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Self Assessment Tax

At The Stan Lee, our tailored service related to self-assessment includes………………… 

Consulting on your self-assessment tax matters
Self-assessment registration
Computing the tax liability
Completing and filing the tax returns on your behalf
Advising on tax payments
Generating ideas for saving on taxes
Appeal for the tax penalties
Dealing with any tax investigations
Self-assessment tax returns on the deceased’s behalf
Closing your self-assessment registration if required

Spreading your January self assessment payment

Spreading your January self assessment payment

Worried about paying your self assessment tax bill? We’ll review your financial situation and whether you meet the criteria for a time-to-pay arrangement with HMRC.

With a combination of low growth and high inflation, the 2022/23 tax year has been a tough time, financially speaking, for many of us.

So it’s no surprise that many owners, directors and self-employed individuals are concerned about having enough funds to pay their self assessment income tax bill.

The good news is that HM Revenue & Customs (HMRC) does have a facility for spreading out your income tax payments. HMRC’s ‘time-to-pay’ arrangement allows you to pay your tax bill in pre-agreed installments, with a small amount of interest added on for the use of this service.

Where the amount due doesn’t exceed £30,000, you can apply online; otherwise you will need to contact them to discuss what arrangements can be put in place.

How does the time-to-pay scheme work?

The time-to-pay scheme relates to HMRC’s online payment plan service, allowing you to come to an agreement about deferring your tax bill and spreading the costs over several months.

For your 2022/23 tax return, you can spread the balance of your 2022/23 liability as well as the first payment on account towards the 2023/24 tax bill. Some other considerations of the facility include:

  • Interest will be charged from 1 Feb 2024, at base rate plus 2.5% p.a.
  • You need to choose how much to pay initially and how much you will then pay monthly.
  • If a payment is missed, the whole amount can be demanded by HMRC.
  • If an arrangement is set up, this avoids any enforcement action to collect your due taxes, ie. calling in debt collectors etc.

How to check if you’re eligible for online payments

 

So, how do you know if you’re eligible to set up a time-to-pay agreement with HMRC? There are five criteria that must be met for HMRC to consider an online payment arrangement. The five criteria are:

  • The amount due must be between £32 and £30,000.
  • There must be NO outstanding tax returns to submit
  • There must be NO other tax debts
  • There must be NO other active HMRC payment plans
  •  The length of the payment plan must not exceed 12 months

The deadline to set up online payments is within 60 days of the due date – in this case, 1 April 2024 for the last tax year and the first payment on account for the current tax year.

If you don’t qualify based on the five rules mentioned above, you can still apply for normal (not online) time-to-pay arrangements. It’s worth noting that time-to-pay arrangements don’t show up in credit searches – but if you default and it ends up with an Individual Voluntary Agreement (IVA) or County Court Judgement (CCJ) being made, that will obviously show up.

Talk to us about agreeing a time-to-pay arrangement

If you’re concerned about not being able to pay your January self assessment income tax bill, please do come and talk to us. We’ll review your financial situation, your liquid funds and will work out how much you can realistically afford to pay.

Get in touch to talk about an online payment plan for your self assessment tax bill and let’s find out how we can help from here at The Stan Lee.

Spreading your January self assessment payment Read More »

Getting your tax affairs in order prior to death

Getting your tax affairs in order prior to death

Your tax liabilities don’t end when you pass away. That’s why getting your tax affairs in order prior to death is so helpful for those you leave behind. Here’s what you need to know.

If you’ve always thought that your tax affairs end once you die, then think again. The truth is that the requirement for tax filings doesn’t end with the death of the taxpayer.

There are tax considerations:

  • Up to the date of death
  • For the period of administration, the time between death and the final winding up of the deceased’s estate
  • And the documentation potentially applicable to inheritance tax.
  • What this means is that you could leave complicated tax liabilities behind for your loved ones, family and the executor of your will to sort out.

So, how do you ensure you leave your tax affairs as tidy and manageable as possible?

