Tax Newsletter August 2019

Welcome to this month's issue of the Clarkson Cleaver & Bowes Ltd newsletter. 

We hope you find our articles of interest.

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Newsletter August 2019


 

Advising HMRC of changes in your personal details

If your personal details change, you may be required to notify HMRC as this can affect your entitlement to certain tax breaks and or benefits.

 

For example, you need to tell HMRC if:

 

  • you get married or form a civil partnership
  • you divorce, separate or stop living with your husband, wife or partner

 

You can tell HMRC online if you are paid a salary or pension through PAYE. The sooner you tell HMRC the better as the change could result in you paying too much or too little tax.

 

If you receive tax credits or Child Benefit you also need to tell HMRC separately about changes to your relationship or family.

 

In the event, that your spouse or civil partner dies it is also a requirement to report the death to HMRC as well as notifying of changes to your income. For example, the death of a spouse would mean that the surviving spouse was no longer entitled to claim the Married Couple's Allowance.

 

If you move home, it is of course advisable to let HMRC know as soon as possible so they can update your contact details. HMRC should also be informed if you change gender, although the process is usually automatic if you apply for a Gender Recognition Certificate.

 

 

 


Its still possible to claim 100% tax allowance for electric vehicles

First Year Allowances (FYA’s) are available for expenditure on new unused electric vehicles and other cars within the threshold for low CO2 emissions. Businesses can claim FYA of 100% in the year they purchase qualifying low emissions or electrically propelled cars. These measures were put in place to help encourage the use of low emission and zero emission vehicles.

 

The FYA’s for businesses purchasing low emission cars are available until 31 March 2021. The emission threshold below which cars are eligible for the FYA is 50 gms/km. The 50gms/km limit had been higher prior to 1 April 2018 but was reduced as car manufacturers reacted to the growing demand for lower emission and electric cars and developed new clean air technologies.

 

The FYA allows companies to set the full cost of these qualifying cars against their tax bills in the year the cars were purchased. The FYA is only available on the purchase of new cars, second-hand cars do not qualify for FYAs (but can claim writing down allowances). If claiming the full amount of FYA would create a loss, it is also possible to claim less than the full 100% FYA and claim the balance using writing down allowances.

 

Planning note

 

There is no doubt that taking advantage of tax concessions to promote sustainable technologies as the world reacts to the growing awareness of climate change issues will increase in years to come. If you are considering changes to your business car(s) and need to consider the tax advantages for your company and the benefits tax charges levied on employees, please call, we can help.

 

 


 

Home to work travel that may be allowed

Whilst there is usually no tax relief for ordinary commuting - home to work - there are a number of exceptions. The term 'ordinary commuting' is defined to mean travel between a permanent workplace and home, or any other place that is not a workplace. Case law has established the principle that travelling between your home and a permanent workplace is not a travel expense related to the performance of your duties.

 

The rules are different for temporary workplaces where the expense is allowable. A workplace is defined as a temporary workplace if an employee only goes there to perform a task of limited duration or for a temporary purpose.

 

Other home to work travel that may be allowed includes:

 

  • where the employee has a travelling appointment;
  • where the employee’s home is a place of work and the place where the employee lives is dictated by the requirements of the job;
  • where the duties of the employment are carried out wholly or partly outside the UK;
  • where a non-domiciled employee is working in the UK;
  • emergency call-outs.

 

There are also specific exemptions from tax for works bus services and subsidies paid to public bus services as well as for the provision by an employer of bicycles and cycling equipment in order to encourage environmentally friendly transport between home and work.

 

 


 

When you can’t reclaim VAT

For most fully taxable businesses, VAT can be reclaimed on goods and services used in the business. This means that businesses must consider where there is any personal or private use of goods or services purchased for the business as the business can only reclaim the business proportion of the VAT.

 

For example, VAT is recoverable on all the costs of mobile phones provided to employees where no personal use is allowed. Where businesses allow private calls to be made at no charge, the VAT recovery must be apportioned on a fair and reasonable basis. Where employees pay for the private use of their phones, the business is allowed to reclaim the input tax in full provided an output tax charge is accounted for in respect of private use payments received from employees.

