CORONAVIRUS: WORKING REMOTELY FOR YOUR UK EMPLOYER WHILESEE MORE ON

LITRG.ORG.UK

PRESS RELEASE: LITRG REPORT PUTS ‘UMBRELLA’ COMPANIES In the 150-page report, LITRG takes a deep dive into the world of labour market intermediaries, with a large focus on umbrella companies. The report is issued ahead of the 6 April 2021 off-payroll changes which are expected to see many private sector contractors shift away from working through their own limited companies towards working through an umbrella company. WHAT IS THE TAX RESIDENCE POSITION OF INTERNATIONAL An overview If you have income while you are studying in the UK, whether earned or from investments and whether from the UK or overseas, you may need to pay tax in the UK and/or file a tax return. In order to work out whether this is the case, you may need to assess whether or not you are resident in the UK for UK tax purposes. Broadly, if you are not UK resident then you are only taxable in WORKING FROM HOME DURING THE VIRUS. WHAT TRAVEL EXPENSES The Low Incomes Tax Reform Group (LITRG) look at the normal rules for claiming tax relief on travel expenses first and then at how these

might be

CORONAVIRUS: PROBLEMS GETTING A NATIONAL INSURANCE NUMBER A National Insurance number is used to uniquely identify you in the UK’s social security system. You need a National Insurance number if you interact with the UK’s social security system in some way. For example, you may be liable to pay National Insurance contributions, or you may be credited with them, or you wish to pay them voluntarily. CAPITAL GAINS TAX EXAMPLES Neil: sale of house – working out gain. Neil bought a holiday house in March 1979 for £10,000. Neil already had another home of his own. By 31 March 1982 the value of the holiday house had increased to

�25,000.

CAPITALS GAINS TAX ON SEPARATION The breakdown of a marriage or civil partnership can be a stressful time for all concerned. The Low Incomes Tax Reform Group (LITRG) highlight some key points to consider from a capital gains tax (CGT)

perspective.

HAVE YOU CORRECTLY CLAIMED THE THIRD SELF-EMPLOYMENT The claim process for the third Self-Employment Income Support Scheme grant (SEISS 3) is currently open until 29 January 2021. Although some of the eligibility conditions are the same as for the first two SEISS grants (SEISS 1 and 2), there are some extra conditions to consider for SEISS 3 which may mean you are not entitled to it even if you were able to claim SEISS 1 and 2. WHAT UK TAX DO I PAY ON MY OVERSEAS PENSION? This page only provides guidance on your UK tax position. The overseas tax position is not considered, other than how it may be affected by the terms of a double taxation agreement. You should always seek advice to confirm the position in the overseas country concerned. WHAT IS SPLIT-YEAR TREATMENT? CORONAVIRUS: WORKING REMOTELY FOR YOUR UK EMPLOYER WHILESEE MORE ON

LITRG.ORG.UK

PRESS RELEASE: LITRG REPORT PUTS ‘UMBRELLA’ COMPANIES In the 150-page report, LITRG takes a deep dive into the world of labour market intermediaries, with a large focus on umbrella companies. The report is issued ahead of the 6 April 2021 off-payroll changes which are expected to see many private sector contractors shift away from working through their own limited companies towards working through an umbrella company. WHAT IS THE TAX RESIDENCE POSITION OF INTERNATIONAL An overview If you have income while you are studying in the UK, whether earned or from investments and whether from the UK or overseas, you may need to pay tax in the UK and/or file a tax return. In order to work out whether this is the case, you may need to assess whether or not you are resident in the UK for UK tax purposes. Broadly, if you are not UK resident then you are only taxable in WORKING FROM HOME DURING THE VIRUS. WHAT TRAVEL EXPENSES The Low Incomes Tax Reform Group (LITRG) look at the normal rules for claiming tax relief on travel expenses first and then at how these

might be

CORONAVIRUS: PROBLEMS GETTING A NATIONAL INSURANCE NUMBER A National Insurance number is used to uniquely identify you in the UK’s social security system. You need a National Insurance number if you interact with the UK’s social security system in some way. For example, you may be liable to pay National Insurance contributions, or you may be credited with them, or you wish to pay them voluntarily. CAPITAL GAINS TAX EXAMPLES Neil: sale of house – working out gain. Neil bought a holiday house in March 1979 for £10,000. Neil already had another home of his own. By 31 March 1982 the value of the holiday house had increased to

�25,000.

