HMRC reminder to employees to claim their tax deductible expenses


HMRC is reminding employees that they may be able to claim a tax rebate on their work related expenses. HMRC estimate that millions of employees, particularly those working in the service industry, could be entitled to a tax refund. Workers, including nurses, hairdressers, construction workers and those working in retail and food sectors, may be able to claim tax rebates.

Individuals in these types of roles sometimes have to pay for work-related expenses including car mileage, replacing or repairing small tools, or maintaining branded uniforms.

Where these types of expenses are incurred, employees may be entitled to claim a tax refund. HMRC is advising individuals to go directly to GOV.UK to check if they can claim extra cash back. HMRC advise taxpayers to log in to their Personal Tax Account to claim their tax relief online and that approved claims should be refunded within three weeks.

Financial Secretary to the Treasury, Mel Stride MP, said:

‘We know what a difference tax relief can make to hard-working customers, especially at this time of year. HMRC is keen to make sure customers get all the relief they’re entitled to, by using the online service.

Tax relief isn’t available for all employment expenses, so the online Check If You Can Claim tool is very helpful – then if your claim is approved, your full tax relief will be paid directly into your bank account.

The majority of claims are for repairing or replacing tools and branded uniforms, professional subscriptions and mileage. Healthcare workers, people working in food and retail, and those in the construction industry are among the top professions to claim from HMRC.

HMRC is advising that taxpayers may be able to claim tax relief on the cost of:

  • repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
  • cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
  • business mileage (not commuting)
  • travel and overnight expenses
  • professional fees and subscriptions.

Contact us if you would like help claiming tax relief on your expenses.

Internet link: GOV.UK news

Pension contribution increases ahead


The Pensions Regulator (TPR) is reminding employers that from 6 April 2019, the amount that will need to be paid into a workplace pension will increase to an overall minimum of 8%, with employers contributing at least 3% of this total amount.

TPR is now starting to write to all employers to remind them of their duties. TRP website provides further information on the increases and a link to a letter template advising employees of the increase.

TPR is advising employers that they should also check with their payroll software provider and pension provider to ensure plans are in place ahead of 6 April 2019.

Please contact us if you would like help with your payroll or pensions auto enrolment compliance.

Internet link: TPR increase

Scottish Budget 2018 income tax changes


Finance Secretary Derek Mackay delivered the 2019/20 Scottish Draft Budget on Wednesday 12 December 2018 setting out the Scottish government’s financial and tax plans. The announcement had been timed to take place after Chancellor of the Exchequer Philip Hammond delivered the UK Budget on 29 October 2018. The Finance Secretary announced changes to Scottish income tax. Contact us for advice on how the Scottish Budget impacts you.

Scottish Income tax

The government has devolved powers to set the rates and bands of income tax (other than those for savings and dividend income) which apply to Scottish resident taxpayers. The Scottish Budget announced the following income tax rates and bands for 2019/20. These will be considered by the Scottish Parliament, and an agreed Scottish Rate Resolution will set the final Scottish Income tax rates and bands for 2019/20.

The current rates and bands for 2018/19 and the proposed rates and bands for 2019/20 on non-savings and non-dividend income are as follows:

2018/19 2019/20Band NameRate
Over £11,850* – £13,850Over £12,500* – £14,549Starter19%
Over £13,850 – £24,000Over £14,549 – £24,944Scottish Basic20%
Over £24,000 – £43,430Over £24,944 – £43,430Intermediate21%
Over £43,430 – £150,000**Over £43,430 – £150,000**Higher41%

Over £150,000**

Over £150,000**Top46%

* assuming the individual is entitled to a full UK personal allowance

** the personal allowance will be reduced if an individual’s adjusted net income is above £100,000. The allowance is reduced by £1 for every £2 of income over £100,000.

The personal allowance is currently £11,850 for 2018/19. The personal allowance for 2019/20 will be £12,500.

The UK higher rate tax point for 2019/20 is set at £50,000 (for those entitled to the full UK personal allowance) and the tax rates for non-savings and non-dividend income have been maintained at 20%, 40% and 45% respectively. The additional rate of 45% is payable on income over £150,000.

