National Minimum Wage and National Living Wage rates

National Minimum Wage and National Living Wage rates

The hourly rate for the minimum wage depends on your age and whether you’re an apprentice..

You must be at least:

  • school leaving age to get the National Minimum Wage
  • aged 25 to get the National Living Wage – the minimum wage will still apply for workers aged 24 and under

Current rates

These rates are for the National Living Wage and the National Minimum Wage. The rates change every April.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
October 2016 (current rate) £7.20 £6.95 £5.55 £4.00 £3.40
April 2017 £7.50 £7.05 £5.60 £4.05 £3.50

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

  • aged under 19
  • aged 19 or over and in the first year of their apprenticeship

Example An apprentice aged 22 in the first year of their apprenticeship is entitled to a minimum hourly rate of £3.40

Apprentices are entitled to the minimum wage for their age if they both:

  • are aged 19 or over
  • have completed the first year of their apprenticeship

Example An apprentice aged 22 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £6.95

 

Share

GIFT AID OVERHAUL TO HELP ONLINE AND SMS CHARITY DONORS.

The new Gift Aid rules are set to come into effect in April 2017.

The government is still reviewing responses to the consultation, but once completed, draft Regulations will be made later this year under the Donations to Charity Regulations of 2016.

Measures are designed to make it easier for donations to be made via text messages or SMS but to still benefit from GIFT AID contributions.

Currently the charity or intermediary’s claim has to be supported by the donor’s name, address and confirmation that the donor is a tax payer. Under the new proposals the government is proposing a system whereby there is one declaration per intermediary who will then be able to create a declaration for all donations that the donor makes for the rest of the tax year. This should relieve the burden on intermediaries who currently have to obtain a Gift Aid declaration for each individual charity a donor donates to.

There are up to 139,000 charities registered for Gift Aid. Less than 70,000 actually claim Gift Aid as this stand.

It is anticipated that if the new procedures are adopted in April this will mean a donor using a fundraising website to sponsor various different parties and raising money for multiple charities will be able to complete one Gift Aid declaration on the website effectively allowing (authorising) the intermediary to register the donor across the board for a 12 month period. The onus is on the donor to notify any change in tax status during this period.

HMRC will issue guidance to cover intermediaries and their role in administering Gift Aid around the same time as the new regulations come into force.

We work with many charities throughout Hampshire. If we can help you with your accounts and/or your accounts administration please do not hesitate to call or email.

www.winchesterbourne.com   (e) sarah@winchesterbourne.com   (t) 01962 715671

Share

SAGE WARNS CUSTOMERS OF DATA BREACH

A statement on the company’s website says:

“We believe there has been some unauthorised access using an internal login to the data of a small number of our UK customers so we are working closely with the authorities to investigate the situation.

Our customers are always our first priority so we are communicating directly with those who may be affected and giving guidance and measures they can take to protect their security.

Anyone who has any concerns should call a dedicated helpline number, 0845 145 3345. They should leave a message with their details, or alternatively email customercontact@sage.com.”

 

About 280 businesses are thought to be affected and the breach to have happened in early August, according to a BBC report. It is not clear if information was stolen or just viewed.

It has been reported to the City of London police and also to the Information Commissioner’s Office (ICO) who could if they decide Sage had been negligent take action including criminal prosecution, non-criminal enforcement, or undertaking an audit at the firm.

www.winchesterbourne.com (e) enquiries@winchesterbourne.com (t) 01962 715671

 

Share

Getting the structure and entity correct for your business is fundamental. Here we take a look at the use of Trading under different names.

After company registration, some companies may decide that they want to trade under a different name to the one that is on the register with Companies House. There are a number of reasons a company may use a different trading name, or “business name’. There are restrictions to the different names that a company can use, but they are more relaxed than those that apply when you register a company.

A company may use a trading name for various reasons. A sole trader may decide that they are going to take the route of setting up a company, but chooses to incorporate under a different name. The sole trader may continue to trade under their previous name, in order to maintain a brand and their customer loyalty achieved to date. In this situation, the company can achieve maximum benefits: having the professionalism of a limited company name, but not losing the customers that are familiar with the brand.

Alternatively, trading names can be a practical way of dividing different activities within one company, without having to form a complicated group structure of companies. If a company trades in a number of different areas, it may be useful to have one company with numerous different trading names to divide the business.

