Business Record Checks and other topics…
This newsletter covers the following subjects:
- Business record checks
- Child benefit changes
- Self employed subsistence
- Self employed travel
BUSINESS RECORD CHECKS
From 1 November 2012 HMRC have recommenced their Employer Record Checks on Small and Medium Sized Businesses (SME’s). They will contact you by phone and ask you various leading questions, and depending on your answers may want to arrange a meeting with you to go through your business in more detail. Please note that they will contact you direct and will not contact your adviser. If you are contacted in this way please contact me before agreeing to any such meeting .
For further information please see http://www.hmrc.gov.uk/dealingwith/bus-record-checks.htm
CHILD BENEFIT CHANGES
From 7 January 2013 where a tax payer has income over £50,000 there is a new tax liability. The child benefit is taxed on the higher earner of the couple.
If income is over £60,000 the income tax will equal the child benefit.
If income is under £50,000 (and also your partner’s income is under £50,000) the child benefit is not taxable.
If one income is between £50,000 and £60,000 there is an increasing scale of charges up until the £60,000 is reached.
A partner is : spouses, unmarried man & woman living together, same sex couple ( in civil partnership) and same sex couple (living together, as if they are in a civil partnership).
Income is : net taxable income and before personal allowances (ie. Includes employment & P11D benefits, self employment income, interest and dividend income less capital allowances and pension contributions)
HMRC are currently writing to everyone concerning these changes.
If you wish to opt out of receiving child benefit the person who is liable to pay the income tax charge (highest earner) must notify HMRC before 7 January 2013. The easiest way to do so is online at http://www.hmrc.gov.uk/childbenefitcharge/stopchbpayments.htm
NOTE : Mothers at home looking after children, and whose partner earns over £50,000, must consider whether (and when) they should opt out of receiving the child benefit as they require the credits from the associated National Insurance contributions (NIC) to go towards their state pension under the Home Responsibilities Protection (where children are under 12 years old). To protect these NIC payments clients should firstly claim the child benefit and then can elect not to receive the payments.
You can find further information at http://www.hmrc.gov.uk/childbenefitcharge/index.htm
SELF EMPLOYED SUBSISTENCE
As a self employed person you can claim subsistence if you are an hours’ travel time away from home and you can claim to stay overnight as long as it is wholly and exclusively for the purposes of the business, and is reasonable and not excessive. Overnight accommodation should permit a good nights sleep, privacy, and a quiet environment to prepare for a meeting the next day. If staying overnight, the first alcoholic drink can be deductible but after that it is not. Accommodation at The Savoy would not be considered reasonable.
Recommend – keep all supporting receipts to prove claims.
SELF EMPLOYED TRAVEL EXPENSES
If a person travels to his base of operations (office) before he can start work, travel cannot be claimed between home and that place of work. If a place of work is at home, travel can be claimed to clients premises from home – he is considered to be an “itinerant worker”.
Recommend – keep detailed mileage log of business journeys including where from and to and amount of miles as supporting evidence in case of an enquiry.
If you have any queries please do not hesitate to contact me