Are you making the most of the Tax Allowances available to you?

Jan 17 2018


You may not even have heard of the Marriage Transfer Allowance, however if you are married or in a civil partnership and your income is under £11,500 and your partner’s income is between £11,501 and £45,000, then you could be eligible! You can even apply if you are currently receiving a pension, or if you live abroad (as long as you still receive a personal allowance).


It works by allowing you to transfer £1,150 (for 2017/2018) of your personal allowance to your husband, wife, or civil partner (as long as they earn more than you). This means that their tax could be reduced by up to £230 for the tax year (6th April – 5th April).


Only just hearing about this but you were eligible last year? Not to worry, you can backdate your claim and reduce this year’s tax.


You can apply for the Marriage Transfer Allowance on the HMRC website, or if you prefer you could ring and apply over the phone. If your claim is successful then changes to your Personal Allowances will be backdated to the 6th April, the claim will then stay active for following years until your circumstances change, should this be a change in income resulting in you no longer being eligible, or through divorce or death. Any change in your circumstances should be reported to HMRC as they can they advise you as to whether your claim can stay active, or if it should be cancelled.


HM Revenue and Customs will allocate your partner part of your Personal Allowance by either changing their tax code to allow for their extra relief, and it will usually end with an ‘M’ (this is  not done instantly and can take up to 2 months), or they will allocate it when your partner submits their Self Assessment for the year.


Click here for more information

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What's changed in the tax world 16/17

Jan 09 2018

What’s changed in the Tax World 16/17

The start of the new tax year brings a raft of changes that have consequences for your personal finances.

And with so much change afoot, it can be difficult keeping up with what's going on. 

To make things a little easier to digest, here's a list of the major changes you simply can't afford to ignore. 

The tax-free personal allowance is going up: This is the amount of money you are allowed to earn before income tax becomes payable. It's rising to £11,000, up from £10,600. It will rise again to £11,500 the following year - on 6 April 2017. Think of any increase in the personal allowance as a pay rise!

The 40p tax threshold will rise too: The amount of money you can earn before having to pay the higher-rate of income tax (40 per cent) increases to £43,000. This is an improvement from £42,385 in the 2015/16 year. It will rise again in April 2017 to £45,000 and the Government says it is committed to raising it further, to £50,000 by 2020.

The marriage allowance is improving (slightly): from £1,060 to £1,100. This means lower earners are able to transfer £1,100 of their tax-free personal allowance to their partner therefore reducing their tax bill.

To benefit, you need to have an income of £11,000 (the new personal allowance) or less and your partner must be a basic-rate taxpayer whose income is between £11,001 and £43,000. 

You must transfer £1,100 exactly - not more or less.

HM Revenue and Customs gives your partner the extra allowance by changing their tax code (usually to 1166M, which can take up to two months) or when they send their self-assessment tax return if they’re self-employed. 

You can apply for the marriage allowance and find more information here.  

Property tax 

Stamp duty is going up for landlords and those buying second homes: They will face a 3 per cent surcharge on the existing price bands from 1 April 2016. (See the box opposite for the full list of charges.) 

Wear and tear allowance is going: The allowance allowed landlords to offset 10 per cent of their rental income against tax for maintenance, regardless of whether they carried out any repairs or not. From April 2016, they will only be able to claim for maintenance they can prove has taken place. That means that careful record keeping of receipts and invoices is essential. The government says the measure will have effect for expenditure incurred on or after 1 April 2016 for corporation tax payers and 6 April 2016 for income tax payers.  This applies to all residential lets, furnished or not but not to Furnished Holiday Lets or Rent a Room relief


Personal savings allowance launches: From 6 April, individuals with taxable income of between £17,000 and £43,000 a year will be eligible for a £1,000 tax-free allowance, meaning they can earn up to £1,000 per year in savings income without paying a penny of tax. Higher-rate taxpayers who have taxable income of between £43,001 and £150,000 will also receive an allowance, but it is capped at the lower amount of £500 per year. 

Isa allowance frozen: It remains at £15,240, while the Junior Isa (and child trust fund) allowance stays at £4,080. 


Lifetime allowance reduction: 

You usually pay tax if your pension pots are worth more than the lifetime allowance. This is currently £1.25 million, but will be reduced to £1 million from 6 April 2016. 