Understanding end-of-life tax responsibilities for your personal representative

When a taxpayer dies, their personal representative is responsible for completing any outstanding tax returns. There will be one for the current tax year up to the date of death, and possibly one (not normally more, but there can be) for previous tax years.

HM Revenue & Customs (HMRC) has a very clear process for what happens once a taxpayer comes to the end of their life:

  • When HMRC is notified of the taxpayer’s death, any outstanding returns will normally be cancelled and then re-issued, together with one for the current year to the date of death. These returns will be sent to your personal representative.
  • If HMRC has issued a notice to submit a tax return. it must be completed unless they agree to cancel it. But in cases where HMRC already has all the information from their own sources – if, for example, your only income is from employment – they will not normally require a separate tax return to be filed.
  • Any re-issued returns must normally be submitted within 3 months and 7 days to HMRC. The return for the current year is due by the following 31 January. Electronic returns cannot be submitted – they must be in paper form.
Providing the required financial information to HMRC

Following your death, it will be your personal representative (usually the executor of your will) who has to deal with your financial and tax affairs on your behalf

Where a return is required, it will be your personal representative’s responsibility to collate the information that’s required and get your tax return completed and filed with HMRC.

So, how does this work in practice?:

  • HMRC will be able to provide details of income from any employment, state and other pensions, as well as any taxable welfare benefits.
  • Banks and building societies should be able to provide values for any interest payments. Dividends on listed shares should be evidenced by dividend vouchers, although the amount paid per share is also publicly available. Dividends on unlisted shares can be confirmed with the company’s accountant if vouchers are not readily available.
  • Any capital assets owned at the date of death go into the deceased person’s estate at the then-market value but are not deemed to have been disposed of by the deceased. Accordingly, these are not required to be reported for capital gains tax purposes. Any assets disposed of prior to death should of course be included in the final tax return.
  • Any tax refund due will be paid to the estate, and the estate is responsible for any tax payable by the deceased.
  • In addition to tax returns up to the date of death, it may also be necessary to complete a return covering any income and capital gains arising during the period of administration – this is the time between the date of death and distribution of assets to the beneficiaries. Where income from interest would result in a tax liability of £100 or less, no return will be required, and the tax-free status of income derived though individual savings accounts (ISAs) is maintained.
  • Where a tax return is required for this period, it will be a Trust and Estate Tax Return, not a normal personal tax return. Often though, HMRC will accept the necessary information less formally, in a written summary.
  • Where any residential property is disposed of from the estate, any capital gains must be reported within 60 days, and tax paid at the same time.
  • The final area of tax following death is in respect of inheritance tax (IHT). That is an area where you should always seek professional advice.
Talk to us about getting your tax affairs in order

Tax administration following death can be confusing, and something your surviving family members will likely find emotionally difficult. We’re always there to help in these circumstances.

Where the size of your estate is likely to exceed the inheritance tax threshold of £325,000 (excluding the residence nil rate band) please talk to us to explore if there is any planning that can be undertaken to reduce your potential IHT exposure.

As your adviser, we can also help you make sure your financial and tax affairs are always in order, and that you have funds put aside to cover your end-of-life tax liabilities.

Get in touch to get your tax affairs in order and let’s find out how we can help from The Stan Lee.

Getting your tax affairs in order prior to death Read More »

Back to Tax Basics: What taxes will I need to pay as a director?

Back to Tax Basics: What taxes will I need to pay as a director?

Are you aware of the personal taxes you’re liable for as a company director? We’ve got the lowdown on self-assessment and capital gains tax – and can help you plan your wealth management as a director.

When you set up a new company, there are certain business taxes you’ll be liable for as a business. But have you also planned for the personal taxes you must pay as a director?

As a company director, it’s not just the company’s corporation tax that you have to pay. You also need to pay the requisite taxes on your own income. This might be dividends payments from the company’s year-end profits, or even the income you receive from any property, shares or investments you own.

