Two new partners at Hawsons Chartered Accountants

Two new partners at Hawsons Chartered Accountants

Two new partners at Hawsons

Hawsons Chartered Accountants are delighted to announce the appointments of Scott Sanderson and David Owens as Partners in the firm on 1st January 2015.

Scott has been with Hawsons for fifteen years in the Sheffield office and specialises in the Healthcare sector, including care homes, pharmacies, doctors and dentists.

David has been with the firm for six years, the last two of these in the Northampton office where he has served a wide variety of clients across a number of industries, including both the legal and charity sectors.

Martyn Weatherall, Hawsons’ senior partner, said: “We are delighted to announce the appointments of Scott and David as Partners in the firm. They will continue to assist in growing the firm’s client base and expertise. This is a wonderful opportunity for Scott and David and is just reward for all their efforts over the years.”

Scott Sanderson

Partner, Sheffield

0114 266 7141

David Owens

Partner, Northampton

01604 645 600
Judge DRDed – new rules on the Direct Recovery of Debts

Judge DRDed – new rules on the Direct Recovery of Debts

Judge DRDed – new rules on the Direct Recovery of Debts (DRD)

You may have heard that HMRC are proposing new rules on the Direct Recovery of Debts (DRD).

HMRC recognise that:

“…there are concerns about the impact of this change on vulnerable members of society. We must ensure that there are strong safeguards in place so that this is only targeted at the truly non-compliant”.

HMRC estimate that:

  • DRD will apply to around 17,000 cases a year
  • the debtors affected have an average of £5,800 in tax and tax credit debts and
  • around half of the debtors affected have more than £20,000 in their bank and building society accounts and ISAs.

After much concern was expressed by professional and representative bodies, HMRC announced on 21 November extensions to the safeguards proposed.

The main safeguards before the DRD will apply are that:

  • a taxpayer will have been contacted a minimum of four times about their tax debt (HMRC say nine times on average)
  • HMRC will have had a face-to-face meeting with the taxpayer
  • the measures will only be applied where in excess of £1,000 of tax is due and unpaid
  • the measures will never be utilised in such a way as to leave a taxpayer with less than £5,000 in their bank account. Regard will also be had to their regular pattern of expenditure over the previous 12 month period in considering whether taking the money would cause hardship.

HMRC will set up a dedicated DRD team and helpline, including a specialist unit to deal with cases involving vulnerable members of society.

The safeguards after implementation are that for 30 calendar days from the date of application of the measures, HMRC will not actually be given access to the monies. Instead, during that period, the monies will in effect, be blocked and the taxpayer will be able to make representations that:

  • either a transfer of the money to HMRC would cause hardship or
  • that the tax debt is not due.

Taxpayers will be given a further 30 days to appeal to the Court for an independent review.

If those representations are not accepted, the monies will be transferred to HMRC.

So it may not be as bad as you might have thought. We will keep you in touch with developments.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Stephen Charles partner

Stephen Charles is a tax partner at the firm, specialising in corporate and business taxation. For more details and advice, please contact Stephen on [email protected] or 0114 266 7141.[/author_info]

Do you employ anyone under the age of 21?

Do you employ anyone under the age of 21?

Paying employees under the age of 21

From the 6 April 2015, if any of your employees are under the age of 21 you may no longer need to pay employer Class 1 secondary National Insurance contributions (NICs) on their earnings.

The rate of employer Class 1 NICs for employees under the age of 21 will be 0% up to the new ‘Upper Secondary Threshold’ (UST) which, for the tax year starting 6 April 2015, will be the same as the Upper Earnings Limit (UEL). Class

1 NICs will however continue to be payable on all earnings above this threshold. The basic rules and calculations of National Insurance including how Class 1 NICs are assessed will not be changed by this measure.

For employees who are at, or over, the age of 16 and under the age of 21 there will be a range of new NI category letters to available. From 6 April 2015, when submitting PAYE information for employees under the age of 21 employers will need to use the new category letter appropriate to the individual.

Seven new National Insurance category letters have been introduced. The most commonly used one will be category M:- Not contracted-out standard rate contributions for employees under 21.

Employers (or their agents) are responsible for ensuring they report the correct category letter. To do this, employers will need to make sure they hold the correct date of birth for employees.

