Author: Glenn

In general, entertaining employees is an exception to the normal rule that business entertainment costs are not allowable for tax purposes. If an employer provides entertainment exclusively for employees and it is “wholly and exclusively for the purposes of the trade”, then the expenditure is allowable as a business deduction. Examples include a staff Christmas party, or a sporting event open only to employees.

It is important that the entertainment is not merely incidental to hospitality provided for customers. The definition of employees accepted by HMRC can extend to retired staff and the partners of existing and past employees.

Although the expenditure is allowable, the employees themselves may have to pay tax on the entertainment received and the employer will have to report this on form P11D. To counter this, many employers choose to include such items in a PAYE Settlement Agreement (PSA) and pay Income Tax and National Insurance contributions on behalf of the employees

Proper record keeping is important to be able to demonstrate where legitimate staff entertainment has taken place. Care should be taken to ensure that staff entertaining is reasonable, as excessive entertainment could lead to a tax charge for employees even if the employer’s costs have been disallowed (in whole or in part).

The Additional State Pension is only available to those who reached the state pension age before 6 April 2016 and are receiving the Old State Pension. The Additional State Pension is an extra amount of money paid on top of the basic Old State Pension.

The Old State Pension is designed to provide individuals of state pension age with a basic regular income and is based on National Insurance Contributions (NICs). To get the full basic State Pension, most people need to have had 35 qualifying years of NICs.

Claimants will automatically have received the Additional State Pension if they were eligible for it. Those who had contracted out were not eligible for the Additional State Pension.

If your spouse or civil partner dies, you may be able to inherit some of their Additional State Pension if you reached State Pension age before 6 April 2016. If you do not receive the full basic State Pension, you may be able to increase it by using your spouse or civil partner’s qualifying National Insurance years.

You may also be able to inherit part of their Additional State Pension or Graduated Retirement Benefit. Different rules apply if you reached State Pension age on or after 6 April 2016. If relevant, you should contact the Pension Service to check what you can claim.

When a couple separates or divorces, most attention focuses on the emotional and practical aspects. However, it is important to consider the tax implications of transferring assets, as these can have significant financial consequences if not managed carefully.

It is most important to consider if there are any Capital Gains Tax (CGT) implications. For transfers between spouses or civil partners, the rules changed on 6 April 2023. Couples that separate or divorce can transfer assets on a ‘no gain/no loss’ basis for up to three years after they stop living together. If the transfer is part of a formal divorce agreement, there is no time limit, ensuring no immediate CGT arises.

Private Residence Relief (PRR) may exempt individuals from paying CGT if the family home meets certain qualifying conditions. It is also important for couples to consider making a legally binding financial agreement. If an agreement cannot be reached, the court can issue a financial order, outlining how assets, financial support, and other arrangements are handled.

Careful planning during separation or divorce can help avoid unexpected tax charges and ensure that financial matters are resolved fairly for both parties.

HMRC online services allow individuals, businesses and agents to manage tax matters securely over the internet. Using an HMRC online account, you can send information such as self-assessment tax returns or VAT registration applications, view important records like your business or personal tax account and make payments online.

To access these services, you will need to ensure you have set up an account with HMRC. If you do not already have sign-in details, you can easily create them. HMRC provides three types of online services accounts: individual accounts, organisation accounts and accounts for agents.

An individual account lets you set up a Personal Tax Account where you can complete tasks such as checking your Income Tax estimate and tax code, updating personal details and claiming tax refunds. You can also register for self-assessment if you need to report income from sources such as property or investments. The same sign-in details can be used for both services.

Organisation accounts are for businesses and trusts. A business tax account allows sole traders, partnerships and limited companies to register for self-assessment (if self-employed), VAT, PAYE and Corporation Tax, depending on what is required.

A number of HMRC services use a separate sign-in process, including excise, import and export services, childcare accounts and for reporting Capital Gains Tax on UK property.

Claiming Business Asset Rollover Relief allows for the deferral of Capital Gains Tax (CGT) when taxpayers sell or dispose of certain assets and use all or part of the proceeds to buy new business assets. The relief means that the tax on the gain of the old asset is effectively rolled over into the cost of the new asset with any CGT liability deferred until the new asset is sold.

Where only part of the proceeds from the sale of the old asset is used to buy a new asset a partial rollover claim can be made. It is also possible to claim for provisional rollover relief where the taxpayer expects to buy new assets but has not yet done so.

Business Asset Rollover Relief can also be claimed if taxpayers use the proceeds from the sale of the old asset to improve assets they already own.

The total amount of rollover relief is dependent on the total amount reinvested to purchase new assets.

The main qualifying conditions to be met to when claiming relief are as follows:

• you must buy the new assets within 3 years of selling or disposing of the old ones (or up to one year before);
• your business must be trading when you sell the old assets and buy the new ones; and
• you must only use the old and new assets for trading.

Under certain circumstances, HMRC has the discretion to extend these time limits. In addition, both the old and new assets must be used by your business, and the business must be trading when you sell the old assets and buy the new ones.

Taxpayers must claim relief within 4 years of the end of the tax year when they bought the new asset (or sold the old one, if that happened after).