 

You cannot reclaim VAT for:

 

  • anything that’s only for private use;
  • goods and services your business uses to make VAT-exempt supplies;
  • business entertainment costs;
  • anything you’ve bought from other EU countries (you may be able to reclaim VAT charged under the electronic cross-border refund system);
  • goods sold to you under one of the VAT second-hand margin schemes;
  • business assets that are transferred to you as a going concern.

 

There are different rules for a business that incurs expenditure on taxable and exempt business activities. These businesses are partially exempt for VAT purposes and are required to make an apportionment between their taxable and exempt activities using a 'partial exemption method' in order to calculate how much input tax is recoverable.

 

Planning note

 

If you have concerns that you may be under or over-claiming VAT, please call, we would be delighted to offer an opinion, and if required, takeover your VAT filing duties.

 


 

Employing family, young people and volunteers

When a new employee is added to the payroll it is the employers' responsibility to ensure they meet the employees’ rights and deduct the correct amount of tax from their salary. This includes any employees who are family members.

 

HMRC’s guidance is clear that if you hire family members you must:

 

  • avoid special treatment in terms of pay, promotion and working conditions
  • make sure tax and National Insurance contributions are still paid
  • follow working time regulations for younger family members
  • have employer’s liability insurance that covers any young family members
  • check if you need to provide them with a workplace pension scheme

 

It is possible to employ young people if they are 13 or over but there are special rules that govern how long they can work and what jobs they can undertake. Young workers and apprentices have different minimum wage rates from adult workers for the National Minimum Wage.

 

There are different rules if you take on volunteers or voluntary staff, but you as the employer are responsible for health and safety and must give inductions and proper training for the 'job' at hand.

 

 


 

Applying to register a trade mark

The process of registering a trade mark can be very complex, and careful due diligence must be undertaken to decide what exactly is being trade marked and in which jurisdictions. It is possible to make a UK only trade mark application or a European Union wide application. The process for applying in other jurisdictions is based on local rules and would need to be considered on a case by case basis.

 

We consider the steps mentioned below to be taken in making an application solely in the UK. An application can be made online with the Intellectual Property Office (IPO), the official UK government body responsible for Intellectual Property (IP) rights including patents, designs, trade marks and copyright.

 

In order to apply you need:

 

  • details of what you want to register, for example a word, illustration or slogan
  • the trade mark classes you want to register in

 

There is a special service available, known as 'Right Start' service that will check your application meets the rules for registration. If you use this service, you pay £100 initially plus another £100 if you complete the application, plus £50 for each additional class applied for. You will then get a report telling you if your application meets the rules. To proceed, you must then pay the full fee within 14 days of getting your report. You can choose to continue your application even if it does not meet the rules for registration. There is also a standard online and paper application process available at slightly different fee rates.

 

The trade mark registration process takes about four months and includes approximately 20 working days for the IPO to consider whether your trade mark is suitable for registration, as well as the publication of the proposed trade mark in the IPO’s Trade Mark Journal - so that third parties have an opportunity to oppose your application. If there is no opposition, the trade mark will be registered.

 


 

New cyber security guidance published

The National Cyber Security Centre (NCSC) has published guidance to help small to medium sized organisations prepare their response to, and plan their recovery from, a cyber incident. 

 

The “Small Business Guide: Response & Recovery” has been produced by the NCSC in response to questions raised by SMEs following the earlier publication of its “Cyber Security: Small Business Guide” in 2017 and it’s intended to be a companion to that guide. The NCSC estimates that there is a one in two chance that UK businesses will experience a cyber security breach.

 

The NCSC define a cyber incident as unauthorised access, or attempted access, to an organisation's IT systems. These may be malicious attacks (such as denial of service attacks, malware infection, ransomware or phishing attacks) or could be accidental incidents (such as damage from fire, flood or theft). The new guidance maps out a response to an incident over the following five stages:

 

  1. Preparation for incidents.
  2. Identifying what’s happening.
  3. Resolving the incident.
  4. Reporting the incident to wider stakeholders.
  5. Learning from the incident.