More from our payroll experts

You can find all of our latest payroll articles here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, you can request a free initial payroll quote online here.

Stephen Charles partner

Stephen Charles is a tax partner at the firm, specialising in corporate and business taxation. For more details and advice, please contact Stephen on [email protected] or 0114 266 7141.[/author_info]

Do you employ anyone under the age of 21?

Personal allowances and tax bands 2015/16

Personal allowances and tax bands 2015/16

See personal allowances and tax bands for 2016/17 here.

For those born after 5 April 1948 the personal allowance will be increased from £10,000 to £10,600. The reduction in the personal allowance for those with ‘adjusted net income’ over £100,000 will continue. The reduction is £1 for every £2 of income above £100,000. So for 2014/15 there is no allowance when adjusted net income exceeds £120,000. In 2015/16 the allowance ceases when adjusted net income exceeds £121,200.

The basic rate of tax is currently 20%. The band of income taxable at this rate is being decreased from £31,865 to £31,785 so that the threshold at which the 40% band applies will rise from £41,865 to £42,385 for those who are entitled to the full basic personal allowance.

The additional rate of tax of 45% is payable on taxable income above £150,000.

Dividend income is taxed at 10% where it falls within the basic rate band and 32.5% were liable at the higher rate of tax. Where income exceeds £150,000, dividends are taxed at 37.5%.

Starting rate of tax for savings income

From 6 April 2015, the maximum amount of an eligible individual’s savings income that can qualify for the starting rate of tax for savings will be increased to £5,000 from £2,880, and this starting rate will be reduced from 10% to nil. These rates are not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income) exceeds the starting rate limit.

This will increase the number of savers who are not required to pay tax on savings income, such as bank or building society interest. If a saver’s taxable non-savings income will be below the total of their personal allowance plus the £5,000 starting rate limit then they can register to receive their interest gross using a form R85.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Allowances on certain fixtures treated differently

Allowances on certain fixtures treated differently

Allowances on certain fixtures treated differently

Certain fixtures in buildings are treated in a special way for the purposes of claiming capital allowances. A fixture is an asset which is installed in a building so that it becomes part of that building or land in law.

Special legislation for fixtures was introduced in 1985 and, broadly speaking, it lets allowances go to a person who incurs expenditure on the provision of a fixture, either on installation or by acquiring an interest in the building or land to which the fixture is attached, provided that allowances do not go to more than one person at the same time. Similar rules apply where a lessee pays a premium that is capital expenditure for a lease of land that includes a fixture.

The problem

The new rules now apply where:

  • a current owner incurs capital expenditure on acquiring a property containing fixtures from another person for the purposes of a business activity (‘new expenditure’)
  • that other person, or a previous owner, is treated as having been the owner of the fixtures at an earlier time as a result of them incurring other expenditure (historic expenditure) for the purposes of a business activity and
  • that other person, or a previous owner, was entitled to claim plant and machinery allowances in respect of the historic expenditure.
  • At their simplest, these rules therefore apply where one business buys a building from another business (although the rules can apply in wider circumstances).

No allowances are due to the buyer of the building if certain requirements are not met, the main two being the ‘pooling requirement’ and the ‘fixed value requirement’.

The pooling requirement applies (from April 2014)

In simple terms, this is met if the past owner pools (ie claims capital allowances on) the relevant expenditure in a chargeable period beginning on or before the day on which the past owner ceased to own the fixture.

The fixed value requirement (from April 2012)

The ‘fixed value requirement’ applies where the past owner has made a claim in respect of the historic expenditure and has been required to bring the disposal value into their tax computations. In this situation, both parties have to make a joint election specifying what value both parties will use in their tax computations.

The consequences

What can be seen is that any failure of the above rules means that the buyer is prohibited from claiming allowances, which may be substantial. Therefore, if you are thinking of buying business premises, please do get in touch with us to check the position before you sign on the dotted line.

More from our property experts

You can find all of our latest property and construction sector news here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Stephen Charles partner

Stephen Charles is a tax partner at the firm, specialising in corporate and business taxation. For more details and advice, please contact Stephen on [email protected] or 0114 266 7141.[/author_info]