Anna’s Accountancy Alerts – Week 27 (4th – 10th October 2021)

business

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Employee loans

A loan to an employee which exceeds £10,000 at any point in the year results in a taxable benefit unless an exemption or exception applies.  For example, interest is due and payable at the rate set by HMRC (2% per annum for 2021/22), or the loan only exceeds £10,000 because of an advance of expenses of up to £1,000.

How to calculate an employee’s billable cost per hour

Ensure you include all employment costs for each billable employee. Gross salary, employers’ NI, company pension contribution, benefits, training and development costs and the annual value of equipment such as a mobile phone and laptop.

As a guide, additional employee costs are usually between 15% and 25% of their salary. You then need to spread these costs across the employee’s available hours, deducting any non-working hours such as non-client admin and new business generation.

Penalties

HMRC delays in responding to your communications that contribute to a tax return being late can count as reasonable excuse in an appeal against late filing penalties.

Always keep records of guidance given by HMRC officers. If your appeal goes to Tribunal they could be important.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.