News & Updates

Hopefully by now you’ve been trying out the exciting new functions and features of the new Mileage Tracker.

We wanted to help you use this as effectively as possible for your day-to-day trips, so here are a few pointers to help you get going:

Check your journeys in-App

Classified a business trip as personal? With the all-new editing function now available, it’s more important that you check over logged journeys to make sure all the details were correct. You may have been in a rush for a meeting and logged a manual trip, and if you’ve mis-typed something, don’t worry – one of the major improvements is the ability to edit your saved trips.

Simply click ‘View trips’ on the Mileage main menu screen and click the pencil editing button to update your journey. Click on a field to start typing and update details, or if you need to swap business to personal, you can either toggle that on the trip overview, or edit it within the Update Trip section. 

Fill out your settings

It may not be the most enjoyable task but filling out your details in the My Settings icon means your details will be pre-populated in the email when it comes to sending us your mileage reports. Simply add your name, employee ID, email address and preference for miles or kilometres, and we’ll receive all the necessary info we need for your records.

Make sure your device is charged

It’s important to remember that using the GPS in the background will consume battery, so make sure your device has enough charge for the trip ahead. The App also must remain open in the background for the journey to track, so if you do leave the App, don’t close it completely.

Head straight to our Mileage Tracker now and start tracking your journeys with improved accuracy, then export them to us when you are ready.

The draft VAT MOSS regulations we told you about in our newsletter on 27 September 2018 have now been passed. This means a de-minimise turnover threshold of £8,818 will apply to the VAT MOSS scheme from 1 January 2019.

UK traders who supply digital services (e.g ebooks) to non-business customers in other EU countries will be able to take advantage of this de-minimise threshold, if all of the following apply:

• The trader is only based in the UK and doesn’t have a base in another EU country.
• The total value of all digital services supplied to consumers in other EU countries is expected to be less than £8,818 for 2019.
• The total value of the electronic services supplied to non-business consumers in other EU countries less than £8,818 in 2018.

Where the de-minimise threshold applies, the place of supply of all the digital services supplied by the trader will be deemed to be in the trader’s home country, so for a UK based trader, in the UK. It follows that the UK trader will only have to apply VAT to those sales if he is register for UK VAT.

A business which makes digital sales to EU customers of less than £8,818 will be able to de-register from VAT MOSS. If the total VATable sales are less than £85,000, the business will also be able cancel their UK VAT registration, which was a requirement of having to register for VAT MOSS.

The amended guidance on VAT MOSS says the trader must tell HMRC at least 15 days before the end of the quarter which ends before the date want to leave the VAT MOSS scheme. So to leave VAT MOSS on 1 January 2019 the trader should tell HMRC by 15 December 2018.

It is not clear how a trader will submit the last VAT MOSS return, if he has already left the VAT MOSS scheme and has also deregistered for UK VAT. A prudent course of action would be to submit the final VAT MOSS return (due by 20 Jan 2019 for the quarter to 31 Dec 2018), on or before 31 December 2018, before the VAT MOSS registration ceases.

Written by the Tax Advice Network

Welcome to our monthly newswire. As usual please contact us if you wish to discuss any matters in this newsletter further.

CHRISTMAS IS THE TIME FOR GIVING

Those thinking about making gifts at Christmas should take advantage of the various inheritance tax (IHT) exemptions and reliefs available to them. Note that certain gifts can also have capital gains tax (CGT) implications.

THE IHT ANNUAL EXEMPTION – USE IT OR LOSE IT!

Although not particularly generous at £3,000 per donor per annum if this annual IHT exemption is not used by 5 April it is lost, although it is possible to carry the allowance forward one year if unused. This means that if the annual allowance for 2017/18 was not used an individual may make gifts of up to £6,000 in 2018/19.

Where the gifts to individuals exceed the annual exemption there may still be no inheritance tax to pay if they survive for 7 years following the gift or the gift falls within the £325,000 nil rate band.

GIFTS OUT OF INCOME ARE NOT TAKEN INTO ACCOUNT FOR IHT

A more generous inheritance tax exemption applies where the donor can prove that he or she is not transferring capital but is making gifts out of their income. There are detailed conditions for this exemption to apply requiring records to be kept of income and expenditure in order to prove that there is sufficient surplus income each year to make regular gifts to the beneficiaries. We can of course assist you in keeping the necessary records to satisfy HMRC.

