Grandparents could be eligible for parental leave from 2018

It’s a long way off but the time does fly!

 

Shared parental leave (SPL) and pay is to be extended to working grandparents, Chancellor George Osborne has announced.

 

A consultation is scheduled for 2016 where the policy, intended to give parents more flexibility during a child’s first year, is expected to be implemented in 2018.

 

The policy aims to benefit single parents and families where one parent is self-employed and cannot take SPL.

Pay & Benefits Magazine reported that recent research conducted amongst new mothers showed that they are reliant on grandparents for childcare on their return to work, enabling older workers to stay in employment longer. Almost two million people had given up work, reduced their hours or taken time off work to help family members who could not afford childcare.

 

Source:

Payandbenefitsmagazine.co.uk – November 2015

Making the most of the Annual Investment Allowance

If you are considering investing a considerable amount in plant and machinery, it’s worth considering the tax implications first.

The annual investment allowance (the amount of capital expenditure you can write off against your tax able profits in the period they are purchased) is set to reduce from £500,000 to £200,000 per annum on 1 January 2016.

Although this is still a significant allowance, where your accounting period spans this date, the transitional rules mean that if you time your spend incorrectly you could be losing out on valuable relief.

For example, if your accounting period ends on 31 March 2016, the amount of relief you would be entitled to would equal the time apportioned allowance of £500,000 for the period to 31 December 2015 ie 500,000 x  9/12 = 375,000 plus the time apportioned allowance of £200,000 for the period to 31 March 2016 ie 3/12 x 200,000 = 50,000, giving a total allowance of £425,000 for the whole accounting period.

However the relief available for any expenditure incurred in the period 1 January – 31 March 2016 is limited to the apportioned amount for that period ie £50,000.

Office refit needn’t be taxing

Organising and managing an office refit out comes with a long list of ‘to-dos’ and one thing to take into consideration is the tax relief opportunities that may be available.  If there’s an opportunity to offset these costs, you are likely to want to do as much as you can to benefit from it.

 

What should you consider?

A large amount of your office fit refit costs could be eligible for 100% tax relief against your taxable profits in the year they were incurred. It is prudent to seek advice prior to any spending to ascertain where you could benefit from tax relief. This will ensure that tax relief is maximised by structuring the fit out in the most tax advantageous way. Keeping detailed costings from your office fit out also means that every potential £1 of tax relief can be identified.

For example, if you are considering partitioning off separate offices within your building space, tax relief can be created simply by ensuring that the partitioning is movable and not fixed in place.

 

What’s available for tax relief?

Tax relief isn’t just available on the items you would expect, such as office furniture, but also on electrical and air conditioning systems under the relatively new integral features rules.

It may be that you are considering an office refit on a property that you have recently purchased, in which case there may be further tax reliefs available, which are often overlooked.

 

What are ‘integral features’?

It’s likely that on purchasing a building, you will have purchased along with it ‘integral features’. These are items such as water and electrical systems.

The rules concerning this are complex but, dependent on the facts of each case, it’s likely that some tax relief, and potentially a lot, will be available for the cost of the integral features that would have been included in the cost price of the building, along with any other fixtures and fittings that may have been included in the sale.

If this type of relief has not been identified and claimed at the time of a property purchase, all is not lost, there is no time limit for claiming the relief.

 

How can I make it as easy as possible?

The process can be complicated and confusing, so it’s always best to use the knowledge and expertise of an accountancy firm such as ourselves as we know what elements you can gain tax relief on. With help and advice, you can make the right decisions that will not only result in an impressive office design but also get the most out of your tax planning and any budget you have allocated to complete the project.

 

 

Do you pay professional fees and subscriptions?

When paying any professional fees or subscriptions to professional bodies on behalf of your employees, check that your organisation is among those which receive tax relief from HMRC.

 

This can be checked on the approved professional organisations and learned societies list found on HMRC’s website as follows:

https://www.gov.uk/government/publications/professional-organisations-approval-for-tax-relief-application

 

Form P356 should be used to apply for inclusion on the list of professional bodies and learned societies approved for tax relief (list 3).

 

This will indicate whether a tax exemption can be applied.

 

The basis of taxation will depend on whether the invoice is made out to the employee or the employer. Taxation of expenses relating to professional subscriptions and fees is covered under the Income Tax (Earnings and Pensions) Act 2003.

 

Should your business type not be included in HMRC’s list 3, the payment must be included in the gross pay and subject to both PAYE Income Tax and Class 1 NI.

If the employee pays directly to an organisation which is included in the list on HMRC’s website as earlier indicated and you have no dispensation to exempt you from reporting the payment, the cost needs to be added to your employee’s earnings, it needs to be included in the gross earning and PAYE income tax will need to be deducted. This type of payment is subject to Class 1A P11D (employer’s NI only).

 

Sources:

Pay & Benefits magazine

HMRC