Employee Share Schemes
Share incentive plans (SIPs) include three elements you can combine in different ways to suit your business (limits are for each employee):
- Free shares up to a limit of £3,000 in any tax year
- Partnership shares (bought out of pre-tax and NIC salary) up to £1,500 in any tax year (or 10% of overall salary, whichever is lowest); there might be a minimum limit of up to £10 on any occasion, and shares can be bought annually rather than monthly.
- Matching shares, which your company provides to match employees’ purchase of partnership shares, up to a limit of two for each partnership share purchased; again there’s a limit of £3,000 in any tax year.
The plan must be made available to all employees, but you can set a qualifying period of up to 18 months. You can vary the value of the free shares you give to each employee on the basis of remuneration, length of service, hours worked, or performance.
Employees taking part must not have a material interest in the company (that is, owning or controlling more than 25% of its ordinary share capital). This also applies to the preceding 12 months.
For free and matching shares, employees are contractually bound to keep them in the plan for between three and five years. The shares can be dividend shares, and you can choose to make dividend reinvestment compulsory or optional. Total dividend reinvestment for any participant must not exceed £1,500 in a tax year. The holding period for dividend shares is three years.
Shares have to come out of the plan when employees leave their job. You can decide whether employees lose their free or matching shares if they leave within three years, and whether employees who leave have to sell their shares.
Our SIP specialists have long-standing experience creating and implementing share schemes for varying businesses both regionally and nationally. If you would like to discuss SIP further you can contact us using the form below.
Non-Domicile And Declaring International Income
our Personal Tax team has long-standing experience supporting and advising international individuals with their tax affairs to ensure they are fully compliant in the UK in relation to both UK and overseas income and gains.
If you are a UK resident and would like support declaring overseas income and gains, or claiming foreign tax relief, then our expert team can provide you with comprehensive and pragmatic advice tailored to your needs.
For those of you who are non-domiciled we are able to discuss your tax affairs to identify any tax planning that might be available. A non UK domiciled individual (or a “non-dom”) for tax purposes has options in how to fulfil their UK tax obligations on overseas income and gains.
Who is non-UK domiciled?
The tax impact of not being UK domiciled
As a non-domiciled individual who is UK resident for tax purposes, you have the option to either pay tax on your worldwide income and gains as they arise – this is known as the arising basis.
If you chose the arising basis, you are entitled to UK personal allowance (which is tapered if your earnings are over £100,000) and the UK capital gains exemption. You are also able to claim double tax relief on any foreign taxes suffered under the terms of the applicable tax treaty.
Alternatively you can claim the remittance basis, which means you only pay UK tax on your foreign income or gains that are remitted into or enjoyed in the UK, for example by transferring offshore income to a UK bank account, UK income and gains will always be assessable as they arise. There are comprehensive rules in place to determine if a remittance to the UK has been made.
The option to choose the arising basis or remittance basis is an annual one and so it is possible to switch between the type of claims in each tax year, depending on which option offers the optimum tax outcome.
How to claim the ‘remittance basis’
For example, a claim to use the remittance basis will mean that you:
- Lose you entitlement to UK personal tax allowance and annual exemption,
- Pay an annual charge of £30,000 if you have been a UK resident for at least 7 of the previous 9 tax years, or
- Pay an annual charge of £60,000 if you have been a UK resident for 12 of the previous 14 tax years.
- If you do remit any non-UK income or gains to the UK these will be taxable, even if the remittance is made in a later tax year.
- Automatic remittance basis
- The remittance basis can apply automatically in certain limited circumstances, such as where a UK resident non-domiciled individual has unremitted income and gains of less than £2,000 in the tax year.
Coming to the UK
Longer term residents
Personal Self Assessment Tax Returns
For many people, tax is usually deducted from your wages or pension – known as PAYE.
Self-Assessment tax returns are how HMRC collect Income Tax and Capital Gains Tax from individuals and unincorporated businesses who have not paid it through PAYE or other means.
Do you need to complete a Self-Assessment?
Some exceptions to this include;
How can we help you?
