During holiday season we are being asked about staff holiday pay. The statutory holiday pay for full time staff is 5.6 weeks per year, which roughly equates to four weeks holiday plus bank holidays.
HMRC allows a certain amount of daily subsistence for tax relief if working away from your usual place of work. If you are travelling up to 5 hours then it is £5 per day, if up to 10 hours then £10 and if over then £25 per day. Remember to add these to your tax return expenses for maximum tax relief.
Entertainment is not allowable for VAT purposes. However, some entertaining maybe claimed for tax purposes. In general, as a rule it is not allowed, however, according to HMRC guidelines if it is secondary to a meeting of more than one client it is, so be careful when claiming. Also do not over claim for reasonable entertaining expenses as there is even more chance they will be disallowed.
Losses and Tax relief. Remember that you can offset trade losses against any other income, including rentals, in the same tax year to reduce your tax liability. You can also carry forward any unused losses to offset future profits in the same trade. However, you cannot offset rental losses against trade profits, you can only carry forward these rental losses against future rental profits.
IR 35 – be careful. HMRC are again checking if you should be employed by your contractor or not. It is obviously better tax wise for both you and your contractor to be self employed, but is it correct? You should be asking yourself some questions, do I do all my work for one person? If no then you should be fine. Is my work guaranteed ? Again if no then you should be fine. Do I take a [...]
We are asked many times, with tax free dividends now at just £2,000 whether it is best to be self employed or Limited. Now the upper rate of tax starts at £50,000 we will use this as an example. If you earn £50,000 of self employed profits you will pay £11999.74 in personal tax and NI. If you earn £12,500 PAYE and take £37,500 of dividends through your Limited company then you will pay £3705 in personal tax + £7,125 in Corporation [...]
If you receive any large cash deposits into your business remember you have a duty to check the ID of the person in question as well as the origin of their money and if you have any doubts about your findings to report this to either PMC or HMRC. As a member of the HMRC AMLR scheme we take this responsibility very seriously.
Remember to use your annual £20,000 ISA allowance by the 5th April 2019 or you will lose it for the year ! All income generated from the ISA is tax free and the £20,000 may be split between cash or stock ISA’s or all in one. The new annual allowance will start on the 6th April. Use it or lose it !
If you have personal use of a Limited company car you should declare the benefit in kind received to HMRC. This is calculated by the list price of the car x CO2 emissions % and then added to your taxable salary. If the car is a pool car – paid for and insured for all employees to use and remains at the company premises overnight then there is NO benefit in kind received and therefore no additional tax due.