Knowing which personal taxes to plan for

A fundamental distinction to understand is the difference between company assets/profits and your own personal money.

Money that’s been generated by your company will sit in your business bank account and can be seen as the cash assets of your business. But, as a director, this is not your money. It’s the company’s money. This cash only becomes yours once it’s been paid to you, either as a dividend, a loan or via a salary paid through the company’s payroll.

HM Revenue & Customs (HMRC) will charge the company corporation tax on the company’s earnings. But HMRC will also need to charge you income tax on the cash you’ve been paid as a director – and this means planning for these tax costs as part of your wealth management strategy.

As a director, you’ll need to plan for:

  • Self-assessment income tax – self-assessment is the way that directors and self-employed people pay their income tax and National Insurance contributions (NICs). In addition to any tax and NIC collected monthly via PAYE as part of your normal payroll, with self-assessment, you must complete an annual personal tax return and submit this to HMRC. You then have to pay two ‘on account’ payments of tax and NICs.
  • Paying your self-assessment tax – paying your self-assessment tax bill is generally done by making two payments on account – one by the 31 January in the relevant tax year and one by the 31 July following the end of the tax year. If needed, a final ‘top up’ payment may be required at the end of January, following the end of the tax year. Through this system, not only does the company pay tax on its profits, but you also pay income tax when you take any of the remaining after-tax profits out of the business as dividends.
  • PAYE income tax – if you pay yourself a salary through the company’s payroll, this income will be taxed at source via the pay-as-you-earn (PAYE) system. The PAYE system will deduct your income tax and National Insurance (NI) contributions via your in-house payroll and this will then be paid directly to HMRC. This income will need to be accounted for in your self-assessment tax return, but you’ve already paid the income tax that is due on this salaried income.
  • Capital gains tax – capital gains tax (CGT) is a tax you pay on ‘gains’ you’ve made during the tax year. CGT is paid on the profit you make when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. So, for example, if you sold your business at a profit, you’d be liable for any gain (increase in value) that you’d made on selling the company. The rate of CGT that you pay will depend on your own income tax band and the nature of the gain that you’ve made. Reliefs are available, including the Business Asset Disposal Relief.

Learn more about the basics of directors’ personal tax

If you’d like to have a chat about your self-assessment or capital gains liabilities, please do contact us. The earlier you plan for these taxes, the more you can mitigate their impact.

Get in touch if you have any questions about your tax and let’s find out how we can help you from the The Stan Lee.

Back to Tax Basics: What taxes will I need to pay as a director? Read More »

Self Assessment Tax Return – Deadlines and Penalties

Self Assessment Tax Return – Deadlines and Penalties

You must do your self assessment tax return here in the United Kingdom if you have any undeclared taxable income including; dividend, property rental income,  investment income and other taxable income. As per the record of tax return 2021/22, more than 300k taxpayers missed their self assessment deadline of 31 January 2023 and 11.7 million submitted their returns on time. You might subject to penalty charges if failure to comply with self assessment requirements. We will note here the key aspect of self assessment registration, submission, payment and inaccurate tax return.

Self Assessment Registration Deadlines

If you have new source of taxable income and you need to declare for income tax purposes, you must notify HMRC by 05 October in your business’s second tax year. For example, you need to notify HMRC by 05 October 2023 for tax year ended 05 April 2023. You could be fined by HMRC if you don’t do so. You can register for self assessment tax return with HMRC via online or post.

Tax Return Submission Deadline

There are two options to submit the tax return; paper based tax return and online tax return. The paper tax return must be submitted by 31 October and the online tax return by 31 January following the tax year ended.

For instance, the tax return for 05 April 2023 must be submitted by 31 January 2024 if doing by online and by 31 October 2023 if via post. If you are failure to submit the return on time, HMRC may charge penalty on your late filing depends on how long you are late. You may appeal on the penalty charges if you have reasonable excuse.    