CERTAIN GIFTS CAN HAVE CAPITAL GAINS TAX CONSEQUENCES

Although there will be no CGT on gifts of cash there may be CGT to pay where the gift comprises shares or other assets. This is because the transaction will generally be deemed to take place at market value between connected persons even though no money changes hands.

The amount of the gain would normally be determined by comparing the market value with the original cost of the asset gifted.

Where the amount of this gain is within the annual CGT allowance (currently £11,700) then there would be no CGT payable.

Where the gift comprises shares in a trading company or other business assets it may be possible for donor and recipient to sign an election to hold over the gain so that no CGT is payable by the donor at the time of the gift. The effect of such an election is that the recipient of the asset will take over the donor’s original cost for subsequent disposal. Please get in touch with us if you are considering making gifts of shares or other assets so that we can advise you fully of all the tax implications.

NOT ALL SHARES QUALIFY FOR CGT ENTREPRENEURS’ RELIEF NOW

As the result of changes announced in the Autumn Budget, and now incorporated into the latest Finance Bill, not all ordinary shares necessarily qualify for the 10% CGT entrepreneurs’ relief rate on disposal.

As mentioned in last month’s Budget newsletter the definition of a personal company was tightened up so that from 29 October the shareholder must have entitlement to at least 5% of the company’s ordinary share capital, voting rights, profits available for distribution, and assets available on the winding up of the company.

The shareholder, as before, will also need to be an officer or employee of the company.

This change means that certain “alphabet” and other shares with limited rights may no longer qualify for CGT entrepreneurs’ relief when disposed of. As a consequence of this change we may need to review the rights attaching to the shares that your company has issued and make changes to ensure that the shares qualify.

GIFTS OF UP TO £50 TO EMPLOYEES

From April 2016 new rules were introduced to allow employers to provide their directors and employees with certain “trivial” benefits in kind tax free.

The new rules were brought in as a simplification measure so that certain benefits in kind do not now need to be reported to HMRC as well as being tax free for the employee. There are of course a number of conditions that need to be satisfied to qualify for the exemption.

Conditions for the exemption to apply

• the cost of providing the benefit does not exceed £50
• the benefit is not cash or a cash voucher
• the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
• the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)

So this exemption will generally apply to small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers.

Note that where the employer is a “close” company and the benefit is provided to an individual who is a director or other office holder of the company the exemption is capped at a total cost of £300 in the tax year.

Please feel free to contact us if you are considering taking advantage of this exemption. 

GIFTS TO CHARITY

Where possible higher rate taxpayers should “Gift Aid” any payments to charity to provide additional benefit to the charity and for the individual to obtain additional tax relief on the payment.

For example where an individual makes a £20 cash donation to charity the charity is able to reclaim a further £5 from HMRC making a gross gift of £25. Where the individual is a 40% higher rate taxpayer he or she is able to claim a further £5 tax relief under self-assessment, reducing their net cost to £15.

Note that the donor is required to make a declaration that they are a UK taxpayer and those that have not suffered sufficient UK tax to support the Gift Aid amount will be taxed on the shortfall.

Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell your donated items on your behalf and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities and land and buildings to charity and claim Gift Aid on the market value of those assets.

COLLECTING UNPAID TAX FOR 2017/78 THROUGH YOUR PAYE CODING

Under certain circumstances it is possible to arrange the collection of unpaid tax through your PAYE coding rather than making a balancing payment on 31 January. This will depend upon the amount outstanding and the amount of income taxable under PAYE.

There is a further condition that the return is submitted to HMRC online before 30 December 2018 in order that the 2017/18 tax be collected by amending the 2019/20 PAYE coding. So please get your tax return information to us as soon as possible if you would like to take advantage of this facility.

