In the upcoming years, taxpayers will not be issued with automatic penalties for the late filing of tax returns or the payment of tax. Instead, HMRC will issue "points" for missed deadlines, before a financial penalty is levied. It is intended that this new system will be fairer and only penalise those who persistently fail to meet their compliance obligations. The changes will apply to VAT customers for accounting periods beginning on or after 1 April 2022, and to those who submit self-assessment tax returns with business or property income exceeding £10,000 p/a for accounting periods beginning on or after 6 April 2023, and to all other self-assessment taxpayers from 6 April 2024. Current Rules (Self-Assessment) Under the current...

As an employer, there are numerous ways that you can remunerate or reward your employees and encourage their ongoing commitment to the business or company. Such rewards can be monetary, the provision of some form of benefit, or the gift or transfer of an asset. However, care should be taken when considering such "rewards" or "gifts" as in many cases they are likely to be deemed to be earnings and therefore subject to tax and/or National Insurance Contributions (NICs). Recent Case In the recent case of Mullens v HMRC (TC08112),  Mr Mullens (the taxpayer) sought to persuade the First-tier Tribunal (FTT) that huge payments he received from Bernie Ecclestone’s businesses, as well as from Ecclestone’s ex-wife and trusts, were gifts...

If you are an employer and you operate either an Enterprise Management Incentives (EMI) scheme or an Employment Related Securities (ERS) scheme, you will need to file an EMI or ERS return by 6 July after the tax year end. For the tax year ended 5 April 2021, the deadline is 6 July 2021. Furthermore, there may be cases where an ERS return is required but no official scheme is in place, such as where an employee or director has acquired shares in a company by reason of their employment (subject to certain exceptions), or the company has been restructured and employees/directors have received new shares. Enterprise Management Incentives (EMIs) EMI is a form of employee share option scheme that allows selected employees to be rewarded ...

In the last 12 months, the UK Government has provided several schemes aimed at supporting businesses through COVID-19. These include the the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Scheme (CBILS), where the Government has agreed to back loans provided under these schemes to help businesses obtain funding and to encourage lending from loan providers. Under the SME R&D tax relief scheme, small and medium sized companies (SMEs) that engage in qualifying research and development projects may also claim enhanced corporation tax relief in relation to certain qualifying expenditure, and where the company is loss making, part of the loss may be surrendered for a repayable tax credit from the Government under ...

Coronavirus Support Measures The Coronavirus Job Retention Scheme (i.e. the furlough scheme) will be extended until the end of September 2021. Whilst there will be no change to the terms for employees, as businesses re-open employers will be asked to contribute. From July, they will be asked to contribute 10% of the cost of unworked hours, rising to 20% in August 2021. The Self Employment Income Support Scheme will also be extended until September 2021, with those who filed a 2019/20 Self-Assessment Tax Return now able to make a claim. Restart Grants will be available to businesses in England of up to £6,000 per premises for non-essential retail, and up to £18,000 per premises for hospitality, accommodation, leisure, personal c...

As part of the government’s coronavirus measures, businesses were given the option to defer their VAT payments between 20 March 2020 and 30 June 2020 under the VAT Payment Deferral Scheme. Initially, they were given until 31 March 2021 to pay any VAT liability accumulated in that period. However, it was later announced as part of the government’s Winter Economy Plan that these businesses would be able to opt to pay their VAT liability in up to 11 equal instalments over 2021-22 (interest free) using the VAT Deferral New Payment Scheme. Your Options In effect, if you deferred your VAT liability as part of the VAT Payment Deferral Scheme, you currently have three options for paying this: Pay the full amount of deferred VAT o...

At PD Tax Consultants we value companies for all kinds of reasons, ranging from setting up employee share schemes to facilitating a management buy-out. In this article, we have provided a brief overview of the methods we typically use to value unquoted trading companies. It is important to understand that valuing companies is both a science and an art, and each valuer will make different judgement calls resulting in a differing result. With this in mind, it is often appropriate to use two or more valuation methods in order to ascertain a better idea of a value range and to ensure that the valuation reached is reasonable. 1. Maintainable Earnings Method The first and most commonly used method for valuing trading companies is the mai...

Efforts are being made by the Government to motivate businesses to own lower CO2 emission cars in the push to become a greener society. From April 2021, new tax measures - particularly relating to capital allowances - are being introduced to encourage and incentivise businesses to opt for more climate-friendly vehicles. First Year Allowances (FYAs) The Government announced during its last budget in 2020 that FYAs would be restricted to expenditure for new zero emission and new electric cars from 01 April 2021 onwards, with these FYAs being extended until April 2025. These allowances allow the whole of the expenditure incurred by the business to be deducted against trading profits in the period. It is important to note that the FYAs ar...

Companies (small or medium enterprises) that engage in research and development (R&D) activities can claim enhanced expenditure against their corporation tax where the R&D project or projects qualify for R&D tax relief. Complex rules apply in determining whether qualifying R&D has taken place, however a successful claim can bring material tax savings along with a cash injection into the company (where there is a loss). Furthermore, for ongoing R&D projects, claims may be made year on year. Note - large companies may also obtain relief for R&D under the RDEC scheme, however the focus of this article is on the rules applying to small and medium enterprises (SMEs). Rates are based on the 2020/21 UK tax year. Wh...

Boris Johnson addressed the nation last Saturday evening (31.10.20) to confirm a second national lockdown as a result of the failure of the tiered local approach to contain the soaring infection rates of Covid-19. The lockdown calls for restaurants, pubs, gyms and non-essential retail shops to remain closed during the period of the four week national lockdown which commences today (05.11.20) and is due to expire on 2 December 2020. Unlike the first lockdown, schools and universities will remain open. Due to this aforementioned announcement, the Government has also announced further support to help afflicted business and households which can be summarised as follows: Furlough Scheme The Coronavirus Job Retention Scheme (CJRS) or f...