When you complete your tax return for 2017-18, make sure you consider the following expenses. Sometimes they are overlooked.

• Approved subscriptions you are required to pay to professional organisations. You must have membership to do your job or it’s helpful for your work. You can’t claim tax back on fees or subscriptions you’ve paid to professional organisations not approved by HMRC or for: life membership subscriptions, fees or subscriptions you haven’t paid, e.g. your employer has paid for them. Approved organisations are listed at https://www.gov.uk/government/publications/professional-bodies-approved-for-tax-relief-list-3/approved-professional-organisations-and-learned-societies.
• If your employer pays less than HMRC’s approved mileage rates to reimburse you for the use of your own transport you can claim the difference. HMRC’s present approved rates are: cars 45p per mile for the first 10,000 miles and then 25p per mile; motor cycles 24p per mile; bicycles 20p per mile.
• If you are required to attend courses as part of your job, then you should be able to recover the course fees and travel expenses if either are not fully or partly reimbursed by your employer.

You may also be able to claim for:

• The cost of work uniforms and tools
• Travel and overnight expenses
• Costs of working at home, and
• Buying equipment that you use in your job.

In all cases, you must have met the cost and your employer has not fully reimbursed you.

Every little helps…

This is the time of year that employers and employees deal with the reporting of Benefits in kind. Taxing times…

The provision and use of company cars features in many of these returns, both the use of the car, and if provided, the cost of any fuel provided by the employer for private mileage. What may not be appreciated is that there is such an item as an exempt use of a car.

To be exempt, an employee must use the car in one of the following ways:

1. Privately owned cars – You don’t have to pay anything on cars that directors or employees own privately.

2. Cars available for business journeys only – Business journeys are either: journeys that are part of your employee’s duties, e.g. a service engineer travelling to an appointment or journeys an employee must make to get to a temporary workplace. To be exempt, you must tell your employee not to use the vehicle for private journeys and check that they don’t.

3. Cars adapted for an employee with a disability – This includes cars with automatic transmission if the employee’s disability means they need this. These cars are exempt if the only private use is for: journeys between home and work or travel to work-related training

4. Fuel that employees pay for – You don’t have to pay or report on fuel, including for private journeys, if either: employees buy the fuel for their own use or you buy it and they pay you back during the tax year, and their payment is equal to or more than the amount you paid.

5. ‘Pool’ cars – You don’t have to pay or report on ‘pool’ cars. These are cars that are shared by employees for business purposes, and normally kept on your premises. You’ll have to pay if a pool car is driven for private use, or if a car is shared by employees and doesn’t qualify as a pool car.

Additionally, if you provide a car to a close relative you won’t have to pay anything if both the following apply:

• you’re an employer who’s an individual, e.g. a sole trader

• you’re providing the car to someone who works in your business, but only because they’re a close relative and not because they work for you (e.g. you give your child a car as a birthday present)

A close relative includes:

• your spouse or civil partner

• your son or daughter, and their spouse or civil partners

• your parents

• any other dependants or guests of your household

Food for thought?

HMRC posted the following reminder on their website the first day of the new tax year:

Employers need to report all Benefits in Kind (BiKs), including those under the Optional Remuneration Arrangements (OpRAs), to HMRC on form P11D from today (6 April 2018), unless they are registered to voluntarily payroll benefits.

They further explained, for those of us who had missed the import of the last Finance Act, that:

OpRAs are where an employee gives up the right to an amount of earnings in return for a Benefit in Kind (BiK) and includes flexible benefit packages with a cash option, cash allowances and salary sacrifice.

Rubbing salt into the wounds they reminded us:

The Income Tax and employer National Insurance contributions (NICs) advantages of BiKs – and employee NICs advantages where a charge exists – have mainly been withdrawn due to new rules that took effect in April 2017.

And then:

From today, the rules will cover all OpRAs, apart from those for cars with emissions above 75g CO2/km, school fees and accommodation – these will be included from 6 April 2021.

If a BiK is provided under OpRA rules, the taxable value is now the higher of the cash foregone or the taxable value under the normal BiK rules. This applies to all BiKs, including those that were previously exempt, such as workplace parking.

Until finally, we get the good news:

However, pensions, pension advice, childcare, cycle-to-work schemes and cars with emissions of 75g CO2/km or less are not affected by the rules.

What we should take seriously, is to observe the filing deadline to submit the BiK returns (forms P11D) to HMRC. For the 2017-18 tax year just ended this is 6 July 2018.

If you need help with the process please call, we are happy to assist.

Now that Scotland and Wales have their very own stamp duty taxes buying a house in the border areas between Wales and England, and Scotland and England, raise some interesting planning options.

Consider Llanymynech, a village that straddles the border between Powys (Wales) and Shropshire (England). The amount of stamp duty payable on an identically priced house, say £179,000, would cost the buyer £1,080 in Stamp Duty Land Tax if bought in the English side of the village, but no Land Transaction Tax would be payable for an equivalently priced house in the Welsh side of the village. A definite incentive to buy in this price bracket the Welsh side of the border.

If you live in the Scotland/England border areas and you are contemplating the purchase of an expensive property and your budget is £1m, you may want to consider the following numbers:

• Buying in Scotland would cost you £78,350 in Land Transaction Tax, and
• Buying in England would cost you a mere £43,750 in Stamp Duty Land Tax.

Scotland has also set its own Income Tax rates for 2018-19. So, depending on the amount of your income, you may pay more or less income tax depending which side of the border you choose to live.

These border considerations will need to be considered as our regions gain more autonomy over their local taxes. They unfortunately add another raft of regulation that will have to be considered when planning on the situation of your residence (in border areas) for stamp duty and income tax in the years to come.

The Telecommunications Infrastructure Act 2018 paves the way for full-fibre broadband and future 5G communications by enabling 100% business rates relief for operators who install new fibre on their networks. In other words, the Act incentivises operators to invest in the broadband network.

Apparently, the secondary legislation has been laid, firing the starting gun on the scheme which will see communications providers exempt from business rates on new fibre for 5 years, backdated to 1 April 2017.

Local Government Minister, Rishi Sunak, said:

From the country’s most rural locations, to our big cities, we want everyone to benefit from fast, affordable and reliable broadband.

With this new legislation now in place, people can expect the rapid installation of new fibre, paving the way for better connectivity across the country.

From making it easier to work from home to allowing digital businesses to flourish, our measures are creating the right conditions for more high-skilled, high-paid jobs of the future.

Hopefully this cash incentive will help to close the loop and provide the many “fibre vacant zones” with much needed high-speed broadband. According to government sources, by driving improvements in the speed, service quality, security and reliability of broadband services, the Act will help transform the way modern businesses work together, reach their consumers and target their export markets.

As well benefiting businesses, full fibre broadband will also increase internet speeds for households and enable users to access more services online with multiple devices. For example, simultaneously streaming high definition TV and films, playing online games, and working from home quicker and more reliably.

Of course, increased funding is one thing, it will be interesting to see if remote businesses still obliged to access the internet at pre-broadband speeds, will finally get a high-speed connection on which all our businesses benefit.