DIARY OF MAIN TAX EVENTS

DECEMBER 2018/JANUARY 2019

Date	What’s Due
1/12/18	Corporation tax for year to 28/02/2018 unless quarterly instalments apply
19/12/18	PAYE & NIC deductions, and CIS return and tax, for month to 5/12/18 (due 22/12 if you pay electronically)
30/12/18	Deadline for filing 2017/18 tax return online in order to request that HMRC collect outstanding tax via the 2019/20 PAYE code
1/1/19	Corporation tax for year to 31/03/2018 unless quarterly instalments apply
19/1/19	PAYE & NIC deductions, and CIS return and tax, for month to 5/1/19 (due 22/12 if you pay electronically)
31/1/19	Deadline for filing 2017/18 self-assessment tax return online and paying your outstanding tax for 2017/18.

Welcome to our monthly newswire. We hope you enjoy reading this newsletter and find it useful.

The New iPad Pro – Good Enough For Business?

Apple has just released its new iPad Pro, which it refers to as “the future of computing”. So, is Apple’s latest and greatest tablet good enough to replace your business laptop with?

The new 2018 iPad Pro has a sleek new design and is available in 11-inch and 12.9-inch screen sizes. There is no home button and, like the latest iPhones, you can unlock the device using facial recognition or by typing in a pin code on screen.

This new iPad Pro features Apple’s latest A12X Bionic processor which makes it as powerful as most business laptop computers. With this amount of power you might imagine that battery life is reduced. However the new iPad Pro offers battery life of up to about 12 hours.

The screen offers Apple’s latest “Liquid Retina” technology and has a very high resolution of 2,732 x 2,048 pixels. The display has a high refresh rate which makes on screen motion look very smooth indeed. This is great if you use your device for video conferencing or you work with video editing tools. 

A major change on the new iPad Pro is the switch to a standard USB-C connector in place of the standard Apple Lightening connector.

This makes the new iPad Pro directly compatible with a wider range of external accessories and peripherals such as digital cameras, card readers, etc.  New accessories include the Smart Keyboard Folio – a keyboard that doubles as a cover which attaches to the iPad Pro magnetically and wraps around the iPad Pro entirely.  This offers additional protection to the device but it isn’t cheap at £179 for the 11-inch version and £199 for the 12.9-inch.

There is also a new version of the Apple Pencil available, which attaches to the side of the new iPad Pro magnetically and charges when attached. It costs an additional £119, so you should be sure you are going to use it before investing the extra money. The iPad Pro starts from £769 (including VAT) for the basic 64GB WiFi only version with the smaller 11-inch screen, and goes up to £1,869 (including VAT) for the top of the range 12.9-inch version with WiFi, Cellular and 1TB of storage. It isn’t cheap, but it is one of the best tablets that money can buy.

Building a sustainable business

There is a trend towards businesses that seek to be more sustainable. 

These firms seek to have a minimal negative impact on the global and local environment, the economy, society and the communities in which they operate.

Sustainable businesses are focused on the long term. They seek to make a positive impact through doing their bit about climate change, recycling, human rights, ethical supply chain management and so on. This is fine if you are a global firm with thousands of staff and vast resources, but how do you create a sustainable small or medium sized business?

Small and medium sized business owners are starting to recognise that consumers and clients respond favourably to companies that place value on people and the planet, as well as profits. For example, millennials won’t just buy anything. They seek to buy products and services that come from businesses that are seen as authentic, that make a meaningful and positive impact and that are linked to important causes.

Small and medium sized businesses can tap into this by getting involved in corporate social responsibility (CSR), charity work, buying from fair-trade or ethical suppliers, hiring a more diverse workforce and so forth.

For example, if your firm uses lots of packaging then you can start to make a positive impact by only using recycled / recyclable packaging. You can promote this fact in your marketing materials, corporate communications, website and so forth so that people know that you are making a positive impact.

Dealing with Imposter Syndrome

“Imposter Syndrome” can be described as a pattern of thinking that leads people to lose confidence in themselves, in their accomplishments and in their ability to do their job. This results in individuals becoming stressed about being “discovered as a fraud” by their peers.

Imposter syndrome can be a very destructive disorder if left unchecked. It can turn positive moments into negatives and put a dampener on an individual’s work related accomplishments. It can present itself as severe anxiety and self-doubt which can inhibit an individual’s ability to perform at the level that they are capable of.

Most people suffer from a degree of imposter syndrome at some point in their career. Perhaps it might happen to you when you take on a more senior position, and you wonder if you have the ability to deliver in your new role. For others, it can seemingly appear from nowhere.

