Author Archives: corlettcolin

Claiming tax relief on a computer

You can claim tax relief on equipment which you buy for your employment or self employment. A computer, printer, scanner and associated equipment falls into this category.

Step 1. Do you have a receipt? That is ideal but not essential. A payment entry on a bank statement or credit card will often suffice.

Step 2. You need to write down the reasons why you need the computer for work. There has to be some business use.

Step 3. Ideally you will then apportion the cost between business and private use. There was a time when this was probably 50/50 or more towards private use. However these days people tend to use mobiles or tablets for Facebook and photos so an estimate of between 80% and 90% might be reasonable.

A general link is here

More detailed ones are here

1.

2.

 

 

 

 

 

 

 

 

 

 

 

Tax and travel within the NHS

Notes which i recently prepared for one of our clients in the medical world.

Travel expenses – what can be claimed and how it works. Reference within the NHS

Travel to a temporary workplace is allowable and you can claim

45p a mile up to 10000 miles

25p a mile thereafter.

Also ancillary costs such as parking.

The question is what is a temporary workplace.

Key test 1. Place of employment where you expect to work for 24 months or less
Key test 2. Or it takes up less than 40% of your working time. E.g. Say one day a week.

What it is not

It cannot be your only place of work. So for instance if you accepted a 6 month contract at another hospital then that is a new place of work and a new contract – this is not temporary for tax.It is a permanent workplace which only lasts for 6 months.

Examples within the NHS which are relevant.

  1. Employed at one hospital on a permanent basis and then asked to cover 6 months at a satellite hospital whilst remaining in the same employment. This 6 month period should be classed as temporary.
  2. If there was a new contract with a new employer for the satellite site then this is not classed as temporary. This is why a lot of trainee GPs cannot recover their rotation travel.
  3. It cannot apply to travel incentives to take up a new position however short.
  4. It cannot work for bank work at another hospital if that means you have a second employer. So for instance you are employed at Kings but do bank work at Royal Surrey. In this case you would have 2 employers one is full time, one is part time but neither are temporary.
  5. However in example 4 if the bank work was at a satellite site for Kings ie you were paid for both jobs on the same payslip or two payslips but the same employer reference then the bank work would be temporary.

 

How will your employer treat the travel?

It depends. Some will recognise that the travel is allowable and will either not tax the payments when they reimburse the mileage or they will tax the excess over 45p a mile. You then have the opportunity to reclaim the element which they have not paid you. For instance they pay 24p a mile then you can reclaim another 21p a mile to make up the full 45p. With these payments they often show with the code TASNT on the payslip.

Sometimes the hospital will wither say they think it is not allowable or they do not want the risk of getting it wrong. So they tax all the payment and leave it to you to claim the fulle 45p a mile. These often show with the NP coding.
References

The core legislation. Here

And whilst the legislation has just a couple of pages the HMRC booklet (basically their views) has some 77 pages.

 

 

 

 

Subbies and tax refunds

Are you a subcontractor in the construction industry?

Do you understand the tax rules and why you have tax deducted from your pay? Do you understand how you can reclaim some or all of the tax?
These Q&As will help guide you through the world of CIS deductions.

1. What is CIS?
Basically the government was worried about construction industry workers not paying their taxes. Their answer was to require any payments to anyone other than a company or someone in employment to have deducted before the monies are paid.
You are paid for the work you do less tax. There is a very good chance that you will be able to reclaim a large percentage of this tax.

2. What percentage is deducted?
There are three rates which could be used:
30% if you are not registered with the tax man as a subbie.
20% if you are registered.
0% if you are an established subbie and meet certain requirements.

3.Why are there usually refunds?
The 20% or 30% deductions are made to all payments which you receive. Even those which cover materials you may have bought for your work. Every person is entitled to a personal tax allowance. Let’s say this is £10,000 ( 2014/15). In this case you are likely to have overpaid by £3,000 ( 30% tax deducted ) or £2000 if 20%.
If you spend £1000 on materials,clothing and other allowable expenses then there will be another £200 to £300 due back.

4.How do i claim my tax refund? 
The easiest way is to complete your tax return as soon as the tax year is ended ( after 5th April).
This can be done online.

5.How much does this cost if i ask an Accountant to do it?
The basic cost should be just over £100 for a simple return done early in the tax year (basically accountants don’t like everyone asking for their returns to be done in January the last month before penalties start to be charged). However you do need to be careful as some accountants will charge a percentage of the refund or maybe ask an unusually high fee. We see prominent online services asking £300 plus for the basic return.

Subbie refund summary

Register with the tax man – this means you will have 20% deducted and not 30%.

Keep all the payment advices as they will back up your claim for a refund.

Make sure any tax deductible expenses such as materials,safety wear and appropriate travel is claimed.

Complete your tax return as soon after 5th April as possible. No point in delaying.

Autumn colours in the Eden Valley

Now that the days are drawing in i can start to look forward to some of the most beautiful autumn colours as the trees lose their leaves. The Eden Valley so verdant during the long hot summer this year will be a lovely place to walk and explore.

Autumn colours coming down to Armathwaite

Autumn colours coming down to Armathwaite

 

If you live near Penrith and would like book keeping or tax advice then
please call me on 075 1391 7997

 

Direct v Indirect taxes

Many times you come across references to direct and indirect taxes. But what is the distinction?

Direct taxes
Income tax
Capital gains tax
PAYE
NIC
Corporation tax
Student loans
and so on.

Indirect taxes
Mainly VAT but also a long list including
Bingo duty
Alcohol levies
Customs duty
and so on

Statutory residence tests

There has always been a degree of uncertainty around whether or not some people are resident in the UK for tax purposes. The recent changes to the rules are meant
to improve this situation. Why is this important? Well if you are resident for tax purposes then you are liabel on worldwide income and capital gains.
If you are not resident then foreign income and gains should usually escape the UK tax man.

This is a very brief simplification of the rules

You are non resident for a tax year if

1) You spend less than 16 days in the UK; or
2) You were non-resident in all of the previous 3 tax years and this year you spend less than 46 days in the UK; or
3) You are working full time abroad.

If none of the three points above apply then you will be resident in the UK if either

1) You spend 183 days or more in the UK; or
2) You have your only or main home in the UK; or
3) You work full time in the UK.

If none of the above six tests apply then we look at a combination of the number of days spent in the UK along with the strength of your ties to the UK.The more
ties you have then the fewer days you can spend here if you want to escape the UK tax regime for foreign earnings and gains.

Travel expenses & Samadian

The Upper Tier Tribunal has upheld the rulings in the Dr Samadian case.

The main point seems to be that travel between a home base and anywhere which is a regular place of business will now be disallowed under duality of purpose.

This is potentially very significant and claims for business mileage should now be reviewed.

Do you live in Carlisle? Would you like tax advice? Please give me a call.