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Reading Time | 4 mins 05 May 2016

Taxbreaks – May 2016

Reading Time • 4 minsWelcome to taxbreaks, your regular update designed to keep you informed of the latest business and tax issues.
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Reading Time | 2 mins 05 May 2016

Charity Accounts – is the lesson being learned?

Reading Time • 2 minsThe Charity Commission has just published a report following research done which shows that less than half of small charity annual reports and accounts meet acceptable standards. A worrying statement, but this needs to be balanced by the comments in the same report that larger charity accounts are getting better!
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Reading Time | < 1 min 04 May 2016

Changes to annual accounting regulations for businesses

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A number of important changes to the way that small and medium-sized companies prepare and file their accounts with Companies House have been introduced.  

The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 came into force on 6 April 2015.

Small and medium-sized companies can no longer file abbreviated accounts to Companies House. Smaller businesses can still prepare micro entity accounts, while others can prepare abridged accounts for members within the company. 

The regulations apply to accounting periods beginning on or after 1 January 2016, while some companies may choose to apply earlier for accounting periods on or after 1 January 2015.

Other changes include:

  • required statement - to deliver small company abridged accounts to indicate that the members have agreed to the abridgement
  • changes to small company size threshold – for small companies the turnover limit rises from £6.5m to £10.2m and the balance sheet total limit rises from £3.26m to £5.1m
  • changes to medium-sized company threshold – turnover limit rises from £25.9m to £36m and the balance sheet total limit rises from £12.9m to £18m
  • employees – the total number of employees remains at 50 for small companies and 250 for medium sized companies.

Contact us today to discuss your accounting obligations.

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Reading Time | < 1 min 03 May 2016

Parents loan £5 billion to children each year

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Parents looking to help their children purchase their first home will loan an estimated £5bn in 2016, according to research from Legal & General (L&G).

The “bank of mum and dad” and financial support from family and friends is expected to help fund £77 billion worth of housing purchases this year. 

L&G claims that 25% of all mortgage transactions – at an average amount of £17,500 – will be funded through inter-family loans.

The main ways buyers receive help from their family and friends are:

  • a gift (57%)
  • a loan with no interest (18%)
  • a loan with interest (5%).

L&G has also warned that the average loan size could wipe out more than half of family net wealth by 2035 – leading to a lack of disposable funds available to help young people onto the property ladder.

L&G chief executive Nigel Wilson said that the “bank of mum and dad” plays a vital role in helping young people take their first steps onto the housing ladder. 

However Wilson warned of important issues such as house prices being “out of sync with wages”. 

"We need to fix the housing market by revolutionising the supply side - if we build more houses, demand can be met at a sensible level and prices will stabilise relative to wages."

Talk to us today about gifting assets to your family.

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Reading Time | < 1 min 03 May 2016

Apprenticeship levy could lead to businesses abandoning training

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The Confederation of British Industry (CBI) has called for a ‘radical rethink’ of the apprenticeship levy ahead of its April 2017 introduction.

Carolyn Fairbairn, CBI director general has warned of fundamental flaws to the levy’s guidelines which could encourage employers to abandon their existing training programmes in order to cover the levy’s costs.

From 6 April 2017, businesses with annual earnings of more than £3 million will need to pay a 0.5% levy to fund apprenticeships. 

Employers will also receive a £15,000 allowance, available through the Digital Apprenticeship Service to offset the levy costs.

The CBI has called for the following:

  • stronger role for the institute for apprenticeships, including measuring and managing the system around the levy
  • more flexibility on the levy and the way it is spent, including training and high quality support
  • the digital system for managing levy spend needs to support the delivery of apprenticeship training for businesses.

Fairbairn, added:

“Currently, the levy misunderstands training only as apprenticeships and the current design encourages firms to rebadge their existing programmes.

“Companies are having to change the ‘spec’ of graduate or management training schemes - programmes that are working perfectly well - just to fit apprenticeship standards.