For 2019/20 Scottish taxpayers with employment income of approximately £27,000 will pay the same amount of income tax as those with similar income in the rest of the UK. For higher earners, with pay of £150,000, a Scottish taxpayer will pay approximately an extra £2,670 of income tax than those on similar income in the rest of the UK.

Internet link: GOV.SCOT budget

The Scottish Budget key announcements


On 12 December 2018 Finance Secretary Derek Mackay delivered the 2019/20 Scottish Draft Budget setting out the Scottish government’s tax and financial plans.

Key announcements included new bands for Scottish income tax and changes to Land and Buildings Transaction Tax.

Scottish income tax

The Scottish government has devolved powers to set the rates and bands of income tax (other than those for savings and dividend income) which apply to Scottish resident taxpayers.

The Scottish Budget announced the following income tax rates and bands for 2019/20 which will be subject to Parliamentary approval:

2018/19 2019/20Name of BandRate
Over £11,850* – £13,850Over £12,500* – £14,549Starter Rate19%
Over £13,850 – £24,000Over £14,549 – £24,944Scottish Basic Rate20%
Over £24,000 – £43,430Over £24,944 – £43,430Intermediate Rate21%
Over £43,430 – £150,000**Over £43,430 – £150,000**Higher Rate41%

Over £150,000**

Over £150,000Top Rate46%

* assuming the individual is entitled to a full UK personal allowance

** the personal allowance will be reduced if an individual’s adjusted net income is above £100,000. The allowance is reduced by £1 for every £2 of income over £100,000

The personal allowance is currently £11,850 for 2018/19. The personal allowance for 2019/20 will be £12,500.

Land and Buildings Transaction Tax (LBTT) changes

Currently higher rates of LBTT are charged on purchases of additional residential properties, such as buy-to-let properties and second homes. Although these are the main targets of the higher rates, some other purchasers may have to pay the higher rates.

The Additional Dwelling Supplement (ADS) potentially applies if, at the end of the day of the purchase transaction, the individual owns two or more residential properties.

The Scottish government announced an increase in the ADS from 3% to 4%. If approved by the Scottish Parliament, the rate change will come into force from 25 January 2019, but will not apply if the contract for a transaction was entered into prior to 12 December 2018. Existing arrangements allowing for the supplement to be reclaimed will continue.

Changes for non-residential rates and bands

The Scottish government will reduce the lower rate of non-residential LBTT from 3% to 1%, increase the upper rate from 4.5% to 5% and reduce the starting threshold of the upper rate from £350,000 to £250,000. Again, these changes are expected to come into force from 25 January 2019, but will not apply if the contract for a transaction was entered into prior to 12 December 2018.

The proposed rates and band for non-residential LBTT transactions are as follows:

Non-residential transactions

Purchase priceRate
Up to £150,0000%
£150,001 – £250,0001%
Over £250,0005%

Non-residential leases

Net present value of rent payable Rate
Up to £150,0000%
Over £150,0001%

For further details on how the Scottish Budget could affect you, please contact us.

Inheritance Tax Review by Office of Tax Simplification


The Office of Tax Simplification (OTS) has published the first of two reports on inheritance tax.

The first report sets out an explanation of the issues and complexities of IHT, gives an overview of concerns raised by the public and professional advisors during the review and then makes recommendations. This first report examines the administrative issues that people complain about and which were raised in the responses. The second report covering other wider areas of concern to people will follow in Spring 2019.

The first report highlights the benefits of:

  • reducing or removing the requirement to submit forms for smaller or simpler estates, especially where there is no tax to pay
  • simplifying the administration and guidance
  • the advantages of banks and other financial institutions having standardised requirements
  • automating the whole system by bringing it online

Angela Knight CBE, OTS Chairman, said:

Inheritance tax is both unpopular and complicated. The basic design of the tax itself is for government, but at the OTS we can address that most frequent of all comments “at least make it easier for the families to fill in the forms”. The OTS has worked on ways to address these practical complexities, which have come through loud and clear.’

‘The recommendations in this report will make it easier for the majority, and would mean that in future, many may not have to do the forms at all. Improving the administration of this tax in these ways is important as having to deal with the current process can seem overwhelming to people at a time when they are both preoccupied and distressed.

Internet link: GOV.UK OTS IHT report