Until end of July if your tax return is late.

New businesses are currently able to enjoy a 1 year holiday from paying Employer’s National Insurance on up to 10 staff, potentially saving £5,000 for each employee.  This is a valuable saving for start-up businesses where cash flow is almost always an issue.  The holiday is due to end on 5 September 2013 so it’s vital that anyone who has started a new business or is about to do so makes sure that they take full advantage of the holiday.  Henderson Loggie have helped deliver valuable savings to a number of clients through this opportunity and will be happy to talk you through the process.

You may recall from previous editions of Insight that buying a low emissions car can be particularly efficient for owner managed companies due to the attractive acceleration of the tax relief on the cost of the car.

As technology in this area has evolved, the maximum CO2 level at which the cost of a new car will qualify for a 100% write off in the first year has been reduced from 110g/km to 95g/km but there are still a wide variety of cars that meet the criteria, including a number of surprisingly efficient models such as versions of the Volvo V40 and Honda Civic.

With relatively low benefit in kind charges for private use, low emission cars continue to be an efficient way both to remunerate Directors and employees, and meet the travel needs of the business.

The new regime for reporting payroll, Real Time Information (RTI) is now upon us, and from April of this year employers should be making a “full payment submission” every time they pay their employees.

Almost at the last minute, HMRC announced a concession for smaller businesses (those with fewer than 50 employees), so that if they pay employees weekly, this can still be reported monthly until 5 October of this year with a view to allowing them more time to adapt to the more rigorous demands of RTI.

Henderson Loggie have taken a pro-active approach to RTI and are well placed to help businesses manage the new regime as smoothly as possible.

Subject to Royal Assent, which is due to be received in July 2013, the UK’s rules on tax residence will be outlined in Finance Act 2013.

This will hopefully deliver a long overdue degree of certainty to the rules on when an individual is or is not resident in the UK for tax purposes. 

The new rules for achieving non-resident status will be based on a series of tests, largely based on the old rules, but the running order of these can be seen as somewhat advantageous to individuals who are looking to achieve non-resident status. 

The first tests to consider are the automatic non-resident tests, and if one of these is met, non-residence is established.  For example, if an individual leaves the UK to take up full time employment abroad and is in the UK for less than 91 days in the tax year (with less than 31 of these spent working), they will have achieved non-resident status with no need to examine other factors.

If none of the automatic non-resident tests are met, the taxpayer will have to look to the automatic residence tests, and if one of these are met then residence is established.  These include being in the UK for more than 183 days, having all of your homes in the UK or working full time in the UK.

If none of the automatic tests for residence or non-residence are met, the number of days a taxpayer can spend in the UK without being resident here will be determined by a range of factors such as the residence of their family, their residence in recent tax years and the availability of UK accommodation. 

Achieving non-residence can be a hugely efficient measure for tax purposes and if the rules are applied correctly, can result in significant tax savings, particularly on foreign income.

If you were issued with a tax return for the year to 5 April 2012 and still have not submitted it, you will now be subject to daily penalties of £10 until the end of July, in addition to the initial £100 penalty.

These penalties can only be halted by submitting the outstanding tax return and since last year these penalties will not be limited to the amount of tax outstanding.

So if you, or anyone you know, falls into this category then arranging for the preparation and submission of the outstanding return should be at the top of the to do list.

For further information on the above topics please contact Barbara McQuillan or Kenneth McEwen.