Could You Claim Small Business Rate Relief?
Small business rate relief & business rates
Did you know that business rates are payable on non-domestic properties such as offices, shops and factories. And that the rates are worked out on the rateable value of the property, but there are various reliefs available including small business rate relief. You should also know that the relief is not given automatically and that, as a small business, you could be overpaying, not realising you are entitled to the relief. However, all is not lost; claims for your relief can be made retrospectively, giving rise to a repayment of overpaid business rates.
The business rates calculation
So how do you calculate business rates, we hear you ask? Well, they are worked out by applying the relevant multiplier (set in terms of pence in the pound) to the rateable value of your property. In addition, we know that the most recent valuation took place in 2015, and is used as the basis for all business rate calculations from April 2017 onwards. And you can check the rateable value of your business property online. You should note that the rateable value is based on the annual rent that could be expected to be received if the property were let on a commercial basis.
To add to that, we also know that in England, there is a standard multiplier and a small business multiplier. The standard multiplier, set at 50.4p for 2019/20, applies to business properties with a rateable value of £51,000 or more. The small business multiplier, applying to business properties with a rateable value below £51,000, is set at 49.1p for 2019/20. The multipliers for the City of London are higher – the standard multiplier is 51p and the small business multiplier is 49.7p. In Wales, there is a single multiplier of 52.6. So, for example, the annual business rates for a property with a rateable value of £20,000 outside London would be £9,820 – found by applying the small business multiplier of 49.1p to the rateable value of £20,000.
Small business rate relief
Furthermore, if your business is in England, small business rate relief is available where your business has only one property and the rateable value of that property is less than £15,000. Full relief is available where the rateable value is less than £12,000 – business with a single property which has a rateable value of less than £12,000 pay no business rates. And taper relief is available where the rateable value is between £12,001 and £15,000. The taper reduces the amount of relief from 100% for properties with a rateable value of £12,000 to 0% for properties with a rateable value of £15,000. The percentage reduction is found by applying the following formula: (£15,000 – x) / (£15,000 – £12,000) x 100%.
Small business rate relief example
Let’s say you are a small business operating from offices with a rateable value of £12,750, and your business is based in Norfolk. The business rates applicable to you, before deducting small business relief, are found by applying the small business multiplier of 49.1p to the rateable value of £12,750, giving you a figure of £6260.25. Taper relief is available. The percentage reduction is 75%. Thus, applying small business relief reduces your business rates by 75% to £1,565.06.
Claim the small business rate relief
Unless you make a claim, your business will not benefit from the relief. And your claim must be made to the relevant council, either in writing or online. Once you’ve made your claim, it will be applied to future years. What’s more, claims can be backdated, so check bills since the start of the current system in April 2017. On top of that, you may not realise this but, small business rates relief is not given automatically, and you may be due sizeable repayments. Unless you make that claim, you will continue to overpay. So take action today!
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of business rates, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Why File Your Tax Return By 30 December?
File your tax return by 30 December
Your 2018/19 self-assessment tax return must be filed online by midnight on 31 January 2020, if you want to avoid a filing penalty. A later deadline applies where you were not given a notice to file your return until after 31 October 2019 – in this case, the deadline is three months after the date of the notice. However, it can be beneficial to file your tax return by 30 December 2019, rather than waiting until 31 January 2020.
Why file your tax return by 30 December?
Filing your 2018/19 tax return online by 30 December 2019, may mean that any underpayment can be collected, through an adjustment to your tax code. This may be preferable to having to pay it in one instalment by 31 January 2020. Instead collection of the underpayment is spread throughout the following tax year. The option to have tax collected through your tax code is available where:
- Your return is filed online by 30 December 2019, or a paper return was filed by 31 October 2019;
- The underpayment is less than £3,000; and
- You, as a taxpayer, already pay tax under PAYE, for example, because you are an employee or because you receive a company pension.
However, HMRC will not collect an underpayment via an adjustment to a tax code if you, as a taxpayer, do not have sufficient PAYE income to allow for the repayment, or if as a result of coding out the underpayment, you, as a taxpayer, would pay more than 50% of your PAYE income in tax or would pay more than twice as much tax, on your PAYE income as you would do otherwise.
No need to tell HMRC you want an underpayment coded out
Where your tax return is submitted online by 30 December deadline, and the conditions for coding out an underpayment are met, HMRC will automatically adjust your tax code for 2020/21, to collect the underpayment for 2018/19. If you have just been organised in filing your tax return, ahead of time, and do not want an underpayment coded out, you must let HMRC know, by ticking the relevant box on your tax return.
How does the adjustment work?
The underpayment is collected by grossing it up, at your marginal tax rate, and treating it as a deduction from your personal allowances, to which you are entitled. For example, if an employee has a tax underpayment of £300 for 2018/19 relating to, say, dividend income and the taxpayer pays tax at 40%, the relevant adjustment to the tax code is £750 (£750 @ 40% = £300). Assuming the taxpayer has a personal allowance of £12,500 for 2020/21, and no other adjustments to their code, their allowances will be reduced by £750 to £11,750, giving rise to a tax code for 2020/21 of 1175L. The underpayment is collected in equal instalments, over the course of the tax year. Where the employee is paid monthly, the £300 underpayment would be collected in 12 instalments of £25. This may be much less painful than paying it all in one hit.
Action point
Consider whether it would be beneficial to file your tax return by midnight on 30 December 2019, to enable a tax underpayment to be deducted from your pay.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of your tax return, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
5 Things You Should Know About Thought Leadership
5 Things You Should Know About Thought Leadership
1. What Is Thought Leadership?
Thought leadership can be a very effective marketing tool for you, but successfully implementing your thought leadership strategy, is a lot harder that it sounds. As such, a good thought leader is someone who, based on their expertise and perspective of an industry, offers unique guidance, inspires innovation and influences others. And their views on a particular subject are taken to be authoritative.
2. How do you become a professional who applies thought leadership?
To become recognised as a thought leader by your peers, you’re going to have to write, speak, produce content such as video, be interviewed and produce original ideas about the topic you want to specialise in. You need to be passionate about your topic or you are unlikely to succeed in becoming a thought leader in that area. Focus on a niche area – if your topic is too broad or is already covered by lots of other industry experts, you risk getting lost in all the noise.
