News

When you cannot use the Property or Trading Allowances

18/07/2024

Two separate £1,000 tax allowances for property and trading income were introduced in April 2017. If you have both types of income highlighted below, then you can claim a £1,000 allowance for each. The £1,000 exemptions from tax apply to: If you make up to £1,000 from self-employment, casual services (such as babysitting or gardening)...

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The NIC Employment Allowance

18/07/2024

The Employment Allowance benefits eligible employers by reducing their National Insurance liability. The current allowance is £5,000. An employer can claim less than the maximum if this covers their total Class 1 NIC bill. The allowance is only available to employers that have employer NIC liabilities of under £100,000 in the previous...

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Child benefit for 16 to 19 year olds

18/07/2024

The child benefit rates for the only or eldest child in a family is currently £25.60 and the weekly rate for all other children is £16.95. Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child’s 16th Birthday. Under qualifying circumstances, the child...

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Gains on sale of shares

18/07/2024

Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% (but see comments below) when you sell shares unless they are in a CGT free investment such as an ISA or qualifying pension. Your gain is usually the difference between what you paid for your shares and the amount received when you sold them. There are special rules...

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Taxable and non-taxable State Benefits

18/07/2024

Whilst there are a large number of state benefits available, it is not clear which of these benefits are taxable and which are tax-free. HMRC’s guidance provides the following list of the most common state benefits that are taxable, i.e., Income Tax is payable, subject to the usual limits: Bereavement Allowance (previously Widow’s...

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Ordering documents from Companies House

18/07/2024

Companies House offers interested parties the ability to order certified copies of certificates and documents held on the Companies House register. You can order: a company certificate with certified facts; or a certified copy of a document held on the register. You can place an order by: using the Find and update company...

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Responding to a personal data breach

15/07/2024

The Information Commissioner’s Office has a simple guide that explains what you need to do in the 72 hours following a data breach. The seven step approach advocated is set out below: Step one: Don’t panic It’s understandable if you’re concerned about what happens next. But we’re here to help you understand what happened and to...

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The new Chancellor’s first speech

15/07/2024

The Chancellor has promised to take immediate action to fix the foundations of the economy, rebuild Britain and make every part of the country​ better off. In her first speech as Chancellor, Rachel Reeves pledged to leaders of some of the UK’s pioneering industries to build growth on strong and secure foundations built on stability,...

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Labour win landslide election result

11/07/2024

As had been widely predicted, the results at the polls have seen the Labour Party back in power after 14 years in opposition. Labour have swept into power with their second-largest majority whilst the Conservative Party have had their worst ever result in terms of the number of seats won. We should expect Labour to fulfil their election...

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Inheritance and tax

11/07/2024

As a general rule, an individual who inherits property, money or shares is not liable to pay tax on the inheritance. This is because any Inheritance Tax (IHT) due should be paid out of the deceased’s estate before any cash or assets are distributed to the heirs. However, the recipient is liable to income tax on any profit earned after the...

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Company filing obligations

11/07/2024

It is important that anyone responsible for the accounts and tax filing regime for private limited companies is aware of their obligations. After the end of its financial year, a private limited company must prepare full annual accounts and a company tax return. The deadline for filing the first set of accounts with Companies House is 21...

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Restarting a dormant company

11/07/2024

HMRC must be informed when a non-trading or dormant company restarts trading and becomes active for Corporation Tax purposes. Companies can use HMRC Online Services to supply the relevant information. When a company has previously traded and then stops it would normally be considered as dormant. A company can stay dormant indefinitely,...

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Business VAT responsibilities

11/07/2024

The taxable turnover threshold that determines whether businesses should be registered for VAT is currently £90,000. Businesses with turnover below this level can also apply for a voluntary VAT registration. Businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs. Similarly, VAT will be...

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Are mega sized marshmallows zero-rated?

11/07/2024

In the UK most basic food stuffs are zero rated. However, the definition of 'basic' is not straightforward and many of the foods are zero rated as a result of historical legislation dating back to the introduction of VAT in 1973. Famously, cakes are zero rated but not all biscuits are zero rated. However, biscuits wholly or partially...

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New government

08/07/2024

Our new government, and in particular, Rachel Reeves, the new Chancellor, will be responsible for raising the funds that our new government requires to finance its activities. The government has already declared that it will not increase Income Tax, National Insurance or VAT and government borrowing has to remain within tight limits. In...

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Exit plans

08/07/2024

Exit can be seen as quitting, especially if the exit discussed is your business interests. But actually, business exit planning is an essential part of general business planning. In some respects, it is the most important aspect of business development planning as it shines a light on the timing and value you can expect when you...

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CGT Incorporation Relief

04/07/2024

Where a taxpayer owns a business as a sole trader or in partnership, a capital gain will be deemed to arise if the business is converted into a company by reference to the market value of the business assets including goodwill. This could give rise to a chargeable gain based on the difference between the market value of the assets and...

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What your tax code means

04/07/2024

The letters in your tax code signify your entitlement (or not) to the annual tax free personal allowance. The tax codes are updated annually and help employers work out how much tax to deduct from an employee’s pay packet. The basic personal allowance for the current (and next) tax year is £12,570. The corresponding tax code for an...

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Income Tax in Scotland

04/07/2024

The Scottish rate of income tax (SRIT) is payable on the non-savings and non-dividend income of those defined as Scottish taxpayers. The definition of a Scottish taxpayer is based on whether the taxpayer has a 'close connection' with Scotland or elsewhere in the UK. The liability to SRIT is not based on nationalist identity, location of...

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Late night taxi for an employee

04/07/2024

There is no specific requirement for employers to provide employees with transport home. Nevertheless, an employer has a duty of care to their employees, which means that they should take all steps which are reasonably possible to ensure their health, safety and wellbeing. Ensuring that an employee gets safely home during unsocial...

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Claim full expensing or 50% FYA

04/07/2024

Full expensing allows for a 100% first-year capital allowance for qualifying plant and machinery assets and came into effect last April. To qualify for full expensing, expenditure must be incurred on the provision of “main rate” plant or machinery. Full expensing is only available to companies subject to Corporation Tax....

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Statutory redundancy pay

04/07/2024

If you have been in the same job for two years or more and are made redundant you will usually be entitled to redundancy money. The legal minimum that you are entitled to receive is known as ‘statutory redundancy pay’. There are exceptions where you are not entitled to statutory redundancy pay, for example, if your employer offers to keep...

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Translation

01/07/2024

If you receive documents from overseas customers or suppliers and you need to translate text into English, have you used Google Translate? It’s a free, but incredibly powerful facility. You can select to translate: Individual blocks of text that you add to view in alternate languages. Images with text. Documents. And really...

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Extracting profits from a small, limited company

01/07/2024

It is pretty much universally accepted that shareholders (usually directors) of small companies take out their remuneration as a small salary - a salary pitched high enough to secure NIC benefits but not high enough to that employee NIC contributions are payable - and any balance as dividends. Unless directors have the need for...

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3A Laburnum Row
Torquay
Devon
TQ2 5QX
Phone: 01803 500210
Email: info@pauldollins.co.uk

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