The tax general anti-abuse rule (GAAR) became law this summer, and there have been rumblings that HMRC will use this to attack income shifting between spouses. Should you be concerned about this?
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Is Sharing Income With Your Spouse Tax Abuse?
Are Entertainment Costs Ever Tax Deductible?
You’ve taken a stand at a trade fair, and to pull in the punters you’ve splashed out on some booze and fancy nibbles. Normally there’s no tax deduction for this type of expense, but you can take steps to change this – what are they?
Tax Efficient Ways Of Getting Your Staff To Work
Finding effective ways to encourage your staff to get to work on time isn’t easy. Providing them with transport would surely help, but it’s likely to be costly. What tax incentives are there to reduce or even eliminate this expense?
The Future Of Tax-Free Childcare
In this year’s Budget tax-free childcare was announced as the successor to employer-supported childcare. It sounded like a good deal, but employers and some employees might do well to stick to the current scheme, why?
The future of tax-free childcare
In this year’s Budget tax-free childcare was announced as the successor to employer-supported childcare. It sounded like a good deal, but employers and some employees might do well to stick to the current scheme, why?
Childcare tax schemes recap
Tax and NI breaks for childcare have been around for quite a while, but currently they’re only available via employer-run schemes. However, the new tax-free childcare (TFC), to be phased in from April 2015, will be available to virtually all working parents who pay for childcare. However, it won’t be a straight swap; parents and employers will have options.
Latest advice
The numbers bandied about by the Chancellor in this year’s Budget suggested that TFC would be more generous to parents than the current system, but that employers might lose out. However, HMRC’s recent consultation paper explains that, in a wide variety of situations, the current scheme is more generous and employers can continue to use it for quite a few years to come (see The next step ).
Why should employers continue?
The advantage of the existing scheme is that employers can offer tax and NI-free childcare payments or vouchers instead of parents paying these costs out of their taxed salary. Obviously, this benefits mums and dads, but the employer also gains by not having to pay employers’ NI on the value of the vouchers/payments. It’s therefore in an employer’s interest to keep the current scheme running as long as possible.
Tip. Employers can continue to accept staff into their scheme until 6 April 2015. To maximise NI savings they should encourage eligible employees to sign up before then (see The next step ). What’s more, they can stay in the scheme until they cease to become eligible or choose to switch to the new one, i.e. TFC.
Why should employees continue?
The headline figures show employees will be entitled to up to £1,200 per year, per child, but this represents the maximum under TFC. In practice, many parents will be entitled to less because of certain terms which apply to the new scheme but not to the existing one:
until April 2016 TFC will be open only to parents with children aged under 5. This limit will rise each April by one year until it applies to children aged twelve and under
the maximum combined tax and NI saving is 20% of the childcare costs.
Rule of thumb calculation
Couples will be better off under the new scheme where they are basic rate taxpayers with two or more children that qualify for TFC and their annual childcare costs are £9,330 or greater; £6,250 for higher rate taxpayers. The position is different again for single parent households.
A VAT-Saving Scheme For Mums And Dads
A new school term and you’ve just laid out for uniform, shoes, PE kit and more. Then comes the bombshell: Amy wants to learn the cello. While we can’t save you the cost of a cello we can save you the VAT. What’s involved?
Nationwide Tax Investigations
HMRC is cranking up the pressure on businesses by launching seven new investigation task forces. Who’s being targeted this time?
How To Collect VAT Before You’re Registered
If you’ve applied to register a new or existing business for VAT, but you’re waiting for your registration number, when should you charge VAT for your customers and what’s the procedure for collecting it?
Suing A Limited Company And Enforcing Judgment
When suing a limited company, there are a number of checks worth making to improve the chance of enforcement, should that prove necessary.
Tax Efficient Company Financing
If you want to raise cash for your company, the Enterprise Investment Scheme offers tax incentives to draw in outside investors. But these tax breaks can be lost if you don’t use the money within a certain time. What do you need to know?