3. What should be your thought leadership angle?
Once you’ve identified your topic, consider the angle. Are you going to challenge conventional thinking? Have you got an original idea that helps you stand out? Go beyond just collecting and disseminating existing information into usable chunks for your audience. Look at your target market – what challenges do they face in their business or personal lives. Perhaps there is a gap where your firm’s product or service can help? Consider how you could go about educating your target audience in a way that adds value for them. Social media makes it easier than ever to disseminate thought leadership material. Start by producing a blog on LinkedIn. Set yourself a target to update your LinkedIn blog once a month, focussing on expressing and articulating your thoughts on your chosen topic in way that is relevant to your target audience.
4. Thought Leadership research?
Carry out research which relates to your topic, you could perhaps create your own online survey. Use that research to substantiate your point of view. Draw on your own customer data and use this to develop your thinking and report on your results. Over time, you will start to gain some recognition among your target audience. As your reputation builds, expand your range of communication channels to include articles for industry magazines, e-news updates, newsletters and posts on your company website.
5. Thought Leadership speaker!
Make yourself available to speak at industry conferences and be open to responding to enquiries from the media and trade press. The more you put yourself, your content and your views out there, the more your reputation will grow and develop. Make a point of sitting down at least once a year to create, review and update a rolling thought leadership plan. Consider what it is you’re trying to achieve and set out your objectives for your thought leadership to support your overall goals.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Off Payroll Working Rules: This Is What You Need To Know
Off-Payroll Working Rules: Are You Ready?
Whether you are a large or medium-sized organisation, paying workers via personal service companies or agencies, you will need to operate new off-payroll working procedures from 6 April 2020. The new rules will apply to partnerships, LLPs and larger charities, as well as limited companies. If you are classed as “small” under the Companies Act criteria, you will fall outside the new rules. Either way, from 6 April 2020, you will be required to determine whether or not your worker would be categorised as an employee of your organisation, if directly engaged. Your determination will need to be communicated to the agency supplying your worker, so that income tax and national insurance is deducted from any payments. With that in mind, you should use the Check Employment Status for Tax (CEST) software on the HMRC website to carry out that determination. You should also give a copy of your determination directly to your worker.
Off-Payroll Working : What If Your Worker Disagrees?
Where your worker disagrees with their employment status determination, they should contact you as the end user organisation straight away, setting out their grounds for their disagreement. You must then provide a response within 45 days of receiving the disagreement. During this time you (as the end user organisation) should continue to apply the rules in line with your original determination.
Radio Presenter Wins IR 35 Personal Service Company Case in Off-Payroll Working Issue
The extension of the “off-payroll” working rules to the private sector, mentioned above is planned for April 2020. But in the meantime, tax tribunal decisions are still being decided against HMRC. In a recent case involving a radio presenter working for TalkSport, it was decided that the presenter would not have been an employee, if directly engaged. A key factor, was that the level of control over the presenter, fell far below the sufficient degree required to demonstrate a contract of service. The accountancy bodies have been lobbying the government to take the judges’decision in this, and the recent case involving Lorraine Kelly, into consideration, when they update their CEST software, used to determine employment status.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of off-payroll working rules & IR35, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Do You Have Your EORI Number, In Case Of No Deal Brexit?
Economic Operator Registration Identification
As a UK business, you will need an ‘Economic Operator Registration Identification’, EORI number, to trade with the EU, after Brexit.
If There is A ‘No-Deal’ Brexit
In the event that the UK leaves the EU on 31 October 2019 without a deal, your business will need an EORI number, that starts with GB, to move goods in and out of the UK. An Economic Operator Registration Identification consists of a 12-digit number following the GB prefix. It includes your VAT registration number where your business is VAT registered.
How Do You Get An EORI number?
Depending on whether your business is registered for VAT, your number may be issued automatically or, where this is not the case, your business can apply for one.
When is your EORI number issued automatically?
In August and early September, HMRC sent out Economic Operator Registration Identification numbers automatically to businesses that are registered for VAT and which had not previously applied for an EORI number. If you are VAT registered, check that you have received your number.
How do you apply?
Where your business is not registered for VAT, and it is likely that you will want to move goods in and out of the UK post Brexit, you will need to apply for an EORI number. You can apply for it online. The process is straightforward and should take you less than 10 minutes, with your number being sent out within 5 working days. Unless, HMRC need to undertake additional security checks.
Do You Trade with Ireland?
An EORI number is not needed if goods are only moved between Northern Ireland and Ireland. However, you are required to have one for imports and exports that move directly between Ireland and Great Britain, without going through Northern Ireland.
EU EORI Numbers
If you want to trade with the EU post-Brexit, you will need an Economic Operator Registration Identification number, starting with the country code of the EU country that you wish to trade with. This should be obtained from the Customs authority of the EU country that your business will first trade with, post Brexit.
Stay Up To Date
Brexit is something of a moveable first. The Government will update the guidance to reflect any changes. Check the Gov.uk website and register for email alerts.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Is Work Efficiency In The Power Of Saying “No”?
When it comes to work efficiency, it’s important to be able to say “no” at work without making enemies.
It’s a simple word, but one that far too many of us have trouble saying. Perhaps it’s because you’ve become successful by saying yes to every business opportunity, every request that has come your way, in order to grow your business or develop your career. However, as you progress through your career, you become more successful and new opportunities will inevitably emerge. More people and more projects will vie for your time. For the sake of your work efficiency and productivity, you cannot do everything and this is when it may be necessary to start saying no to things.
Focusing And Work Efficiency Is About Saying No
More than ever, we’re all working harder with less resources, which means that we can often take on too much work. Sometimes saying “yes” to another project when you’re already at full capacity, effectively means that you’re saying no to completing the tasks that you already have to do. Steve Jobs famously said that “focusing is about saying no”. Focusing on what matters, and work efficiency, not just what’s in front of you, is the key to driving the success of your business.
What About Objectives?
Just like most teams in most businesses, you set out your annual objectives at the start of the year, right? And your objectives should align with your overall business goals. And your individual projects and day-to-day tasks should also align with these objectives. So, if a new project or request doesn’t align with your team’s objectives, then it might be best to push back and say “no” to help your work efficiency.
How To Say No
If a senior colleague asks you to do something, a flat “no” may not be an appropriate response. Instead it may be more suitable to say that you don’t have any capacity at the moment, outlining the key projects you’re currently working on. If the new request is to be prioritised, your colleague may suggest that one of your other projects is put on the back burner.
Say No and Manage Your Projects and Time More Effectively
When it comes to managing your time, your career, and your business, over-committing yourself isn’t a sign of success. If you’re struggling to say no, think back to all the times when you agreed to take on something new, and that in turn distracted you from your own priorities. How much time, energy, and stress you might have been saved, if you’d just been able to say no? If you don’t have time to take on more work, and you need to watch your work efficiency, next time simply say, “No, I can’t commit to that due to other priorities.” You don’t need to apologise or over-explain. Just be polite and move on.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Company Car Tax Break – Could you benefit?
