About Sadia Ajaz

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So far Sadia Ajaz has created 41 blog entries.

Pension Relief – availing the opportunity

Pension Relief - availing the opportunity Although the government has announced that pension relief will be reduced from April 2016, there is still a window of opportunity to utilise any unused relief's from the last three years. Pension relief  is the amount that can be paid into a pension fund in any single year tax free. It currently stands at £40,000, however from April 2016 that will fall to £30,000 for everyone. Tax payers who pay income tax at 45% will find this pension relief amount even lower. However, what some people may not realise is that unused contributions from the last three years can be carried forward. Chas Roy-Chowdhury, ACCA head of taxation, said: '£40,000 or even £30,000 may sound like a lot of money to pay into a pension fund but that includes both employer and employee contributions, and for anyone with more than one pension fund it is the total amount spread over the multiple schemes." "It is very disappointing the government has chosen to reduce the amount people can save tax free for their retirement. It is another blow to creating a nation of savers – as the Chancellor and Prime Minister pledged to do after being elected in 2010. I would urge everyone that is able to use their full allowance every year, to check whether they have unused allowance from previous years. If you are unsure check with your pension provider, they will be happy to provide you with a statement of contributions for each year." "Those hit hardest, again, will be those just entering the workplace. Not only will they have a reduced yearly allowance but also a reduced lifetime allowance. The government seems to be targeting younger [...]

By |2018-12-26T13:53:36+00:00August 2nd, 2015|Uncategorized|0 Comments

The Summer Budget- ACCA responds

The Summer Budget- ACCA responds The ACCA's Head of Taxation, Chas Roy-Chowdhury, has commented on the Summer Budget delivered by George Osborne. Inheritance Tax "The Chancellor should have been bolder in his first Budget in a Conservative majority government. The change to inheritance tax is a positive step, although he could have just removed the primary residence from the scope of the tax entirely. This would have made it a level playing field for all. He has introduced a highly complex system of relief tapers and carry forwards." "Many people imagine a house worth £1million to be a mansion but in the South East, and especially London, that is not the case." Living Wage "We welcome that he took the opportunity to incentivise employers to pay the living wage. During the election campaign he and the Prime Minister spoke about raising wages for all but a commitment to eventually raising the minimum wage. This is the right direction at £9 per hour and increasing the NIC relief to £3,000." Corporation Tax "It was a very pleasing and important message to send to the global business community to continue to reduce corporation tax. Although a reduction to 18% by 2020 will be welcome Mr Osborne could have gone further by continuing the 1% per year reductions throughout this parliament. We are in a competitive global market and the more we can do to encourage all businesses to the UK, the better the long-term tax yields will be." Fiscal Drag "We welcome the rise in the 40% tax threshold, something the Chancellor has wanted for some time. Over the past five years, he has restricted the personal allowance increase to basic rate taxpayers and on many occasions lowered [...]

By |2018-12-26T13:53:37+00:00July 16th, 2015|Budget|0 Comments

Amending MOSS VAT Returns

Guidance issued on MOSS VAT Returns by HMRC HM Revenue and Customs (HMRC) has updated its guide on its Mini One Stop Shop (MOSS) scheme. The guide explains how businesses can correct VAT MOSS returns. The MOSS was introduced to simplify compliance with the January 2015 change to EU place of supply rules, which have required companies that provide broadcasting, telecommunications, or electronic services to account for VAT in the location of the consumer. Businesses have to file a MOSS VAT Return 20 days after the end of each calendar quarter. The first deadline was 20th April and the next deadline is 20th July. HMRC has said that businesses can amend their VAT MOSS Returns by submitting a correction to the original return using the online service. Changes to MOSS VAT Returns can be made up to 3 years and 20 days after the end of the relevant period. In order to reduce VAT liabilities businesses should ensure that their bank details are up to date before correcting a return. Speak to Avery Clifton about amending Moss VAT Returns Latest From The News Desk

By |2018-12-26T13:53:37+00:00June 14th, 2015|VAT|0 Comments

Tim Healy v HMRC – Claim for renting a flat

Crackdown on duality of purpose - Tim Healy v HMRC The decision in Tim Healy v HMRC [2015] TC04425 , published in June 2015  has shown how tax payers should demonstrate that their expenses are solely for the purpose of the trade. The Claim In this case, an actor failed in his claim for tax relief for renting a flat whilst working away from home. He inadvertently claimed the three bedroom flat was required not only required for business use, but to accommodate guests as well, which meant that the expense was not "wholly and exclusively incurred" for the purpose of his business. In 2012 the case was heard by the First Tier Tribunal  and had decided in the actor's favour. In 2013 HMRC appealed to the Upper Tribunal on the grounds that the law had been misinterpreted and the case was sent back to the First Tier Tribunal. The Facts of the Case The facts of the case were that Mr Healy was an actor based in Cheshire and was casted in a West End musical. When the show went live in March 2005 , he rented a flat in London as it was cheaper than renting a hotel.  The rent was for a 12 month contract with a 6 month break clause. He terminated the lease when he finished the musical contract. HMRC disallowed the rental expenditure on the basis that the rental term was for a year, stating that a taxpayer cannot obtain tax relief on rental accommodation as the costs of living are private costs. The Law Section 34 of the Income Tax (Trading and Other Income) Act 2005 states that: (2) If an expense is incurred for more than one purpose, this section does not [...]