“The government needs to work with business to resolve these issues before the levy launches. This means taking the time to get this right to design a flexible, business-led system – through the Institute – that encourages employers to spend on quality training opportunities.”

Talk to us today to find out more about the apprenticeship levy.

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Reading Time | < 1 min 29 Apr 2016

Rise of self-employed could result in retirement problem

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Increasing self-employment could lead to long-term retirement problems in the future, the Federation of Small Business (FSB) has warned.

Less than a third (31%) of the 1,600 self-employed workers surveyed reported that they were saving into a private pension, while 27% are planning to rely on their business to fund their retirement.

15% suggested that do not currently have retirement savings of any kind.

FSB also found:

  • ‘security of income’ was the biggest challenge for the self-employed with 18% reporting that they don’t know how much income they will have from ‘month to month’
  • income levels were diverse with 32% claimed to earn more than £2000 per month. 41% claimed to earn under £1000 while 19% said they earned less than £500 a month.

Self-employment in the country is at its highest record, up from 12% of the workforce in 2000 and 8% in 1980.

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said: 

“It has never been easier to go it alone and self-employment now stands at the highest level since records began. This should be celebrated as it brings freedom and flexibility to millions of people.

“Yet policymakers have been slow to respond to the boom in self-employment and are therefore playing catch up. If we do not act now to adapt to this changing workforce, we will only be shoring up problems for the future.”

Contact us today to discuss self-employment.

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Reading Time | 2 mins 28 Apr 2016

Changes to Pensions Allowances

Reading Time • 2 minsHealthcare professionals, in particular doctors and dentists, are facing the possibility of a  further tax charge as a result of...
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Reading Time | < 1 min 28 Apr 2016

Daily penalties date for late tax returns approaching

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Those who have yet to file their online tax return with HMRC for the 2014/15 tax year are being urged to do so by the end of this month.

The additional £10 daily charge will be levied on taxpayers for 90 days if they failed to submit their return by the end of April 2016. 

The legal filing deadline for online self-assessment is on 31 January. Those that fail to file their return face a fixed penalty fee of £100. 

Anyone who still has a return outstanding at the end of July will have accumulated fines of £1000, including the additional £10 per day penalty. 

Outstanding returns that are not filed to HMRC by 31 July 2016 will face a further penalty of at least £300.

Anthony Thomas, chairman of the Low Incomes Tax Reform Group, said:

“Importantly, the fines can be appealed against if you have a reasonable excuse for filing the return late.  This might include situations such as prolonged ill-health, bereavement, or family breakdown – to give just a few examples.

“We would strongly urge anyone with an overdue return to submit it as soon as possible; and to do so online as a paper return for 2014/15 will already attract the maximum £1,000 penalty. You can then appeal against the fines by writing to HMRC to explain why the return has been filed late.”

Talk to us today to discuss your tax return.

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Reading Time | < 1 min 27 Apr 2016

Wedding season 2016 – gifts and tax relief

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With wedding season fast approaching, the Institute of Chartered Accountants in England and Wales (ICAEW) is reminding guests of the tax relief available if they choose to make a gift to a married couple.

Gifts to married couples or civil partners are exempt from inheritance tax (IHT) as long as the couple have a UK residence.

The tax relief available on wedding gifts varies depending on the relationship between the giver and the recipient. 

The following applies for wedding gifts:

  • each parent can give up to £5,000 tax free
  • grandparents can give up to £2,500 each
  • relatives and friends can give up to £1,000.

All gifts must be made on or before the date of the wedding ceremony.

Anita Monteith, technical tax Manager at ICAEW, said:

“With more and more couples living together before marriage, it is becoming increasingly common for newlyweds to request gifts of cash rather than more traditional gifts such as a kettle or toaster for their new home.  

“Whatever the gift, all or part of it will be exempt from IHT provided the gift is made on or shortly before the date of the wedding or civil partnership ceremony.”

Contact us today to discuss your tax planning.

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