September Newsletter

This month's communication includes an article about HMRC's online Personal Tax Accounts - a way of keeping track of your tax transactions, income, benefits and a whole lot more. We are also letting you know the latest position on the High Income Child Benefit Charge for earners of over £60,000 - and your options if this affects you. As working from home culture continues to be a popular choice (including hybrid models where you combine working from home and at your place of work) it's worth knowing what tax allowances you can claim for. Our final article highlights Pension Credits for those on a low income and of pensionable age. It goes hand-in-hand with the Winter Fuel Allowance so it's important to check eligibility to benefit from both. Don't forget to check our financial deadlines calendar - we have key dates that take us up to the end of October.

Links to our latest blogs

Measuring the health of your business with ratio measures

What’s an Employee Ownership Trust?

Why your accountant is the mentor you didn’t know you needed

Why Choose Bidwell Accountancy's Bookkeeping Services?

Elevate Your Tax Strategy with Bidwell Accountancy

Unlock Greater Profitability with Bidwell Accountancy

Do you have a personal tax account?

HMRC's Personal Tax Accounts (PTAs) serve as an online tool that enables taxpayers to view and update their information in real time. The PTA can be used for many routine requests and services and help you bypass the need to call or write to HMRC.

Every individual in the UK that pays tax has a PTA, but taxpayers must sign up in order to access and use the service. This can be achieved by using the Government Gateway. You may need to verify your identify when using the service.

The following services are currently available on your PTA:

• check your Income Tax estimate and tax code
• fill in, send and view a personal tax return
• claim a tax refund
• check your Child Benefit
• check your income from work in the previous 5 years
• check how much Income Tax you paid in the previous 5 years
• check and manage your tax credits
• check your State Pension
• check if you'll benefit from paying voluntary National Insurance contributions and if you can pay online
• track tax forms that you've submitted online
• check or update your Marriage Allowance
• tell HMRC about a change of name or address
• check or update benefits you get from work, for example company car details and medical insurance
• find your National Insurance number
• find your Unique Taxpayer Reference (UTR) number
• check your Simple Assessment tax bill

The PTA is a key component of HMRC's broader strategy to transition to a fully digital tax service.

Update on High Income Child Benefit Charge

Changes to the High Income Child Benefit Charge (HICBC) came into effect on 6 April 2024. The income threshold at which HICBC starts to be charged increased to £60,000 (from £50,000).

The charge is calculated at 1% of the full Child Benefit award for every £200 (2023-24: £100) of income between £60,000 and £80,000. (2023-24: between £50,000 and £60,000). For taxpayers with income above £80,000 (2023-24: £60,000) the amount of the charge is the same as the amount of Child Benefit received. The HICBC therefore either reduces or removes the financial benefit of receiving Child Benefit.

For new Child Benefit claims made after 6 April 2024, any backdated payment will be treated for HICBC purposes as if the entitlement fell in the 2024-25 tax year if backdating would otherwise create a HICBC liability in the 2023-24 tax year.

Even if HICBC applies to you or your partner, it's generally still beneficial to claim Child Benefit as doing so can safeguard certain benefits and ensure your child receives a National Insurance number. Claims can be made by using the HMRC app or online resources. New claims are automatically backdated for up to 3 months or to the child's birth date if later.

Taxpayers can choose to continue receiving Child Benefit - and pay the tax charge - or opt to stop receiving benefits and avoid the charge.

Claim tax deduction for working from home

Employees who are working from home may be eligible to claim a tax deduction on certain work-related bills. If their employer does not cover these expenses or allowances, they can claim tax relief directly from HMRC.

You can claim tax relief if you are required to work from home, such as if your job requires you to live far from your office or if your employer does not have an office. However, tax relief is typically not available if you choose to work from home, even if your employment contract allows it or if your office is occasionally full.

Employees can claim tax relief of £6 per week (or £26 per month for those paid monthly) to cover additional costs of working from home without needing to keep specific records. The amount of tax relief you receive depends on your highest tax rate. For instance, if you pay the 20% basic rate of tax, you will receive £1.20 per week in tax relief (20% of £6). Alternatively, you can claim the exact amount of additional costs incurred, but you must provide evidence to HMRC. HMRC accepts backdated claims for up to four previous tax years.

You may also be eligible to claim tax relief for using your own vehicle, whether it's a car, van, motorcycle, or bike. Generally, there is no tax relief for regular commuting to and from your usual workplace. However, the rules differ for temporary workplaces, where such expenses are typically allowable, or if you use your own vehicle for other business-related mileage. Additionally, you may be able to claim tax relief on equipment purchased for work, such as a laptop, chair, or mobile phone.

If you are an employee who is working from home, you may be able to claim tax relief for some of your bills that are related to your work. If your expenses or allowances are not paid by your employer, then you can claim tax relief directly from HMRC.

Could you claim Pension Credits?

Pension Credits can provide extra income to those over State Pension age and on a low income. The credits were first introduced back in 2003 to help keep retired people out of poverty.

The Department for Work and Pensions has launched a Pension Credit awareness drive, urging pensioners to check their eligibility for Pension Credit in order to secure this year's Winter Fuel Payment. This follows the Chancellor's recent announcement that the Winter Fuel Payment will be means tested in future.

Approximately 1.3 million households in England and Wales are expected to continue receiving Winter Fuel Payments. The government is eager to increase the uptake of Pension Credit to ensure that low-income pensioners who qualify for these payments continue to receive the Winter Fuel Payment. Pensioners must apply by 21 December 2024 in order to make a backdated claim for Pension Credit and be eligible for the Winter Fuel Payment.

Pensioners whose weekly income is below £218.15 for a single person or £332.95 for a couple should check to see if they are eligible. If your income is higher, you might still be eligible for Pension Credit if you have a disability, you care for someone, you have savings or you have housing costs. Not all benefits are counted as income.

Claimants entitled to the Pension Credit could be entitled to a support package worth an average of £3,900 per year. Details of how to make an application for Pension Credit can be found on GOV.UK at https://www.gov.uk/pension-credit/how-to-claim 

The Chancellor of the Exchequer, Rachel Reeves commented that: 

"The dire state of the public finances we inherited from the previous government means we've had to make some very difficult decisions.

Our commitment to supporting pensioners remains, which is why we are maintaining the triple lock.

We want pensioners to get the support they are entitled to. That's why I urge all pensioners to check whether they are eligible for the Pension Credit."

Tax Diary September/October 2024

1 September 2024 - Due date for corporation tax due for the year ended 30 November 2022.

19 September 2024 - PAYE and NIC deductions due for month ended 5 September 2024. (If you pay your tax electronically the due date is 22 September 2024)

19 September 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 September 2024.

19 September 2024 - CIS tax deducted for the month ended 5 September 2024 is payable by today.

1 October 2024 - Due date for Corporation Tax due for the year ended 31 December 2023.

19 October 2024 - PAYE and NIC deductions due for month ended 5 October 2024. (If you pay your tax electronically the due date is 22 October 2024.)

19 October 2024 - Filing deadline for the CIS300 monthly return for the month ended 5 October 2024.

19 October 2024 - CIS tax deducted for the month ended 5 October 2024 is payable by today.

31 October 2024 - Latest date you can file a paper version of your 2023-24 self-assessment tax return.