By |2018-12-26T13:53:37+00:00June 5th, 2015|Small business|0 Comments

Queen’s Speech 2015

Commentary on Queen's speech 2015 Following on from the Queen's speech on 27th May 2015, the Association of Chartered Certified Accountants (ACCA) has stated the Queen showed a strong tone for tackling tax avoidance, tax evasion, economic stability and job creation. Several individuals from ACCA's offices have commented on the Queen's speech 2015. The ACCA's Head of Tax, Chas Roy-Chowdhury stated "Tackling unacceptable tax avoidance and tax evasion forms a strong pillar of the Government’s economic plan." "We are particularly pleased to see the Government’s five year tax lock – this is an interesting move, with no increases in VAT, National Insurance and Income Tax during the lifetime of this Parliament. This is a policy aimed squarely at tax stability, but we also want to see this lock applied so that tax allowances and reliefs are not decreased, such as pensions tax relief." Andrew Leck, who is the Head of Western Europe at ACCA commented on the Jobs and Enterprise Bills, stating "We welcome the Government’s commitment to creating 3 million new apprenticeships, and its agenda to find a further £10 billion worth of cuts to red tape for business." "The details of both bills will be essential for ensuring business has the means to invest and grow and that businesses large and small are able run workable apprenticeship schemes. We also welcome the Government’s plans for SMEs, especially their creation of a Small Business Conciliation Service to help with disputes and late payment." Mr Leck also expressed views on policies for Scotland and Wales, stating: "This Queen’s Speech also deals with two areas which will no doubt define David Cameron’s legacy - Scotland and Europe. Both are set to receive a transfer of powers, [...]

By |2018-12-26T13:53:37+00:00June 2nd, 2015|Law|0 Comments

Tax Freedom!

 Tax Freedom for individual taxpayers is two days later in 2015 Taxpayers in the UK are working two days longer on average in 2015 before they start earning for themselves, the Association of Chartered Certified Accountants (ACCA) has stated. Research by Adam Smith Institute  has found tax freedom day is two full days later than last year. Tax freedom is calculated as the date taxpayers stop paying taxes and start earning for themselves.  This tax freedom day fall on 31 May in 2015. The tax freedom day has been increasing steadily over the years. Due to the overly complicated tax system in the UK and the numerous indirect taxes that exist, UK tax payers are paying more and more to the government, even after five years of increases in personal allowances. Chas Roy-Chowdhury, Head of Taxation at the ACCA said: 'The rises in the personal allowance have created a huge amount of fiscal drag. More and more people are being caught in the 40% tax bracket. At the end of the 1980s only 500,000 people were paying the higher rate of tax, now that is more than four million people. So despite all the Government hype on increasing the personal allowance we are actually two full days worse off this year before our income is ours to keep. 'Despite large cuts to the public sector the government is needing more and more money to keep public services going, a bill that has to be paid for by all UK taxpayers. Individuals are well within their rights to take steps to legally reduce their tax burden. ISAs are the perfect example of one method they can use.' Other steps include: Claiming all benefits and allowances: Taxpayers’ money is ploughed [...]

By |2018-12-26T13:53:37+00:00May 31st, 2015|Uncategorized|0 Comments

Holiday pay – Contractors falling foul of IR35

Contractor getting caught by IR35 Rules successfully claimed for unpaid holiday pay The Employment Appeal Tribunal upheld a judge's decision that a general labourer, who was employed for four years before becoming a labour-only subcontractor for the same company, was a worker for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998 (SI 1998/1833). The tribunal therefore had jurisdiction to hear his claims for unlawful deductions in respect of unpaid holiday pay. The Case  In Plastering Contractors Stanmore Ltd (PCS) v Mr P Holden (UKEAT), Mr Holden a self-employed sub-contractor claimed holiday pay and won. His task involved general labouring, clearing sites and transporting equipment between sites. He was contacted by a manger who would provide him work at a number of sites. Mr Holden was paid by price or time and no sales invoices were raised by him prior to him receiving payment. There was no obligation for Mr Holden to be offered work or to accept it. He worked almost exclusively for PCS for 16 years. There was no marketing initiative from his side such as researching other contracts. He did not provide a substitute when he could not work due to his wife's appointments, even when he had the right to do so. All protective clothing, with the exception of safety boots was provided by PCS. Therefore Mr Holden was not a client of PCS  but rather he was integrated into PCS's  business. As work from PCS dwindled, Mr Holden left the company without giving any notice. The Legislation In order for his claim for holiday pay to succeed it was necessary for Mr Holden to establish that he was a worker by virtue of the Working Time Regulations 1998 (WTR) and [...]

