News from your Accountants in Harrogate & Leeds

Keep yourself up-to-date on the latest accountancy news and information with our useful articles.

End of the road for salary sacrifice schemes

February 1st 2017

Under a salary sacrifice arrangement, the employee gives up an amount of cash salary in return for a benefit in kind. Where the benefit is exempt from tax and National Insurance, the employee saves the tax and primary Class 1 National Insurance that would otherwise be payable on the cash salary and the employer saves the associated secondary Class 1 National Insurance.

Changes to the VAT flat rate scheme

February 1st 2017

The VAT flat rate scheme is an optional simplified accounting scheme for small businesses. The scheme is available to businesses which are eligible to be registered for VAT and whose taxable turnover (excluding VAT) in the next year will be £150,000 or less. Once in the scheme, a business can remain in it as long as its taxable turnover for the current year is not more than £230,000.

Abolition of Class 2 National Insurance contributions

February 1st 2017

Class 2 National Insurance contributions are to be abolished from 6 April 2018. Class 4 contributions are to be reformed from the same date to provide the mechanism by which the self-employed earn entitlement to the state pension and certain contributory benefits. The reform has a number of implications for the self-employed.

Time running out for Business Premises Renovation Allowance (BPRA)

February 1st 2017

The window of opportunity to take advantage of Business Premises Renovation Allowance (BPRA) is drawing to a close - to benefit from the relief, expenditure must be incurred on or before 31 March 2017 for corporation tax purposes and on or before 5 April 2017 for income tax purposes.

New exemption for pensions advice

February 1st 2017

From 6 April 2017 employers will be able to provide employees with pensions advice costing up to £500 a year without triggering a taxable benefit. The new exemption will cover not only advice on pensions, but will also extend to advice on general financial and tax issues relating to pensions. The exemption will replace the current exemption, capped at £150 a year, available solely for pensions advice.

Money purchase annual allowance to fall

February 1st 2017

Since 6 April 2015, individuals aged 55 and over have been able to flexibly access pension savings in a money purchase (defined contribution) scheme. To prevent ‘recycling’ of contributions (withdrawing and reinvesting to take advantage of the associated tax relief), a lower annual allowance, the money purchase annual allowance, applies (subject to certain exceptions) where a pension pot has been flexibility accessed.

Lifetime ISA

February 1st 2017

The lifetime ISA will launch in April 2017. A lifetime ISA can be opened by anyone between the ages of 18 and 40. Savings of up to £4,000 a year made before the individual’s 50th birthday will earn a government bonus of 25% - a potential bonus of up to £1,000 a year. There is no minimum contribution.

Deemed Domicile

February 1st 2017

From 6 April 2017 anyone who has been a resident in the UK for 15 of the previous 20 tax years will be deemed to have a UK domicile where they do not already have one. This will apply for all tax purposes and will replace the current deemed domicile rule for inheritance tax purposes whereby an individual is deemed to be domiciled in the UK where he or she has been UK-resident for 17 of the previous 20 tax years.