CAPITALS GAINS TAX ON SEPARATION The breakdown of a marriage or civil partnership can be a stressful time for all concerned. The Low Incomes Tax Reform Group (LITRG) highlight some key points to consider from a capital gains tax (CGT)

perspective.

HAVE YOU CORRECTLY CLAIMED THE THIRD SELF-EMPLOYMENT The claim process for the third Self-Employment Income Support Scheme grant (SEISS 3) is currently open until 29 January 2021. Although some of the eligibility conditions are the same as for the first two SEISS grants (SEISS 1 and 2), there are some extra conditions to consider for SEISS 3 which may mean you are not entitled to it even if you were able to claim SEISS 1 and 2. WHAT UK TAX DO I PAY ON MY OVERSEAS PENSION? This page only provides guidance on your UK tax position. The overseas tax position is not considered, other than how it may be affected by the terms of a double taxation agreement. You should always seek advice to confirm the position in the overseas country concerned. WHAT IS SPLIT-YEAR TREATMENT? LOW INCOMES TAX REFORM GROUP Welcome. People on low incomes need their taxes to be as simple as possible. Our aim is to persuade politicians and HM Revenue & Customs to make the tax system easier and fairer for all while making tax and tax credit information available to those who are

LATEST NEWS

The LITRG have become aware of a new telephone scam, purporting to be from the police telling the listener that HMRC have taken out a warrant for their arrest. MY EMPLOYER ISN’T PAYING ME THE CORRECT MINIMUM WAGE. WHAT From 1 April 2021. Age 23 and over (national living wage) £8.91. Age 21 and 22. £8.36. Age 18 to 20. £6.56. Age 16 to 17. £4.62. Apprentice rate – payable to all apprentices under the age of 19 and to any apprentice in the first year of their apprenticeship,

regardless of age

WHAT IS THE TAX RESIDENCE POSITION OF INTERNATIONAL An overview If you have income while you are studying in the UK, whether earned or from investments and whether from the UK or overseas, you may need to pay tax in the UK and/or file a tax return. In order to work out whether this is the case, you may need to assess whether or not you are resident in the UK for UK tax purposes. Broadly, if you are not UK resident then you are only taxable in HAVE YOU CORRECTLY CLAIMED THE THIRD SELF-EMPLOYMENT The claim process for the third Self-Employment Income Support Scheme grant (SEISS 3) is currently open until 29 January 2021. Although some of the eligibility conditions are the same as for the first two SEISS grants (SEISS 1 and 2), there are some extra conditions to consider for SEISS 3 which may mean you are not entitled to it even if you were able to claim SEISS 1 and 2. SOLD A PROPERTY AFTER 6 APRIL 2020? DON’T GET CAUGHT OUT However, if you need to make a 30-day report in respect of a property disposal which completed between 6 April 2020 and 1 July 2020, the deadline is extended to 31 July 2020. If the 30-day report is not submitted by the deadline, a £100 late-filing penalty will apply. Further penalties will be applicable for a continued delay. CAPITAL GAINS TAX ON GIFTS Capital gains tax family tree example 2290 by LITRG. A connected person can also include: certain trustees; or; a company you control. You must get a valuation of the asset at the time you made the gift and use this value in place of any amount you received for the asset – usually nothing, if it is a gift – to work out your gain or

loss.