By |2018-12-26T13:53:37+00:00May 28th, 2015|IR35|0 Comments

Micro Businesses Fast Payers

Micro Businesses are Fast Payers Micro businesses tend to be the fastest to pay their invoices out of all sizes of business in the UK, according to new research. Data from Experian shows that businesses with 2 workers or less paid overdue invoices within an average 20.58 days beyond the contract terms in 2014/15. This is half a day quicker than in 2013/14 and almost 4 days quicker than the national average of 24.29 days. Large businesses with more than 500 employees took an average 34.18 days to pay overdue invoices in 2014/15. This is the slowest in the country and more than 10 days above the national average. The data shows that all business sizes improved their payment times in 2014/15 from 2013/14: micro businesses with 3-5 employees saw the biggest improvement in payment time, falling from 22.64 to 21.34 days firms with 26-50 employees paid an average 24.11 days late, down from 24.77 large businesses cut their average late payment time from 35.25 to 34.18 days the national average dropped from 25.28 to 24.29 days. Max Firth from Experian, said: "The improved payment performance shown by businesses of all sizes in the last tax year is an encouraging sign for the economy. Cash flow is especially important to SMEs. Late payments can hinder their profitability and growth prospects, while also having a knock-on impact on suppliers."   Latest From The News Desk

By |2018-12-26T13:53:37+00:00May 27th, 2015|Small business|0 Comments

General Election Pledges

General Election Pledges by the Parties With the General Election round the corner, below are the key points made by the major parties regarding taxation. The Labour Party's General Election pledges:  Introducing a new 10p rate of tax  Re-introducing the 50% top rate of income tax for people earning over £150,000 No rate increases of Income Tax, National Insurance or VAT Abolish the controversial non dom status Review of HMRC's working practice and culture Extra powers provided to Scotland so they can make more decisions over tax Introducing mansion taxes on properties worth over £2m The Conservative Party's General Election pledges: Increasing Personal Allowances to £12,500 Increase the 40% higher rate tax threshold to £50,000 No rate increases in VAT, National Insurance contributions or Income Tax Married couples to be allowed to transfer their personal allowances of up to £1,060 to their partner, where both partners are basic rate tax payers Increase the annual non dom charge Inheritance tax threshold for married and civil couples to rise to £1m Liberal Democrats' General Election pledges: Increase Personal Allowances to £12,500 Consider raising the employee National Insurance threshold to the Income Tax threshold Set a target for HM Revenue and Customs to reduce the tax gap and continuing to invest in staff to enable them to meet it Introduce a new offence- corporate failure to avoid economic crime. Introduce penalties for directors and custodial sentences Increase annual non dom charges Reform Capital Gains Tax and Dividend Tax relief Introduce a High Value Property Levy for properties worth more than £2m throughout the UK Allow Local Authorities to allow council tax of up to 200% on second homes Green Party's General Election pledges: Increase the top rate of [...]

By |2018-12-26T13:53:37+00:00May 6th, 2015|Uncategorized|0 Comments

Do Small Businesses Value Business Plans

Business Plans for Small Businesses Up to 29% of small and medium sized businesses fail to see a reason for preparing a business plan, following research undertaken by Close Brothers Business Barometer, which takes into account views of small and medium sized business owners along with senior management. Worryingly, 43% of those who do not have a business plan admit they don't see it as necessary and 20% state they keep business plans in their head. 15% claim having a business plan is not a priority for them. Those businesses that do have a business plan, a surprising 40% review them at least once a year, with 20% reviewing it every two years. Although having a business plan is important, it is only useful if it is reviewed regularly and reflects the ambitions of the business, current and future trends and realistic targets are set, bearing in mind the economic and industry challenges. Regular SWOT analysis (strength, weaknesses, opportunities and threats) should be undertaken and the findings should be implemented and regularly followed up. Otherwise reviewing a business plan becomes another task undertaken by the business with no meaningful outcome. The CEO of Close Brothers Asset Finance, Mike Randall stated, "It is somewhat concerning that so many small and medium-sized firms do not have a business plan as without clear direction, they may be missing out on opportunities for growth and not realising their full potential." "Planning is key to any business throughout its lifecycle. A formal plan can be an extremely valuable tool for managing and growing a business as it allows a company to recognise its strengths and weaknesses and ensure they have appropriate plans in place." 'Of the companies we talked to that do [...]

By |2018-12-26T13:53:37+00:00May 5th, 2015|Uncategorized|0 Comments