Please click on the link below to get our view on the Autumn Statement delivered by The Chancellor yesterday
November 30, 2010
November 29, 2010
Guidance on Christmas Parties and Gifts
Guidance on Christmas Parties and Gifts
Once again the Christmas season is upon us so this year we’ve put together a basic guide to help you understand what you need to know about tax and VAT when it comes to Christmas parties and giving gifts to customers and staff.
Staff Christmas Parties
HMRC allows up to £150 per employee for an annual party as long as all employees are entitled to attend. Be careful though, if the party exceeds the £150 per person threshold then the full amount of the benefit will be chargeable.
The cost of the function includes VAT and the cost of transport and/or overnight accommodation if these are provided to enable employees to attend. Divide the total cost of each function by the total number of people (including non-employees) who attend in order to arrive at the cost per head.
• If non-employees attend the party, i.e. partners or spouses, expenditure is allowable for tax. This is providing the total expenditure for the party, including the non-employee guests, amounts to £150 or less per attendee.
• If you are a small, owner-managed business then you are still able to claim up to £150 per employee for any Christmas party or meal, even if just two or three members of staff attend.
• Where VAT is concerned, the expenditure on non-employees is viewed as entertainment which means the VAT on that proportion of the expenditure cannot be claimed back, so you will need to show the split between employees and their non-employee guests.
Social functions and annual parties
Seasonal Gifts
All gifts to staff including Christmas gifts are classed as taxable benefits, except where they deemed to be trivial gifts.
• An employer may provide employees with a seasonal gift, such as a turkey, an ordinary bottle of wine or a box of chocolates at Christmas. All of these gifts are considered to be trivial and as such are not taxable.
• Monetary gifts, for example bonuses, are accounted for through the payroll system and taxed in the usual way.
• Any non-monetary, non-trivial gifts must be included on form P11D.
Particular benefits: Trivial Benefits
Christmas Gifts to Clients
Normally gifts for customers and clients are treated in the same manner as entertainment but gifts (up to £50) carrying conspicuous advertisement can be an allowable expense.
However as with Christmas parties you need to be careful as if the gift costs more than £50 including gift wrap the whole amount will be disallowed.
Common examples of allowable gifts are diaries, pens and mouse mats. The advertisement should be on the gift itself, and not just on the wrapping.
Have an enjoyable Christmas!
November 24, 2010
National insurance savings by being employed and self-employed
I was reminded of an interesting and potential money-saving feature of the way the National Insurance system works.
If you are self-employed, you do not pay Class 4 National Insurance (8% now but 9% after 5/4/11) on the first £5,715 of profit. If you are employed, you do not pay Class 1 National Insurance (11% now but 12% after 5/4/11) on the first £110 of your weekly earnings.
So, if you are a self-employed tradesman doing a few hours every week for a client, why not try to persuade your client to pay you a regular weekly wage of, say, £100. Doing this will save you £468 of National Insurance in 2010/11 and not affect your state benefit entitlement.
There are quite a few other considerations but it may be worth you contacting us to discuss it further.
November 22, 2010
Please submit a review of my services
The link below will explain how to submit your review of my services by Google. Your feedback would be really appreciated. It will help improve my Google rankings.
Advice about having a TV on public display
If you have, or are considering having a television on public display in your office or shop please be aware that you will require the following licenses;
1. A standard TV licence from the TV Licensing Agency (£145.60)
2. A licence from the Performing Rights Society (approx. £120)
3. A PPL Licence (£108 plus VAT). There is an additional £50 charge if an application is submitted retrospectively.
The PPL and PRS are two separate bodies responsible for managing royalty payments within the music industry. Copyright law, as it stands, requires that any person or organisation have a PPL and PRS licence if they have a radio and/or television playing to the public. This is not limited to music – theme tunes and any sound effects are also included.
The PPL and PRS represent different groups; the PRS represent songwriters/composers and publishers and the PPL represent performers and record companies. Even though producers will have paid for use of any music and sound effects this does not cover public performances by other individuals or organisations.
Personal finance planning wheel
Click on the link below to access our planning wheel. This is a checklist to help you assess all aspects of your personal finance matters. Please contact us for further help.
Temporary Loss Relief due to end this month
The temporary loss carry-back relief introduced to assist limited companies during the recession is due to come to an end this month.
You may recall that the temporary relief allows companies to carry back trading losses to reduce corporation tax liabilities in the three previous years, compared to the usual provision which only allows a corporation tax loss to be carried back for one year. This temporary relief ends on November 23 2010.
If a company’s current accounting year ends after November 23 2010 and losses are expected, you will not be able to take advantage of the three year carry back. However you could consider changing the accounting year end date to fall on or before 23 November 2010, thereby enabling you to use the extended carry back relief.
It should be noted that if a company is ceasing to trade and losses exceed £50,000, it may be beneficial to claim terminal loss relief instead of the temporary loss relief, as there is no restriction to the amount of loss that can be carried back under terminal loss rules and those rules still provide for the loss to be carried back three years.
November 17, 2010
INC Charity Quiz
Our Christmas Charity Quiz Night will be held at Hawkstone Park Hotel on Wednesday 1 December 2010 starting at 7.00pm. There will be a £10 entry fee for each person. All proceeds go to our Chairman’s Charity which this year is the Teenage Cancer Trust. Teams from businesses and other business networking clubs are welcome to attend. This will be a fun evening with plenty of opportunity to meet other like-minded business people. More details are shown in the link below
November 11, 2010
82% rise in HMRC enquiries
CCH, the market leader in fee protection for accountants, have reported that new claims from HMRC enquiries have increased by 82%. This confirms our concern that the number of small firms being scrutinised under HMRC’s inquiry process would rise. Designed to help the government plug the £158bn hole in the public finances, the offensive follows other revenue-raising schemes, like the NDO for offshore savers, last year.
It is vital, therefore, that you make sure that your accountant has this form of protection in place so that you are not charged a substantial fee for dealing with an HMRC tax enquiry.
We have this protection.
One of our clients was recently the subject of a routine PAYE compliance visit which then led to an employment status enquiry. Things quickly escalated. We handled the routine elements ourselves and brought in a tax investigation specialist from CCH to deal with the more unusual aspects. We have taken the stress and strain away from our client all at no cost.
November 8, 2010
Reclaiming VAT incurred before registration
I have been asked about this twice in the last couple of days so I thought I would post some guidance on this subject.
Registering for VAT entitles a business to reclaim VAT on most of its expenses, but a lot of businesses do not realise that there are generous provisions which allow you to reclaim sometimes substantial amounts of VAT on some expenses incurred before registration.
VAT can be reclaimed on items bought in the 3 years before registration that you still had in your possession on the date you registered. This may include stock, office equipment or vans for example.
VAT can be reclaimed on services supplied in the 6 months before registration, providing they do not directly relate to goods that have been sold prior to registration. This may include rent, advertising or telephone bills, for example.
In all cases you must have a valid VAT invoice, and the purchase must have been for business purposes.
