Parents and caregivers can claim for Child Benefit, which is a tax-free payment calculated by reference to the number of eligible children in the household. Since the introduction of the High Income Child Benefit Charge (HICBC) in 2012, many taxpayers have been caught out by the charge, resulting in the issue of penalties by HMRC. Indeed, the failure to notify HMRC of the liability was so widespread that last year HMRC reviewed the penalties and confirmed that they would be cancelled if they met a number of conditions. Ramsdale v HMRC (2020) In the recent case of Ramsdale v HMRC (2020), the First Tier Tribunal considered whether being unaware that your partner was claiming Child Benefit was a reasonable excuse for failing to notify...

HMRC have issued detailed guidance regarding how the coronavirus job retention scheme will work in practice. How Much is the Grant? Employers can claim: the lower of; 80% of furloughed workers regular wage, or £2,500 per month associated employer NICs on that subsidised wage, and minimum automatic enrolment employer pension contributions on that subsidised wage This gives a maximum grant per employee of £2,804 per month (£2,500 salary + £245 Employer NIC + £59 automatic enrolment pension contribution). For salaried employees; the employee’s actual salary as at 19 March 2020 (excl. commission and bonuses) should be used to calculate the 80%. However, originally the amount needed to be calculated using the emp...

On 26 March 2020, the Government announced a much awaited support package for self-employed individuals and partnership businesses that have suffered a loss of earnings due to COVID-19. Eligible individuals will receive a grant of up to 80% of their average monthly trading profits, up to a cap of £2,500 per month. Initially the scheme was set to run for a 3 month period (March to May). However, as this scheme is designed to match the support given to furloughed individuals, it is thought that it will be extended to end of October to match the extension of the Job Retention Scheme announced by Rishi Sunak on 12 May 2020. So far, only those who work in the construction or manufacturing industry have been encouraged to go back to wor...

In this ‘pause from normality’ it is important to keep your tax compliance guard up. The period we are going through is not a ‘tax holiday.’ If the quality of your tax compliance drops, then the existence of Covid-19 will be no excuse for inaccuracies or negligence later down the line when faced with an HMRC enquiry, nor is it likely to be an excuse for late returns unless you become seriously ill. The reality of this is exemplified by the fact that people are still receiving loan charge settlement letters (which require a response in 30 days) during this time. Our advice: Understand the specific tax payment holidays and reliefs that exist through Covid-19 and apply them to the best of your ability. Prepare cash-...

Restrictions imposed in light of the coronavirus pandemic have resulted in widespread disruption to travel and business operations. Due to individuals being unable to leave the UK to carry out certain business duties, overseas companies could inadvertently find themselves taxable in the UK. To provide some clarity, HMRC has provided new guidance on how the residence and taxable presence rules will apply to companies with a specific focus on the impact of COVID-19. Company Residence When is a Company UK-Resident? As discussed in our blog Home or Away? Company Residence and CMC (23 October 2019), a company will be resident in the UK if either of these conditions are met: The company was incorporated in the UK; or The centr...

The Upper Tribunal has found that Mr Davies, Mr McAteer and Mr Evans-Jones (the taxpayers) could not benefit from the Motive Exemption or Treaty Relief in relation to overseas property income subject to UK tax under the Transfer of Assets Abroad rules. Transfer of Assets Abroad Rules  The transfer of assets abroad (TOAA) rules were brought in in their original form for income tax in 1935, and extended to capital gains tax (CGT) in 1965. The rules are complex and far reaching, but in short they may apply where non-UK resident companies or trusts are created which can benefit UK-resident individuals. An income tax charge will apply to the individuals where the following conditions are met: There must be a transfer of assets by ...

From today (4 May 2020), businesses that have been affected by the coronavirus pandemic can apply for a loan under the Bounce Back Loan Scheme (BBLS). As noted in our previous blog, the BBLS was introduced to help smaller businesses that were struggling to obtain finance under the previously announced Coronavirus Business Interruption Loan Scheme (CBILS). The key features of the BBLS are as follows: Small and medium sized businesses can apply for a loan from £2,000, up to 25% of the business' turnover (capped at £50,000). The loan will be guaranteed 100% by the government (as opposed to 80% guaranteed under the CBILS). The government will pay interest and fees for the first 12 months, and the interest rate for the facility i...

In line with government guidelines, large swathes of UK workers are currently working from home.  Whilst there are a range of expenses you may be able to claim depending on your specific circumstances, this blog is aimed at those of you who own a limited company and are running the business from home. Rather than claiming the flat rate of £6 per week (£26 per month) under the simplified expenses rules, it may be more beneficial to instead rent out the personal work space in your home to your limited company. Under this arrangement, where the rent charged is equal to costs (see below), then no taxable rental profits will arise. Furthermore, provided that the rent is charged at no more than the market rate then the rental payments ma...

On 27 April 2020, Chancellor of the Excheuqer Rishi Sunak acknowledged that many smaller businesses were struggling to obtain finance under the previously announced Coronavirus Business Interruption Loan Scheme (CBILS). In light of this, a new Bounce Back Loan Scheme was announced which will be 100% guaranteed by the government (as opposed to 80% guaranteed under the CBILS). The Bounce Back Loan Scheme will launch on 4 May 2020 and will allow small and medium-sized businesses (SMEs) to borrow between £2,000 and £50,000. It has been confirmed that loan terms will be up to 6 years and there won't be any fees, interest, or repayments to pay for the first 12 months. Eligibility You can apply for a loan if your business: is based...

Individuals who submit a self assessment tax return are required (subject to certain exceptions) to make payments on account to HMRC by 31 January and 31 July. The payments are based on the previous years income tax liability, and represent an advance payment for the following year's tax liability. The government has announced that the July 2020 payment on account may be deferred to January 2021, for individuals in self assessment. Initially the measure was only expected to apply the self-employed, however HMRC have since confirmed that it applies to all taxpayers with payment on account liabilities. Deferral of July 2020 Payment  Due to the effect of COVID-19, the government has brought in several measures aimed at supporting ...