When setting up a company, you are unable to use a company name that is currently being used on the register of companies. This regulation does not apply when using a trading name. However it is important not to cause confusion between your company and another, as this could lead to a claim of passing off. If your company is seen to be misleading customers, impersonating another company and therefore damaging their business, you could face a legal claim. It is also important to avoid legal claims arising from trademark infringement, or similar. By using a name that is protected by intellectual property rights you could find your company subject to a legal claim, so it is important to study current protection.

Also by not registering your trading name at Companies House as a separate company there is nothing to stop someone else from registering a company with that name at Companies House.

There are also certain “sensitive” situations and words that will require written consent from the appropriate body. Examples are those which imply a connection to a government body, or relating to the structure of the company (for example, “Group”). Similarly, the trading name must not mislead the consumer into the type or activity of the company, for example, using “Ltd” when it is not actually registered with Companies House under that name.

It should be noted that although a limited company is perfectly entitled to use a trading name, they should display their company name as it appears on the incorporation certificate in the relevant places. The company name should be displayed at the company’s registered office, and additionally in legible text somewhere on correspondence from the business.

Just an observation – if you think the new one is likely to fail, it may be a bit dodgy running it under the same ltd co. as your main one, as if it goes into debt, it could also bankrupt your main business?

For more help and advice contact sarah@winchesterbourne.com or telephone 01962 715671

Share

R&D tax relief of 230% – New Clearance Procedure for Small Companies

If you can demonstrate that what you are doing is innovative, not just in relation to previous knowledge, but also what is known generally, your expenditure in pursing this innovation, including staff costs, consumables and sub-contractors, can be multiplied by 2.3 when calculating the total amount to offset against profits for corporation tax purposes – that equates to 230% tax relief [From 1 April 2015].

Take up by companies is low despite the huge potential savings.

In order to be eligible your company must:

  • Have an annual turnover less than £2million
  • Have less than 50 employees
  • Have not claimed R&D tax relief before.

So if your company meets all these criteria you can apply to HMRC for advance assurance.

To do so you can fill in a form on-line, send accounts and registration details of your company and HMRC will contact your “nominated” person to talk about the companies activities in detail, either by phone or in person.

If HMRC are then satisfied that the company qualifies under the rules of the research and development scheme thy will send a written decision letter and you are free to claim 230% tax relief on the related expenditure.

If you would like advice or help with the clearance procedure and contacting HMRC call Winchester Bourne on 01962 715671 or email sarah@winchesterbourne.com

 

Share

EIS or SEIS – offer generous tax reliefs but…

These are complex schemes, there are many pitfalls so we recommend you take nothing for granted!

When issuing EIS or SEIS shares ordinary shares must be subscribed for in cash and fully paid up at the time of issue. [Payment by capitalising an existing debt, for example, does not count as a cash subscription].

In order to qualify the company must be a trading company. This excludes the following: any kind of financial or property based trade, a company dealing in land, commodities, property development, hotels, nursing homes, farming and forestry.

There are various qualifying tests in order to obtain the income tax relief and there may be a withdrawal or reduction of relief if these are not met.

Also it is important to remember that monies raised from the issuing of the EIS/SEIS shares should be “spent” within two years and be employed for the purposes of the trade. We would advise that an additional account set up to demonstrate that it is these monies spent in this way and not working capital.

For more advice and how to benefit and not fall foul of the many pitfalls contact Winchester Bourne: by phone on 01962 715671 or email sarah@winchesterbourne.com

Share

“Dividend Tax” on PAYE coding notices?

We have seen “dividend tax” as a deduction appearing on some 2016/17 PAYE coding notices.

This year sees the change in the taxation of dividend payments with dividends that fall outside the £5,000 dividend allowance being taxed at 7.5%, 32.5% and 38.1% depending on an individual’s level of income. [Dividends are always the final form of income added when the calculation of a person’s tax on income is calculated].

This means an increase in the taxation of dividends for many company owners/directors.

To clarify the “dividend tax”, as quoted on these notices, is not a tax but is an estimation of tax that may be payable – dividends paid may vary depending on a company’s performance, fluctuating profits and changing tax regimes and may also vary depending upon the other elements of the individual’s income mix for a specific year. The calculations can be complex and may not be easy to estimate until much further into a year.

Is this HMRC attempting to get tax payments in sooner – absolutely! Can you object – absolutely too!

Can HMRC include this deduction in the PAYE code? Yes, but only if the individual does not object.

Objections can be made by telephone to HMRC or on-line by completing a form and it should be a fairly straight-forward matter to get the PAYE coding revised.

Confused about your PAYE coding, unsure of the changes to tax rates and how these impact you?

Unsure about the tax implications for your income this year?

Call Winchester Bourne on 01962 715671 or email sarah@winchesterbourne.com

 

Share

HMRC AND NOT FOR PROFIT SPORTS CLUBS

HMRC is currently undertaking a campaign specifically targeted at not for profit sports clubs that may have incorrectly issued certificates in order to obtain zero-rated construction services for new buildings and annexes used for a “relevant charitable purpose”. This is a complex area of VAT.

The construction of a new building or annex intended to be used solely for a “relevant charitable purpose” can be zero-rated if the charity provides their developer with an appropriate certificate before the supply is made. The definition of a “relevant charitable purpose” is otherwise than in the course or furtherance of business or as a village hall or similar.

HMRC has focused on certain clubs, particularly (but not limited to) football, rugby and cricket clubs that have used the funding to construct buildings and annexes and requested information relating to the building projects.

The sole purpose of this exercise by HMRC has been to check that the buildings would be used for a “relevant charitable purpose”.

HMRC has since issued numerous assessments and penalties to sports clubs which have, in HMRC’s opinion, incorrectly used the certificates.

Winchester Bourne offers a full range of support services and expertise in VAT schemes and their correct administration and implementation. 

For further information, ask Sarah at: sarah@winchesterbourne.com 

Share

Changes to the tax on dividends from 6th April 2016 – are you aware?

In the latest Budget the Chancellor changed the way that dividends are being taxed from the start of the new tax year 6 April 2016.

Presently and Dividends paid, that form part of the income between the tax free allowance and the 40% tax threshold within a tax year, attract no additional personal tax [corporation tax having been paid by the company at 20%].

From April 6th this changes. The tax on dividends between the tax allowance and the 40% tax band becomes 7.5% [However the first £5000 of dividends paid in a year are tax free].

This emphasises that from 6th April 2016 it becomes even more important to plan how and when to take your remuneration and to take advice about this. Indeed there is no time like the present to be reviewing this year and next year’s income streams.

At Winchester Bourne we work with our clients to help them achieve the most tax efficient ways to plan the remuneration. For more information please call 02380 693366 or email Sarah.

sarah@winchesterbourne.com

Share

THE END OF BUY TO LET?

For Buy to Let landlords the world has changed; and it has not changed for the better. By 2020, the Chancellors change to the tax regime for privately owned buy to let property will be fully in force and will have fundamentally changed the economic model on which investors have relied upon for their success, and profit.

As of 2020 Buy to Let landlords who own their property personally will no longer be able to deduct the whole of the interest they pay on a mortgage. They will only be able to claim a tax credit of 20% of the mortgage interest.

At present the tax picture for a rental property might look like this:

Rental Income                       £20,000
Mortgage Interest                 £13,000
Taxable Profit                        £7,000
Tax at 40%                             £2,800
Net Profit                                £4,200

Once the changes have fully taken effect, the picture will be changed beyond measure:

Rental Income                        £20,000
Mortgage Interest                  £13,000
Tax Credit (20%)                    £2,600
Taxable Profit                         £17,400
Tax at 40%                              £6,960
Net Profit                                 £40

An extreme example perhaps but the lesson is clear; property investors will have to look at restructuring their portfolio or face losing their profit – this is where Winchester Bourne can help you.

There are several options open to Buy to Let landlords to prepare for the change:

  • Reduce Borrowing or Sell Up – Bringing down the overall level of borrowing across your portfolio will reduce the effect of the loss of relief. Properties with higher interest charges should be targeted first. Consideration might be given to selling low yield properties to reduce the debt on high performance properties.
  • Increase Rents – The National Landlords Association have warned that this is the likeliest response to the change and has the potential to add £840 per year to the average rent bill. It may not have the effect intended; regardless of the choke hold on housing supply the rental market still works like any other. If people feel like they are being over charged; they’ll vote with their feet.
  • Use a Corporate Wrapper – Since the new rules only apply to personally owned properties, consideration might be given to restructuring properties into a Limited Company. Care should be taken however as there are Stamp Duty Land Tax and Capital Gains Tax consideration.
  • Consider Trust Planning – Using a vehicle such as a trust to structure a portfolio can have the effect of changing the way that revenue from a property is treated for tax purposes.

If you are a property investor it seems clear that you need to start planning now. The phased approach that the government is taking is welcome, but hard and fast decisions need to be made to preserve the profitability and the efficacy of your investment.

For more information about any of the above please call Winchester Bourne on 02380 693366 or email sarah@winchesterbourne.com

Share