In this week's web-update we have our Employer's Update for March. Don't miss it. It's packed full of practical information and planning points for employers for the end of the year and getting started for the new one.
We also have detailed guidance on the new rules for dividends, savings, employee expenses and benefits, distributions and we have been looking at what the House of Lords has to say about Finance Bill 2016. They are as baffled as everyone else is about the new savings rules.
Meanwhile the OTS has been considering Small company taxation. Probably to the horror of every accountant throughout the land it has been devising even more changes to small business taxation, in fact quite radical changes: a new form of "micro entity". To put this proposal into context we have to look at what is driving change. At first I thought it was tax driven however the new dividend tax removes that problem. "Disruptive technology" and "uberisation" seem to be the next key drivers to change the tax system and update it for the digital age. Although I feel that it is fair to point out that there is nothing new about disruptive technology: the iron age replaced the stone age, the combustion engine replaced the horse, in the modern era we have computer science replacing people with AI. As to uberisation (as in online microbusinesses letting out your property for cash), the chancellor put up rent-a-room relief and car sharing is, we all thought good. Before computers people still rented out their homes and, before and long after ebay there will be car boot sales, small ads and physical auctions. Perhaps the real issue it that there are simply more people doing business now.
Looking at what recent changes have done for the tax system: Disincorporation relief flopped, simplified accounting for unincorporated businesses is not at all simple, Flat Rate VAT, now that really takes the biscuit in terms of hidden complexity and tax avoidance, and now a proposal for new cash based micro entity that defies GAAP. Please no more! I can't help thinking that the current obsession with transforming tax for the new digital age has already reached the stage where some people are unable see the woods for the trees. Double entry bookkeeping was invented what 1,500 years ago. It works because for every debit there is a credit. A simple system of checks and balances. Do we really still need to try and reinvent the wheel when it comes to small business taxation? Answers please on 'Snapchat'...if you can't find me on there I'll be on the internet.
Back with the budget next week
Nichola Ross Martin FCA Tax Director
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Finance Bill: complex, confusing and poorly communicated
The House of Lords is "concerned that the Government’s consultation and communication about imminent and important changes in the Finance Bill has been so poor.”
It's complicated: closer alignment of income tax and NIC
The Office of Tax Simplification has identified 84 "misalignments and differences" between the treatment of income tax and NIC, and proposes a seven-stage plan to bring the two closer together.
Small Company Taxation Review
The Office of Tax Simplification recommends dramatic changes to small company taxation
New Employee Starter Checklist (2016/17)
So fed up are we with HMRC's horrible online forms that we have created this so that employees can see what on earth they are supposed to complete.
Dividend tax: index
Different case studies worked through (includes links to the Subscriber version and Client Briefing)
Essential reading this time
(for paid subscribers)
Employer's Update March 2016
A summary of Employer Essentials for March 2016: RTI, Payroll, new forms and planning for 2016/17
Private Client: Tax planning for the 2015/16 year end
Our unique year-end and new tax year tax checklist for "Private Clients", it can be used in conjunction with our checklists for Directors, Employers and Self-employed individuals.
Finance Acts 2015/16: rolling tax planner
UPDATE: this is our favourite place for staying up to date with what's new across all the taxes.
Savings income: tax on interest
Detailed working to show how the new 2016/17 savings allowance and savings band will interact with the new dividend allowance and other income.
Seed Enterprise Investment scheme (SEIS)
EIS' little sister is more flexible in that a director may invest. Tight limits on investment.
Designing an employee share scheme
If you are considering giving a director or employee shares or share options start here.
ABC shares and family companies
Creating different share classes for family companies.
Buy-to-let ownership: personal or limited company
What works better, holding a buy-to-let property investment personally or via a company?
Missed last time's update?
Features updates and guides for:
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- Private client year end tax planning
- Residence v non-residence tax treatment
- Cash accounting and fixed expenses for the self employed
- Trust ten-year reporting requirements
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