15
Aug, 2024

IHT unused Residence Nil Rate Band (RNRB)

The Inheritance Tax Residence Nil Rate Band (RNRB) is a transferable allowance available to married couples and civil partners when their main residence is inherited by direct descendants, such as their children or grandchildren.

The RNRB is available at a maximum allowance of up to £175,000 per person. This allowance can be transferred to a surviving spouse or partner if it remains unused. It is in addition to the existing £325,000 Inheritance Tax (IHT) nil-rate band.

Together with the current Inheritance Tax limit of £325,000, this allows married couples and civil partners to pass on property valued up to £1 million free of IHT to their direct descendants.

However, the transfer of the unused RNRB does not happen automatically; it must be claimed from HMRC when the second spouse or civil partner passes away. Typically, the executor of the estate will file a claim to transfer the unused RNRB from the estate of the first deceased spouse or civil partner. This transfer can also be claimed even if the first spouse or civil partner died before the RNRB was introduced on 6 April 2017.

It is important to note that the RNRB is tapered for estates valued over £2 million, even if the family home is left to direct descendants. For every £2 that the estate exceeds the £2 million threshold, the RNRB is reduced by £1, potentially eliminating the allowance entirely.

Source:HM Revenue & Customs | 12-08-2024
15
Aug, 2024

Do you have a personal tax account?

HMRC’s Personal Tax Accounts (PTAs) serve as an online tool that enables taxpayers to view and update their information in real time. The PTA can be used for many routine requests and services and help you bypass the need to call or write to HMRC.

Every individual in the UK that pays tax has a PTA, but taxpayers must sign up in order to access and use the service. This can be achieved by using the Government Gateway. You may need to verify your identify when using the service.

The following services are currently available on your PTA:

  • check your Income Tax estimate and tax code
  • fill in, send and view a personal tax return
  • claim a tax refund
  • check your Child Benefit
  • check your income from work in the previous 5 years
  • check how much Income Tax you paid in the previous 5 years
  • check and manage your tax credits
  • check your State Pension
  • check if you’ll benefit from paying voluntary National Insurance contributions and if you can pay online
  • track tax forms that you’ve submitted online
  • check or update your Marriage Allowance
  • tell HMRC about a change of name or address
  • check or update benefits you get from work, for example company car details and medical insurance
  • find your National Insurance number
  • find your Unique Taxpayer Reference (UTR) number
  • check your Simple Assessment tax bill

The PTA is a key component of HMRC’s broader strategy to transition to a fully digital tax service.

Source:HM Revenue & Customs | 12-08-2024
15
Aug, 2024

Checking employees DBS certificates

The Disclosure and Barring Service (DBS) is an executive non-departmental public body sponsored by the Home Office. The DBS helps employers across the public, private, and voluntary sectors make safer hiring decisions by identifying individuals who might not be suitable for certain roles, particularly those involving children or vulnerable adults. Additionally, the DBS maintains the Adults’ and Children’s Barred Lists. The DBS checks are used across England, Wales, the Channel Islands and the Isle of Man.

There are four types of DBS checks, and each type results in the issuance of a DBS certificate to an individual. Employers are allowed to request to see this certificate in order to confirm that they are hiring suitable candidates.

The four levels of DBS check are:

  • Basic DBS check
  • Standard DBS check
  • Enhanced DBS check
  • Enhanced with Barred List(s) DBS check

The DBS also offer an Update Service that allows:

  • applicants to keep their DBS certificates up to date
  • employers to check a DBS certificate

The service is for standard and enhanced DBS checks only.

In order to use this service, a subscription is required. It costs £13 per year, and you can pay by debit or credit card. There is no charge for volunteers or for those living in Guernsey, Jersey or the Isle of Man.

Source:Home Office | 12-08-2024
15
Aug, 2024

Check your State Pension forecast

The enhanced Check Your State Pension forecast service is available online. The service can be found on GOV.UK at the following webpage https://www.gov.uk/check-state-pension.

The new digital service is a joint service by HMRC and the Department for Work and Pensions (DWP). It has been enhanced to include a fully end-to-end digital solution.

The service allows most people under State Pension age to view their pension forecast and identify any gaps in their National Insurance Contributions (NICs) record. This will be helpful for taxpayers looking to make voluntary NIC contributions to increase their entitlement to benefits, including the State or New State Pension.

