The apprenticeship levy was introduced on 6 April 2017 meaning some UK employers now need to calculate, report and pay a contribution towards the apprenticeship levy to HMRC through the PAYE process each month. Levy payers should use the Employer Payment Summary (EPS) to report any levy due and should pay the apprenticeship levy alongside tax and national insurance contributions by the 19th (or 22nd if paying electronically) of each month.
Employers will be able to see their apprenticeship levy data using their Business Tax Account after April. Agents will be able to view their clients’ apprenticeship levy data through Agent Services from late summer 2017.
A client asked me about working from home…
She spends time working from home and wishes to claim a deduction against her trading profits for use of home expenses. She doubts whether the income tax savings will be significant and could easily be outweighed by future capital gains tax payable because of a loss of principal private residence relief. What should she do?
It is possible there is no capital gains tax problem to worry about. The legislation denies PPR relief to that part of a gain which is attributable to any part of the house which has been used exclusively for business purposes. So, for example, a room which is occupied for business use during the working day but occupied for family and residential purposes in the evenings and at weekends will qualify in full for relief.
On the other hand, HMRC take the view that where the residential use is occasional and very minor then relief can be denied. They give the example of a doctor who keeps some private possessions in a room used as a surgery – the room will be treated as used exclusively for business purposes.
Most people experience frustrations at work from time to time. Whether it is due to constant pressure, last-minute demands or irritating colleagues, at some stage, most of us reach a point where we want to vent our frustrations in the office.
Frustrations happen, and venting is an easy way to blow off steam. However, just because it happens doesn’t mean it’s ok. Constantly venting can spread negativity and bring your colleagues down. It can also be disruptive and annoying to the rest of your team.
Minimise the impact
Before you decide to vent your frustration, pause and take a moment to think about how you would like others to think of you at work. Do you want to be seen as a competent, intelligent leader? Unless you want to be known as someone negative who complains a lot, it’s probably best not to vent in the open office. If you really do need to talk to someone about the challenges you are currently facing, perhaps find a quiet room where you can close the door and discuss your issues with a trusted colleague or friend in the office.
Balance the positive and the negative
It is very easy to point out the things that are wrong. There is always something negative to focus on, no matter where you work. However, it is important to force yourself to notice the positive things too. If you challenge yourself to be a bit more observant, you will notice plenty of positive things happening around the office.
Write it down
Write down the things that are frustrating you so that you can better understand the problem. This can also help you to anticipate the issues that trigger your stress so that you can address them in future, before they become bigger problems. Writing things down can also help you to de-stress as the act of doing so is effectively venting your frustration (silently). This can also help you to arrange your thoughts and may even result in you coming up with a solution to the issue.
Invest time coming up with solutions
You can vent about things as much as you like but nothing will change unless you come up with some solutions. Try to spend some time thinking about how to solve the problem itself rather than focusing on the frustration caused by the symptoms of the problem.
The online world is constantly evolving. As such, the way that people use online search engines such as Google, Yahoo, Bing, etc. is changing all the time. Businesses need to keep up to date with these changes so that customers and potential customers can continue to find them online. Here are some of the big new trends that businesses need to be aware of.
People are now accessing their devices with their voice. People are using “digital assistants” such as Siri or Cortanta to search for things online. This is becoming more common as voice recognition technology continues to improve.
People are now spending more time using messaging apps than on social media. This includes apps such as WhatsApp, Snapchat, WeChat, etc. Usage levels of messaging services overtook social media in 2015. Since then, usage has continued to grow.
Look around the next time you are on a train or standing in a queue. You will notice that most people are staring at their smartphone screen, surfing the web and searching for information online. Since the arrival of the smartphone a few years back, mobile has become the primary channel through which people access the internet. One of the most significant consequences of this shift has been that we access the web much more often but for shorter periods of time.
According to a recent survey, people now own an average of 3.64 connected devices. This is going to keep on growing, particularly with the rise of the “Internet of Things” (IOT) and online digital assistants such as the Amazon Echo, Siri, etc.
What should you do next?
How you choose to take advantage of these trends depends on the type of business that you have and the customers that you are targeting.
Perhaps you should consider setting up a Snapchat or WhatsApp account for your business so that you can tap into these marketing channels. If you haven’t already done so, perhaps it is time for your company website to be redesigned with “responsive” technology so that it resizes appropriately for smartphone screens, tablets, etc. Maybe there are new ways for Siri or Cortana to access your firm’s services? Now is the time to consider these trends and how leveraging them could be advantageous to your business.
From 6 April 2017, the repayment threshold for plan 1 loans increased to £17,775. The plan 2 threshold will remain at £21,000.
Off Payroll working – student loan deductions
From 6 April 2017 reforms to off-payroll working in the public sector introduced a change to the way fee-payers (public authority, agency or other third party) pay for services from individuals engaged through an intermediary.
The fee-payer will:
- be required to report the amounts deemed paid to the worker, including Income Tax and National Insurance contributions to HMRC. This should be done on or before the date of deemed payment to the worker on a Full Payment Submission (FPS).
- not be required to report or deduct Student Loan payments from these individuals. Student Loan payments will be calculated and deducted from the individual’s Self Assessment (SA) return based on their total income.