Company Car Tax Break: Are you eligible?
You may be aware that the UK government recently announced its intention to exempt newly registered zero-emission company cars from a benefit in kind tax charge, for one year, from April 2020. In effect, this exemption underlines the key role, the company car has to play, in helping the government achieve its zero emissions ambitions. In addition, this company car tax break move is also intended to ensure that company car tax rates are not hiked, as a result of the introduction of the Worldwide Harmonised Light Vehicles Test Procedure (WLTP).
Company Car Tax Break and WLTP – What’s It All About?
With that said, effective April 2020, WLTP will introduce a new CO2 emission-linked benefit in kind calculator to be applied to all new cars. And so, it has been developed using real driving data gathered from around the world. Consequently, the aim is to introduce a universal global test cycle across different world regions. In this way, pollutants, CO2 emissions and fuel consumption values can be compared. This ensuring a level playing field. WLTP is divided into four different average speeds: low, medium, high and extra high. Each speed has a variety of driving phases. As a result, it is considered more representative of everyday driving. Intentionally, the new bands have been made more sensitive to changes in CO2 emissions as a way to nudge companies and their employees to opt for lower emission vehicles in the future.
Why the Change?
Well, the new measure is intended to reduce carbon dioxide (CO2) emissions by encouraging a move towards lower emission vehicles. Whilst we welcome this ambition, the Treasury has acknowledged that the WLTP measure will have significant impact on company car users. Similarly, this was also acknowledged in a recent Treasury document which stated: “Whilst the government’s view is that vehicle tax rates should more closely reflect the environmental impacts of driving, it is important that the transition to WLTP is managed.”
Carefully Managed
So you know, in response to this, and following a period of consultation, the government announced that appropriate percentages of new zero emission models will be as follows:
- Nil in 2020-21;
- 1% in 2021-22;
- 2% rate in 2022-23.
By comparison, the appropriate percentage for most other cars registered from 6 April 2020 will be reduced by the following appropriate percentages:
- 2% in 2020-21;
- 1% in 2021-22;
- 1% in 2021-22;
- 1% in 2022-23.
A small number of company cars with the greatest CO2 emissions (170g/km and over) will continue to attract the maximum appropriate percentage of 37%. The Treasury has acknowledged: “Due to the range of WLTP impacts on CO2 emissions, this approach means some [new] conventionally fuelled cars will be liable to pay an equal amount of company car tax as of today, whilst others will pay more, and a small number of models could pay less.” The government has promised that it will set company car tax rates in advance of the tax year affected by the proposed change. This has normally been the position in recent years. In addition, it will continue to use the current NEDC-based measure for road tax (graduated vehicle excise duty, VED) for 2020/21. However, a public consultation is planned for later this year to establish the best approach to changing the wider road tax system, but avoid hikes in VED for the majority of car users.
Legislation & Company Car Tax
Legislation is to be introduced in the next Finance Bill to amend the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) in order to reflect the changes to the appropriate percentage(s) that will be applied to the list price of the car.
In Summary
So you are aware:
- A zero rate of BIK tax for ‘zero emission vehicles’ from next April for tax year 2020-21, rising to 1% in 2021-22 and 2% in 2022-23;
- A 2% reduction in scale charge from next April for cars registered after 6 April 2020, with a 1% discount in 2021-22;
- A freeze on existing 2020-21 BIK rates for the following two years.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of these payment & tax rules and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Is Off-Payroll Working A Ticking Timebomb?
Private Sector & Off-Payroll Working
While you might have been entertained over the last two years by the IR35-related tribunals involving celebrities such as Lorraine Kelly and Christa Ackroyd, a more significant issue closer to home has been looming large on the tax landscape. HMRC is planning to roll out their public sector version of ‘off-payroll’ working to the private sector. Although this might risk being blown off course by the ongoing Brexit uncertainty, all medium and large private sector businesses employing off-payroll workers (contractors and freelancers) will feel the impact of the new off-payroll working rules when they become mandatory in April 2020. As a signal-of-intent, HMRC published a consultation document on 5 March 2019 aimed at seeking views on how the off-payroll working rules will work. This period of consultation concluded on 28 May 2019. Importantly, it proposed some changes to the existing public sector legislation and promised that any resulting amendments would be reverse-engineered into the 2017 public sector legislation.
Relief for Small Businesses
One piece of good news in response to feedback from AAT and other relevant parties on off-payroll working is that HMRC has excepted operators of ‘small businesses’ from any requirement to implement the proposed rules. HMRC has indicated that the definition of a small business will be in line with the Companies Act definition:
- Annual turnover: less than £10.2m
- Balance sheet total: less than £5.1m
- Number of employees: less than 50
While the definition may be apparent for companies, the definition of ‘small business’ for un-incorporated entities still needs to be adequately defined. Moreover, although the wording in the recent consultation document concerning the core deciding-components appears to be the same, what remains unclear is just how they are to be applied.
You Must Decide
According to the consultation document, it will be your responsibility (the ‘engaging party’) to determine whether or not a contractor is an IR35 deemed worker, based on the terms of the engagement. You will also be expected to set out the reasons for reaching a particular decision, as well as working out the practicalities, how you will be required to share this information with other parties within the supply chain and even directly with the contractor.
Off-Payroll Working and A New Improved CEST
To help you determine a worker’s employment status, HMRC is to revamp its much-criticised Check Employment Status Tool (CEST) tool. As part of the revision exercise, it has promised to consult with interested parties to improve the way that CEST currently works. It will be interesting to see how the department will rise to the challenge of addressing the full range of different concerns about the existing operational shortfalls levelled at CEST. One key area of interest is the Mutuality of Obligation (MOO), and the department’s ability to improve this will be seen by many as a critical test.
Who Is Responsible?
As can be expected, any party in a lengthy supply chain that fails to meet its obligations under the proposed legislation will, at least in the first instance, be held liable by HMRC for any monies due. However, in a move intended to protect the public purpose, HMRC proposes that any liability will transfer back up the supply chain where HMRC finds itself unable to recover the monies due. This may ultimately fall back on you in some instances. In HMRC’s view, this, therefore, requires that the right incentives are in place so that all parties in the supply chain not only comply but are also ensuring the compliance of others further down the line.