Usually, HMRC allow you to pay voluntary contributions for the past 6 tax years. The deadline is 5 April each year. However, there is currently an opportunity for people to make up for gaps in their NICs for the tax years from April 2006 to April 2017 as part of transitional measures to the new State Pension. The deadline has been extended a number of times and has been most recently extended until 5 April 2025.

The launch of HMRC’s online service will help speed up this process. HMRC’s helplines have been struggling to meet the demands for information and processing claims to pay additional NIC contributions.

HMRC has also confirmed that all relevant voluntary NIC payments will be accepted at the rates applicable in 2022-23 until 5 April 2025.

It is advised to regularly check your State Pension position to help optimise your entitlement. You should also consider what other savings or pensions might be required for a long and comfortable retirement.

Source:HM Revenue & Customs | 12-08-2024
12
Aug, 2024

Guidance for charities on managing public disorder

The charity commission has offered the following guidance to charities following the recent public disorder events.

The main points are summarised below:

  • Are you operating in an area which has seen or is at risk of unrest? If so and you wish to continue to operate what changes could be made to mitigate any risk to your staff, visitors or beneficiaries?
  • Have you reviewed the entry points to your property for weaknesses should there be unrest? Can you restrict access/improve secure entry to the property?
  • Are different entrances available?
  • Do you have alternative exit routes from the property if required? Are these clear and communicated to staff visitors on arrival?
  • Should an incident occur do you have a clear procedure in place for what staff / visitors should do to stay safe? Is everyone briefed on this procedure and is it clear who will issue instructions should an incident occur?
  • Do you need to have first aid trained staff or volunteers onsite?
  • Have you contacted the local police force community liaison team to agree contact points for sharing of specific risks or to seek specific advice and guidance on operating?

Some risks may be specific, or time bound such as an alert from police of a specific risk / threat based on their monitoring of social media or intelligence. You may therefore want to consider:

  • Who in your charity / how your charity continually reviews the latest advice, guidance or alerts from police forces or other local authorities including monitoring of social media channels.
  • If you are at higher risk do you need a procedure at the start of each day to assess risk and a clear channel or method to communicate with staff or beneficiaries prior to start of operations on whether or not they should attend site.
  • Ensuring you have a clear process or nominated person responsible for acting upon any urgent alert or risk.

Charities should not hesitate to call emergency services if their staff, volunteers or beneficiaries face abuse, feel threatened, or are in danger.

Source:Other | 11-08-2024
12
Aug, 2024

£32m for AI projects

Companies developing artificial intelligence (AI) to improve safety on construction sites, reduce time spent repairing the railways and cut emissions across supply chains are amongst a number of projects set to receive a share of £32 million in UK Government funding.

Announced 7 August 2024, almost 100 ground-breaking projects have been awarded financial backing as the government continues its mission to boost productivity and kickstart growth across the economy through AI, so everyone is better off.

A total of 98 projects from Southampton to Birmingham and Northern Ireland will receive funding, involving more than 200 businesses and research organisations spanning a range of sectors including public services, driving efficiencies and reducing administrative tasks.

As part of the government’s mission to build an NHS which is fit for the future, pharmacies that deliver prescriptions across the country are also set to benefit from this new financial support. A project led by Nottingham-based Anteam will see them collaborating with retailers and the NHS to improve the efficiency of their deliveries using AI algorithms. This technology will match the delivery needs of retailers and hospitals to existing delivery journeys, unlocking under-utilised capacity, cutting carbon emissions and delivering a better experience for patients.

Source:Other | 11-08-2024
8
Aug, 2024

Don’t forget to report property gains

A higher rate of CGT applies to gains on the disposal of residential property (apart from a principal private residence). In the Spring Budget 2024, the Chancellor announced a reduction in the higher rate that exists for residential property to 24% (from 28%) from 6 April 2024. These rates apply to higher rate taxpayers as well as to trustees and personal representatives. The lower rate that applies to basic rate taxpayers remain unchanged at 18% in the current 2024-25 tax year.

Most people are aware that they do not usually have to pay CGT when they sell their qualifying residential property used wholly as a main family residence. However other sales of property that are not a principle private residence (PPR) will be subject to CGT.

