Clampdown on fake reviews and hidden fees

Posted on 12th September 2023 by Solutions Accountancy

The Department for Business and Trade published the following announcement, that if implemented, should reduce the present trend to publish fake reviews and charge hidden fees at point of sale. The overall aim is to help consumers cut the cost of living…

In a recent press release the Department said:

“Commissioned by the Prime Minister in June as part of the Government’s ongoing work to support people with the cost of living, government research published today will inform the consultation to ensure we root out where ‘drip pricing’ harms consumers most.

The research has confirmed so-called ‘drip pricing’ – where the price paid at checkout is higher than originally advertised due to extra, but necessary, fees – is widespread, and occurs in more than half of providers in the entertainment (54%) and hospitality (56%) industry, and almost three quarters across transport and communication (72%) sectors. In total, this costs UK consumers £1.6 billion online each year.”

Additional consultations that target labelling and so-called “fake reviews” are in the pipe-line that should ensure that unit pricing is consistently applied, including to promotions and special offers, helping consumers compare products easily and identify what items represent the best value.

At present, these noble initiatives are speculative. We will have to wait and see if the proposed consultations produce effective legislation.

Back to school – help with childcare costs

Posted on 7th September 2023 by Solutions Accountancy

As children return to school after the summer break, HMRC is reminding parents that they may be eligible to use the Tax-Free Childcare (TFC) scheme to help pay for any approved childcare.

The TFC scheme can help parents of children aged up to 11 years old (17 for those with certain disabilities). The TFC scheme helps support working families with their childcare costs. There are many registered childcare providers including childminders, nurseries, breakfast and after school clubs and approved play schemes signed up across the UK. Parents can pay into their account regularly and save up their TFC allowance to use during school holidays.

The TFC scheme provides for a government top-up of parental contributions. For every £8 contributed by parents an additional £2 top up payment will be funded by Government up to a maximum total of £10,000 per child per year. This will give parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the age of 17) in childcare costs.

The TFC scheme is open to all qualifying parents including the self-employed and those on a minimum wage. The scheme is also available to parents on paid sick leave as well as those on paid and unpaid statutory maternity, paternity and adoption leave. In order to be eligible to use the scheme parents will have to be in work at least 16 hours per week and earn at least the National Minimum Wage or Living Wage. If either parent earns more than £100,000, both parents are unable to use the scheme.

HMRC’s Director General for Customer Services, said:

‘Starting back to school and arranging childcare for the term ahead can be costly for working families. Tax-Free Childcare offers financial help so families can save on the cost of childcare. Search Tax-Free Childcare on GOV.UK and sign up online today.’

Tax on trivial benefits

Posted on 7th September 2023 by Solutions Accountancy

There is a benefit-in-kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a bouquet of flowers given occasionally to employees, or any other BiK classed as 'trivial' that falls within the exemption. By taking advantage of the exemption employers can simplify the treatment of BiKs whilst at the same time offering a tax efficient way to give small gifts to employees.

The trivial benefit rules provide a great opportunity to provide small rewards as an incentive to employees. The main caveat being that the gifts are not provided as a reward for services performed or as part of the employees’ duties. However, gifts to employees on milestone events such as the birth of a child or a marriage or other gestures of goodwill would usually qualify.

The employer also benefits as the trivial benefits do not have to be included on PAYE settlement agreements or disclosed on P11D forms. There is also a matching exemption from Class 1A National Insurance contributions.

The tax exemption applies to trivial BiKs where the BiK:

is not cash or a cash-voucher; and
costs £50 or less; and
is not provided as part of a salary sacrifice or other contractual arrangement; and
is not provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.

The rules also allow directors or other office-holders of close companies and their families to benefit from this relief but with an annual cap of £300. The £50 limit remains for each gift but could allow for up to £300 of non-cash benefits to be withdrawn per person per year. The £300 cap does not apply to employees. If the £50 limit is exceeded for any gift, the value of the benefit will be taxable.