HOW DO I CASH IN MY SMALL PENSION? To test against the £30,000 limit, pensions being paid are valued at 20 times the annual pension income. For example, a pension of £750 a year would be valued at £15,000 (20 x £750). If you received a tax-free lump sum when the pension commenced, the amount of the lump sum is added to this value. See the example of Mel below. WHAT IS SPLIT-YEAR TREATMENT? Therefore split-year treatment can be quite useful in helping to prevent double taxation. Split-year treatment can be complex, and the year may not be split on the date you expect, particularly if you spend time in the UK before your arrival or after your departure. You cannot choose the date on which you split the year; it is determined

by law

HMRC: TAX REFUND IDENTITY CHECKS What do HMRC do when I submit a tax return resulting in a repayment of tax? When you submit a Self Assessment tax return resulting in a repayment of tax being owed to you, HMRC do routine checks to ensure the claim is genuine and to identify potential problems. Where HMRC’s systems suggest that your claim may not be legitimate, they will contact you by letter to confirm your identity. LITRG - LOW INCOMES TAX REFORM GROUP Welcome. People on low incomes need their taxes to be as simple as possible. Our aim is to persuade politicians and HM Revenue & Customs to make the tax system easier and fairer for all while making tax and tax credit information available to those who are PRESS RELEASE: LITRG REPORT PUTS ‘UMBRELLA’ COMPANIES In the 150-page report, LITRG takes a deep dive into the world of labour market intermediaries, with a large focus on umbrella companies. The report is issued ahead of the 6 April 2021 off-payroll changes which are expected to see many private sector contractors shift away from working through their own limited companies towards working through an umbrella company. LITRG STAFF: MEET THE TEAM First joined LITRG in 2007 and returned to the staff in 2019 after a year working for Tolley broadening her tax writing experience. Kelly is Chair of the CIOT’s East Anglia branch and has an interest in education. Kelly is a CTA (Fellow), awarded in 2018 for her thesis on the complexities of tax-incentivised savings for the low-income

population.

CORONAVIRUS: WORKING REMOTELY FOR YOUR UK EMPLOYER WHILESEE MORE ON

LITRG.ORG.UK

WORKING FROM HOME DURING THE VIRUS. WHAT TRAVEL EXPENSES The Low Incomes Tax Reform Group (LITRG) look at the normal rules for claiming tax relief on travel expenses first and then at how these

might be

WHAT IS THE TAX RESIDENCE POSITION OF INTERNATIONAL An overview If you have income while you are studying in the UK, whether earned or from investments and whether from the UK or overseas, you may need to pay tax in the UK and/or file a tax return. In order to work out whether this is the case, you may need to assess whether or not you are resident in the UK for UK tax purposes. Broadly, if you are not UK resident then you are only taxable in CAPITAL GAINS TAX EXAMPLES Neil: sale of house – working out gain. Neil bought a holiday house in March 1979 for £10,000. Neil already had another home of his own. By 31 March 1982 the value of the holiday house had increased to

�25,000.

CAPITAL GAINS TAX ON GIFTS Capital gains tax family tree example 2290 by LITRG. A connected person can also include: certain trustees; or; a company you control. You must get a valuation of the asset at the time you made the gift and use this value in place of any amount you received for the asset – usually nothing, if it is a gift – to work out your gain or

loss.

CAPITALS GAINS TAX ON SEPARATION The breakdown of a marriage or civil partnership can be a stressful time for all concerned. The Low Incomes Tax Reform Group (LITRG) highlight some key points to consider from a capital gains tax (CGT)

perspective.

WHAT UK TAX DO I PAY ON MY OVERSEAS PENSION? This page only provides guidance on your UK tax position. The overseas tax position is not considered, other than how it may be affected by the terms of a double taxation agreement. You should always seek advice to confirm the position in the overseas country concerned. LITRG - LOW INCOMES TAX REFORM GROUP Welcome. People on low incomes need their taxes to be as simple as possible. Our aim is to persuade politicians and HM Revenue & Customs to make the tax system easier and fairer for all while making tax and tax credit information available to those who are PRESS RELEASE: LITRG REPORT PUTS ‘UMBRELLA’ COMPANIES In the 150-page report, LITRG takes a deep dive into the world of labour market intermediaries, with a large focus on umbrella companies. The report is issued ahead of the 6 April 2021 off-payroll changes which are expected to see many private sector contractors shift away from working through their own limited companies towards working through an umbrella company. LITRG STAFF: MEET THE TEAM First joined LITRG in 2007 and returned to the staff in 2019 after a year working for Tolley broadening her tax writing experience. Kelly is Chair of the CIOT’s East Anglia branch and has an interest in education. Kelly is a CTA (Fellow), awarded in 2018 for her thesis on the complexities of tax-incentivised savings for the low-income

population.

