If the business incurs few expenses, and it operates in a sector with a relatively low FRS percentage, it will pay out less VAT to HMRC under the FRS than it would outside the scheme.
Even if the loan account was overdrawn at the end of the accounting period, the section 455 charge can be avoided if the loan is cleared by the corporation tax due date of nine months and one day after the end of the period.
The tax code also indicates whether a taxpayer is a Scottish or a Welsh taxpayer, and whether they should be taxed at the Scottish and Welsh rates of tax, as appropriate. Scottish taxpayers’ codes have an ‘S’ prefix, while Welsh taxpayers’ codes have a ‘C’ prefix.
HMRC have published guidance for employers on the tax treatment of various expenses and benefits provided to employees during the coronavirus pandemic in which they specifically address the extent to which a company car remains available for an employee’s private use.
The P45 is an important document as it is the way in which pay and deduction details are transferred from one employer to the next. As PAYE is operated on a cumulative basis, this transfer of information is crucial, particularly where an employee changes jobs during the tax year.
Where the business operates as a company, the grants should be taken into account in calculating the profits chargeable to corporation tax.
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