Every week we take a look at what is trending in the accountancy and tax press and share items that we think will interest you. However, these are only outlines and where they relate to tax planning should not be acted upon without looking into them more completely as everyone’s circumstances are particular to them. You need to take specific advice appropriate to your own circumstances.
While every effort is made to deliver accurate, informative and balanced articles this content is general in nature and should not be used as the sole basis for making decisions.
Do you own property in France?
If you own property in France then you need to be aware of changes to the taxation of property in France.
France is phasing out the taxe d’habitation (occupancy tax) for all properties physically occupied by their owners or tenants, leaving only the taxe foncière (land tax) as its annual property tax.
French government requires all owners of French property to confirm the occupancy status of their buildings so that the correct tax regime can be applied.
If you are a private owner or you have a company which owns property in France, you have until 30 June 2023 to declare your interests or risk fines for non-compliance.
The information that needs to be declared will at least include the basis the property is occupied and the identity of the occupants. This is a one-off declaration. It will only need updating when there is a change of circumstances. It is estimated that 34 million property owners will be making the declaration.
Declarations must be submitted through an online tax portal which is already open.
The French government has already published a step-by-step guide on how to use the declaration service on the portal.
Any UK nationals affected by these rules need to act swiftly to ensure compliance in good time.
Encouraging the over 50s back into work
The government has identified 600,000 people who have dropped out of the employment pool largely but not exclusively die to the effects of Covid.
These people will be financially relatively comfortable but are likely to have experience and skills that would be useful to the economy.
Some of them will have chosen to retire early due to flaws and problems within the UK tax system. It might be said that the UK pension rules discourage those with a strong pension fund or with a final salary scheme from continuing to work. The lifetime pension allowance, which applies to pension schemes with a ‘pensionable value’ of more than £1.073m, means that the excess pension income will be taxed at an effective rate of 55%.
It is this marginal tax rate on excess pension values that is one of the factors which has driven early retirement among GPs and NHS surgeons.
In addition, the IR35 off payroll working regulations have hit the self-employed and people working through personal services companies (PSCs). The complexities and uncertainties surrounding the operation of IR35 mean that many people who were happy being freelancers through their own service companies, are discouraged from continuing.
The government needs to address the tax system to encourage older workers back to the workplace.
It would seem that is Rishi Sunak is serious about encouraging older workers back into the labour market then changes need to be made to the UK tax system.
Trustees come in all shapes and sizes. Smaller charities will have trustees who are potentially new to the role while the trustees of larger charities should be well versed in their responsibilities and in any event may well come from a professional background.
The Charity Commission has launched a campaign to educate and inform trustees to improve compliance generally, but largely directed at the trustees of smaller charities.
Research shows that many trustees often seek advice from a fellow trustee or colleague (70%) or look online (59%).
The commission would like more to use their online guidance. Their own research found that the majority who use the regulator’s guidance found it helpful (94%) and most (89%) would recommend the guides to others.
They are currently running a campaign that aims to raise awareness of the trustee guidance available online on the website. Similar guidance will be found on the OSCR website.
The Commission are concerned that there is presently a knowledge gap that could lead to unintentional governance failings.
The Charity Commission have a series of five-minute guides offering trustees engaging, informative content covering the basics all trustees should know.
The guides cover the following:
- delivering purpose – advice on how to use your charity’s governing document, how to deliver on your charity’s purposes and the law;
- managing finances – advice on how to ensure your charity’s money is safe, properly used and accounted for;
- conflicts of interest – advice on how to identify and deal with conflicts of interest in your charity;
- making decisions – advice on how to make valid trustee decisions that are in your charity’s best interests;
- reporting information –advice on how and what you need to report to the Commission;
- safeguarding people – advice on your responsibilities to keep everyone who comes into contact with your charity safe from harm; and
- political activity and campaigning – advice for charities that want to support, or oppose, a change in government policy or the law.
Tax-free Childcare Accounts Going Unused
The scheme offers savings of up to £2,000 a year on childcare costs and more than 401,300 families were using the scheme as of September 2022. Take-up of the childcare support has been low with only half of eligible families claiming.
