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New ‘Starter Homes’ scheme gives 20% discount!

Group of construction workers. House renovation.

The 20% discount is achieved by waiving local authority fees for homebuilders of at least £45,000 per dwelling on brownfield sites.

At the heart of the Starter Homes initiative is a change to the planning system. This will allow house builders to develop under-used or unviable brownfield land and free them from planning costs and levies. In return, they will be able to offer homes at a minimum 20% discount exclusively to first time buyers, under the age of forty.  Under the proposals, developers offering Starter Homes would be exempt from those Section 106 charges and Community Infrastructure Levy charges. The homes could then not be re-sold at market value for a fixed period – making sure that the savings are passed onto homebuyers.Gov.uk

To qualify first time buyers must be under the age of 40 and living in England

steve@bicknells.net

Letters for under 21s

Changes for employees under 21

From 6th April 2015 employer national insurance contributions will be abolished for under 21s.  If you employ anyone over 16 and under 21 years old you will need to use one of the new letters for under 21s in the national insurance category setting of your payroll software.

English: British National Insurance stamp.

English: British National Insurance stamp. (Photo credit: Wikipedia)

Secondary contribution rates

This table shows how much employers pay towards employees’ National Insurance for tax year 2014 to 2015.  The contribution rate calculated by your payroll software is set by the category letter.

Category letter £111 to £153

a week

£153.01 to £770

a week

£770.01 to £805

a week

From £805.01

a week

A 0% 13.8% 13.8% 13.8%
B 0% 13.8% 13.8% 13.8%
C 0% 13.8% 13.8% 13.8%
D 3.4% rebate 10.4% 13.8% 13.8%
E 3.4% rebate 10.4% 13.8% 13.8%
J 0% 13.8% 13.8% 13.8%
L 3.4% rebate 10.4% 13.8% 13.8%

National insurance categories

Most employees will have a category letter of A or D depending on whether or not they are in a contracted-out workplace pension scheme.  There are categories for mariners and deep-sea fisherman; the more common categories are shown below:

Employees in a contracted-out workplace pension scheme

Category letter Employee group
D All employees apart from those in groups E, C and L in this table
E Married women and widows entitled to pay reduced National Insurance
C Employees over the State Pension age
L Employees who can defer National Insurance because they’re already paying it in another job

Employees not in contracted-out pension schemes

Category letter Employee group
A All employees apart from those in groups B, C and J in this table
B Married women and widows entitled to pay reduced National Insurance
C Employees over the State Pension age
J Employees who can defer National Insurance because they’re already paying it in another job

Employees in a money-purchase contracted-out scheme

This kind of scheme ended in April 2012 but some employees might still be part of one.

Category letter Employee group
F Tax years before 2012 to 2013 only: all employees apart from the ones in groups G, C and S in this table
G Tax years before 2012 to 2013 only: married women and widows entitled to pay reduced National Insurance
C Employees over the State Pension age
S Tax years before 2012 to 2013 only: employees who can defer National Insurance because they’re already paying it in another job

How to claim zero rate of employer contributions

You should already have proof of age for all your employees.  A copy of a passport, driving licence or birth certificate will be required to show that your employee qualifies for the new zero rate of employer’s contribution.  The seven new categories are valid from 6th April and must be applied from the first salary payment after 5th April 2015 to benefit from the new zero contribution rate for employers.

What does this have to do with Auto Enrolment?

You need to have proof of age for all your employees aged under 21 to claim the zero contribution rate for employer’s National Insurance.  By the time of your staging date you must assess all your workers, based on their earnings and age.  To help you prepare for Pension Auto Enrolment you can make sure that all your employee records are up to date and that your payroll software has the full details for all workers including their date of birth.  This is a good opportunity to clean up all your employee data.

Alterledger can help

For more information on saving employer’s national insurance and preparing for Pension Auto Enrolment, contact Alterledger or visit the website alterledger.com.

 

Say goodbye to small earnings

Say hello to small profits

HMRC has changed the name of the threshold for paying Class 2 National Insurance from the Small Earnings Limit to the Small Profits Threshold.  If you earn less than £5,965 in 2015-16 you won’t need to pay Class 2 NI, but if you do, it will be calculated as part of your 2015-16 tax return and due with the rest of your tax by 31st January 2017.

English: British National Insurance stamp.

English: British National Insurance stamp. (Photo credit: Wikipedia)

Alterledger can help

For more information on filling in your tax return, contact Alterledger or visit the website alterledger.com to see if you can organise yourself better and cut your tax bill.
 

The Yacht that wasn’t a benefit in kind

Yacht de luxe.

This is the case of Gillian Rockall v HMRC (2014) HKFTT 643.

Mr Michael & Mrs Gillian Rockall were involved in running a hotel and conference centre and providing high-end residential courses, amongst the companies assets was a 140 foot ocean-going yacht costing $11.9 million called Masquerade of Sole.

HMRC issued assessments on Mr & Mrs Rockall for the tax years 2000-2001 to 2008-2009 on the basis of personal use (benefit is normally assessed as 20% of the market value).

The Yacht was used for:

  • Business Networking
  • Customer Training
  • Exploring Business Opportunities in the Caribbean and Mediterranean
  • Friends and Acquaintances were taken on occassional trips to provide a opinion on opportunities

The Yacht was also placed with an agent for charter when not required for the purposes above.

The First-Tier Tribunal took the view that the use of the Yacht was only for Business and not for private purposes.

However under S203 ITEPA 2003 a benefit in kind would arise because the asset was at the disposal of the employees.

