Many employers have been enjoying the benefits of the Employment Allowance, which started in April 2014.
Currently, employers can reduce the amount of National Insurance contributions they pay for their employees by up to £2,000. The good news is that it was announced in the recent Budget that with effect from April 2016, the allowance is set to increase to £3,000.
The bad news is that the allowance will no longer be able to be claimed by companies whose only employee is the sole director.
HMRC have recently changed the process for dealing with landlords who are resident overseas, but own and let property in the UK.
Letting agents within the UK must release details of income received by non-resident landlords to HMRC, and they must also deduct basic rate tax from the receipts, before paying it over to the landlord.
As well as this, the agent (or tenant) must submit an annual return to both HMRC and the landlord by 5th July each year, despite the fact that HMRC will no longer be sending out these annual return forms!
In a family business it may be beneficial to pay a bonus to your employee/female director before their maternity leave begins.
As paying Statutory Maternity Pay (SMP) is not optional, if your employee qualifies for it, you must pay it. However, if your business is classed as a small business, (a business that pays less than £45,000 in Class 1 NICs in a year is classed as small for this purpose) you can recover 103% of the SMP paid from HMRC!
If your employee earns at least £111 per week, the employer must pay SMP at 90% of the employee’s average weekly wage, for the first six weeks of the Maternity period, and the lower of either the 90% rate or £138.18 per week for the remaining maternity time.
By paying a bonus before the maternity period begins, you can increase the average weekly wage and increase the amount recovered from HMRC.
The timing of the bonus is crucial to maximise benefits, so please let us know if you need any further advice in this respect.
The new standard personal allowance (the amount you can earn each year free of tax) will be increasing from 6th April 2015.
The standard personal allowance for 2014-15 is currently £10,000, which is due to increase to £10,600 for 2015-16.
However, the personal allowance for those born before 6th April 1938 remains frozen at £10,660.
As well as the increase to the personal allowance, from 6th April 2015, married couples and civil partners will be able to transfer up to £1,060 of their unused personal allowance to their partner, provided that their partner’s total income does not exceed the basic rate threshold.