Right of Appeal
HMRC is also promising to introduce a statutory appeal process. The absence of any such process in the 2017 public sector legislation left many workers exposed to inappropriate decisions and even the subject of a blanket employment status decision without a right of appeal. This was seen as a severe oversight in AAT’s opinion.
What Action to Take
You should take steps to ensure that you’re aware of this new change and ask yourself how you might be affected. As HMRC has only recently closed its consultation response window, the department will still be sifting through a deluge of response, and the final legislation still resembles shifting sands. Consequently, we are issuing a health warning to the effect that nothing is certain until the underpinning legislation has been passed. Having acknowledged that our advice is built on nothing more robust than the legislative equivalent of these shifting sands, we are outlining the fundaments of what is currently proposed:
- From 6 April 2020, medium and large businesses will need to decide whether the rules apply to an engagement with individuals who work through their own company.
- Where it is determined that the rules do apply, the business, agency, or third party paying the worker’s company will need to deduct income tax and employee NICs and pay employer NICs.
- HMRC has promised to revamp its CEST tool to help businesses determine whether the off-payroll working rules apply.
Finally
We’ll be keeping a close eye on this challenging IR35 issue and closely monitoring future developments, and if there are any updates, we’ll let you know.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of these payment & tax rules and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
What You Should Know About Commercial Vehicles
When it comes to commercial vehicles, when is a van not a van?
If you use commercial vehicles, you’d want to urge HMRC to provide clarity and consistency on the tax treatment of commercial vehicles such as VW Kombi Vans marketed as goods vehicles. You may or may not be aware of a ruling in an important tax tribunal case involving “vans” provided to employees of Coca Cola. The court has upheld the HMRC view that certain vehicles are not goods vehicles, but motor cars for benefit in kind purposes. Consequently, the income tax and national insurance payable by you as an employee and you as an employer, is significantly higher than if the vehicles had been classified as goods vehicles.
Certain vans / commercial vehicles are exempt from income tax
In addition, there is no assessable benefit in kind, whether you use a van only for business journeys or for private use. Examples would include making a slight detour to pick up a newspaper on the way to work, or taking an old mattress or other rubbish to the tip once or twice a year.
Income tax definition of “Goods Vehicle”
So how does the income tax legislation define a “goods vehicle”? It is defined as “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description…” Although the VW Kombi vans failed this test, the Tribunal held that Vauxhall Vivaro vans provided by Coca Cola did fall within the definition of goods vehicles! We understand that this case is due to be heard at the Court of Appeal. This will undoubtedly provide legal precedent over the tax treatment. Until then it gives you, as an employer, a dilemma as to how to report such vehicles on employees’ form P11d and also whether the position in earlier years should be rectified. You should note that the tribunal had to seek evidence from automotive industry experts, so how are you, as an employer, expected to interpret the rules?! What is also particularly confusing, and thus difficult for your business to deal with, is that the benefit in kind rules are not the same as the rules for capital allowances and VAT.
Capital allowances definition of “Motor Car”
The definition of a “motor car” for plant and machinery allowances purposes is a mechanically propelled vehicle except a vehicle:
- Constructed in such a way that it is primarily suited for transporting goods of any sort, or
2. Of a type which is not commonly used as a private vehicle and is not suitable for use as a private vehicle.
VAT definition of “Motor Car”
For VAT purposes, the definition of a motor car has been amended several times over the years. The current definition states: “Motor car” means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:
a) Is constructed or adapted solely or mainly for the carriage of passengers; or
b) Has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows;
There is a number of exceptions to this rule, notably vehicles constructed to carry a payload of one tonne or more. A common example would be a “double cab” pick-up such as a Mitsubishi L200 or Toyota Hilux.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of these payment & tax rules and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
How To Organise Your Tasks More Effectively
Your Tasks Organised And Simplified
Tasks Balancing Act
The daily grind, for most of us, can feel like a constant juggling act. You attempt to balance work, household chores, bills, family – and hopefully some leisure in between if there’s any time leftover. In fact, trying to find time for things you enjoy – or for projects to improve yourself – can often feel impossible. And you could feel it’s incredibly frustrating to not move forward with things you truly value. Besides, It’s just as frustrating for you to get stuck under a tower of tasks that never seems to get any smaller…
Tasks Stats
Did you know that an online poll by the Mental Health Foundation found that “in the past year, 74% of people have felt so stressed they have been overwhelmed or unable to cope”. In addition, a report by ACAS, the workplace experts, had similar findings. You might be surprised to further know that 66% of poll respondents, had felt stressed or anxious about work over the past year – and that 35% struggled to balance home and work lives. This, in turn, encouraged us to look into a helpful and less disheartening way to improve task organisation.
Tasks Apps and Tools
One example of this is for you, to embrace online apps and tools available to you. As these can support your progress, and break an expanding task list into manageable segments. What this then does, is to prevent you from falling into the pattern of trying to complete multiple tasks simultaneously, while considering other items that may need to be started soon. This is a common mistake that can lead you to feel overwhelmed. As your effort to move forward becomes mentally taxing and prevents your progress. So, we encourage you to condense the mass of tasks you may currently be working on, into a more manageable and visually pleasing format. And to help you do that, you could use scheduling style techniques, such as Personal Kanban, and post-it note-style tools, like Trello boards. Both strategies encourage you to break down your to-do list into two main areas – which are followed by a “done” or “complete” column.
To Do / Options / Ideas
Right, so you should use this column (or two columns if you would like to separate your ideas from the general to-do list) for everything you currently have pending. Trello will allow you to organise this further, with handy coloured labels and due dates, etc. If you actually view this list alone, you can unfortunately slip back into your habit of trying to tackle as many tasks as possible, and struggle to complete tasks at a standard you’re happy with.
Doing / In progress
Carrying on, the “In Progress” list, according to the Personal Kanban, should be restricted to three tasks. Effectively allowing you to clearly focus on your tasks, and also giving you the ability to complete them, without reaching a mental block. You should resist the temptation to add any more than three, or to add tasks that should be broken down into multiple tasks. For example, if your task is to start a new business or write a new business strategy, it will obstruct your progress instantly. These need to be broken down further.
Complete / Done
Although this column may appear self-explanatory, not all your tasks are indefinitely complete. For example, self-assessment is an annual business task you complete on a yearly basis. Once you have completed it, you can then add a due date, and, once relevant, you can move the card back to the To Do column. For your other completed tasks, it’s simply rewarding to see them move over to the completed column. And enjoy the sense of satisfaction as the list grows!
We hope this simple concept can help you manage your planning and task lists.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Could You Claim Small Business Rate Relief?
Small business rate relief & business rates
Did you know that business rates are payable on non-domestic properties such as offices, shops and factories. And that the rates are worked out on the rateable value of the property, but there are various reliefs available including small business rate relief. You should also know that the relief is not given automatically and that, as a small business, you could be overpaying, not realising you are entitled to the relief. However, all is not lost; claims for your relief can be made retrospectively, giving rise to a repayment of overpaid business rates.
The business rates calculation
So how do you calculate business rates, we hear you ask? Well, they are worked out by applying the relevant multiplier (set in terms of pence in the pound) to the rateable value of your property. In addition, we know that the most recent valuation took place in 2015, and is used as the basis for all business rate calculations from April 2017 onwards. And you can check the rateable value of your business property online. You should note that the rateable value is based on the annual rent that could be expected to be received if the property were let on a commercial basis.
To add to that, we also know that in England, there is a standard multiplier and a small business multiplier. The standard multiplier, set at 50.4p for 2019/20, applies to business properties with a rateable value of £51,000 or more. The small business multiplier, applying to business properties with a rateable value below £51,000, is set at 49.1p for 2019/20. The multipliers for the City of London are higher – the standard multiplier is 51p and the small business multiplier is 49.7p. In Wales, there is a single multiplier of 52.6. So, for example, the annual business rates for a property with a rateable value of £20,000 outside London would be £9,820 – found by applying the small business multiplier of 49.1p to the rateable value of £20,000.
Small business rate relief
Furthermore, if your business is in England, small business rate relief is available where your business has only one property and the rateable value of that property is less than £15,000. Full relief is available where the rateable value is less than £12,000 – business with a single property which has a rateable value of less than £12,000 pay no business rates. And taper relief is available where the rateable value is between £12,001 and £15,000. The taper reduces the amount of relief from 100% for properties with a rateable value of £12,000 to 0% for properties with a rateable value of £15,000. The percentage reduction is found by applying the following formula: (£15,000 – x) / (£15,000 – £12,000) x 100%.
Small business rate relief example
Let’s say you are a small business operating from offices with a rateable value of £12,750, and your business is based in Norfolk. The business rates applicable to you, before deducting small business relief, are found by applying the small business multiplier of 49.1p to the rateable value of £12,750, giving you a figure of £6260.25. Taper relief is available. The percentage reduction is 75%. Thus, applying small business relief reduces your business rates by 75% to £1,565.06.
Claim the small business rate relief
Unless you make a claim, your business will not benefit from the relief. And your claim must be made to the relevant council, either in writing or online. Once you’ve made your claim, it will be applied to future years. What’s more, claims can be backdated, so check bills since the start of the current system in April 2017. On top of that, you may not realise this but, small business rates relief is not given automatically, and you may be due sizeable repayments. Unless you make that claim, you will continue to overpay. So take action today!
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of business rates, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Why File Your Tax Return By 30 December?
File your tax return by 30 December
Your 2018/19 self-assessment tax return must be filed online by midnight on 31 January 2020, if you want to avoid a filing penalty. A later deadline applies where you were not given a notice to file your return until after 31 October 2019 – in this case, the deadline is three months after the date of the notice. However, it can be beneficial to file your tax return by 30 December 2019, rather than waiting until 31 January 2020.
Why file your tax return by 30 December?
Filing your 2018/19 tax return online by 30 December 2019, may mean that any underpayment can be collected, through an adjustment to your tax code. This may be preferable to having to pay it in one instalment by 31 January 2020. Instead collection of the underpayment is spread throughout the following tax year. The option to have tax collected through your tax code is available where:
- Your return is filed online by 30 December 2019, or a paper return was filed by 31 October 2019;
- The underpayment is less than £3,000; and
- You, as a taxpayer, already pay tax under PAYE, for example, because you are an employee or because you receive a company pension.
However, HMRC will not collect an underpayment via an adjustment to a tax code if you, as a taxpayer, do not have sufficient PAYE income to allow for the repayment, or if as a result of coding out the underpayment, you, as a taxpayer, would pay more than 50% of your PAYE income in tax or would pay more than twice as much tax, on your PAYE income as you would do otherwise.
No need to tell HMRC you want an underpayment coded out
Where your tax return is submitted online by 30 December deadline, and the conditions for coding out an underpayment are met, HMRC will automatically adjust your tax code for 2020/21, to collect the underpayment for 2018/19. If you have just been organised in filing your tax return, ahead of time, and do not want an underpayment coded out, you must let HMRC know, by ticking the relevant box on your tax return.
How does the adjustment work?
The underpayment is collected by grossing it up, at your marginal tax rate, and treating it as a deduction from your personal allowances, to which you are entitled. For example, if an employee has a tax underpayment of £300 for 2018/19 relating to, say, dividend income and the taxpayer pays tax at 40%, the relevant adjustment to the tax code is £750 (£750 @ 40% = £300). Assuming the taxpayer has a personal allowance of £12,500 for 2020/21, and no other adjustments to their code, their allowances will be reduced by £750 to £11,750, giving rise to a tax code for 2020/21 of 1175L. The underpayment is collected in equal instalments, over the course of the tax year. Where the employee is paid monthly, the £300 underpayment would be collected in 12 instalments of £25. This may be much less painful than paying it all in one hit.
Action point
Consider whether it would be beneficial to file your tax return by midnight on 30 December 2019, to enable a tax underpayment to be deducted from your pay.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of your tax return, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
5 Things You Should Know About Thought Leadership
5 Things You Should Know About Thought Leadership
1. What Is Thought Leadership?
Thought leadership can be a very effective marketing tool for you, but successfully implementing your thought leadership strategy, is a lot harder that it sounds. As such, a good thought leader is someone who, based on their expertise and perspective of an industry, offers unique guidance, inspires innovation and influences others. And their views on a particular subject are taken to be authoritative.
2. How do you become a professional who applies thought leadership?
To become recognised as a thought leader by your peers, you’re going to have to write, speak, produce content such as video, be interviewed and produce original ideas about the topic you want to specialise in. You need to be passionate about your topic or you are unlikely to succeed in becoming a thought leader in that area. Focus on a niche area – if your topic is too broad or is already covered by lots of other industry experts, you risk getting lost in all the noise.
3. What should be your thought leadership angle?
Once you’ve identified your topic, consider the angle. Are you going to challenge conventional thinking? Have you got an original idea that helps you stand out? Go beyond just collecting and disseminating existing information into usable chunks for your audience. Look at your target market – what challenges do they face in their business or personal lives. Perhaps there is a gap where your firm’s product or service can help? Consider how you could go about educating your target audience in a way that adds value for them. Social media makes it easier than ever to disseminate thought leadership material. Start by producing a blog on LinkedIn. Set yourself a target to update your LinkedIn blog once a month, focussing on expressing and articulating your thoughts on your chosen topic in way that is relevant to your target audience.
