mills wasn’t expecting this, he contacted our property fraud line. As a result of Mr Mills alerting us to the fact that the mortgage request was suspicious, we investigated and prevented the application from being registered once we realised it was fraudulent. As Mr Mills’ contact details were out of date, we advised him to update them so that if we needed to contact him in the future, he would be sure to receive our emails or letters.

As a result of signing up to Property Alert, Mr Mills was able to spot suspicious activity on his property and his prompt action in alerting us meant we were able to stop the fraudulent transaction from being registered.

To set up an alert fill in the online application at

Basic terms and conditions of the service

  • The property you want to monitor must be situated in England or Wales and registered with HM Land Registry
  • You must create a Property Alert account to use the service
  • You will receive a HM Land Registry email (please check spam inbox) to enable you to verify your email details
  • You must then sign into your account to add a property
  • Email alerts are sent when official searches and applications are received against a monitored property
  • If you receive an alert about activity that seems suspicious you should take swift action. The alert email will signpost you to who to contact.
  • You don't have to own a property to set up an alert
  • The same property can be monitored by different people.
  • Property, especially flats/apartments, can be registered with two titles. Blocks of flats are often owned by companies (Freehold), and the person owning the individual flat (Leasehold). When registering for this service please choose Leasehold title for individual flats/apartments.
  • You can use the service if you are not online. Call the Property Alert team on 0300 006 0478.

What constitutes profit for tax purposes?

Thursday, December 5th, 2019

There is no simple answer to this question. We have listed below some of the matters that need to be are considered. As self-employed business owners’ profits are subject to income tax and National Insurance – and limited companies to corporation tax – we have divided our comments accordingly.

Before making this distinction it is important to state that profit shown on your accounts is not the figure that is used by HMRC to work out taxes due. Your published figures are adjusted to reflect the following (this is not a comprehensive list):

  • Depreciation of assets is always added back and replaced with a capital allowance. Generally, capital allowances claimed will reduce your tax bill and on some occasions the amount claimed can be more than any depreciation charge shown in the accounts.
  • Certain business expenses are not allowed for tax purposes. A common example is business entertaining.
  • Payments to the owners of the business are treated differently if the business is incorporated or self-employed. Some of these distinctions are set out below.

Self-employed – income tax and Class 4 NIC

Sole traders and partners in trading partnerships (including Limited Liability Partnerships) are subject to income tax and Class 4 NIC. Profits adjusted for tax purposes are treated as the income of the business owner.

The self-employed are not taxed on the funds they withdraw from the business but the profits they earn.

They will pay income tax at 20%, 40% or 45% depending on the amount of profits earned. Additionally, the self-employed pay Class 4 NIC of 9% on profits between £8,632 and £50,000. This 9% rate drops to 2% for profits earned in excess of £50,000.

This exposure to potentially high rates of income tax and NIC is the main reason for considering the incorporation of successful self-employed business.

Limited companies

In the majority of cases limited companies pay corporation tax on their adjusted trading profits at a fixed rate. Currently, corporation tax is charged at 19%.

However, if director/shareholders withdraw money from the company they are taxed separately on those withdrawals. The most common director shareholder rewards are:

  • A salary – taxed under the PAYE rules. Salaries and employer NIC charges are an allowable deduction for corporation tax purposes.
  • A dividend – dividends are a distribution of taxed profits (company trading profits less corporation tax paid). They are not a cost to the business and do not reduce the company’s corporation tax bill. Any dividends received by shareholders in excess of £2,000 are taxed at hybrid rates of income tax (7.5%, 32.5% or 38.1%) the rate you would pay depends on the level of your overall income.
  • A benefit, company car etc – most benefits are treated as income and will increase a beneficiary’s income tax charge. Additionally, companies will be charged extra NIC based on the total value of benefits provided.

Planning note

Working out the best structure for your business should take the above into account. However, there are a range of other “risk” considerations that should be examined. If you are concerned that you may not be operating in the most tax efficient way please call so we can help you work through your options.