If the fee-payer receives a Student Loan Start Notice (SL1) and a Generic Notification Service (GNS) Employer Prompt for these individuals, they do not need to take any action and should file these away for their own records.
GNS Notifications for student loans Employers – remember to regularly check your inbox for online notices as this is where you’ll find any GNS student loan notifications.
If you receive a GNS notification instructing you to start student loan deductions, ask each employee displayed which plan type they are repaying, or refer to the SL1 Start Notice if you have it. Either way, you can now begin making deductions.
Read HMRC Student Loan repayment: guidance for employers.
Farmers and other landowners will often be approached by developers seeking to obtain planning permission to build on the land. Great care is needed to avoid unnecessary tax charges on the transaction. HMRC have recently updated their guidance on transactions in land clarifying that under certain circumstances some of the eventual profit can be taxed as income not a capital gain. For individual property owners that could mean 45% income tax as opposed to just 28% CGT.
For example, a landowner sells some land to a developer for £5 million plus 10% of any profit on the development over £6 million. If the profit on the project was £8 million then the additional £200,000 would be taxed as a trading profit.
The tax rules in this area are complex. If you are involved in such a deal contact us so we can advise on the best way of structuring the transaction.
We have all been there before – stuck in a city with time to kill between meetings. Some of us head off for the nearest coffee shop at this time while others might make a few calls or go for a stroll in order to think about the next meeting. Perhaps there is a better way to make the most of this dead time.
Focus on a project
Long waits in the airport or sitting on a long-haul flight can be used as the ideal time to focus on a special project. It may or may not be related to the reason for your corporate trip. Perhaps it is a good time to go through the notes of a presentation or the final details of a big project. You should bear in mind that there may be some difficulties getting online (particularly on planes) so you should download the files you need in advance of boarding in order to work offline.
Plan an activity
The line between work and private life is becoming increasingly blurred. As a result, one notable trend in corporate travel is business-leisure travel. In other words, business travellers try to make the most of the time between professional appointments on a corporate trip to get to know their destination or stay a few days longer to sightsee.
Make progress with your work
Periods of dead time between journeys can be used to make progress with work. For instance, you can catch up on email or read through some documents. If you are on a business trip for a few days, it can be a good time to do your expenses, check into your return flight and so forth.
Business trips tend to be a bit stressful. Therefore, it is extremely important to make sure you get some downtime on your own. A good set of headphones can be your best friend when it comes to getting some rest on a plane. Audio books can also be a good way to relax and can even provide some inspiration for your work. Perhaps watching a bit of Netflix or Amazon Prime on your tablet can help to take your mind off work. If you are sporty, it can be good to hit the gym or go for a run (which is also a great way to see a city if you are visiting on business).
In light of two recent tribunal judgments, HMRC have re-affirmed their stance on travel and subsistence claims. We have highlighted the points below, as this may be something you need to consider in your day to day business.
HMRC won both tribunal cases by emphasising the “regular and predictable” nature of business travel, regardless of whether it is to a fixed place of work or not. This means that If you are attending one place of work regularly for a prolonged period, any fuel or other type of travel or subsistence are not allowable expenses.
HMRC, will allow travel if the journey is deemed a “special trip.” The example they give to define a “special trip”, is a doctor who uses his home as his main office and but goes to the hospital to see patients. Occasionally the doctor leaves his paperwork at home. The doctor’s journey home to collect the paperwork before seeing the patient is allowable, however their everyday journey to the hospital is not.
HMRC are carrying out more investigations and it seems to be where they believe the claims are “excessive.”
The £5,000 dividend and savings allowance of up to £1,000 have been with us since 6 April 2016. There are now two further allowances available since 6 April 2017. There are concerns that these have not been widely publicised and not properly understood.
The first £1,000 allowance is against self-employed income. This is a deduction from gross income so will only be of benefit to those with a small amount of self-employed income – for example a part time yoga teacher. If their gross self-employed income is less than £1,000 a year then it will now be tax free and will not need to be reported to HMRC. If the income is marginally above £1,000, say £1,200, then only £200 will be taxable. For many self-employed it will continue to be more beneficial to compute profits by deducting their allowable expenses from their gross income.
The other new allowance is a £1,000 deduction from gross income from property. For example a couple might receive £700 in charges for parking on their drive in Wimbledon during the tennis tournament.
Joint owners of property could receive £1,000 tax free each, however you can’t claim the allowance on income from letting your own home under the Rent a Room Scheme.
For deaths on or after 6 April 2017 there is now an additional £100,000 inheritance tax (IHT) allowance where the family home is passed on to direct descendants. This was originally announced on 8 July 2015 and that date is relevant where the deceased has downsized to a lower value property.
This additional relief increases to £175,000 in 2020, and where the relief was not used on the death of the first spouse, it is available on the death of the surviving spouse.
This means that after 6 April 2020 a married couple can potentially pass on assets worth up to £1,000,000 without paying IHT as there would be £350,000 relief against the value of the family home in addition to the combined £650,000 nil rate bands (2 x £325,000).
Note however that the Labour Party have announced that if elected they will reverse this generous measure!
As mentioned in previous blogs, it may be necessary to review your will and estate planning to ensure that you take full advantage of this new relief.