4. Thought Leadership research?
Carry out research which relates to your topic, you could perhaps create your own online survey. Use that research to substantiate your point of view. Draw on your own customer data and use this to develop your thinking and report on your results. Over time, you will start to gain some recognition among your target audience. As your reputation builds, expand your range of communication channels to include articles for industry magazines, e-news updates, newsletters and posts on your company website.
5. Thought Leadership speaker!
Make yourself available to speak at industry conferences and be open to responding to enquiries from the media and trade press. The more you put yourself, your content and your views out there, the more your reputation will grow and develop. Make a point of sitting down at least once a year to create, review and update a rolling thought leadership plan. Consider what it is you’re trying to achieve and set out your objectives for your thought leadership to support your overall goals.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Off Payroll Working Rules: This Is What You Need To Know
Off-Payroll Working Rules: Are You Ready?
Whether you are a large or medium-sized organisation, paying workers via personal service companies or agencies, you will need to operate new off-payroll working procedures from 6 April 2020. The new rules will apply to partnerships, LLPs and larger charities, as well as limited companies. If you are classed as “small” under the Companies Act criteria, you will fall outside the new rules. Either way, from 6 April 2020, you will be required to determine whether or not your worker would be categorised as an employee of your organisation, if directly engaged. Your determination will need to be communicated to the agency supplying your worker, so that income tax and national insurance is deducted from any payments. With that in mind, you should use the Check Employment Status for Tax (CEST) software on the HMRC website to carry out that determination. You should also give a copy of your determination directly to your worker.
Off-Payroll Working : What If Your Worker Disagrees?
Where your worker disagrees with their employment status determination, they should contact you as the end user organisation straight away, setting out their grounds for their disagreement. You must then provide a response within 45 days of receiving the disagreement. During this time you (as the end user organisation) should continue to apply the rules in line with your original determination.
Radio Presenter Wins IR 35 Personal Service Company Case in Off-Payroll Working Issue
The extension of the “off-payroll” working rules to the private sector, mentioned above is planned for April 2020. But in the meantime, tax tribunal decisions are still being decided against HMRC. In a recent case involving a radio presenter working for TalkSport, it was decided that the presenter would not have been an employee, if directly engaged. A key factor, was that the level of control over the presenter, fell far below the sufficient degree required to demonstrate a contract of service. The accountancy bodies have been lobbying the government to take the judges’decision in this, and the recent case involving Lorraine Kelly, into consideration, when they update their CEST software, used to determine employment status.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of off-payroll working rules & IR35, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Do You Have Your EORI Number, In Case Of No Deal Brexit?
Economic Operator Registration Identification
As a UK business, you will need an ‘Economic Operator Registration Identification’, EORI number, to trade with the EU, after Brexit.
If There is A ‘No-Deal’ Brexit
In the event that the UK leaves the EU on 31 October 2019 without a deal, your business will need an EORI number, that starts with GB, to move goods in and out of the UK. An Economic Operator Registration Identification consists of a 12-digit number following the GB prefix. It includes your VAT registration number where your business is VAT registered.
How Do You Get An EORI number?
Depending on whether your business is registered for VAT, your number may be issued automatically or, where this is not the case, your business can apply for one.
When is your EORI number issued automatically?
In August and early September, HMRC sent out Economic Operator Registration Identification numbers automatically to businesses that are registered for VAT and which had not previously applied for an EORI number. If you are VAT registered, check that you have received your number.
How do you apply?
Where your business is not registered for VAT, and it is likely that you will want to move goods in and out of the UK post Brexit, you will need to apply for an EORI number. You can apply for it online. The process is straightforward and should take you less than 10 minutes, with your number being sent out within 5 working days. Unless, HMRC need to undertake additional security checks.
Do You Trade with Ireland?
An EORI number is not needed if goods are only moved between Northern Ireland and Ireland. However, you are required to have one for imports and exports that move directly between Ireland and Great Britain, without going through Northern Ireland.
EU EORI Numbers
If you want to trade with the EU post-Brexit, you will need an Economic Operator Registration Identification number, starting with the country code of the EU country that you wish to trade with. This should be obtained from the Customs authority of the EU country that your business will first trade with, post Brexit.
Stay Up To Date
Brexit is something of a moveable first. The Government will update the guidance to reflect any changes. Check the Gov.uk website and register for email alerts.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Is Work Efficiency In The Power Of Saying “No”?
When it comes to work efficiency, it’s important to be able to say “no” at work without making enemies.
It’s a simple word, but one that far too many of us have trouble saying. Perhaps it’s because you’ve become successful by saying yes to every business opportunity, every request that has come your way, in order to grow your business or develop your career. However, as you progress through your career, you become more successful and new opportunities will inevitably emerge. More people and more projects will vie for your time. For the sake of your work efficiency and productivity, you cannot do everything and this is when it may be necessary to start saying no to things.
Focusing And Work Efficiency Is About Saying No
More than ever, we’re all working harder with less resources, which means that we can often take on too much work. Sometimes saying “yes” to another project when you’re already at full capacity, effectively means that you’re saying no to completing the tasks that you already have to do. Steve Jobs famously said that “focusing is about saying no”. Focusing on what matters, and work efficiency, not just what’s in front of you, is the key to driving the success of your business.
What About Objectives?
Just like most teams in most businesses, you set out your annual objectives at the start of the year, right? And your objectives should align with your overall business goals. And your individual projects and day-to-day tasks should also align with these objectives. So, if a new project or request doesn’t align with your team’s objectives, then it might be best to push back and say “no” to help your work efficiency.
How To Say No
If a senior colleague asks you to do something, a flat “no” may not be an appropriate response. Instead it may be more suitable to say that you don’t have any capacity at the moment, outlining the key projects you’re currently working on. If the new request is to be prioritised, your colleague may suggest that one of your other projects is put on the back burner.
Say No and Manage Your Projects and Time More Effectively
When it comes to managing your time, your career, and your business, over-committing yourself isn’t a sign of success. If you’re struggling to say no, think back to all the times when you agreed to take on something new, and that in turn distracted you from your own priorities. How much time, energy, and stress you might have been saved, if you’d just been able to say no? If you don’t have time to take on more work, and you need to watch your work efficiency, next time simply say, “No, I can’t commit to that due to other priorities.” You don’t need to apologise or over-explain. Just be polite and move on.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Company Car Tax Break – Could you benefit?