To qualify for tax-free childcare, families must have all adults earning the equivalent of at least the national minimum or living wage for 16 hours per week, and the benefit is not available for those earning over £100,000 a year. They must not be claiming tax credits or universal credits in any form or other disqualifying benefits such as job seeker’s allowance. It is available for children aged 11 or under, or 16 if the child has a disability.
The scheme covers nurseries, childminders, breakfast or after school clubs, holiday care and out of school activities.
For every £8 paid into an online account, families will automatically receive an additional £2 from the government. Parents can receive up to £500 every 3 months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.
Each eligible child requires their own tax-free childcare account. If families have more than one eligible child, they will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child, not household.
Account holders must confirm their details are up to date every three months to continue receiving the government top-up.
An open consultation has been launched seeking views on improving crypto market integrity and consumer protection.
The government has published proposals for crypto asset regulation to mitigate the risks of a “turbulent industry” with exchanges such as FTX going under and losing customers’ money.
The consultation will close on 30 April 2023.
The Treasury says that its robust approach to regulation mitigates the most significant risks, while harnessing the advantages of crypto technologies, enabling a new and exciting sector to safely flourish and grow, boosting jobs and investment.
The proposals will impose standards on crypto trading venues and also strengthen the rules around financial intermediaries and custodians with responsibility for facilitating transactions and safely storing customer assets.
Corporate Criminal Offence Data
The corporate criminal offences (CCO) for failure to prevent the facilitation of tax evasion were introduced by Pt 3, Criminal Finances Act 2017. Offences are committed where a relevant body fails to prevent an associated person criminally facilitating the evasion of a tax. This applies regardless of whether the tax evaded is owed in the UK or in a foreign country.
The onus is on the relevant body to demonstrate that it has put in place a system of reasonable procedures that identifies and mitigates its tax evasion facilitation risks.
HMRC regularly publishes data about the number of live cases and opportunities it is reviewing under the CCO legislation. The purpose of the legislation is to drive behavioural change, although the fines for organisations found guilty of offences are potentially unlimited. ICAEW members are reminded of their responsibilities in this area: the need to review their organisation’s attitude to risk and to put in place reasonable procedures to stop the facilitation of tax evasion. Members are also reminded of the requirement to comply with ICAEW’s Professional Conduct in Relation to Taxation (PCRT).
Investigations have spanned a range of business sectors, from small business through to some of the UK’s largest organisations. The named sectors include financial services, oils, construction, labour provision, software development, software providers, accountancy and legal services, and transport.
The number of investigations reported is not large, but you still do not want to take the chance that the next one could be you.
Working From Home Tax Relief
Two relaxations were introduced as a result of the COVID-19 pandemic lockdowns to allow millions of employees to claim tax relief for the costs of working from home during the 2020/21 and 2021/22 tax years. These were:
- the relaxation of the strict eligibility requirements; and
- allowing relief to be claimed for the full year, even if there was a full or partial return to working at the employer’s location during the tax year.
From the current tax year 2022/23 onwards, employees who are eligible can still make a claim for tax relief for working from home. The claim can be made in self-assessment (SA) returns, online, or on a paper P87 form.
The amount that can be claimed is £6 per week (£26 per calendar month), or actual evidenced amounts incurred on electricity and gas relating to the work area and business phone calls, as a deduction against earnings in respect of the weeks worked from home. A claim for the full tax year is no longer automatic.
You are not eligible to claim a deduction if you have chosen to work at home. Also, even if the contract allows the employee to work from home for some, or all of the time, no deduction can be claimed if the employer has appropriate facilities to allow the employee to work at the employer’s premises.
If you are making a claim for actual expenditure, a deduction is not allowed if the amounts are not wholly incurred in the performance of your employment (e.g., costs of broadband that is used privately as well as for the employment).
If you have any questions about any of these, you know where to find us. If you prefer, just give me a ring on 07770 738770 or email me at email@example.com.