Taking goods temporarily out of Great Britain

Posted on 7th September 2023 by Solutions Accountancy

There are special rules that must be followed when goods are taken temporarily outside of Great Britain (England, Scotland and Wales). As a general rule, when goods are moved, they must be declared, and any duty owed must be paid.

You can usually claim relief from UK import duties where goods are being moved temporarily, for example, to a trade show or an event. This is called Returned Goods Relief (RGR). If RGR is available, then no import duties will be payable when the goods are returned to Great Britain.

Examples of items you might move temporarily are:

music equipment, such as portable instruments;
film and sound equipment, such as cameras;
education or science equipment;
sports equipment; or
samples for trade fairs.

Before you travel, you’ll need to:

check if you can claim relief from import duty when you return;
decide how you want to declare your goods; or
check if you need an export licence for your goods.

It is important to note that RGR only gives relief from Great Britain’s import duties. The rules regarding how you declare goods and claim relief from import duty are different in other countries.

There are different rules if you move goods temporarily between Northern Ireland and Great Britain.

Business asset disposals taxed at 10%

Posted on 7th September 2023 by Solutions Accountancy

Business Asset Disposal Relief (BADR) applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available Capital Gains Tax (CGT) of 10% is payable in place of the standard rate. There are a number of qualifying conditions that must be met to benefit from this relief.

BADR used to be known as Entrepreneurs’ Relief before 6 April 2020. The name change did not affect the operation of the relief.

You can currently claim a total of £1 million in BADR over your lifetime. The £1m lifetime limit means you can qualify for the relief more than once. The lifetime limit may be higher if you sold assets before 11 March 2020.

Claims for BADR are made via your self-assessment tax return or by filling in Section A of the Business Asset Disposal Relief help sheet.

The deadline for claiming relief is as follows:

Tax year when you sold or closed your business	Deadline to claim BADR
2021-22	31 January 2024
2022-23	31 January 2025
2023-24	31 January 2026

Closing a limited company

Posted on 7th September 2023 by Solutions Accountancy

There are a number of reasons why you may consider closing your limited company. This could be because the limited company structure no longer suits your needs, your business is no longer active, or the company is insolvent. You will usually require the agreement of all the company’s directors and shareholders to close down the company.

The method for closing down a limited company depends on whether it is solvent or insolvent. If the company is solvent, you can apply to get the company struck off the Register of Companies or start a members’ voluntary liquidation. The former method is usually the cheapest.

It is the responsibility of the company directors to ensure that all of a company’s assets and liabilities are dealt with before it is dissolved. For example, that you have settled any outstanding bills and collected all debts owed to the business. Any assets or rights (but not liabilities) remaining in the company at the date of dissolution can pass to the Crown as ownerless property.

Where a company is insolvent, the creditors’ voluntary liquidation process must be used. There are also special rules where the company has no director, for example if the sole director has passed away.

A company can also elect to become dormant. A company can stay dormant indefinitely. However, there are costs associated with this option. This might be contemplated if, for example, a company is restructuring its operations or wants to retain a company name, brand or trademark. The costs of restarting a dormant company are typically less than forming a new company.

Tax when you sell property

Posted on 7th September 2023 by Solutions Accountancy

The annual exempt amount applicable to Capital Gains Tax (CGT) is currently £6,000 and is set to be reduced to £3,000 from April 2024.

CGT is normally charged at a simple flat rate of 20% and this rate applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain, they may only be subject to a reduced rate of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT.

A higher rate of CGT applies to gains on the disposal of residential property (apart from a principal private residence). The rates are 18% for basic rate taxpayers and 28% for higher rate taxpayers.

Most people are aware that they do not usually have to pay CGT when they sell their qualifying residential property used wholly as a main family residence. However, other sales of property that are not a principle private residence (PPR) will be subject to CGT.