Company Car Tax Break: Are you eligible?
You may be aware that the UK government recently announced its intention to exempt newly registered zero-emission company cars from a benefit in kind tax charge, for one year, from April 2020. In effect, this exemption underlines the key role, the company car has to play, in helping the government achieve its zero emissions ambitions. In addition, this company car tax break move is also intended to ensure that company car tax rates are not hiked, as a result of the introduction of the Worldwide Harmonised Light Vehicles Test Procedure (WLTP).
Company Car Tax Break and WLTP – What’s It All About?
With that said, effective April 2020, WLTP will introduce a new CO2 emission-linked benefit in kind calculator to be applied to all new cars. And so, it has been developed using real driving data gathered from around the world. Consequently, the aim is to introduce a universal global test cycle across different world regions. In this way, pollutants, CO2 emissions and fuel consumption values can be compared. This ensuring a level playing field. WLTP is divided into four different average speeds: low, medium, high and extra high. Each speed has a variety of driving phases. As a result, it is considered more representative of everyday driving. Intentionally, the new bands have been made more sensitive to changes in CO2 emissions as a way to nudge companies and their employees to opt for lower emission vehicles in the future.
Why the Change?
Well, the new measure is intended to reduce carbon dioxide (CO2) emissions by encouraging a move towards lower emission vehicles. Whilst we welcome this ambition, the Treasury has acknowledged that the WLTP measure will have significant impact on company car users. Similarly, this was also acknowledged in a recent Treasury document which stated: “Whilst the government’s view is that vehicle tax rates should more closely reflect the environmental impacts of driving, it is important that the transition to WLTP is managed.”
Carefully Managed
So you know, in response to this, and following a period of consultation, the government announced that appropriate percentages of new zero emission models will be as follows:
- Nil in 2020-21;
- 1% in 2021-22;
- 2% rate in 2022-23.
By comparison, the appropriate percentage for most other cars registered from 6 April 2020 will be reduced by the following appropriate percentages:
- 2% in 2020-21;
- 1% in 2021-22;
- 1% in 2021-22;
- 1% in 2022-23.
A small number of company cars with the greatest CO2 emissions (170g/km and over) will continue to attract the maximum appropriate percentage of 37%. The Treasury has acknowledged: “Due to the range of WLTP impacts on CO2 emissions, this approach means some [new] conventionally fuelled cars will be liable to pay an equal amount of company car tax as of today, whilst others will pay more, and a small number of models could pay less.” The government has promised that it will set company car tax rates in advance of the tax year affected by the proposed change. This has normally been the position in recent years. In addition, it will continue to use the current NEDC-based measure for road tax (graduated vehicle excise duty, VED) for 2020/21. However, a public consultation is planned for later this year to establish the best approach to changing the wider road tax system, but avoid hikes in VED for the majority of car users.
Legislation & Company Car Tax
Legislation is to be introduced in the next Finance Bill to amend the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) in order to reflect the changes to the appropriate percentage(s) that will be applied to the list price of the car.
In Summary
So you are aware:
- A zero rate of BIK tax for ‘zero emission vehicles’ from next April for tax year 2020-21, rising to 1% in 2021-22 and 2% in 2022-23;
- A 2% reduction in scale charge from next April for cars registered after 6 April 2020, with a 1% discount in 2021-22;
- A freeze on existing 2020-21 BIK rates for the following two years.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of these payment & tax rules and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Is Off-Payroll Working A Ticking Timebomb?
Private Sector & Off-Payroll Working
While you might have been entertained over the last two years by the IR35-related tribunals involving celebrities such as Lorraine Kelly and Christa Ackroyd, a more significant issue closer to home has been looming large on the tax landscape. HMRC is planning to roll out their public sector version of ‘off-payroll’ working to the private sector. Although this might risk being blown off course by the ongoing Brexit uncertainty, all medium and large private sector businesses employing off-payroll workers (contractors and freelancers) will feel the impact of the new off-payroll working rules when they become mandatory in April 2020. As a signal-of-intent, HMRC published a consultation document on 5 March 2019 aimed at seeking views on how the off-payroll working rules will work. This period of consultation concluded on 28 May 2019. Importantly, it proposed some changes to the existing public sector legislation and promised that any resulting amendments would be reverse-engineered into the 2017 public sector legislation.
Relief for Small Businesses
One piece of good news in response to feedback from AAT and other relevant parties on off-payroll working is that HMRC has excepted operators of ‘small businesses’ from any requirement to implement the proposed rules. HMRC has indicated that the definition of a small business will be in line with the Companies Act definition:
- Annual turnover: less than £10.2m
- Balance sheet total: less than £5.1m
- Number of employees: less than 50
While the definition may be apparent for companies, the definition of ‘small business’ for un-incorporated entities still needs to be adequately defined. Moreover, although the wording in the recent consultation document concerning the core deciding-components appears to be the same, what remains unclear is just how they are to be applied.
You Must Decide
According to the consultation document, it will be your responsibility (the ‘engaging party’) to determine whether or not a contractor is an IR35 deemed worker, based on the terms of the engagement. You will also be expected to set out the reasons for reaching a particular decision, as well as working out the practicalities, how you will be required to share this information with other parties within the supply chain and even directly with the contractor.
Off-Payroll Working and A New Improved CEST
To help you determine a worker’s employment status, HMRC is to revamp its much-criticised Check Employment Status Tool (CEST) tool. As part of the revision exercise, it has promised to consult with interested parties to improve the way that CEST currently works. It will be interesting to see how the department will rise to the challenge of addressing the full range of different concerns about the existing operational shortfalls levelled at CEST. One key area of interest is the Mutuality of Obligation (MOO), and the department’s ability to improve this will be seen by many as a critical test.
Who Is Responsible?
As can be expected, any party in a lengthy supply chain that fails to meet its obligations under the proposed legislation will, at least in the first instance, be held liable by HMRC for any monies due. However, in a move intended to protect the public purpose, HMRC proposes that any liability will transfer back up the supply chain where HMRC finds itself unable to recover the monies due. This may ultimately fall back on you in some instances. In HMRC’s view, this, therefore, requires that the right incentives are in place so that all parties in the supply chain not only comply but are also ensuring the compliance of others further down the line.
Right of Appeal
HMRC is also promising to introduce a statutory appeal process. The absence of any such process in the 2017 public sector legislation left many workers exposed to inappropriate decisions and even the subject of a blanket employment status decision without a right of appeal. This was seen as a severe oversight in AAT’s opinion.