This includes:

  • buy-to-let properties
  • business premises
  • land
  • inherited property

The deadline for paying any CGT due on the sale of a residential property is 60 days. This means that a CGT return needs to be completed and a payment on account of any CGT due should be made within 60 days of the completion of the transaction. This applies to UK residents selling UK residential property where CGT is due. There are various reliefs available from CGT for the sale of qualifying business assets.

Source:HM Revenue & Customs | 05-08-2024
8
Aug, 2024

Tax relief for goodwill purchases

Goodwill is a concept frequently discussed, and yet it is seldom addressed in legislation. Typically, it is defined as the additional value of a business beyond its tangible assets.

In the vast majority of cases, when a business is sold, a significant proportion of the sale price will be for intangible assets including goodwill. Essentially, this involves assigning a monetary value to the business’s reputation and customer relationships. Or as HMRC say in their guidance, in accounting terms, purchased goodwill is the balancing figure between the purchase price of a business and the net value of the assets acquired. Valuing goodwill is complex and there are many different methods which can be used and that vary from industry to industry.

Businesses may qualify for Corporation Tax relief on purchases of goodwill made on or after 1 April 2019 if the:

  • goodwill and relevant assets are purchased when you buy a business with qualifying intellectual property (IP);
  • business is liable to Corporation Tax; and
  • relevant assets (including goodwill) are included in the company accounts.

If relief is available, it is at a fixed rate of 6.5% a year on the lower of the cost of the relevant asset or 6 times the cost of any qualifying IP assets in the business purchased. Relief is given yearly until the limit is reached and a claim is made using the Company Tax Return.

Source:HM Revenue & Customs | 05-08-2024
8
Aug, 2024

Corporate claims for charitable donations

When a limited company makes charitable donations specific rules apply. These may include Corporation Tax relief for donations to registered charities or community amateur sports clubs (CASC), as well as capital allowances for equipment donated that has been used by the company.

However, the rules are different if the company is given something in return for making a donation, such as tickets for an event.

Donation amount

Maximum value of benefit

Up to £100

25% of the donation

£101 – £1,000

£25

£1,001 and over

5% of the donation (up to a maximum of £2,500)

These rules apply to benefits given to any person or company connected with your company, including close relatives.

Charity sponsorship payments are different from donations because the company gets something related to the business in return. A company can deduct sponsorship payments from its business profits before it pays tax by treating them as business expenses. 

Payments qualify as business expenses if the charity:

  • publicly supports the company's goods or services;
  • allows the company to use their logo in company’s printed material;
  • permits the company to sell their goods or services at the charity's events or premises; and/or
  • has links from their website to the company's website.
Source:HM Revenue & Customs | 05-08-2024
8
Aug, 2024

More detail on VAT charge on private school fees

More details have been published regarding Chancellor Rachel Reeves' plans to impose a VAT charge on private school fees. The government has said that the money raised by ending the tax breaks on VAT, and business rates for private schools, will help secure additional funding for state education programs.

From 1 January 2025, all education services and vocational training supplied by a private school, or a connected person, for a charge will be subject to VAT at the standard rate of 20%. Boarding services provided by a private school, or a connected person, will also be subject to VAT at 20%. In addition, any fees paid from 29 July 2024 pertaining to the term starting in January 2025 onwards will be subject to VAT. Boarding and lodging closely related to such supplies will also be subject to 20% VAT.

The government have also said they will legislate to remove eligibility of private schools in England to business rates charitable rates relief. However, the government accepts that some students with special educational needs may require the specific support available only in private schools. As a result, the government will review how to mitigate the potential effects of these changes for students whose private school placement is outlined in an Education, Health, and Care Plan (EHCP).

Schools that do not currently make any taxable supplies, such as renting out their facilities, will be able to register with HMRC starting from 30 October 2024, the date of the Autumn Budget. Schools that already make taxable supplies can choose to register for VAT before 30 October if they so wish.

School fees that were paid before 29 July 2024 will follow the VAT treatment in force at the time of the normal tax point for these supplies, where the fee rate for the relevant term has been set and was known at the time of payment.

Source:HM Treasury | 05-08-2024