As a general rule, if you use your private transport for trips related to your employment, you may be able to claim tax relief if you are not reimbursed for this business use by your employers.

Exceptionally, any normal travel between your home and your place of work will always be excluded from this calculation unless you are required to travel to a temporary place of work.

How much you can claim depends on whether you’re using:

• a vehicle that you’ve bought or leased with your own money
• a vehicle owned or leased by your employer (a company vehicle)

Using your own vehicle for work

If you use your own vehicle or vehicles for work, you may be able to claim tax relief based on an approved, HMRC mileage rate. This covers the cost of owning and running your vehicle. You cannot claim separately for things like:

• fuel
• electricity
• road tax
• MOTs
• repairs

To work out how much you can claim for each tax year you will need to:

• keep records of the dates and mileage or your work journeys
• add up the mileage for each vehicle type you’ve used for work
• take away any amount your employer pays you towards your costs, (sometimes called a ‘mileage allowance’)

Approved mileage rates

If your employer pays less than the above rates you can claim tax relief on the difference.

If your employer pays more than the above rates per mile you will be taxed on any excess as a benefit-in-kind.

We are fast approaching the deadline for filing self-assessment tax returns in the UK for 2018-19. As readers will be aware, this deadline is 31 January 2020.

Unfortunately, this coincides with a pick-up in scamming activity by fraudsters pretending to be the tax office. HMRC have recently posted an alert for taxpayers and this is reproduced below.

Over the last year, HMRC received nearly 900,000 reports from the public about suspicious HMRC contact – phone calls, texts or emails. More than 100,000 of these were phone scams, while over 620,000 reports from the public were about bogus tax rebates.

Some of the most common techniques fraudsters use include phoning taxpayers offering a fake tax refund or pretending to be HMRC by texting or emailing a link which will take customers to a false page where their bank details and money will be stolen. Fraudsters are also known to threaten victims with arrest or imprisonment if a bogus tax bill is not paid immediately.

HMRC operates a dedicated Customer Protection team to identify and close down scams but is advising customers to recognise the signs to avoid becoming victims themselves. Genuine organisations like HMRC and banks will never contact customers asking for their PIN, password or bank details. Customers should never give out private information, reply to text messages, download attachments or click on links in texts or emails which they are not expecting.

Taxpayers are urged to act by forwarding details of suspicious calls or emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599. Individuals who have suffered financial loss should contact Action Fraud on 0300 123 2040, or use their online fraud reporting tool.

As readers will note, it is highly unlikely that HMRC will contact taxpayers using text, email or the telephone. Certainly, HMRC staff should never ask for your personal details or bank information in this way.

If you are contacted, and are unsure if the message is genuine, you should call HMRC using one of their contact numbers listed on the gov.uk website. If you are one of our clients please call your point of contact at the practice and we will check out if the communication you have received is genuine and the action you should take.

The following extracts from HMRC’s website explain how certain benefits to employees can be tax-free. Surprisingly, HMRC describe these as “trivial” benefits.

You don’t have to pay tax on a benefit for your employee if all of the following apply:

• it cost you £50 or less to provide
• it isn’t cash or a cash voucher
• it isn’t a reward for their work or performance
• it isn’t in the terms of their contract

This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HMRC know.

You have to pay tax on any benefits that don’t meet all these criteria.

Salary sacrifice arrangements

If you provide trivial benefits as part of a salary sacrifice arrangement they won’t be exempt. You’ll need to report on form P11D whichever amount is higher:

• the salary given up
• how much you paid for the trivial benefits

These rules don’t apply to arrangements made before 6 April 2017 – check when the rules will change.

Directors of ‘close’ companies

You can’t receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.

A close company is a limited company that’s run by 5 or fewer shareholders.

So, if you keep to HMRC’s trivial benefit rules, these payments may help you to spread a little festive cheer this Christmas. Goodness knows, we could all do with some of that.

We are approaching the end of the calendar year, goodbye 2019, and the end of the of the current tax year, 2019-20, will draw to a close 5 April 2020.

Add to this self-assessment deadlines, Brexit changes, election results and will we – won’t we – have a budget speech any time soon, and it’s clear that the outlook for businesses, taxpayers and their advisers is changeable and hectic.

We are approaching a period of significant change in multiple areas that have an impact on our financial affairs. In our opinion, there has never been a more crucial time for serious planning. In particular:

• All businesses should be availing themselves of the reporting benefits of keeping their accounts electronically. There are a number of online, cloud-based systems available at low cost that can take the misery out of this repetitive chore. Benefits are legion, improved: cash-flow, credit control, and real-time management information.
• All self-assessment taxpayers should have their tax returns for last year filed and be aware of tax payments due on or before 31 January 2020.
• Have you taken advantage of our year-end tax planning review? Many of the opportunities to reduce your annual tax bills need to be actioned before the end of the tax year, 5 April 2020.

Add to this a rethink of your capital gains tax and inheritance tax position for 2019-20. Again, action needs to be taken before the end of the tax year.

If you have significant business interests and/or personal income sources that are approaching or exceeding the higher rate tax band triggers, and you have not yet examined opportunities to reduce your liabilities, please call, the clock is ticking.

Most buy-to-let property is let on short leases to a single tenant. The income from rents is treated as a property business, but a number of reliefs available to other trading businesses are not available to buy-to-let landlords.

However, if these same properties were let as Furnished Holiday Let (FHLs) property, more advantageous tax benefits may apply.

If you let properties that qualify as FHLs:

• you can claim Capital Gains Tax reliefs for traders (Business Asset Rollover Relief, Entrepreneurs’ Relief, relief for gifts of business assets and relief for loans to traders),
• you are entitled to plant and machinery capital allowances for items such as furniture, equipment and fixtures, and
• the profits count as earnings for pension purposes.

To benefit from these rules, you will need to work out the profit or loss from your FHLs separately from any other rental business.

Accommodation can only qualify as an FHL if it passes 3 occupancy tests

1. If the total of all lettings that exceed 31 continuous days is more than 155 days during the year, this condition is not met so your property will not be an FHL for that year.
2. Your property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year. Do not count any days when you’re staying in the property. HMRC do not consider the property to be available for letting while you are staying there.
3. You must let the property commercially as furnished holiday accommodation to the public for at least 105 days in the year. Do not count any days when you let the property to friends or relatives at zero or reduced rates as this is not a commercial let.

Do not count longer-term lets of more than 31 days, unless the 31 days is exceeded because something unforeseen happens. For example, if the holidaymaker either: falls ill or has an accident, and cannot leave on time or has to extend their holiday due to a delayed flight

These notes cover the basics and there are other rules that may help you to average occupancy stats to meet the above criteria.

There are significant CGT benefits to reorganising appropriate lets as FHLs and we would encourage landlords who would like to consider this option, to contact us for more information.