We act for a variety of individuals and unincorporated businesses and can provide tailored advice to suit your needs.
If you are self-employed and are filling in a Self-Assessment tax return as a sole trader, we can help you meet your tax reporting requirements, identify all deductible expenses and reliefs available to you to ensure you can fully concentrate on growing your business.
If you receive taxable income from abroad, or have assets in more than one country, our team at TCL can help you navigate complex double taxation agreements to ensure that you minimise the overall taxes paid worldwide. You can usually claim Foreign Tax Credit Relief when you report your overseas income on your tax return, something we can help you achieve.
If you owe Capital Gains Tax (CGT) from selling assets at a profit, there is a tax-free allowance, as well as some additional reliefs that may help reduce your CGT bill, all of which we can help with.
If you run a limited company, you’ll need to file a company tax return in addition to a tax return on your personal income.
No matter the reason why you need to fill in a Self-Assessment tax return, we can fill in and send your tax return for you and provide you with any advice relating to Self-Assessment tax returns.
Tax Allowances, Reliefs And Exemptions
We all have to pay tax, of course. But, there are a range of tax allowances, reliefs, and exemptions that are there to be used.
Our Tax team has long-standing experience advising clients on what’s due to them, and helping them to reduce their tax liability.
Understanding the bigger tax picture
- Research and development tax relief
- Patent box
- Agricultural property and business property relief (APR and BPR)
Tax Dispute Resolution
Expert support when you really need it
A tax enquiry can happen to anyone, at any time. Whether you’re a sole trader, company, partnership, trustee, executor, charity or individual taxpayer, you could be subject to a random or targeted tax investigation.
Sometimes errors come to light that HMRC need to be told about so that they can be mitigated.
As a business owner and employer, your company may be at risk of examination of its P11D returns of benefits, or PAYE or NIC audits. If you are a VAT-registered business, HMRC may arrange a visit to check your VAT records which could lead to further investigations.
If you find yourself in any of these situations, you will want to resolve them with as little stress and disruption as possible. We will provide expert specialist representation to bring your tax affairs fully up to date.
Ready for a range of challenges
We’re here to help in a timely and proactive manner, whether you’re currently facing a tax investigation or want to prevent problems in the future.
Our tax dispute resolution specialists can also support you in appealing HMRC decisions at the First-Tier Tax Tribunal.
Our services include:
- Resolving complex tax investigations – including COP 9 civil investigation of fraud and COP 8 serious suspected anti-avoidance investigations
- Dealing with routine aspect enquiries and advising on specific tax problems
- Making voluntary disclosures to HMRC – including under the Worldwide Disclosure Facility or Let Property Campaign
- Negotiating tax penalties
- Making representations to HMRC’s independent reviewer
- Representing you at Alternative Dispute Resolution (“ADR”) meetings
- Instructing legal Counsel and taking tax appeals to the tribunal
- Responding to HMRC “nudge letters”
- Addressing historic tax issues brought to light by family and commercial disputes
- Advising on options and assisting in exiting failed tax avoidance schemes
Tax Governance
We believe that robust tax governance is a vital aspect of appropriately managing business risk. Tax governance involves establishing and maintaining appropriate strategies, policies and procedures that demonstrate best practice and ensure ongoing compliance with your UK tax obligations. Our professional advice will assist you in ensuring your governance is compliant with HMRC’s three key regimes if your business is in scope.
Below we summarise the key HMRC tax governance regimes that UK entities need to be alert to.
Tax Strategy
A business must publish a tax strategy if it is a UK group, sub-group, company, or partnership and in the previous financial year turnover was above £200 million and/or the balance sheet was over £2 billion. The tax strategy must be published by the end of the first year to which it applies. For full information on whether you need to publish a tax strategy, HMRC provides full guidance here. A business does not have to publish a tax strategy for a year when it is no longer within the regime, but the last tax strategy that it published must remain accessible for free for at least a year from the date it was published (typically a link on your website).