The rate of tax you pay on pension savings above your lifetime allowance depends on how the money is paid to you. The rate is 55 per cent if you get it as a lump sum and 25 per cent if you get it any other way.

Tapered annual allowance: The size of the annual allowance will be gradually reduced from £40,000 to £10,000 for those making between £150,000 and £210,000 a year.

National insurance 'contracting out' to end: From 6 April, individuals will no longer be able to contract out of the additional state pension (also known as second State Pension or SERPs). It allowed those paying into a company pension scheme (usually a defined benefit scheme) to pay a reduced rate of national insurance or have it paid into a private pension. 

The end of contracting out means those who previously qualified for a reduced rate by way of a 1.4 per cent rebate will pay more national insurance.

You can tell if you’re contracted by checking a recent payslip and looking at the national insurance line. If you’re contracted out if it has the letter D, E, L, N or O next to it. You’re not contracted out if it has the letter A. 


New dividend tax allowance: This is also brand new and will affect all individuals in receipt of dividends, either from a company as part of a remuneration strategy or from investments that are not held within an ISA or pension.

Dividend tax credit rules replaced with a tax-free allowance: which entitles all individuals to the first £5,000 of income from dividends each tax year free from taxation.

Dividends over this level will be subject to tax and for basic-rate taxpayers this will be 7.5 per cent, higher-rate taxpayers will pay 32.5 per cent and additional-rate taxpayers will pay 38.1 per cent.  

Remember that you no longer need to ‘gross up’ dividends before putting them onto your return


Tax-Free Childcare scheme: From early 2017, working parents can get up to £2,000 a year, per child, in tax relief to help cover childcare costs. It replaces the existing system that sees parents buy 'childcare vouchers' from their employer that enable each parent to pay for childcare worth up to £243 a month. 

Each £243 voucher costs the parent £165.24. For higher-rate taxpayers who can only buy vouchers of £124, the cost is £71.92. For additional-rate taxpayers, their £110 voucher costs £58.30. Each parent can sign up to the voucher scheme (as long as their employer offers it).

However, once the new scheme comes in, you won’t be able to sign up to both schemes. If you're in the old one, you don’t have to switch over. But once you’ve moved to the new one, you won’t be able to move back again. 


As always if you have enjoyed this blog post and found it informative then please use the buttons to ‘like’ it (and us!) in all the relevant places.  Please feel free to use the buttons to share to your Social Media

If you have any questions then please get in touch

And please be aware that this is ‘general’ information designed to give you a quick overview and this information may not apply to everyone in every circumstance so please do you own due diligence or take professional advice and do not rely on the information in this blog post


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Top Tips for Last Minute Tax Returns

Jan 02 2018

So it’s that time of year once again where we are really quickly approaching the Self Assessment filing deadline of 31st January.  Despite all of our best intentions there are still some of us that haven’t filed our returns.  In fact there’s still some of us that haven’t even got the paperwork out to have a look!  There is one thing that you can be certain of.. when you actually bite the bullet and ‘do’ your return it won’t be as bad as you expected, so come on, get it done.  Don’t be one of the estimated 870,000 people that were late last year, got fined £100 and helped HMRC receive a massive £87 million pound overnight windfall in late filing penalties.

If you’re one of the smug people that got organised and filed early congratulations, this blog isn’t for you but I’d say still read it as you may find some good tips for next years return or you may realise that you need to amend your return (sorry but you might!)

This blog is all about the biggest ‘things’ we’ve seen with tax returns this year, the things that our clients have struggled the most with, the things that have caught them out and the things that they have asked us questions about..

Government Gateway Login and Password

This is a biggie and it catches people out EVERY year.  We always get a few panicked phone calls from people that have got their information ready to file but can’t find their log in details and haven’t got time to request copies as they are sent through the post and can take 7 days to arrive.

So.. dig out your login details NOW.  Even if you haven’t got your information ready to file, just log in and check that everything is working.  If it isn’t you still have time to receive the information from HMRC through the post.

Own Consumption

With so many people in our area running B&B’s, Guest Houses, Pubs, Nursing Homes etc.. own consumption is a question that is raised quite frequently.

If you take items from stock for your own consumption then you must make an adjustment for this.  If for example you run a pub and you drink a pint of beer then you must make an adjustment for your ‘own consumption’ of basically what is a business asset.  And the jaw dropper is that this adjustment must be at the selling price (Yes, the price that you charge your customers) and not your cost price.

