CGT on disposal of UK residential property by non-residents

CGT on disposal of UK residential property by non-residents

Capital Gains Tax on the disposals of UK residential property by non-residents

From 6 April 2015 non-UK resident individuals, trusts, personal representatives and narrowly controlled companies became subject to capital gains tax on gains arising on the disposal of UK residential property on or after that date. Only the gains relating to the period from 5 April 2015 will be taxable. In this regard, the gains will be calculated using one of two methods.

The first is based on the proceeds less the market value at 5 April 2015. The second method involves carrying out simple straight line time apportionment of the whole gain obtained over the period of ownership. The taxpayer may choose which method to use. Non-resident individuals will be subject to tax at the same rates as UK taxpayers (28% or 18% on gains above the annual exemption). Non-resident companies will be subject to tax at the same rates as UK corporates (20%).

Some Principal Private Residence (‘PPR’) relief  may be available to non-residents if the property is or has ever been the owner’s only or main residence . This may partially exempt some of the gains arising. However, the rules relating to PPR have been modified to take into account potential claims by non-residents. From 6 April 2015 a person’s residence will not be eligible for PPR for a tax year unless either the person making the disposal was resident in the same country as the property for that tax year, or the person spent at least 90 midnights in that property.’

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.

Aaron Hemmington

Aaron Hemmington is a Tax Manager based in the Northampton office and specialises in providing tax planning, advisory and compliance services to owner managed businesses across a variety of sectors. For more details and advice, please contact Aaron on [email protected] or 01604 645 600. You can also follow Aaron on LinkedIn. [/author_info]

VAT recovery on car-derived vans and combi vans

VAT recovery on car-derived vans and combi vans

VAT recovery on car-derived vans and combi vans

HMRC have issued a list of makes and models of car derived vans and combi vans which VAT registered businesses can use to determine if the VAT paid on the purchase can be reclaimed as input tax.

The issue is that VAT will normally be claimable in full on the purchase of a commercial vehicle.  However if the vehicle purchased is a passenger car VAT is not recoverable unless it is used ‘exclusively for the purposes of a business’. Generally cars are therefore VAT ‘blocked’ and no input VAT is recoverable.

The VAT guidance states

‘Motor car means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:

a) is constructed or adapted solely or mainly for the carriage of passengers; or

b) has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows’

Whether or not a vehicle is commercial is not specifically defined but instead the definition of a car excludes:

  • vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver
  • vehicles of more than three tonnes unladen weight;
  • caravans, ambulances and prison vans
  • special purpose vehicles such as ice cream vans, mobile shops, hearses, bullion vans and breakdown and recovery vehicles
  • vehicles constructed to carry a payload of one tonne or more.

Many car-derived vans are not cars for VAT purposes as they have no rear seats, have metal side panels to the rear of the front seats and a load area which is highly unsuitable for carrying passengers etc.

HMRC have issued the clarification due to developments in the car-derived van market as some vehicles with a payload of less than one tonne, have ‘blurred’ the distinction between cars and vans.

If you would like help with this or any other VAT issue please contact us.

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]

Auto enrolment – Big fines for those that delay

Auto enrolment – Big fines for those that delay

Auto enrolment  – are you ready? Big fines for those that delay

From June 1, SMEs employing fewer than 30 staff must be ready to comply with auto-enrolment pension regulations or risk fines of at least £400.

Designed to encourage 10 million employees to save towards their retirement, the government regulations are being rolled out in stages based on the size of a company’s workforce. Smaller businesses are in the next tranche to enrol employees onto the scheme.

Are you ready for auto enrolment?

The Pension Regulator is clamping down on businesses who fail to comply so any delay is risky. Regardless of their size, firms can be fined £400, with the possibility of further escalating fines.
Some of the key facts and issues:

Businesses in the next stage of auto enrolment will have received a letter from the Pensions Regulator, which is sent 12 months ahead of the due start date. They should have started the registration process already, otherwise fines may be due.

Businesses should already be planning ahead for their ‘staging date’ and ensuring that they have all the necessary paperwork to complete their declaration of compliance.