The strategy must be approved by your Board of Directors and be consistent with the business’s overall strategy and operations. The tax strategy itself must outline the business’s approach to UK taxation, addressing a number of specified areas:
the extent to which it participates in arrangements which could be considered tax planning.
the approach to risk management and governance arrangements in relation to UK tax.
the level of business risk associated to UK tax that the group is prepared to accept.
the business’s approach to communications and relations with HMRC.
This strategy must be revisited annually and made available in the public domain – for this reason, it does not require you to publish any information that could be commercially sensitive.
Non-compliance with the regime attracts significant penalties – up to £7,500 for not publishing a tax strategy, and additional penalties of the same amount for continued non-publication.
If your business is within the threshold of the scheme and you have not yet published a tax strategy within the time frames set out above, there is a risk that HMRC will issue late publication penalties.
Senior Accounting Officer (“SAO”)
The Senior Accounting Officer (“SAO”) regime was introduced in 2009 and is designed to ensure that large companies (meeting broadly the same size criteria as those required to publish a tax strategy i.e., above £200 million aggregate UK turnover and/ or a balance sheet of above £2 billion considering UK companies in aggregate) take reasonable steps to maintain “appropriate tax accounting arrangements”.
The SAO is the director or officer of a company who has overall responsibility for the company’s “tax accounting arrangements”. Tax accounting arrangements cover the end-to-end process from the initial data input into accounting systems to arriving at the numbers which form the basis for completion of the tax return. This includes the adjustments, data extraction and analysis which enable the completion of the returnsand all the people involved in the governance and operation of these various stages. “Appropriate” tax accounting arrangements must allow the company’s tax liabilities to be calculated accurately in all material respects.
Under the regime, the SAO must certify on an annual basis that tax accounting arrangements are appropriate, or if not, provide further explanation (a “qualified” certificate). In addition, HMRC expect the company to hold adequate documentary evidence in support of the certification filed. Failure to comply with the regime attracts penalties of £5,000 per offence, some of which are levied on the SAO personally (although in practice the company will often indemnify the individual for this).
Corporate Criminal Offence (“CCO”)
The Corporate Criminal Offence (“CCO”) regime i.e. “the corporate criminal offence of the failure to prevent the facilitation of tax evasion legislation”, to give it its full title, has no de minimus so applies to all UK companies, be that a solely UK trading business or an overseas entity doing business in the UK. There are two separate criminal offences associated with the regime, the first relates to the evasion of UK tax and the other relating to evasion of foreign tax.
CCO requires a company to consider not only its own internal practices, but its interactions with employees and third parties e.g. customers and suppliers, in so far as there could be an opportunity to facilitate tax evasion. The legislation requires that as a minimum, a company has a written policy which is proportionate, based on a business risk assessment undertaken. HMRC will also want to be satisfied that the policy has board level buy-in, has been distributed and understood by the workforce at large, and that it is revisited periodically.
The legislation is closely aligned to the Bribery Act and penalties for non-compliance are severe and include the potential of an unlimited fine, a public record of the conviction and the resultant reputational damage. HMRC is conducting CCO investigations – as at1 January 2024, HMRC had eleven live investigations, and a further 24 opportunities under review.
HMRC have provided extensive guidance on compliance with the regime including six key steps to ensuring you’ve put reasonable procedures in place, these are covered in our article on the necessary steps and reasonably procedures to avoid falling foul of the CCO.
Corporate Criminal Offence (“CCO”)
CCO requires a company to consider not only its own internal practices, but its interactions with employees and third parties e.g. customers and suppliers, in so far as there could be an opportunity to facilitate tax evasion. The legislation requires that as a minimum, a company has a written policy which is proportionate, based on a business risk assessment undertaken. HMRC will also want to be satisfied that the policy has board level buy-in, has been distributed and understood by the workforce at large, and that it is revisited periodically.
The legislation is closely aligned to the Bribery Act and penalties for non-compliance are severe and include the potential of an unlimited fine, a public record of the conviction and the resultant reputational damage. HMRC is conducting CCO investigations – as at1 January 2024, HMRC had eleven live investigations, and a further 24 opportunities under review.