The important thing is to recognise that it is imposter syndrome and to take control of the situation in order to move forward. Although imposter syndrome is not considered to be an official “psychological disorder”, it is a real occurrence and can often be identified as work-related anxiety or stress.

Like any other pattern of thinking, it is learned and reinforced in the individual’s mind. Therefore it can be addressed through retraining yourself to adopt healthier patterns of thinking.

A good method of helping to deal with imposter syndrome is to track every accomplishment. Doing so in a way that is visible (in a notepad or on a whiteboard on your wall), can help you to remind yourself that you are doing well.

Another way to flex your skills and make a positive impact is to reach out and help others in your firm. You could mentor and develop junior colleagues. This can reinforce in your mind that you know a lot about your specific subject matter. An additional benefit is the feel-good factor associated with bringing people on and making a difference.

If you are suffering badly with imposter syndrome (to the extent that it is keeping you awake at night, for example), it may be time to seek help from a professional coach or therapist. The idea is to discuss the root cause(s) of the anxiety with a professional who can help you to create an effective coping mechanism. They can help you to move forward by finding ways to assist you in changing your pattern of thinking.

Keeping Your Firm’s Mobile Devices Safe From Malware Attacks

Recent industry reports from cyber security firms such as McAfee and Kaspersky Lab have identified that mobile malware attacks are becoming increasingly widespread and more sophisticated.

Most business professionals use smartphones these days. These devices are basically small computers and can be infected with malware in a similar way to a PC – usually through malicious links or attachments sent via email. As people are now using smartphones to access corporate email accounts, make online payments, etc. there is an increased risk for businesses. Another risk exists where an employee’s device is hacked and the firm’s passwords and remote access logins are stolen. This can allow hackers to get inside a businesses’ firewall and spread malware to computers across the company network.

So, what should businesses do to protect themselves? Mobile antivirus tools can help to a degree and all company data should be backed up regularly. That said, it is more important to teach your employees the basics of mobile security to eliminate putting themselves or the firm at risk in the first place. Basic training can involve teaching your employees how to identify suspicious emails and to avoid clicking on potentially dangerous links on their smartphones.

Fake apps are another serious risk. Cyber criminals often design apps that imitate legitimate apps or they might offer a game or utility app for free. In order to minimise this risk, your firm should create and publish an internal list of approved apps. All employees that use company devices should receive regular communication regarding which apps are approved for use on company devices. It should also be made clear that no other apps can be installed on a company device without express permission from the relevant person(s).

Finally, your firm should have monitoring tools in place, which check for signs of unusual activity on the network, such as remote logins from unfamiliar IP addresses, large files moving out of the network over email, etc.

Brilliant news – our brand-new Mileage Tracker is now live and ready for you to start tracking journeys!

 

Simply head to the App store on your device now and download the recent update. We’ve made improvements just for you, so you can auto track journeys in the background, edit trip details, sync trips in the cloud and more!

 

Since 6 April 2015 employment intermediaries have been required to make quarterly reports to HMRC of payments made to non-payroll workers placed with third parties (see our newsletters: 9 July and 6 August 2015). If those reports are not submitted on time HMRC can impose stiff penalties (see our newsletter on 20 October 2016).

Some of those penalties are now being challenged at the first-tier tribunal, and in the four cases we have seen the taxpayer win the appeal, so the penalties were cancelled.

The reasons given by the judges in accepting the appeals are interesting as they could apply far more widely.

Penalty not correctly issued

In three cases: Expion Silverstone ltd, A* Education, and Tarrant Howl Ltd, the judge decided that there was no evidence that an officer of HMRC made the penalty determinations. The court found that in each case the penalty was issued automatically by a computer, and as the computer is not a real officer of HMRC, the penalties weren’t valid.

It is worth using this argument in cases involving penalties which have been issued automatically for late or non-submission of returns in other situations, as the same underlying law in TMA 1970 will apply.

Not an employment intermediary

In Leverton Search Ltd the judge found that the taxpayer was not a “specified employment intermediary”, as at no point in the periods covered by the penalties did the company supply more than one individual to work for a third party. This is the exemption which takes personal service companies out of the requirement to submit reports as an employment intermediary.

It is always worth checking the detailed conditions of the legislation, as HMRC don’t always do so.

 

Written by the Tax Advice Network