 

The guidance includes practical advice on what to do at each stage, including action points. It also advises that SMEs who are experiencing a live cyber incident should call Action Fraud immediately on 0300 123 2040 and then press 9 on their keypad. This will allow the call to be dealt with as a priority and the live incident will be triaged over the phone. The incident will then be passed to the National Fraud Intelligence Bureau (NFIB) who will review the report and conduct a range of enquiries and it may then get passed to the relevant police agency.

 


 

New guidance on cookies published

The Information Commissioner's Office (ICO) has published new guidance on the use of cookies and similar technologies, as well as an associated blog. 

 

The guidance looks at cookies and similar technologies in detail and it is relevant to any organisations operating online services such as websites or mobile apps. It covers:

 

  • What cookies and similar technologies are
  • What the rules are on cookies and similar technologies
  • How the cookie rules relate to the GDPR
  • How to comply with the cookie rules
  • Other matters to consider.

 

 
The blog highlights, and aims to debunk, the myths that:

 

  • Organisations can rely on implied consent for cookies
  • Analytics cookies are strictly necessary, so consent is not needed
  • Organisations can use a cookie wall to restrict access to their websites until users consent
  • Organisations can rely on legitimate interests to set cookies, so consent is not needed
  • The ICO wants online services to stop using cookies and similar technologies.

The ICO highlights that cookie compliance will be an increasing regulatory priority for it in the future.

 


 

The Pensions Regulator launches new re-enrolment tool

Every three years, employers must put certain eligible workers who have left their automatic enrolment workplace pension scheme back into it. This is called re-enrolment. Employers must also complete and submit a re-declaration of compliance to tell The Pensions Regulator (TPR) how they have met their re-enrolment duties, even if they do not have any workers to re-enrol. This re-declaration confirms the employer has checked whether it needs to re-enrol any of its workers or not. Re-enrolment and re-declaration are legal requirements and a failure to comply could result in a fine.

As thousands of small and micro employers are reaching their re-enrolment dates in the coming months, TPR has now launched a new online resource to enable employers to re-enrol their staff into their workplace pension scheme more simply. The tool asks a series of questions and employers’ answers will enable them to find out what they need to do and by when.

        


 

Reducing penalties for late disclosure of income

ou can use the Digital Disclosure Service (DDS), if you need to make a voluntary disclosure of income or other taxable events that have not previously been reported to HMRC. 

Other current HMRC campaigns that facilitate disclosure by taxpayers, include the Card Transaction Programme - a disclosure opportunity for businesses that accept card payments and have not paid the right amount of tax due - and the Let Property Campaign for landlords who have undeclared income from residential property lettings in the UK or abroad.

 

There are three main stages to making a disclosure, notifying HMRC that you wish to make a disclosure, preparing an actual disclosure (within 90 days from the date HMRC acknowledged your notification), and making a formal offer together with payment.

 

Avoiding or reducing penalty charges

 

It is important to remember that there are usually lower penalties if you make a voluntary disclosure. The actual rate of the penalties will vary depending on the specific circumstances and in some limited cases there may be no penalties due. There are higher penalties for offshore liabilities. For undisclosed liabilities, the penalties could be up to 100% of the unpaid liabilities if the income or gain arose in the UK, or up to 200% for offshore liabilities.

 

The process of reporting income and gains in this way needs to be handled carefully, and we recommend that readers who are mindful to "bring matters up-to-date" take professional advice. Please call if you are considering your options, we can help you through the disclosure formalities.

 


 

 

Tax Diary August/September  2019

 

1 August 2019 - Due date for Corporation Tax due for the year ended 31 October 2018.

 

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

 

19 August 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2019. 

 

19 August 2019 - CIS tax deducted for the month ended 5 August 2019 is payable by today.

 

1 September 2019 - Due date for Corporation Tax due for the year ended 30 November 2018.

 

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

 

19 September 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 September 2019. 

19 September 2019 - CIS tax deducted for the month ended 5 September 2019 is payable by today.


       


DISCLAIMER - PLEASE NOTE: The ideas shared with you in this email are intended to inform rather than advise. Taxpayers circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. 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.