The Rockalls appealed to the First-Tier Tax Tribunal, on the grounds that the use of the yacht was tax-deductible under s365 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). This requires that the item comprising the benefit in kind was used ‘wholly, exclusively and necessarily in the performance of the duties of the employment’.

The tribunal has now ruled that the yacht was bought and operated purely for business purposes and thus was fully tax-deductible for both the Rockalls.

– See more at: http://www.step.org/yacht-used-impress-customers-were-legitimate-expense#sthash.dNRhVYmG.dpuf

steve@bicknells.net

HMRC Solicitors Campaign – do you have anything to declare?

11931862094_e7a9299369_z

You can tell HM Revenue and Customs (HMRC) about any income you haven’t declared (this is known as ‘voluntary disclosure’).

The Solicitors Tax Campaign gives you the chance to do this if you work within the legal profession as a solicitor in a partnership or company, or as an individual.

How to tell HMRC about undeclared income

  1. Fill in a notification form by 9 March 2015.
  2. Fill in a disclosure form and pay what you owe by 9 June 2015.

Use the calculator to help work out what you owe. Only use the calculator if both of the following apply:

  • your tax affairs are straightforward
  • you’re entitled to only basic personal allowances

There’s a different calculator if you need to tell HMRC about more than 5 years of unpaid tax.

Call the helpline before 9 June 2015 if you need more time to pay.

Help and advice

You can read more about how to make your voluntary disclosure.

Call the Solicitors Tax Campaign helpline if you need more help.

Solicitors Tax Campaign helpline
Telephone: 0300 013 4749
From outside the UK: +44 300 013 4749
Monday to Friday, 8am to 8pm

https://www.gov.uk/solicitors-tax-campaign

steve@bicknells.net

Self Employed National Insurance

Changes to payment of National Insurance

HMRC has announced changes to the way that the self-employed will pay their Class 2 and Class 4 National Insurance Contributions (NIC).  This is not the first time the process has changed.  Some people still refer to paying their stamp – in days of old you had to buy special stamps for your NIC!

English: British National Insurance stamp.

English: British National Insurance stamp. (Photo credit: Wikipedia)

No new direct debits

Until recently I would have encouraged the self-employed to set up a Direct Debit Instruction (DDI) with HMRC to pay their Class 2 NIC.  From April 2015 HMRC will calculate the NIC due from your self-assessment tax return.

Deferment of National Insurance Contributions

If you currently defer NIC, you don’t need to re-apply to do so.  HMRC will be sending out letters in December to everyone who currently defers NIC to confirm this.  Any new applications to defer NIC will not be processed.  For more information on National Insurance for the Self Employed please go to my blog post here: Class 2 NIC.

Alterledger can help

For more information on filling in your tax return, contact Alterledger or visit the website alterledger.com to see if you can organise yourself better and cut your tax bill.

 

Orchestra Tax Relief

New Creative Industries Tax Relief

The 2014 Autumn Statement from the UK Chancellor included a proposal for a new Orchestra Tax Relief.

Orchestra Tax Relief for UK Companies

FHM-Orchestra-mk2006-01 (Photo credit: Wikipedia)

Orchestra Tax Relief

Many orchestras are charities and therefore don’t pay Corporation Tax, but any that do pay tax may qualify for a future Orchestra Tax Relief.  The tax break proposed yesterday will be going through a consultation process, so if you have an interest get involved!

Other Creative Industries Tax Reliefs

For more information on the tax reliefs for Orchestras, Theatres, Animation, Video Games and High End TV please go to my blog post here: Orchestra Tax Relief.

Alterledger can help

Why wait for the law to favour your industry?  Contact Alterledger or visit the website alterledger.com to see if you can organise yourself better and claim more expenses to cut your tax bill.

 

Have you got undeclared Credit Card sales?

Kartenlesegerät, geld überweisen,  Kreditkarte, Hand

The Credit Card Sales Campaign is an opportunity to bring your tax affairs up to date if you’re an individual or business that accepts credit or debit card payments.

Who can do this

This opportunity is for you if:

  1. you accept card payments for goods or service
  2. you haven’t declared all your UK tax liabilities

Get the best terms

You need to tell HM Revenue and Customs (HMRC) if you either:

  • haven’t registered with them
  • have failed to declare all your income

This is called a ‘voluntary disclosure’.

What happens if you should disclose but don’t

HMRC has details of all credit and debit card payments to UK businesses. This information is used to identify individuals and businesses that might not have paid what they owe.

Credit Card Sales Campaign Helpline
Telephone: 0300 123 9272
From outside the UK: +44 300 123 9272
Monday to Friday, 9am to 5pm

steve@bicknells.net

Have you got a Will?

Signing Last Will and Testament

Currently 47% of UK adults die intestate, in other words without a will.

The new Inheritance and Trustees’ Powers Act 2014 (ITPA 2014), came into force on 1 October 2014.
Here are some of the New Rules:
  1. Where there are no children, the entire estate will pass to the surviving partner (this shuts out blood relatives such as parents, brothers, sisters or their children)
  2. Where someone dies leaving a spouse and direct descendants the first £250k will pass to the surviving spouse/partner plus 50 per cent of the remaining balance as a capital sum (previously they had a life interest in 50 per cent of the remaining balance)
  3. Unmarried couples continue to recieve nothing if their spouse dies intestate

If you are tempted to try a ‘do it yourself’ Will, think again, they might be cheap but the consequences of getting it wrong could be extremely costly for your family.

If you own a business you also need to consider carefully what your succession plan will be.

My advice is to see a solicitor carryout estate planning and prepare a will.

 

steve@bicknells.net

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