HMRC have provided extensive guidance on compliance with the regime including six key steps to ensuring you’ve put reasonable procedures in place, these are covered in our article on the necessary steps and reasonably procedures to avoid falling foul of the CCO.
Tax Investigation Services
We have crafted our tax investigation service to alleviate the stress of possible HMRC investigations of you and your business.
We can minimise the risk of having additional duties to pay by providing you with the best possible representation if HMRC decides to inspect your books or records.
Over 1000 of our clients – individuals and businesses – are covering themselves with TIS, ensuring they receive the best possible defence to protect their tax position.
Business cover
The service also reimburses the professional costs arising from the following:
- Employer Compliance Disputes
- IR35 Disputes
- HMRC VAT Disputes
- Schedule 36 Enquiries
- Private cover
Peace of mind
Tax Planning
You know there are certain times of the year when you need to think about tax. But if you really want to keep your tax bill to a minimum, consistent and ongoing tax planning can make a big difference.
With our help, you can make informed choices about factors that could affect your tax bill. We can advise you on strategies that will make the most of the tax reliefs, allowances, and credits available to you.
Our tax planning services relate to many aspects of your business, and cover areas such as:
- Cash and profit extraction
- International activity
- Land and property
- Share schemes
- Choice of business structures
- Succession and sale
- Transaction planning
- Trust and estate planning
- Wealth preservation
- Raising finance
We can provide personal tax planning advice regarding:
- Land, property, and estates
- Income tax
- Capital gains tax
- Non-domiciliary and international tax-related issues
- Inheritance tax
Transfer Pricing
But what does transfer pricing really mean?
Who needs to consider transfer pricing?
Transaction between UK entities and related parties resident in territories with whom the UK does not have an appropriate non-discrimination clause in its relevant double taxation agreement
Any transactions caught by the relatively new “profit fragmentation” rules effective from 1 April 2019.
Equally, there may not be any such exemption in the territory of the counterparty to the transaction, meaning that overall its arm’s length nature still needs to be considered.
UK transfer pricing rules are modelled on the standards developed by the OECD*. Any transfer pricing study will require both a functional and economic analysis to inform the “transfer price”, and to guide the business’s legal advisors in preparing the associated intercompany agreements.
Our service can include:
- Valuating the tax implications of related party transactions
- Reviewing your international market entry or evolution strategy
- Pinpointing your UK transfer pricing obligations, including any reporting required under country by country reporting (“CBCR”) or DAC 6
- Establishing the interplay of transfer pricing with other regimes which may impact the UK corporation tax filing position, for example, corporate interest restriction
- Highlighting potential withholding tax implications of related party transactions and advising on mitigating strategies
- Considering methods of comparability
- Assessing whether existing policies are appropriate
- Determining whether you are charging an arms-length price
- Creating a transfer pricing report on the functions and risk analysis
- Recommending new policies and agreements
- Advising on the implementation of new transfer pricing policies
- Analysing competitor margins and the potential benefits of outsourcing
Vat Services
Specialist support
The world of VAT has often been seen as involving complexities and confusing interpretations that businesses frequently struggle to navigate safely. Hurdles and pitfalls can still catch you out, even when you think you’re being as prudent and compliant as possible.
Financial penalties and increased attention from HMRC can be costly and damaging for even the most innocent of mistakes.
Making sure that your VAT affairs are in order and as cost-effective as possible is what we do, helping to ensure that you’re maximising efficiency whilst minimising risk and exposure.
Specialist support
- Changes to your business, such as selling new products, making acquisitions, selling shares, or restructuring
- Land and property transactions, such as building, buying, selling, letting, developing, refurbishing, or moving premises
- Providing services that attract VAT-exempt income, such as financial services, insurance, education, health and welfare
- Exporting or importing goods, or buying in or supplying services across national borders.
- As well as VAT planning, our services cover all aspects of VAT, including:
- Negotiation and dispute resolution
- VAT health checks
- Training your staff
- Representation at tribunal
- Dealing with unhelpful rulings or directions from HMRC
- Support through a VAT investigation
- Assisting with international VAT assignments
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