Income Tax Payment Date

The income tax liability must be paid by 31 January following the tax year ended. For an example, the income tax for 05 April 2023 must be paid by 31 January 2024. However, you may be subject on payment account if your tax liability is more than £1,000 and you paid less than 80% of the previous year’s tax. Payment on account means you need to pay two payments in a year; one is on 31 January and another one is on 31 July.

HMRC will charge penalty and interest on your late payment if you missed the deadline. The penalty depends on how long the payment is overdue and the amount of income tax liability. However, you may pay only the interest, not the penalty on the late payment if you have a payment plan arrangement with HMRC for your tax liability.

Incorrect Tax Return

HMRC will charge penalty on your wrong tax return if you have lack of reasonable care, deliberate error or concealed and the penalty depends on the reasons of the error and the potential lost revenue. Penalty may be reduced to nil and it depends on your quality of disclosure.

Here to Help on Your Tax Return?

At The Stan Lee, we can confidently help on your self assessment tax matters with reasonable fees. For further information and about your income tax affairs, please get in touch with one of the friendly team and let’s find out how we can meet your tax return deadline and minimise your tax legitimately.

Disclaimer: The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.

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Extension of Making Tax Digital for Income Tax (Individuals)

Extension of Making Tax Digital for Income Tax (Individuals)

On 19 December 2022, the government announced the extension of Making Tax Digital (MTD) for Income Tax (individuals) from April 2024 to April 2026 (except general partnerships). In this article, a brief of the changes in MTD for ITSA will be explained.

MTD for ITSA Extension

  • From April 2026, you must meet the MTD compliance if you have more than £50,000 qualifying income.
  • From April 2027, if your qualifying income is more than £30,000, you must comply with MTD requirements.

The qualifying income refers to your gross self-employment income or rental property income or both in together. Gross income means the total income before the deduction of expenses.

Example 1: You have gross income of £30,000 from self-employed and property rental income of £25,000, so the total income is £55,000. Here, you are subject to MTD for ITSA from April 2026 as having total qualifying income more than £55,000 from both self-employed and property rental.  

MTD for Jointly Owned Property:

You may have property rental income from jointly owned property and in this case, your share of the property income will count as your qualifying income rather than the total income of the jointly owned property.

Example 2: You have jointly owned property income of £50,000 (equal share to you and your partner, £25,000 each). You also don’t have any income from self-employed. Here, you are not subject to MTD for ITSA from April 2027 as having less than £30,000 income per individual.

Other matters of MTD for ITSA:

  • You may use MTD for ITSA in voluntary even if your income is less than the qualifying income.
  • Your residency and domicile status will effect on your qualifying earning. For instance, you are UK resident and domicile and having self-employed income in the UK, but property rental income from overseas. Here, your overseas property rental income will count as qualifying income along with your self-employed income here in the UK. However, if you are domiciled outside of the UK then only your UK self-employed and property rental income will count as qualifying income.
  • You may apply for exemption from MTD for ITSA if you can not use software due to your age, disability, location or other unavailable circumstances.
  • However, you can not sign up for MTD in case of you are trustee, personal representative of someone who has died, Lloyd’s member and non-resident company.

Here to Help on Your MTD for ITSA?

At The Stan Lee, we have MTD compatible software for you and pleased to support confidently. For further information and about your MTD for ITSA, please get in touch with one of the friendly team and let’s find out how we can help you.

Disclaimer: The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.

Extension of Making Tax Digital for Income Tax (Individuals) Read More »

The Autumn Budget 2022 at a Glance

The Autumn Budget 2022 at a Glance

The Autumn Budget 2022 has a significant to you and your business as it has huge number of changes on tax matters once the Mini Budget 2022 became questionable. While people are suffering from living costs, the Government takes many steps in this budget. In this article, the writer will note the summary of key tax matters relevant to you and your business.