What Action to Take
You should take steps to ensure that you’re aware of this new change and ask yourself how you might be affected. As HMRC has only recently closed its consultation response window, the department will still be sifting through a deluge of response, and the final legislation still resembles shifting sands. Consequently, we are issuing a health warning to the effect that nothing is certain until the underpinning legislation has been passed. Having acknowledged that our advice is built on nothing more robust than the legislative equivalent of these shifting sands, we are outlining the fundaments of what is currently proposed:
- From 6 April 2020, medium and large businesses will need to decide whether the rules apply to an engagement with individuals who work through their own company.
- Where it is determined that the rules do apply, the business, agency, or third party paying the worker’s company will need to deduct income tax and employee NICs and pay employer NICs.
- HMRC has promised to revamp its CEST tool to help businesses determine whether the off-payroll working rules apply.
Finally
We’ll be keeping a close eye on this challenging IR35 issue and closely monitoring future developments, and if there are any updates, we’ll let you know.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of these payment & tax rules and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
What You Should Know About Commercial Vehicles
When it comes to commercial vehicles, when is a van not a van?
If you use commercial vehicles, you’d want to urge HMRC to provide clarity and consistency on the tax treatment of commercial vehicles such as VW Kombi Vans marketed as goods vehicles. You may or may not be aware of a ruling in an important tax tribunal case involving “vans” provided to employees of Coca Cola. The court has upheld the HMRC view that certain vehicles are not goods vehicles, but motor cars for benefit in kind purposes. Consequently, the income tax and national insurance payable by you as an employee and you as an employer, is significantly higher than if the vehicles had been classified as goods vehicles.
Certain vans / commercial vehicles are exempt from income tax
In addition, there is no assessable benefit in kind, whether you use a van only for business journeys or for private use. Examples would include making a slight detour to pick up a newspaper on the way to work, or taking an old mattress or other rubbish to the tip once or twice a year.
Income tax definition of “Goods Vehicle”
So how does the income tax legislation define a “goods vehicle”? It is defined as “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description…” Although the VW Kombi vans failed this test, the Tribunal held that Vauxhall Vivaro vans provided by Coca Cola did fall within the definition of goods vehicles! We understand that this case is due to be heard at the Court of Appeal. This will undoubtedly provide legal precedent over the tax treatment. Until then it gives you, as an employer, a dilemma as to how to report such vehicles on employees’ form P11d and also whether the position in earlier years should be rectified. You should note that the tribunal had to seek evidence from automotive industry experts, so how are you, as an employer, expected to interpret the rules?! What is also particularly confusing, and thus difficult for your business to deal with, is that the benefit in kind rules are not the same as the rules for capital allowances and VAT.
Capital allowances definition of “Motor Car”
The definition of a “motor car” for plant and machinery allowances purposes is a mechanically propelled vehicle except a vehicle:
- Constructed in such a way that it is primarily suited for transporting goods of any sort, or
2. Of a type which is not commonly used as a private vehicle and is not suitable for use as a private vehicle.
VAT definition of “Motor Car”
For VAT purposes, the definition of a motor car has been amended several times over the years. The current definition states: “Motor car” means any motor vehicle of a kind normally used on public roads which has three or more wheels and either:
a) Is constructed or adapted solely or mainly for the carriage of passengers; or
b) Has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows;
There is a number of exceptions to this rule, notably vehicles constructed to carry a payload of one tonne or more. A common example would be a “double cab” pick-up such as a Mitsubishi L200 or Toyota Hilux.
Lotuswise Chartered Accountants and Business Consultants can help you make sense out of these payment & tax rules and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
How To Organise Your Tasks More Effectively
Your Tasks Organised And Simplified
Tasks Balancing Act
The daily grind, for most of us, can feel like a constant juggling act. You attempt to balance work, household chores, bills, family – and hopefully some leisure in between if there’s any time leftover. In fact, trying to find time for things you enjoy – or for projects to improve yourself – can often feel impossible. And you could feel it’s incredibly frustrating to not move forward with things you truly value. Besides, It’s just as frustrating for you to get stuck under a tower of tasks that never seems to get any smaller…
Tasks Stats
Did you know that an online poll by the Mental Health Foundation found that “in the past year, 74% of people have felt so stressed they have been overwhelmed or unable to cope”. In addition, a report by ACAS, the workplace experts, had similar findings. You might be surprised to further know that 66% of poll respondents, had felt stressed or anxious about work over the past year – and that 35% struggled to balance home and work lives. This, in turn, encouraged us to look into a helpful and less disheartening way to improve task organisation.
Tasks Apps and Tools
One example of this is for you, to embrace online apps and tools available to you. As these can support your progress, and break an expanding task list into manageable segments. What this then does, is to prevent you from falling into the pattern of trying to complete multiple tasks simultaneously, while considering other items that may need to be started soon. This is a common mistake that can lead you to feel overwhelmed. As your effort to move forward becomes mentally taxing and prevents your progress. So, we encourage you to condense the mass of tasks you may currently be working on, into a more manageable and visually pleasing format. And to help you do that, you could use scheduling style techniques, such as Personal Kanban, and post-it note-style tools, like Trello boards. Both strategies encourage you to break down your to-do list into two main areas – which are followed by a “done” or “complete” column.
To Do / Options / Ideas
Right, so you should use this column (or two columns if you would like to separate your ideas from the general to-do list) for everything you currently have pending. Trello will allow you to organise this further, with handy coloured labels and due dates, etc. If you actually view this list alone, you can unfortunately slip back into your habit of trying to tackle as many tasks as possible, and struggle to complete tasks at a standard you’re happy with.
Doing / In progress
Carrying on, the “In Progress” list, according to the Personal Kanban, should be restricted to three tasks. Effectively allowing you to clearly focus on your tasks, and also giving you the ability to complete them, without reaching a mental block. You should resist the temptation to add any more than three, or to add tasks that should be broken down into multiple tasks. For example, if your task is to start a new business or write a new business strategy, it will obstruct your progress instantly. These need to be broken down further.
Complete / Done
Although this column may appear self-explanatory, not all your tasks are indefinitely complete. For example, self-assessment is an annual business task you complete on a yearly basis. Once you have completed it, you can then add a due date, and, once relevant, you can move the card back to the To Do column. For your other completed tasks, it’s simply rewarding to see them move over to the completed column. And enjoy the sense of satisfaction as the list grows!
We hope this simple concept can help you manage your planning and task lists.