There is also ‘own consumption’ of your utilities and other items that need to be taken into account.  For instance if you live above the pub or in the guest house then a proportion of your ‘bills’ are actually for your own consumption.  Now HMRC have some fixed rates for making these adjustments for the industries above, sometimes these work out well but you can use actual figures but only if you have kept good and accurate records. 

Private Use

You must make adjustments for Private Use of vehicles.  If you use your vehicle personally and for business then you need to ‘disallow’ a proportion of your running costs.  You also need to disallow a proportion of your Capital Allowance Claim (Ask us – that’s not something I can explain in a paragraph!)

Use of Home

If you are self employed and you work from home then you can claim for costs that are incurred for business purposes.  In addition to that you can also claim for a ‘proportion’ of the cost of running your home.  These costs include your utilities (heat, light and water), insurance, council tax, rent and it also includes repairs to your house and your rent.  If you own the property then you can include mortgage interest (not the capital repayment part). 

HMRC do have fixed rates that you can use, currently that is £208 per year and this is for minor use of your home for business.  There are also flat /fixed rates for use of home that are based on the number of hours that you work at home ‘wholly and exclusively’ for the purposes of the trade.  25-50 hours per month you can claim £10 per month, 51-100 hours £18 per month and 101+ hours £26 per month.

The full calculation to work it out the actual proportion can be quite complicated.  It basically looks at the number of rooms in your house and the percentage that is used for business and the amount of time that you spend working on your business in your house and gives you a percentage of your home running costs that you can claim for. 

Whilst this calculation is more difficult than just putting a flat rate number in the correct box we often see that it is really worth your while to take the time to do it.


You may be able to use estimates if some of your figures aren’t available but you need to make sure that you tell HMRC that you have used estimates/provisional figures by ticking the right box on your tax return.  You do need to be careful doing this as there is a high risk of penalties for not following the rules.

White Space

There’s more and more ‘white space’ on Tax Returns these days and we constantly get asked what they are for!  Yes, they are there so that you can give HMRC more details about the numbers on your return.

You should be very careful about what you write in these boxes.  We’ve seen some cracking comments full of humour but you need to keep it factual.  Whatever you write in these boxes is actually considered to be part of your tax return and you are liable for a penalty if any of the information is incorrect..  Exactly the same as if you put an incorrect number in one of the boxes


Don’t forget that brought forward losses can be used.  Sideways relief is available, for instance if you make a loss on one activity and a profit on another then you may be able to set one off against another.  Likewise you may be able to carry back losses for 3 years and get a refund on tax that you paid in previous years if you are in the first 4 years of trading.

Don’t forget though that there is a Sideways Relief ‘Cap’ of £50,000 (don’t stop reading here as the next bit is important!) OR 25% of adjusted net income of a Sole Trader.

And finally don’t forget about any Capital Losses that you may be carrying forwards.  It’s easy to do so as you don’t use them until a relevant Capital Gain occurs


As always if you have enjoyed this blog post and found it informative then please use the buttons to ‘like’ it (and us!) in all the relevant places. Please feel free to use the buttons to share to your Social Media

If you have any questions then please get in touch

And please be aware that this is ‘general’ information designed to give you a quick overview and this information may not apply to everyone in every circumstance so please do your own due diligence or take professional advice and do not rely on it


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Further changes to how you can pay HMRC

Oct 23 2017

Important Information about Changes to Paying HMRC

HMRC are making some changes to the ways customers can make payments.

The pay at the Post Office service will be withdrawn from 15th December 2017 and from 13th January 2018, HMRC will no longer accept payment by personal credit card. Debit cards and corporate credit cards will continue to be accepted.

There are still many ways to pay including:

• Direct Debit

• Online or telephone banking (including Faster Payments, Bacs and CHAPS)

• Debit/Corporate Credit card online or by telephone.

Just remember to pay your bill by 15th December 2017 if you want to go to the Post Office

and by 13th January 2018 if you want to use a personal credit card

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Can I pay my tax bill with a credit card?

Oct 23 2017

For whatever reason some people would like or need to pay their tax liability by credit card.  It can help spread the payments or free up cash that is needed elsewhere in your business.

