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Marriage allowance

f you are married or in a civil partnership, and born on or after 6 April 1935 you can now apply for the new marriage allowance. This is not an extra amount of tax free allowance, but a transfer of £1,060 of unused personal allowance from one spouse or civil partner to the other. It will save the couple tax of £212 for 2015/16.

The marriage allowance can only be claimed where one person has unused personal allowance and the other partner/spouse is taxed at no more than 20%. The transferred allowance is treated as belonging to the recipient for the whole of the tax year for which it is claimed.

The claim for the marriage allowance must be done online through the GOV.UK website, by the person who is surrendering part of their allowance. If the taxpayer can’t use the online service HMRC is supposed to provide additional support.

Once the marriage allowance is claimed, the couples’ PAYE codes will be altered to reflect the change in allowances with the following suffix letters used in the place of L:

M – for the person who receives the extra allowance
N – for the person who has surrendered £1,060 of their personal allowance
The existing married couple’s allowance (worth up to £835.50) continues to apply for couples who were born before 6 April 1935.

VAT on Food

If you have any clients that are VAT Registered and offer any form of seating or a place to eat in their premise, then they will need to ask each individual customer if they will be eating in or out of the establishment.

If they opt to eat in, then VAT will need to be applied regardless of whether the food served is hot or cold and also even if it is normally zero rated; for example a cold sandwich.

To read the full HMRC article please see the link below:

Limited Companies with Patents pay lower rate of Corporation Tax

There is good news for limited companies with patents. HMRC introduced the ‘Patent Box’ which offers a 10% corporation tax rate on profits attributable to qualifying patents. This has applied for limited companies with profits arising after 1 April 2013.

The reduced tax rate not only applies to royalty income but also includes profits derived from patented products or patented processes. HMRC have confirmed that there only has to be one patented and UK managed invention embodied in a product for the entire product to be within the patent box. So the scope of the relief is very wide and many companies will be able to qualify for this lower rate of tax

Company car drivers can now report changes to HMRC online

An online trial has been launched by HM Revenue and Customs (HMRC), allowing company car drivers to make changes to car and fuel benefits that will affect their tax codes.

This means that Pay As You Earn (PAYE) customers who have company cars will be able to make any changes online to their company cars and will no longer have to wait for HMRC to update their tax code for them.

To read the article in full please use the link below:

Incorporation of a business

When a business incorporates and transfers its trade and assets to a company controlled by the seller, the assets must be transferred at open market value for tax purposes. The assets may include “goodwill” which is defined as the business reputation or customer relationships, including the value of continuing contracts.

The transfer of the assets may generate a taxable capital gain in the hands of the seller, as the assets will have appreciated in value during the time they were used or created by the first business.

Capital gains tax will arise on those gains, but there are various tax reliefs that can be used to postpone or reduce any tax payable. One of those reliefs is entrepreneurs’ relief, which can reduce the tax payable to only 10%.

The use of entrepreneur’ relief has been blocked for gains arising on the transfer of goodwill as part of an incorporation on or after 3 December 2014. Entrepreneurs’ relief is still available to reduce tax from gains arising on other transferred assets, but not from the goodwill.

If you are thinking of incorporating your business, we should talk about which assets you want to transfer to the company, and which you want to leave in your own name. Transferring land and buildings will often carry an additional cost of stamp duty land tax. Planning the transaction well in advance is the best way to reduce any tax payable.

Small Business Saturday 6th December

We are offering our services at a reduced rate of 50% for one day only to celebrate the Small business saturday event, if you would like our services then please send an enquiry to  and we will secure this reduced rate for you. Small-Business-Saturday-UK-2014-Logo-Blue

George Osborne has delivered his final Autumn Statement before the General Election next year

Stamp Duty Land Tax (‘SDLT’) has been changed and a progressive tax rate will apply to residential sales completed after midnight on Wednesday 3rd December. The ‘break even’ point is £935,000, purchases below that will be subject to lower SDLT than before whereas purchases above that will be subject to higher SDLT.

Research & Development Tax Credits paid to small and medium sized companies will increase from 125% to 130% of ‘qualifying expenditure’ incurred after 1 April 2015. The credit for large companies will also increase from 10% to 11%.

Income Tax Personal Allowance will increase to £10,600 for the 2015/16 tax year – this is higher than previously advised by the government.

Resident non-domiciles will see an increase in the annual charge payable if they wish to retain the remittance basis of taxation. A new scale will apply from £30,000 for those resident in 7 out of 9 tax years up to £90,000 for those resident 17 out of 20 tax years. A consultation is also being proposed to make the election apply for a minimum of three years.

Diverted profits tax is a new tax to counter the use of aggressive tax planning techniques used to divert profits away from the UK. The tax will be levied at 25% from 1 April 2015 although exact details on how this will be applied have not yet been released.

Air Passenger Duty is being scrapped on economy flights for those under 12 years old with effect from 1 May 2015. The relief will extend to under 16’s from 1 March 2016 and tickets will be expected to display the amount of duty payable to ensure that the savings are passed on.

The amount held in an ISA at the time of death of an individual can now be used by a surviving spouse to invest into their own ISA. Although no IHT was payable on the transfer of assets between spouses on death the funds can now be reinvested in full into an ISA.

Entrepreneurs’ Relief will be removed for individuals in respect of the transfer of goodwill to their own company and Corporation Tax reliefs will be restricted for payments in respect of these intangible assets.

National Insurance employers contributions are abolished for apprentices under 25 with effect from 1 April 2016 (unless the apprentice earns more than circa £42,000).

A new ‘aggravated’ penalty loading of 50% will apply in addition to existing behavior related penalties for individuals who move hidden funds to circumvent tax transparency agreements

Enterprise Nation Growth Vouchers – Do you need government funding?

Please visit our page on the enterprise nation website marketplace to take advantage of the Growth Vouchers


Let Property – Repairs or Improvements

If you let out residential property you need to know whether you can receive a tax deduction for the cost of replacing or repairing furniture and fittings provided inside that property. The cost of equipment used to maintain the outside of a property, or used in the communal areas of a building containing multiple dwellings, is always deductible.

When you fit something for the first time to a property, such as a fitted kitchen, that cost will form part of the capital cost of the building and will only be deductible when you sell the property. If you repair a fitting or replace the fitting with something of the same quality, the cost counts as a repair which can be deducted from the rental income.

If the fitting is replaced with items of a higher quality, the whole cost must be treated as a capital improvement, which is only deductible from the proceeds of selling the property. This does not apply if the replacement is superior just because the modern equivalent of an outdated material or design is used. For example when you replace an old central heating boiler with a new condensing boiler, which does the same job but with greater energy efficiency, that will be a tax deductible repair not an improvement

Annual Investment Allowance‏

Vans, computers and most office furniture can help reduce your tax bill

Do you know that there are a range of tax reliefs/allowances that you may be able to claim that could help save your business money?

Whether you are thinking of investing or buying assets for your business, or simply thinking of employing someone, there may be a tax relief or allowance that you are entitled to.

 contact us now at Cloudbookkeeper for more help