Compulsory employer contributions are the main costs associated with the pension scheme with businesses required to pay a minimum employer contribution for everyone they automatically enrol and anyone who opts in. The minimum amount is being phased in, starting at 1% and rising to 3% of staff’s qualifying earnings.

Pension solutions are not necessarily free and some of the large insurance companies will charge employers a service fee to have their pension scheme.

Businesses should check with pension providers whether existing pensions for any employees will qualify for auto-enrolment as some may not.

Small employers introducing a workplace pension for the first time should speak to an appropriate adviser who can help to identify a scheme best suited to their workforce.

The Pensions Regulator lists the ‘staging dates’ for the legislation and provides a useful step by step online guide to preparing for compliance. www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx

For more information contact Erica Dietsch on 00 44 114 229 6557 or email [email protected], alternatively please ontact Barry Warne on 00 44 114 252 1437 or email [email protected].

By Erica Dietsch, independent financial adviser, Hawsons Wealth Management Limited and Barry Warne, partner and head of employment law at hlw Keeble Hawson.

P11D forms – P11D common errors to avoid

P11D forms – P11D common errors to avoid

HMRC have published a list of common errors in the completion of forms P11D.

The information is part of the latest Employer Bulletin and we have reproduced the guidance below.

  • Submitting duplicate P11D information on paper where P11D information has already been filed online to ensure ‘HMRC have received it’. These duplicates can cause processing problems.
  • Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page.
  • Not ticking the ‘director’ box if the employee is a director.
  • Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
  • Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
  • Completing the declaration on the final FPS/EPS submission accurately (for those employers whose software package requires them to be completed) or question 6 in section A of RT 4 form to indicate whether P11Ds are due.
  • Not advising HMRC either by paper form P11D(b) or electronic submission that there is no Benefits in Kind & Expenses return to make.
  • Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit.
  • Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
  • Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2014 to 05/04/2015 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed.

If you would like help with the completion of the forms P11D please contact us.

For more information on employment taxes, please click 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]

Cloud Service Providers

Cloud Service Providers

Over the last two or three years, there has been an unprecedented rise in the number of small business owners across the UK that are now using cloud-based software.

Some of the biggest questions many small business owners who have not moved to the cloud yet may be thinking about are:

  • What is cloud accounting?
  • Should my business move to the cloud?
  • What cloud service provider should I work with?
  • How secure is cloud accounting?

This article will look at the cloud service providers Hawsons work with. For more information on the cloud or how secure moving to the cloud is for your business, please click on the links.

If you’re thinking of moving to the cloud then it is important you consider your options in terms of cloud-based service providers. At Hawsons we work with all the leading traditional and cloud accounting software providers, including Xero, Sage, KashFlow, FreeAgent and QuickBooks.

Xero

Xero is a leading cloud accounting software solution for small businesses with over 250,000 users worldwide. It’s small business accounting software that’s simple, smart and occasionally magical. Hawsons is a Xero reseller providing Xero training and Xero bookkeeping , with a team of Xero accountants in our Sheffield, Doncaster and Northampton offices.

For more information please visit our Xero page.

 

Sage One

Sage One makes accounting and payroll simple and effortless so you can focus on what you love and get back to business. Sage One is a family of online accounts software that helps you manage your business finances and is simple, flexible, effortless and secure online accounting. Hawsons is a Sage One reseller providing Sage One training and we have a team of Sage One accountants in our Sheffield, Doncaster and Northampton offices.

For more information please visit our Sage One page.

QuickBooks

Accounting software helps organise your business and makes it easier for you to meet HMRC requirements. Get started fast with QuickBooks’ easy step-by-step setup process and make the most of unlimited free support, including freephone and online chat support.

For more information please visit our QuickBooks page.

 

In summary

This article has given a brief introduction to some of the leading cloud service providers that Hawsons work with.

What happens once you have chosen a provider?

Once you have chosen a provider, Hawsons’ cloud accounting specialists will help you move to your new software and make the data transfer as automated as possible. Next, we will provide you with training on your cloud accounting software so you know how to use it efficiently and get the benefits as quickly as possible.

Once you are up and running we are available to help at any time answering any questions you may have. With your permission, we can log into the software at the same time as you and even take control of your screen to help you with any questions you may have.

For more information on cloud accounting and the different cloud service providers please get in touch or visit our cloud accounting page.