Income Tax Allowance and Rates for Individuals

  • The basic, higher, and additional income tax rates will remain at 20%, 40% and 45% respectively for 2023/24 tax year
  • The basic and higher rate thresholds remain at the current level of £12,570 and £50,270. However, the additional income rate thresholds will reduce from £150,000 to £125,140 from April 2023
  • The personal allowance will remain frozen at £12,570 until 6 April 2028

 National insurance (NI) Contributions

  • The employment allowance is set at the current level of £5,000
  • The Health and Social Care Levy is no longer going ahead and the temporary NIC increase of 1.25% has been removed from 6 November 2022
  • The national insurance thresholds for all classes will be maintained at the current level until April 2028

National Minimum Wage

  • From April 2023, the hourly national minimum will increase to £10.42 (aged 23 or over), £10.18 (aged between 21 and 22), £7.49 (aged from 18 to 29), £5.28 (16-17 years old) and £5.28 (apprentice rate)   

Dividend Allowance and Tax Rates

  • The annual dividend allowance for individual will reduce from £2,000 to £1,000 from April 2023 and a further reduction to £500 from April 2024
  • The dividend tax rate will remain at the current level of £8.75%, 33.75% and 39.35% respectively for the basic, higher, and additional taxpayers

Corporation Tax

  • From April 2023, the companies with profits over £250,000 will pay tax at 25% and small companies with profits up to £50,000 will pay tax at the current rate of 19%
  • Companies with profits between £50,000 and £250,000 will pay tax the main rate reduced by a marginal relief providing gradual increase in the effective corporate tax rate

Annual Investment Allowance

  • Annual Investment Allowance (AIA) has been confirmed at a permanent rate of £1 million from April 2023

Annual Exemption Reduction of Capital Gains Tax (CGT)

  • The annual exemption of capital gains tax for individuals will reduce from £12,300 to £6,000 from April 2023 and then further to £3,000 from April 2024

Inheritance Tax (IHT)

  • The thresholds will remain at the current level (until April 2028) for Inheritance tax nil-rate band (£325,000) and residence nil-rate band (75,000)
  • Without IHT liability, qualifying estates can continue to pass on up to £500,000 and qualifying estate of a surviving spouse or civil partner can continue up to £1m

Stamp Duty Land Tax (SDLT)

  • The cut of Stamp Duty Land Tax (SDLT) will remain in place until 31 March 2025. On 23 September 2022, the government increased the nil-rate threshold of SDLT from £125,000 to £250,000 for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000
  • The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000. This will now be a temporary SDLT reduction which will remain in place until 31 March 2025
 

Disclaimer: The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.

The Autumn Budget 2022 at a Glance Read More »

Tax Return 2022 – Key Benefits of Early Self-Assessment Tax Filing

Tax Return 2022 – Key Benefits of Early Self-Assessment Tax Filing

The self-assessment tax return for tax year ended 05 April 2022 is due to submit online by 31 January 2023 to avoid late filling penalties. However, submitting the return well in advance could get several benefits including saving your time and money. In this article, we will mention the key benefits of being self-assessment early bird.

Key Benefits of Being Self-Assessment Early Bird

 
  • Time to arrange finance: Doing early self-assessment means you know how much tax is due to pay and then you have more time to manage the finance to pay your tax bills on time. You know that late tax payment is subject to interest and penalty charges by HMRC.
  • Claiming tax refund sooner: If you have any repayment available from HMRC once you have submitted your tax return, you can claim early repayment and then able to manage your finance smoothly.
  • Right information ready for mortgage: If you have plan to buy a property and want to get mortgage or mortgaging your current property, the lender will look for your present circumstances with right information. Doing the early tax return submission means your information is ready for the lender to get sorted your mortgage.
  • No stress for first time: If you are doing the first tax filing means you may not quite familiar with self-assessment tax affairs. Therefore, plan for early tax return will give you more time to submit the tax return without any stress. There is a great chance of missing the deadline if you are waiting for the last minute.
  • Time to find your tax accountants: Self-assessment tax return is not always straightforward and easy to submit to HMRC, specifically if you have complex scenarios or new in self-assessment tax matters. Waiting for the last minute means you may not be able to find your suitable and trusted tax accountants that you are looking for.
  • Escaping any mistakes: Once you have more time in your hands, you can gather the required documents and information as you need for your tax return. Moreover, you can review your tax return and computation precisely before submitting to HMRC. As you know that submitting the incorrect tax return could lead to penalty charges by HMRC.
  • Avoiding late filing penalties: HMRC imposes late filing fines if you are failure to submit the return on time. The fine starts from £100 and then will be more if you are late for longer.
  • Avoiding January madness: Almost all accountants are usually busy during the January time and if you are waiting for last minute means you will not get your desire services. Moreover, Contacting HMRC in January involves a long wait. To avoid the January madness, you can consider submitting your tax return earlier.   