Up until now you have been able to do so.  However from 13th January 2018 HMRC will no longer be accepting payments from personal credit cards.  Corporate, Business and Commercial credit cards are not affected and you will still be able to make payments by debit card.

What's the reason for this? - You might have heard on the news that there has been a change in EU law regarding merchants passing on the cost of credit card fees to the consumer, from 13th January 2018 they are no longer allowed to.  And it is good news really for all consumers.. but not if you wanted to pay your tax bill by personal credit card...

Within the change in EU law HMRC are also included as 'merchants' so they are not allowed to pass on the credit card charges to the consumer.  Currently HMRC is only allwed to accept credit card payments on the basis that there is 'no cost to the public purse' so this new law will mean that HMRC cannot accept credit card payments from the date the law changes.

So if you are intending to pay your tax bill by credit card you have until 13th January 2018 to do so.  This ultimately means that you cannot leave your self assessment until the last minute.  You will need to do your self assessment in good time so that you know what you owe and can pay what you owe by 13th January 2018. Don't be caught out unexpectedly and wait until 31st January 2018 to make your payment as you will not be able to make it by personal credit card.

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What’s an Accountant for?

Jan 27 2017

What’s an Accountant for?

Why does anyone need an accountant?  

How do they help me?  

What do they do anyway?

Here’s my answers to those questions:

Keeping you Legal.  We help you do your financial administration so you file everything you need to, on time, every time.

Saving Tax.  We help you save tax by making sure you do things in a way that incurs as little tax as possible.

Understanding your taxes.  Helping you understand how you are taxed, so you can plan for it.

Knowing your numbers.  Helping you understand your business by interpreting the numbers for you, so you can make decisions based on fact not just intuition.

Making you rich.  Helping you put a plan together so you can get your personal finances in order and meet your financial goals.

Budgeting and forecasting.  Planning for the future, so you can arrange your finances effectively.

Support.  Your accountant is probably one of the few people you can talk to with complete honesty about your business.  He knows the facts, so there is no need to show off or for false modesty.  

If you need any help with these, you know where we are.

Jess Brooks
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Who are your best customers?

Jan 27 2017

The Pareto principle or the 80–20 rule says that, for many events, roughly 80% of the effects come from 20% of the causes.  So how might this affect you in your business?  I’d suggest that it can be profound.  If you can identify which of your clients or customers are: 

  • The 20% who produce 80% of your profits.
  • The 20% who produce 80% of your complaints and hassle. 
  • The 20% of your products that produce 80% of your profit.
  • The 20% of your sales staff that produce 80% of the sales. 
  • The 20% of your marketing that produces 80% of the results.

Then you can make decisions that will drive your profits to super success.  Of course it can be hard work analysing who are the
best and worst customers, staff or suppliers. Having identified them you can exit the troublesome ones and get to work replicating your best areas.  

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The clock is ticking... just 25 days to submit your tax return.

Jan 27 2017

As the adverts say ‘tax doesn’t have to be taxing’. 

In fact if your affairs aren’t that complex it could take as little as 30 minutes to complete the online form BUT you need to be registered for online filing AND you need to have all the necessary paperwork in front of you. 

And deciding which information you need is one of the parts our clients have most difficulty with. 

We are always happy to answer quick questions, even if you're not a client. So if you're feeling stressed then pick up the phone.

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Predicted £87 million windfall for HMRC on 31st January 2017

Jan 27 2017

Last year around 870,000 people missed the 31st January 2016 deadline and were issued with a £100 fine. 
That amounts to a whopping £87 million pounds for HMRC overnight on 31st January. 
 And don’t forget it doesn’t stop there you will receive further penalties for being 3 months, 6 months and 9 months late

In fact if you leave it until 1st August 2017 to submit your tax return your penalties will add up to a minimum of £1300!  OUCH!

Don't forget we are happy to answer quick questions even if you're not a client so if you are struggling to submit your return please pick up the phone.

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Don't leave it too late to register.. you need at least 7 days before the deadline...

Jan 27 2017

If you are submitting your return online for the first time then you need to register online with HMRC and that takes time. 
You will need your 10 digit unique taxpayer reference number (UTR) which you will find on most letters from HMRC. 
Once you’ve enrolled you will be sent an activation code in the post which SHOULD arrive within 7 days.
 You can then use the code to activate the service and then finally submit your return.
If you have left it too late then we can submit on your behalf without you having to register.

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