Category: Tax Tip

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Tax Tip – Casual staff 

If you’re taking on seasonal staff over the Christmas period then the normal employment rules apply.  

  1. They must go on the payroll and NOT be paid ‘cash in hand’ 
  1. They may be eligible for a pension under autoenrollment. You can defer this for 3 months which may mean that you don’t need to provide a pension if they are with you for less than this 
  1. If they are self employed you should have a contract to this effect confirming that THEY are responsible for paying their own taxes 
  1. Use the HMRC employment status indicator to see whether they should be employed or whether they can be self employed Check employment status for tax – GOV.UK 
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Tax tip

Capital gains tax when selling your home.

If your home has always been occupied as your principle private residence then any increase in value is probably covered by Private Residence Relief so no tax is payable. BUT, if your property has ever been rented out, left unoccupied, or served as your second home then you may have to pay capital gains tax within SIXTY DAYS of disposal.

Estate agents and solicitors don’t usually mention this to their clients so it’s up to you to remember to avoid late filing and payment penalties.

There are various exemptions and allowable costs so we’re happy to do the calculations for our clients to see if they need to pay. (We don’t do them for non-clients as, frankly, they’re done manually so they’re a pain.)

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Tax tip

Research and development tax credits are a government incentive to encourage companies to invest in INNOVATION. Over recent year HMRC have tightened up on what qualifies for research and development tax credits.  

Please ensure that your research is original work. 

Your project may research or develop a new process, product, or service or improve on an existing one.  

You must explain how your project: 

  • Looked for an advance in the field 
  • Had to overcome the scientific or technological uncertainty 
  • Tried to overcome the scientific or technological uncertainty 
  • Could not be easily worked out by a professional in the field 

Much of the ‘research’ that businesses previously tried to claim is now being rejected.  

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Tax Tip

This week saw the release of the quarterly ICAEW South West business confidence monitor. Have a read to see how the region is feeling about doing business. Do you feel the same?

Although generally positive late payments and increased regulation are worrying many.

In a separate survey, almost 50% of businesses said their costs had risen because of the increase in the National Living Wage. Almost 20% put up prices to cover the increase. Around 20% have already improved efficiencies, including using automation and investing in technology. Others have closed pay gaps and increased upskilling of staff in response.

On Friday 2nd August at 8.30am ICAEW will be holding an online discussion and overview of the results for the South West Region, led by ICAEW Head of Business, Simon Gray and Ed Tellwright from the British Business Bank – to join us please register here.

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The King’s Speech 

At the state opening of parliament King Charles announced the following economic measure on the agenda for the new government 

  • Audit reform and corporate governance – long overdue and something that ICAEW have been pushing for 
  • Using the independent OBR (Office for Budget Responsibility) to assess any significant and permanent tax and spending changes – this makes a lot of sense 
  • Great British Energy to accelerate future technologies for clean power – we have a number of clients working in this area who will be pleased to hear that they can move forwards 
  • Streamlining the delivery process for critical infrastructure such as the national grid and renewable energy 
  • Generally improving employment rights – while this may come at a cost to employers the best ones are already doing most of these things anyway 

And lots more

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Tax Tip

Business Confidence Monitor – Quarter 2 2024
Once a quarter the ICAEW produces a business confidence monitor which is passed to government and other bodies to aid their decision making. You may also find it useful to help predict future growth of your industry.

Minerva Accountants contributes to this for the South West region so please feel free to pass your comments to Della on the sort of issues that are mentioned in this report. Della is an elected member of ICAEW global Council as well as Chair of the West of England.

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Tax Tip

Tax free allowances.

Don’t forget to make use of your 2024/25 tax free allowances:
• Dividends £500
• ISA £20,000
• Interest £1,000 (£500 higher rate or £0 additional rate)
• Rent a room £7,500 (special rules apply)
• Personal allowance £12,570 (reduced by £1 for every £2 income above £100,000)

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Tax Tip

The special tax rules relating to Furnished Holiday Lets are changing from April 2025. After that date they will be taxed as normal residential lettings. We don’t expect any change in government to affect this decision.

After that date you will no longer be able to claim mortgage interest and certain other costs.

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Tax Tip

We often get asked whether certain training courses can be claimed against tax and we give the usual accountant’s answer … it depends.

It depends whether the training is to improve an existing business service or to start a new one. Eg a hairdresser wanting to start providing nail service could not claim a course on manicures but the could claim an course on colouring. Similarly an accountant beginning to provide business coaching can not claim the initial course but can claim subsequent courses to improve their coaching service.

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Tax tip

Business entertaining is not allowed for VAT or Corporation/Income tax purposes.

The only exception is staff entertaining. I’ve written on this separately if you want the detail but it must be below £150 per person per year.

Customer and supplier entertaining are never allowable and this is one of the many adjustments that we make when we prepare your accounts and tax returns.

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