Tax E-News September 2023
Welcome to the September edition of Tax E-News. We hope that you find this informative.
Please contact us if you wish to discuss any matters in more detail.
Below we set out some of the main points.
BACK TO SCHOOL – SET UP A TAX-FREE CHILDCARE ACCOUNT?
The Government’s Tax-Free Childcare Accounts provide a 25% subsidy towards the cost of childcare. The scheme operates by topping up savings of up to £8,000 per child by 25%, potentially an extra £2,000 a year. Tax free childcare accounts are available to both employees and the self-employed. However, parents are not eligible if either of the parents’ adjusted net income is more than £100,000 a year…
CHILD BENEFIT MAY CREATE A TAX CHARGE FOR THOSE WITH HIGH INCOME
Parents and carers need to be aware that if either of the couple have ‘adjusted net income’ in excess of £50,000 then the one with the higher income will potentially be charged to tax on some or all of the child benefit and will need to request a self-assessment tax return to report the amount of child benefit received in the tax year…
MERGER OF R&D TAX RELIEF SCHEMES TO GO AHEAD
The government have issued draft legislation for consultation on the proposal to merge the two forms of corporation tax relief for expenditure on research and development (R&D)
For expenditure incurred on or after 1 April 2024, it is proposed that the two schemes providing for R&D relief – R&D expenditure credit (RDEC) and Credit Relief for SMEs, will be merged and replaced with a single unified scheme. This will operate alongside a new scheme to provide additional relief for “R&D intensive” SME companies…
INCOME TAX ON INHERITED PENSION FUNDS
Currently, where an individual pension holder dies before age 75, drawdown pensions paid to a successor can generally be received free from income tax. Where the pension holder dies over the age of 75, then the amounts drawn by the successor are taxed at their marginal income tax rate…
HMRC TO REQUIRE MORE INFORMATION TO BE PROVIDED BY TAXPAYERS
Draft legislation released for consultation on 18 July indicates that business and individual taxpayers will be required to provide more information to HMRC in the next few years.
It is proposed that from 2025/26, employers will be required to provide more detailed information on employee hours worked via real time information (RTI) PAYE reporting. The information to be reported will be set out in separate regulations…
ADVISORY FUEL RATE FOR COMPANY CARS
The table below sets out the HMRC advisory fuel rates from 1 September 2023. These are the suggested reimbursement rates for employees’ private mileage using their company car.
Where the employer does not pay for any fuel for the company car these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee…