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High Income Child Benefit Charges Tax Return Guide 

Child Benefit Charges Tax Return Guide

Getting a pay rise is a good thing that is to be celebrated but it could bring with it new problems especially if your income goes above 50,000.

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If you have children and have been getting Child Benefit tax breaks, you may have to pay back some of the benefits. The good thing is that there are morally acceptable and legitimate ways to reduce tax liability.

Child Benefit if you are Earning More than 50,000

If you or your spouse are earning an income of 50,000 or more in a year before tax, then the HMRC will expect that you pay back a portion or in some instances all of the Child Benefit that has to be declared in the form of Extra Income Tax.

What Happens when you and your Spouse are Making Less than 50,000 Annually?

In the instance that you and your spouse each make less than 50,000 annually, you will be eligible for Child Benefit and will not have to remit or pay back anything to the HMRC.

What Happens when either you or your Spouse is Making between 50,000 and 60,000 Annually

If either you or your spouse is earning between 50,000 and 60,000 annually, you will be expected to declare and pay back part of the Child Benefit you got which will now be deemed extra Income Tax.

What Happens of either you or your spouse is making more than 60,000 per year

If one or both of you are making more than 60,000 a year, then you will need to pay back the Child Benefits as Income Tax.

What Happens When a Spouse Moves In
If you move in with a spouse that is earning more than 50,000, the tax situation will change. If you are earning more than 50,000 and your income is higher than that of your spouse, you will have to pay the tax charge. If their income is higher they will pay the tax charge.

How does it work?

Top tip
One of the biggest benefits of claiming Child Benefits is the effect on your State Pension. This works if you are currently unemployed and happen to be at home looking after your child or children. Since you may not be making payments to National Insurance, the Child Benefits will be credited to your State Pension. You can always call 0300 200 3100 and talk to a Child Benefit Office representative if you need more information on how this works.

If you are being paid on a weekly basis the full amount of Child Benefits will still be paid to you every single month. However, this is only applicable if the amount of money you are making is below the 50,000 income mark.

However, things will typically change if either you or your spouse start making more income. For instance,

if either of you starts getting more than 50,000 a month, the HMRC will expect that you pay more Income Tax. The reasoning for this is that you will need to repay part of the Child Benefit that you are no longer eligible for.

The HM Revenue and Customs authority (HMRC) requires that you file a Self-Assessment tax return. This makes it possible for the HMRC to determine how much in extra Income Tax you should pay.

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Choosing an Accountant in London Guide

Choosing an Accountant in London Guide

Selecting an Accountant for Your Business

Business and tax affairs are sometimes complicated and hence the choice of an accountant is critical, whether you are an established company or a new business. The best accountants will typically have the necessary qualifications, and be members of a regulatory and professional body. Such accountants is good for your business since they have not only the practical experience but also the technical expertise in the field.

 

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Choosing Your Accountant

A good account is one that is suitable for your business and also for your individual needs. As such, whether you are seeking qualified accountants in London or any other location in the United Kingdom, it is absolutely critical to be very careful. Take your time rather than engage in the last-minute rush when the deadline for filing your returns is imminent. When selecting accountants, ensure that the firm has the necessary skills and experience in your industry. The best way to determine their experience is if they have clients that are of the same size and are in the same industry. Such a firm will understand the types of issues the business is likely to face. GM professional accountants work in a number of sectors and are awarded the tree best rated accountants.

Why Get a Licensed Accountant for Your Business

1. They will handle the tedious activities of account preparation so that you can have time to take care of other important activities.
2. Help you to be more efficient in structuring your tax obligations
3. They offer specialized tax saving advice
4. Help you secure funding and loans critical for the growth of the business

Where to Hire a Highly Qualified Licensed Accountant in London

You can always start with asking other people for recommendations though you will still need to ensure that your recommendations are a proper fit. A friend of a friend in your locale might have been great at helping file individual tax returns but they will not cut it if you are a fast-growing business in London.

You should also take into account the benefits of hiring an accounting firm. You will always have someone to step into the gap and take care of all your accounting needs whenever an urgent matter comes up or when your dedicated accountant is on holiday or otherwise incapacitated. A firm will also have accountants with a range of specializations and experience should you need it. However, you should find a firm that is not too large that it is impossible to speak to the same person whenever you email or call in. In an ideal situation, you want a firm that gets you a dedicated accountant that will come to learn how your business works and also build a working relationship with you. Since they will have an intimate understanding of your business they will be able to give highly relevant advice to you.

Critical Things to Take Into Account for When Choosing an Accounting Firm

1. Dedicated accountant for your business
2. Fixed fee options so that you can control costs
3. Have clients of similar size and industry
4. Local accountants that you can meet for one on one meetings

Having fixed fees is particularly critical especially if you are just starting out and need to know the exact costs of accounting services. GM Accountants are located in Ilford and central London and provide fixed price accounting services if you need such services. You get a range of pricing option for anything from basic service to one on one meetings or regular phone support depending on your needs and budget.

Taxation on Foreign overseas Pensions Guide

Taxation on Foreign Pensions

For some professionals, working overseas is a critical component for the growth of their careers. This means that such persons may over the years accumulate significant retirement savings abroad. The big question is “How will these retirement benefits and pensions be taxed once they come back home to the UK to retire?”

The tax obligations could vary depending on how much a person accrued in retirement benefits and savings during that time and the country where they accumulated such savings, the type of retirement provisions employed and the manner of distribution of such benefits. You may have pensions in the US or Europe and its important to assess the tax and look at tax planning solutions before making that choice.

 

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Combined with the fact that there have been changes made to the tax obligations for persons with non-UK retirement benefits, things have become more complicated.

Determining the Nature of Payments

Before providing any advice, the first thing the adviser needs to do is to determine that nature of the client’s benefits. This article analyzes the treatment of pension earnings made while a professional is working abroad. However, it is possible that such a professional might also have other income while they are in retirement.

Different jurisdictions have different ways of encouraging people to save for retirement and not all of such schemes may have the structure or characteristics of what would be considered a pension scheme in the UK.

In some countries, the benefits may include end of service awards, savings schemes or deferment of receipt of employment income. All of these may be treated differently in the UK when they are declared as pension benefits.

The second part of this article makes the assumption that any of the retirement benefits the professional is earning come from a regime that may be regarded as a pension scheme in the UK, even if it is not registered.

Taxation of Lump Sums from a Foreign Pension Scheme

Generally, a person resident in the UK would have to pay income tax on any lump sum payments they get from their foreign pension scheme.

By and large, such lump sums will be fully subjected to income tax regulations.

While the basic premise is that the lump sum will be subjected to income tax, there is need to take into account exemptions that may reduce obligations, given that the professional accumulated the benefits when they were not living in the United Kingdom.

Reduction of Obligation for Foreign Service
You could get a partial reduction or complete exemption of income tax obligations for pension savings that a person might have accrued while working abroad in the Foreign Service.

The FA of 2017 made recent changes to relief for Foreign Service workers and the details of these changes are set out below.

Getting Relief through Invoking a Double Taxation Agreement

The United Kingdom has many Double Taxation Agreements (DTAs) with many countries and these DTAs have articles governing how pension income will be taxed. The pension article in a DTA will typically grant taxation rights to one country and exclude the other. As such, it will be critical to establish when and where the individual was resident in when the pension benefits were accumulated, and what the DTA stipulations say regarding the tax obligations on their pensions.

Home visit Accountants in London

Accountants for Home visits in London

As we are now moving towards digital technology, people can now operate tasks from home. With Video recording and digital signatures , the need to go the accountant has become less popular. There are still benefits of face to face meeting as this form of communication is far superior and better for undertaking.

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GM professional provide accounting and tax services in selected areas and can also assist you with the latest technology to provide you with the same experience. We provide Self assessment tax returns services, Limited company accounting services and tax advisory services.

GM profesional accountants provide these services around the London and Essex area, we have a specialist team that has the experience and expertise to take care of your tax affairs.

Contact us today to enquire about an appointment.

Accountants guide for Remitance basis, Overseas workday relief

Accountants guide for Remittance basis, Overseas workday relief

On the basis that the individual coming to the UK is non-domiciled, they will be able to take advantage of the ‘remittance basis’ for taxing overseas income and/or gains.

This topic can conveniently be divided into two areas:

  1. Overseas workday relief, applicable to certain employment income;
  2. The remittance basis for other (overseas) income and/or gains.
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Overseas workday relief

Where a non-domiciled individual has not been UK resident in previous tax years (or, if UK resident, has been resident for no more than the previous two tax years), general earnings arising in the following tax year which are not in respect of UK duties of the employment, are taxed on the remittance basis only.

Remittance basis generally

For non-domiciled individuals who are not ‘long-term’ residents of the UK (that is, they have been resident for less than seven out of the previous nine tax years), the remittance basis of taxation is available with respect to their other overseas income and their overseas gains, and this can be enjoyed without having to pay the ‘remittance basis charge’ (a sum of £30,000 upwards per tax year).

Where the remittance basis applies, such foreign income and gains are charged for a tax year only on so much of such income or gains as are remitted to the UK in that tax year. The meaning of ‘remitted to the UK’ was significantly tightened up in 2008.

In most cases, the individual has to make a claim for the remittance basis to apply.

There are certain exemptions or reliefs available, in particular ‘Business investment relief’ which was introduced from 2012. This permits monies to be brought into the UK for the purposes of acquiring qualifying business assets, without such amounts counting as ‘remittances’ for tax purposes.

 

Vat registration number for Amazon FBA

Vat registration number Amazon FBA Business

Starting an Amazon FBA business can be challenging. It’s import to assess whether you will need to register for vat. This is an important stage and the correct decisions will need to be made. The best vat scheme will need to be selected and you will need to keep records in MTD format and software.

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This will depend on your location. UK companies have a threshold of 85,000 on a cumulative basis. This threshold does not apply to businesses outside the UK. You may need to register for vat on the onset.

There are few schemes for vat. This will depend on your purchases. You have the standard rate vat scheme and the flat rate vat. With the flat rate vat scheme, there is the limited cost trader rule which will negate the benefit of the vat scheme

Amazon business owners will need to also differentiate between customers, Businesses to business and business to consumers . As the vat treatment can be different if you are selling outside the Uk.

An EC sales will also need to be done with the vat returns.

GM professional accountants specialise in the E-commerce sector. This ensures you are compliant and up to date with latest changes. Our experts help you select the schemes that benefit your business. We help you understand you obligations and fulfil them in a timely manner.

Applying CGT in Divorce Cases, Reports for the Court

Applying capital gains tax (CGT )in Divorce Cases

More often than not, a divorce will result in assets being transferred from one spouse to another. Read on for a better understanding of the application of CGT, including how and when it is used. You may need to produce a capital gains tax report for the court.

When a marriage breaks down, no one ever thinks of the tax obligations that may arise from subsequent happenings. However, it is important to do some tax planning as this can have some significant benefits for both parties.

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Transfers between Spouses

Taxation of Chargeable Gains Act 1992 Section 58 has the provision asserting that if civil partners or spouses that happen to be living together transfer assets in a tax year, the transfers are deemed to be made on a no loss/no gain basis.

The implication is that the person who receives the asset will be treated like they paid an amount equivalent to the total of the original cost of acquisition.

Transfers between Spouses in the Year of Separation
The no loss/no gain treatment is also applicable to transfers between civil partners and spouses for the remainder of the year that the separation is reported, even if the civil partners or spouses may not be living together when the transfers are made.

If dissolution of a civil partnership or a divorce happens in the same year in which the separation was reported, the no loss/no gain treatment is applicable to all asset transfers made after the dissolution or divorce as long as they happen before the end of the tax year.

The ICTA 1988/S 282 defines living together. A woman is deemed to be living together with the husband unless she can show that (a) she separated in circumstances that are likely to make the separation permanent (b) she has a formal deed of separation (c) she separated under a court order.

According to the ruling in Holmes v Mitchell STC 25, a couple may be deemed separated even if they still share a residence. For instance, when financial considerations make it impossible for one civil partner or spouse to move out or when the parties desire to minimize the initial harm that could be inflicted on the children.

Conclusion
In conclusion, capital gains tax on transfers between civil partners or spouses is not payable in a year in which they still live together. This will still be applicable for the entire year in which they got separated. You may have to pay capital gains tax if the asset transfer is done in the year following the separation. The assumption made in such an instance is that the transfer is made at market value. The reasoning for this is that the spouses are still connected to each other until the provisional decree of divorce is proclaimed.

In an ideal situation, the asset transfers if they may attract chargeable tax should be conducted before the end of the tax year of separation. In an instance in which asset transfers could result in tax liability on capital gains, a transfer made in different years may be the best option. The reason for this is that you can reduce the

total payable amount since you get to enjoy two annual exemptions. If the transferor civil partner’s or spouses capital gains tax are likely to be lower in a given tax year as compared to another, then delaying, accelerating or asset transfers could be one way of improving their capital gains tax position.

Accountants Guide for Overseas Contractors

Accountants Guide for overseas contractors

One of the benefits of being a contractor or freelancer is that you can work from wherever and for whomever you want.

Nonetheless, working from abroad is not all sandals and margaritas: There are tax and legal implications if you are working for a foreign company or if you are working in a foreign country.

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Contracting Abroad

If you intend to be away for a few months or even just a few weeks and intend to work while abroad, then you typically will not have to deal with issues with regard to tax.

But if you intend to move for a period of three years or more or even permanently, you are going to be treated as a non-resident person right from the day you leave the UK. Once you are no longer deemed a resident of the UK, you will not have any tax obligations.

Things get more complex if you intend to visit the UK frequently while living abroad. If you have such intentions, the HMRC will deem you a resident expected to pay tax unless it is determined that your visits to the UK are less than:

1) 183 days of a tax year
2) An average of 91 days every tax year over a four year period

In addition to this, the HMRC will take into consideration several other factors such as:

1) Your ties to family
2) Memberships to UK societies and clubs which can prove social ties
3) If you still maintain a house in the UK
4) Whether you still retain work ties such as directorship of your limited company

It is important to note that the 91-day residency test can also be determined through qualitative analysis. These may include aspects such as whether or not you purchased properties in the foreign country you currently live in. If this is deemed insufficient as proof of change of residency, you will be treated as a UK resident for at least three years before your circumstances are reviewed again.

The implication of this is that you may have to pay taxes on capital gains and income on an adjusted basis if you spent a significant number of days in the UK. This is what is referred to as split year treatment.

This can be a particularly significant thing to note, especially if you also have to pay tax in your current country of residence. Given that each country has its own laws on tax and residency, it is advisable to always find a professional tax accountant to give you advice on how tax in your country works.

You also need to remember that you have to apply for the relevant visas if you are residing in a non-EU country. This is usually so if you are on a tourist visa and you intend to stay for more than the typical 90 days allowed.

Residency laws tend to be very complex and hence if you are not sure if you are classified as a UK resident or not, you need to speak with a specialist who knows these things. “Am I a UK Tax Resident” is an

excellent piece that should get you up to speed on how tax and residency in the UK works.

Finally, you will have to take into account your expenses and how the implications of these on your options. If you are going abroad as part of the fulfilment of a contract, then you can claim from your limited company expenses such as hotels, flights among other things.

Nonetheless, if you are just doing a little work while on holiday, you cannot claim any expenses for that.

Accountants Guide for Expats

Accountants Guide for Expats

If you work or live abroad or intend to do so, you need to know that changing your residence from the UK to abroad will impact your tax status.

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Working and Living Overseas

The tax status of expatriates is one very complex issue. If you are not meticulous with your tax planning,
you may find yourself subjected to punitive tax obligations. In addition to having changed your UK tax
status, you will also need to take into account the tax laws of the country where you now live.

Statutory Residence Test

First, you will have to take into account the new expatriate benchmarks as set out in the New Statutory
Residence Test, as set out by the tax authorities.

A good understanding of how it works will be helpful to help you determine:

1) How any income from your investments in the UK will be treated
2) The Capital Gains and Inheritance Tax rules
3) The consequences of selling any of your assets in the UK (such as stocks)

As such, you need to have an expert review your contracts to determine what aspects of your income are
impacted by the change in tax status.

Expatriate Tax Advice if you are leaving the UK

Once your tax status is established, the professionals will assist you with planning your financial affairs so
that you can minimize your tax obligations. Areas that would need to be taken into consideration include:

1) Advise on how tax would be treated in your new overseas resident country and in the UK.
2) Inheritance Tax planning
3) Taking into account efficient asset disposal
4) How to deal with investments

Tax Returns as a Non Resident

In addition to tax planning, you also need to know your filing obligations for both your new residence
country and the UK. We can help you stay compliant and avoid any liability by making sure that:
1) All tax returns and obligations are documented and,
2) Filled out accurately and
3) Filed in a timely manner so that you do not have to pay any late filing fees

Tax Planning when you come back to the UK

This will be the complement to tax planning when you are leaving the UK. You need to take care of similar
issues to make sure you avoid any pitfalls and lessen the amount of tax you have to pay.

Expat Tax Extenuation Professionals

We have specialist tax professionals who provide advice to expatriates on how to perform efficient tax
planning and on tax mitigation.

Deliveroo driver Tax return accountants guide

Deliveroo driver Tax return Accountants Guide

Will Shu the founder and also the CEO of the Deliveroo received motivation after his amazing journey to a great city that was endowed with rich restaurants but they only had one shortcoming! most of these rich restaurants could not really do the food delivery. Will Shu decided to initiate the best local restaurants that could deliver foods to the client s doors.

Deliveroo has since seen a greater growth that’s is approximated at 650% following its convenient and the most reliable food deliveries! Customers can really get their full supply by just making a call. The restaurants partnering with this amazing company has also seen the growth of over 30% and has really done great in creating job opportunities for the people.

Independent self-employed drivers sometimes find it difficult handling issues of the tax. Some drivers are really not educated on the bookkeeping and also the taxes and sometimes they pay the excess or even subjected to some penalties.

All these issues can be really sorted out when a proper accountant who understands s the tax mechanism is employed. You can always contact us for assistance.

 

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Four major bookkeeping requirements for efficient Tax management;

1. The deliveroo driver must have the register with HMRC using there website as self-employed

2. The second step is to ensure that business transactions documents such as the receipts and the expenses are just kept for the year end.

3. The Deliveroo driver should also ensure that they do the self-assessmen tax return which consists of the income and expenses before 31st January of every year.

4. Other liabilities such as the pending tax or the national insurance must be paid before the 31st January every year.

Allowable expenses

Drivers of the Deliveroo are entitled to some allowable expenses which have really done a lot in reducing their tax bill. Taxes are always paid on the amount that is left after subtracting the allowable business expenses. They include;

Mileage claim

Mileage claim is always entitled to the drivers who own a car. When the claim is made, the eligibility to claim for the cost of the car, servicing and also the insurance is canceled. The first 10,000 miles  attracts the rates of 45p and then after which it attracts 25p thereafter.

Car purchase

Purchasing a new vehicle will actually make you liable to claim all the cost in a few years with the following rates;
up to 130g/KM will entitle you to an 18% capital allowances while those that exceed 131/KM will entitle you to an 8% capital allowance.

Car Lease payments

There is also an allowable deduction for the car lease at whilst working as a Deliveroo driver. You can always deduct the amount that is obtained from the cost of the lease, insurance and also the repair cost every month!

Service charges and commission at Deliveroo

Deliveroo drivers can claim deductions for the following services; Tolls and parking charges, insurance, the bank charges, car cleaning, accountants fees vehicle and public liability fee.

Finding a good accountant for your business

Finding the best accounting firm has always been an easy task following the large variety of accounting firms that really offer the same service. They offer the accounting services to the Deliveroo drivers who find the accounting work tedious. GM professional accountants has played an important role in providing deliveroo drivers with mobile apps that enables them recording of the daily transactions.

Among the key roles played by the firms are;

1. Create a Self assessment record with HMRC
2. Are responsible for the bookkeeping and accounts to judge the real profit of the driver.
3. Provision of the mobile Apps that will enable the drivers to do record keep
4. Keep track of all the business expenses and also the income.
5. Keep a record of all the vehicle details such as the mileage.
6. They also provide the preparation of accounts for filling to HMRC

Other roles are the bits of advice on the importance of the record keeping and also they do help in issues that prevent a tax investigations.

For the individual accountant, it can go up to 250 GBP while companies may cost more than 600 GBP. It’s always advisable to check the ratings of any accountant before hiring.

Call nowCovent Garden office address, Amadeus House, 27B Floral Street, London, WC2E 9DP, Ilford office address, 14 Clements Court, Clements lane, Ilford,Essex, IG1 2QY Tel: 0208 396 6128,