Tax Diary December 2019/January 2020

Tuesday, December 3rd, 2019

1 December 2019 – Due date for Corporation Tax payable for the year ended 28 February 2019.

19 December 2019 – PAYE and NIC deductions due for month ended 5 December 2019. (If you pay your tax electronically the due date is 22 December 2019)

19 December 2019 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2019.

19 December 2019 – CIS tax deducted for the month ended 5 December 2019 is payable by today.

30 December 2019 – Deadline for filing 2018-19 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2020-21.

1 January 2020 – Due date for Corporation Tax due for the year ended 31 March 2019.

19 January 2020 – PAYE and NIC deductions due for month ended 5 January 2020. (If you pay your tax electronically the due date is 22 January 2020)

19 January 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2020.

19 January 2020 – CIS tax deducted for the month ended 5 January 2020 is payable by today.

31 January 2020 – Last day to file 2018-19 self-assessment tax returns online.

31 January 2020 – Balance of self-assessment tax owing for 2018-19 due to be settled on or before today. Also due is any first payment on account for 2019-20.

Obtain proof of employment history

Tuesday, December 3rd, 2019

If you need evidence of employment for a claim, the following notes published by HMRC may help.

You can ask HMRC for a record of your employment history, for example if you are making a compensation claim for:

  • an industrial injury (for example asbestosis or industrial deafness)
  • a road traffic accident
  • medical negligence
  • hardship (for example you’re claiming through a benevolent fund or charity)

How to get your employment history

Fill in the application form that is available on the website and send it to HMRC. The address is on the form.

Apply for an employment history on behalf of someone who has died

You can also apply to get the employment history of someone who has died if you are legally entitled to claim damages on behalf of their estate.

If you are wary of undertaking the task, we can help.

Christmas gifts

Tuesday, December 3rd, 2019

You don’t have to pay tax on a benefit (gift) to your employee if all of the following apply:

  • it cost you £50 or less to provide
  • it isn’t cash or a cash voucher
  • it isn’t a reward for their work or performance
  • it isn’t in the terms of their contract

Gifts that fall into this category are known as a ‘trivial benefit’; and whilst they may be much more than trivial in substance, you don’t need to pay tax or National Insurance or let HMRC know you are making the gift.

Any gifts that do not meet this definition will likely be taxable.

Gifts to directors are treated in a similar fashion with one over-riding condition: a director cannot receive trivial gifts of more than £300 in total each tax year. This restriction only applies to the directors of “close companies”. A close company is a limited company with five or fewer shareholders.

Watch out for VAT charge

If you recover the input tax charged when you buy gifts for employees, and if the total value of gifts given to an employee in a tax year exceeds £50, then you will have to account for VAT on the total value of gifts provided. If this is the case, you may be advised to avoid recovering the VAT in the first place.

Flood support

Tuesday, December 3rd, 2019

The government announced 13 November that it will extend its Farming Recovery Fund to support farmers badly affected by the recent flooding across Yorkshire and the Midlands. Through this scheme, farmers and land managers who have suffered uninsurable damage to their property will be able to apply for grants of between £500 and £25,000 to cover repair costs – whether that’s clearing debris or recovering damaged land.

Householders affected will need to contact brokers and insurers – if supplied direct – to start the weary process of claims for flood damage. This in addition to dealing with the distressing upheaval caused by extensive water damage.

In the past HMRC has been supportive if tax-payers cannot make returns or pay tax due to flood disruption. They will also be sympathetic if business or tax records are lost due to water damage.

There is a pretty comprehensive flood alert service on the website and it is possible to register for a flood alert. These can be sent to your mobile, email address or landline. The service is free to use.

Time is running out for tax planning 2019-20

Tuesday, December 3rd, 2019

A reminder that in just a few months the present tax year closes, 5 April 2020.

After this date, a whole raft of 2019-20 tax planning options for individuals will cease to be available.

These cover a multitude of opportunities to reduce your liability to Income Tax, Capital Gains Tax and National Insurance. These opportunities include, but are not limited to:

  • Remuneration choices for director/shareholders of small companies,
  • Pension planning,
  • Tax effective gifts to charities,
  • Repaying certain benefits to employers – for example, repaying any private petrol provided,
  • Reviewing tax efficient use of investment allowances – planning capital expenditure,
  • Maximising use of the “trivial benefits” exemption,
  • Gifting income producing assets to spouse or civil partner,
  • Considering options if your total annual income is approaching £100,000 for the first time. Income over this figure will trigger a gradual reduction in your personal tax allowance.

We cannot list all of the available options here. Each person’s financial affairs are to some extent unique.

If you have not yet considered your options, please call so we can act before it’s too late.