These include:

buy-to-let properties
business premises
land
inherited property

The deadline for paying any CGT due on the sale of a residential property is 60 days. This means that a CGT return needs to be completed and a payment on account of any CGT due should be made within 60 days of the completion of the transaction. This applies to UK residents selling UK residential property where CGT is due.

There are various reliefs available from CGT for the sale of qualifying business assets.

Tracking down lost pension details

Posted on 4th September 2023 by Solutions Accountancy

Ever had a nagging feeling that you have a pension pot somewhere but have no idea how to track it down?

Well, there is a solution.

There is a search link on the GOV.UK website at https://www.gov.uk/find-pension-contact-details that will help.

The service will help you find contact details to search for a lost pension by tracking down contact details for:

your own workplace or personal pension scheme; or
someone else’s scheme if you have their permission.

This service will not tell you whether you have a pension, or what its value is, and you will need the name of an employer or a pension provider to use this service.

If this line of enquiry fails, you could also request contact details from the Pension Tracing Service by phone or by post.

Pension Tracing Service

Telephone: 0800 731 0193
From outside the UK: +44 (0)191 215 4491
Textphone: 0800 731 0176
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 731 0193
British Sign Language (BSL) video relay service if you’re on a computer – find out how to use the service on mobile or tablet. Monday to Friday, 10am to 3pm.

You could also write to The Pension Service at:

Post Handling Site A
Wolverhampton
WV98 1AF
United Kingdom

Companies urged to file accounts early

Posted on 4th September 2023 by Solutions Accountancy

Companies House has issued a news update targeted at companies who are due to file accounts by the end of September 2023. Generally, this would be for accounts ending 31 December 2022.

In their update they said:

All limited companies, whether they trade or not, must deliver annual accounts to us each year. This includes dormant companies.

Running your own company can be exciting but also challenging. Directors have lots of responsibilities including keeping company records up-to-date and making sure they are filed on time. You need to understand your role as a director, the importance of remaining compliant and how late filing could affect your company.

Missing your filing deadline could affect your credit score or access to finance. It can affect how others view your company and whether they want to do business with you. There are also financial penalties and legal consequences – you could get a criminal record, a fine or disqualification.

If you file using Companies House online services, we will send you an email to confirm we have received your accounts. We will send you another email when we have registered your accounts.

The penalties for late filing are:

Length of period (measured from the date the accounts are due)	Penalty for a private company or LLP
Not more than 1 month	£150
More than 1 month but not more than 3 months	£375
More than 3 months but not more than 6 months	£750
More than 6 months	£1,500

Self-Assessment threshold change

Posted on 31st August 2023 by Solutions Accountancy

The £100,000 threshold for Self-Assessment change for taxpayers taxed through PAYE only, increased from £100,000 to £150,000 with effect from 6 April 2023. However, the Self-Assessment for 2022-23 tax returns remains at £100,000. 

Taxpayers who submit a Self-Assessment tax return for 2022-23 showing income between £100,000 and £150,000 taxed through PAYE and do not meet any of the other criteria for submitting a Self-Assessment return will be sent an exit letter by HMRC. This will remove the requirement for an annual Self-Assessment tax return to be submitted by qualifying taxpayers.

For the 2023-24 tax year onward, taxpayers will still need to submit a Self-Assessment tax return if their income taxed through PAYE is below £150,000 but they meet one of the other criteria for submitting a Self-Assessment return, for example:

receipt of any untaxed income;
partner in a business partnership;
liability to the High Income Child Benefit Charge; or
self-employed individual and with gross income of over £1,000.

Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October following the end of the tax year for which a Self-Assessment return needs to be filed. If you are required to submit a Self-Assessment return for 2022-23, you should ensure that you file your tax return electronically and pay any tax due by 31 January 2024.

HMRC has an online tool available at www.gov.uk/check-if-you-need-tax-return/ that can help taxpayers decide if they are required to submit a Self-Assessment return.