Disclaimer: The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.

Tax Return 2022 – Key Benefits of Early Self-Assessment Tax Filing Read More »

Mini-Budget 2022

Mini-Budget 2022

How Does It Impact on You and Your Business?

The mini-budget 2022 by Kwasi Kwarteng has enormous changes for individuals and businesses here in the UK. However, the budget becomes questionable, though the Prime Minster and Chancellor are confidence for the economic growth. In this article, we will note the key aspects of the budget.

Key Aspects of The Mini-Budget 2022: –

 
  • The corporation tax will remain at 19% and the planned increase to 25% from April 2023 bas been withdrawn. This is good news for small businesses as they are struggling since the COVID-19 pandemic.
  • The 1.25% increase in dividend tax will be abolished from April 2023 which came into effect from this year (April 2022).
  • From April 2023, the income tax will be cut from 20% to 19% for basic rate taxpayers. In addition, the additional rate (45%) of income tax will also be abolished and only the higher rate of income tax at 40%. It looks like huge incentive for enterprise and hard-working people.
  • The rise of 1.25% in National Insurance (NI contributions) from 06 July 2022 will be reversed from 6 November 2022. As a result, you have “better take home” from your employment income.
  • In the past few years, the off-payroll working has been incredibly debatable. Good news! the controversial IR35 has been eliminated and this is a great move for the entire contracting industry.       
  • With the aim of high growth and low tax, the government cuts Stamp Duty Land Tax by doubling the level (from £125,000 to £250,000) for purchasing a residential property. Moreover, the SDLT is nil (level increase from £300,000 to £425,000) for the first-time buyers when the property price is less than £625,000 (rather than the current £500,000). This is really a great news for the property industry when the interest rate is rising sharply.
  • The Annual Investment Allowance (AIA) will remain at £1m and the planned fall to £200,000 from April 2023 has been removed.
  • To encourage investment in the small businesses, the investors can invest annually up to £200,000, which is double of the current limit. In addition, the company can raise up to £250,000 rather than the current limit of £150,000.
  • No major changes announced in the mini-budget regarding VAT, only VAT free shopping for overseas visitors. This will be replaced the old paper-based system with the digital one. It could encourage more visitors here in the UK that leads to the economic growth.

The mini-budget has huge tax cuts with the aim of economic growth and the question is whether this is sustainable as the government has huge debt because of the COVID-19 support made and the current war in Ukraine.

Disclaimer: The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.

Mini-Budget 2022 Read More »

UK Property Rental Income Tax: Seven Things to Know When You Let Property

UK Property Rental Income Tax: Seven Things to Know When You Let Property

Are you a property owner here in the UK and having property rental income? You might have questions how to manage your property income and expenses for tax purposes and whether any new rules coming that will affect you. In this article, we will mention seven key things as a guidance regarding your UK property rental income tax and might help you.

