The Let Property Campaign – should you make a disclosure?

23 October 2015

Residential landlords are being targeted by HMRC for tax evasion.  Their aim is to identify anyone who may not have paid what they owe, whether the rental property is in the UK or abroad.

The Let Property Campaign gives landlords a chance to come clean if they have paid the tax they owe and get the best possible terms to make any back payments, while bringing your tax affairs up to date.  You can let HMRC know you want to declare unpaid tax on rental properties by making a voluntary Disclosure.  Once the disclosure has been made, you have a 3 month period to calculate taxes owed.

Who is eligible to make disclosures in the Let Property Campaign?

This campaign is only applicable to individual landlords renting out residential property in any of the following circumstances:

  • Renting out single or multiple properties
  • Charging more than £4,250 a year for renting out a room in your main home
  • Living in the UK and renting out a property abroad, or vice versa
  • Renting out a holiday home

Please note: This scheme is not applicable for companies or trusts renting out residential or commercial property.

If you are not sure whether you need to make a disclosure, HMRC have devised a simple questionnaire which will establish what action you need to take – this can be accessed here.

If you choose not to make a disclosure to HMRC, they will utilise the information they hold to identify people who have not paid what they owe.

For further information on the Let Property Campaign please Contact Us.

 

 

Mileage Allowances Explained

21 October 2015

A frequent topic which often requires further clarification, is the Tax-Free Mileage Allowance. It is common for an employee to use their own car for business journeys and for employers to pay their mileage allowance when they do so.

The HMRC sets rates that employers can pay to their employees free of tax and without the need to the report the payments on an employee’s P11D.

Approved Mileage Allowances

Employers are able to use the Approved Mileage Allowance Payments System (AMAP) to pay employees a mileage allowance each year up to an approved amount without having to report the payments to the HMRC or deduct tax. All an employer needs to obtain from their employee to process the approved amount is the number of business miles they drive in their own vehicle, multiplied by the rate for that vehicle.

Rates for 2015/16 are as follows:
Cars - First 10,000 business miles @ 45p per mile, thereafter 25p per mile 
Motorcycles - 24p per mile
Bicycles - 20p per mile

As long as employers do not pay mileage allowances in excess of £5,000 during the tax year, amounts can be paid to the employee tax free without having to report them to HMRC.

If the employer pays mileage in excess of the approved amount this is known as Taxable Mileage Profit and will need to be reported on the P11D, section E.  On the flip side, if the employer pays less than the approved amount the employee is able to claim tax relilef, known as Mileage Allowance Relief, on the difference between the amount approved and amount actually paid.

What about company car drivers?
Comapny car drivers can not use the AMAP scheme, as this only applies to employees using their own vehicles for business purposes.  Instead HMRC publish advisory fuel rates for company car drivers, used to agree dispensations for mileage and therefore removing the need to report them to HMRC. 

For further information please Contact Us.

Top Tax-Free Benefits Employers can provide to Employees

05 October 2015

It is possible for employers to provide employees with exemptions as part of their remuneration package free of tax and National Insurance. We have summarised some of the most popular tax-free benefits below. Employers will also save on the employer’s NIC.

Employers can provide exemptions in the following areas:

Mobile phones – this can be provided to employees on the basis that that the contract is between the employer and the mobile phone company and the cost is met by the employer. The exemption doesn’t apply if the employer pays the employee’s mobile phone bill registered in their name.

Pension contributions - income tax is not payable from the employer when contributing to an employee pension scheme. Contributions by the employer count towards the pension annual allowance for tax relieved contributions. This is currently set at £80,000 for 2015/16, which is subject to a cap of £40,000 on contributions during the period 9th July 2015 to the 05th April 2016.

Free and subsidised meals - An employer can provide its employees with a meal on its premises free of tax. The meals must be available to all of its members of staff. An employer can also provide its staff members with a voucher if they are unable to eat in the canteen.

Childcare vouchers – An employer can meet the cost of its employee’s childcare at nursery or a childminder by way of issuing a childcare voucher. The maximum tax-free amount which an employer can provide is £55.00 per week. If childcare is provided in a workplace nursery it will be tax-free and without limit (however there are strict conditions the nursery must meet).
Note: a new tax-free childcare system will be in place from 2017.

Medical check-ups and health screening – one health screening and one medical check-up can be provided by an employer in a tax year. If there is a cost of any associated treatment, the employer can pay up to £500.00 per employee to facilitate a quicker return to work after illness or injury.

For further information on tax-free benefits please Contact Us.

 

 

TT Intelligence News Launch

01 October 2015

We are pleased to announce the arrival of our News section.  Here you will find useful updates, tips and topical information.

We hope you find this useful, if you have any feedback or suggestions please Get In Touch - we'd love to hear your thoughts.

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