Archive for July, 2014

Inheritance Tax

Thursday, July 31st, 2014

Inheritance Tax (IHT) is due when a person’s estate (their property and possessions) is worth more than £325,000 when they die. This is called the ‘IHT threshold’.

The current rate of IHT is 40% on anything above the threshold. The rate may be reduced to 36% if more than 10% of the estate is left to charity.

Who pays Inheritance Tax

Usually the executor or personal representative for the person who has died pays IHT using the funds from the estate.

Trustees are responsible for paying IHT on trusts, which are a way of looking after assets (money, investments, land or buildings) for people. A trustee is a person who looks after the trust.

If you’ve got an inheritance or a gift from someone who has died you only owe IHT if their estate is more than £325,000 and either:

  • it says in the will that you should pay Inheritance Tax
  • the deceased’s estate can’t pay it

There are certain reliefs from IHT. These include estates that include certain business assets or agricultural property.

 

It is also possible to reduce any IHT due on death by reorganising your estate while you are alive. This can be done with the use of trusts or by gifting assets. As you can imagine there are complicated rules that set out how these strategies can be used. Additionally, any assets left to your spouse or civil partner (providing they are UK domiciled) are exempt from IHT.

Trade marks

Tuesday, July 29th, 2014

Ever wondered how you can register a trade mark that makes your brand recognisable, for example a logo or a sound?

Registering a trade mark lets you stop other people from using it without your permission. A trade mark registration lasts 10 years and is only valid in the country of registration. You can renew it every 10 years. Company names and domain names aren’t automatically trade marks. Company names are registered with Companies House (so no-one else can register a company with the same name at the same registry). Domain names for internet use are registered with a domain registrar and are similarly protected.

If you want to protect your brand name or image you will have to go through a different registration process.

Register a trade mark in the UK

  1. Firstly, you will need to check that your brand qualifies as a trade mark – you can’t change it after you’ve submitted an application.
  2. Find out if an identical or similar trade mark already exists – it’s your responsibility to do a thorough search.
  3. If a similar mark does not exist you can proceed to register your trade mark.
  4. The Intellectual Property Office (IPO) checks your application.
  5. The IPO makes your application public to give other people the chance to oppose it.
  6. The IPO accepts or refuses your trade mark application – they’ll send you a certificate if they accept it.

If you are establishing a recognisable brand image the last thing you want is a competitor to capitalise on your hard work by plagiarising your trade mark. The best way to protect your investment is to register your trade mark. The IPO website explains how this can be done or you can employ a registration firm to do the form filling for you. http://www.ipo.gov.uk/types/tm/t-applying/t-apply.htm

National Minimum Wage (NMW) rates and penalties

Thursday, July 24th, 2014

Last week we published details of who is, and who is not, entitled to payment at National Minimum Wage rates. This week we have listed the current rates of NMW that apply.

There are currently three aged based national minimum wage rates and an apprentice rate, which are usually updated in October each year. The rates that apply from 1 October 2013 are as follows:

  • for workers aged 21 years or more: £6.31 per hour
  • for workers aged 18 to 20 inclusive: £5.03 per hour
  • for workers aged under 18 (but above compulsory school age): £3.72 per hour
  • for apprentices aged under 19: £2.68 per hour
  • for apprentices aged 19 and over, but in the first year of their apprenticeship: £2.68 per hour

Apprentices aged 19 or over who have completed one year of their apprenticeship are entitled to receive the national minimum wage rate applicable to their age.

Note for employers:

 

Don’t forget that it’s a criminal offence not to pay someone the National Minimum Wage or to falsify payment records. Employers who discover they’ve paid a worker below the minimum wage must pay any arrears immediately.

 

HMRC officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers, following a worker’s complaint to them. If HMRC finds that an employer hasn’t been paying the correct rates, any arrears have to be paid back immediately. There will also be a penalty and offenders might be named by the government.

It’s the employer’s responsibility to keep records proving that they are paying the minimum wage – most employers use their payroll records as proof. All records have to be kept for 3 years.

Exporters data to be released by Government

Tuesday, July 22nd, 2014

 UK businesses should be aware that the Government are consulting on the possible release of data held by public departments, particularly, HMRC. We have reproduced extracts from a recent press release that sets out the scope of the present consultation.

 

“The data held by the public sector is among the most useful and valuable anywhere. This is why the UK Government is at the forefront in making a step change in the availability of data held by the public sector, with the potential to deliver significant public benefits.

 

… some of the customs data that HMRC holds has the potential to be used in ways which could generate real public benefits if made more widely available, without compromising the core principle of taxpayer confidentiality. In particular, the ability for HMRC to share and publish certain export data would enable HMRC to more effectively support and contribute to public and private sector initiatives to help UK exporters compete and prosper in the global market place.

 

This consultation proposes the release by HMRC of a limited set of exporter data alongside similar data that HMRC already makes available in respect of importers. Release of some exporter data would provide a number of potential benefits such as:

  • greater visibility of UK exporters to new customers in the global market place;
  • assisting developers to create exporter registers and online shop fronts to advertise and showcase UK exporters and their products;
  • enabling those who provide export services to more easily identify their customers;
  • helping importers to locate alternative UK suppliers.

 

There are likely to be further positive uses which emerge only once the data is available.”

A new look to benefits in kind regime?

Tuesday, July 15th, 2014

HMRC are currently consulting with interested parties (the accounting profession and associated professional organisations) to re-vamp the UK’s system for taxing employee benefit in kind and expenses. Changes are planned to simplify this process in accordance with recommendations made by the Office of Tax Simplification.

Consultations commenced 18 June 2014 and due to be completed 9 September 2014.

The four areas of consultation are:

  • The abolition of the £8,500 threshold. The government believes that this threshold adds unnecessary complexity to the tax system and is consulting on who would be affected and how to mitigate the effects of abolition on vulnerable groups of employees.
  • Introducing a statutory exemption for trivial benefits in kind. The government believes that a clear and simple statutory exemption will make administering such benefits substantially easier for employers. The government will therefore consult on the design of such an exemption.
  • Replacing the current system of dispensations for reporting non-taxable expenses with an exemption for expenses paid or reimbursed by employers. The government believes that an exemption would be simpler, more transparent, consistent and easier to use for employers than the current system. This consultation will cover the design features of such an exemption and its administration.
  • Introducing a system of voluntary payrolling for benefits in kind. The government believes that payrolling benefits in kind instead of submitting forms P11D can offer substantial administrative savings for some employers and wishes to create a system that will enable employers to do so if they wish. The government will consult on the design and scope of a payrolling model and is also interested to hear from employers who are already payrolling benefits on an informal basis.

Exchequer Secretary to the Treasury, David Gauke, said:

“Following the valuable work the Office of Tax Simplification has carried out in reviewing employee benefits and expenses, the government is now consulting on changes that will deliver real improvements for businesses and individual and their experience of the tax system.

“We want to make sure we get the structure and detail absolutely right and each consultation will allow us to engage with and learn from those who will be directly affected.”

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