Seven Things About Property Rental Income Tax: –

 
  1. Register for Self Assessment: You should register with HMRC for your self assessment tax so that you can declare your UK property rental income. You can do the registration online or via post. Doing online registration is quicker and time consuming. Please note that the registration deadline is 05 October (for example, you should register by 05 October 2022 for tax year ending 05 April 2022).
  2. Record Keeping: You need to keep your rental income records for 5 years and 10 months after the end of the tax year. We commend to use one dedicated bank account for your property rental income and expenses and keep all invoices accordingly so that we can manage your record smoothly.
  3. Use All Available Expenses: A range of expenses are available to deduct from your property rental income that are allowable for tax purposes. Please have a look in HMRC website and speak to your tax advisors how to minimise your tax liability legitimately. Please note that any expenses that are “wholly and exclusively” for rental income purpose can be deductible.
  4. Transferring Ownership Between Spouses: If you are newly married and having property in your name only, you may transfer the property between spouses without paying Capital Gains Tax (CGT). However, the transfer might be subject to Stamp Duty Land Tax (SDLT) and you should take careful decision when doing so.
  5. Mortgage Interest and Tax Relief: Since April 2020, you are no longer eligible to deduct interest as an expense on your property rental income. Instead, you will receive tax relief at 20%. Therefore, the basic taxpayers can utilise the interest fully. Unfortunately, the higher and additional taxpayers can do so.
  6. Ready for Making Tax Digital (MTD): The MTD for ITSA is compulsory for all from 06 April 2024 for those people having annual rental income of more than £10,000. You need to update your rental income and expenses every quarter along with your annual self assessment tax return that you do currently.
  7. Submission and Payment to HMRC: 31 January is the deadline for submitting the tax return by online and pay the tax to HMRC as well on the same date. For example, the tax return for year ending 05 April 2022 should be submitted by 31 January 2023. If you submit paper-based tax return, then the submission should be by 31 October. Moreover, some taxpayers may subject to pay their tax liability on account and the deadline is 31 January and 31 July.   

As a landlord, you should comply with the tax matters on your property rental income. You may also consider some other aspects along with the above mentioned. The Stan Lee is here to help confidently on your UK property rental income tax affairs.

The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.   

UK Property Rental Income Tax: Seven Things to Know When You Let Property Read More »

Tax-Free Company Benefits

Summer Event – Is This Tax-Free Employee Benefit?

Summer Event – Is This Tax-Free Employee Benefit?

Tax-Free Company Benefit

After the long stressful time during COVID-19 pandemic, you may offer the summer party for your employees and wonder whether the benefit is subject to the tax. In this article, we have a brief about tax-free events for your employees in the UK.

Conditions for tax-free events:

A statutory exemption exists where certain social events for employees are not triggering to tax or NICs liability once some conditions are satisfied as follows:

  • The total costs (including VAT) not exceed £150 per head (annually)
  • The event mainly for entertaining employees
  • Generally, the event open to all employees

The limit of £150 can be used in many events including Christmas Party, Summary Event and more. However, if there are two parties and the combined costs exceed the £150 limit, then £150 can be offset against the most expensive one and leaving the other one a fully taxable benefit.

You can also consider the tax-free trivial benefits (costs not more than £50) for your employees so that they may enjoy more the summer party. However, the benefits should not be in cash or cash voucher and not work recognised.

Tax treatment if £150 limit exceeds

If the costs per head (annually) exceeds the limit of £150, the full amount is subject to tax and NICs on the benefit-in-kind (BIK). However, the employees may not be taxed under PAYE or P11D if the employer agreed to pay HMRC under the PAYE Settlement Agreement (PSA). Under the PSA, the employer’s tax liability must be paid to HM Revenue and Customs by 19 October following the tax year ending.  

The costs of events (regardless of £150 limit) are tax allowable expenses for the employers and can be treated as “staff welfare” costs. The input VAT can be claimed back if the business is VAT registered.

If you have any questions and need further information about tax-free benefits, please feel free to get in touch with us. Also don’t forget to contact us for your accountancy, taxation and business support needs.

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The Stan Lee is our trading name of two separate entities as follows:
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