CORONAVIRUS: WORKING REMOTELY FOR YOUR UK EMPLOYER WHILESEE MORE ON

LITRG.ORG.UK

WORKING FROM HOME DURING THE VIRUS. WHAT TRAVEL EXPENSES The Low Incomes Tax Reform Group (LITRG) look at the normal rules for claiming tax relief on travel expenses first and then at how these

might be

WHAT IS THE TAX RESIDENCE POSITION OF INTERNATIONAL An overview If you have income while you are studying in the UK, whether earned or from investments and whether from the UK or overseas, you may need to pay tax in the UK and/or file a tax return. In order to work out whether this is the case, you may need to assess whether or not you are resident in the UK for UK tax purposes. Broadly, if you are not UK resident then you are only taxable in CAPITAL GAINS TAX EXAMPLES Neil: sale of house – working out gain. Neil bought a holiday house in March 1979 for £10,000. Neil already had another home of his own. By 31 March 1982 the value of the holiday house had increased to

�25,000.

CAPITAL GAINS TAX ON GIFTS Capital gains tax family tree example 2290 by LITRG. A connected person can also include: certain trustees; or; a company you control. You must get a valuation of the asset at the time you made the gift and use this value in place of any amount you received for the asset – usually nothing, if it is a gift – to work out your gain or

loss.

CAPITALS GAINS TAX ON SEPARATION The breakdown of a marriage or civil partnership can be a stressful time for all concerned. The Low Incomes Tax Reform Group (LITRG) highlight some key points to consider from a capital gains tax (CGT)

perspective.

WHAT UK TAX DO I PAY ON MY OVERSEAS PENSION? This page only provides guidance on your UK tax position. The overseas tax position is not considered, other than how it may be affected by the terms of a double taxation agreement. You should always seek advice to confirm the position in the overseas country concerned. LITRG - LOW INCOMES TAX REFORM GROUP Welcome. People on low incomes need their taxes to be as simple as possible. Our aim is to persuade politicians and HM Revenue & Customs to make the tax system easier and fairer for all while making tax and tax credit information available to those who are unable to afford professional advice.

LATEST NEWS

The Low Incomes Tax Reform Group (LITRG) is reminding couples that they have until this time next year (5 April 2020) to claim marriage allowance refunds dating back t CORONAVIRUS: WORKING REMOTELY FOR YOUR UK EMPLOYER WHILE ⚠️ Warning: this is a complex area and we cannot cover every scenario. We strongly recommend that you seek advice based on your personal circumstances. All I need is an internet connection. Can’t I work from anywhere? Unfortunately, it is not that simple. Working overseas can trigger all sorts of tax, social security and other legal consequences for both you and your employer. HOW DO I CASH IN MY SMALL PENSION? To test against the £30,000 limit, pensions being paid are valued at 20 times the annual pension income. For example, a pension of £750 a year would be valued at £15,000 (20 x £750). If you received a tax-free lump sum when the pension commenced, the amount of the lump sum is added to this value. See the example of Mel below. WHAT IS SPLIT-YEAR TREATMENT? Therefore split-year treatment can be quite useful in helping to prevent double taxation. Split-year treatment can be complex, and the year may not be split on the date you expect, particularly if you spend time in the UK before your arrival or after your departure. You cannot choose the date on which you split the year; it is determined

by law

WHAT UK TAX DO I PAY ON MY OVERSEAS PENSION? This page only provides guidance on your UK tax position. The overseas tax position is not considered, other than how it may be affected by the terms of a double taxation agreement. You should always seek advice to confirm the position in the overseas country concerned. DO SEASONAL WORKERS PAY TAX? Do seasonal workers pay tax? When you visit the UK for a short period, the first step to determine your tax liability in the UK is always to establish your UK tax residence status. If you come to the UK for a short time only and for a temporary purpose, you may not become resident in the UK for tax purposes. Even if you are not UK resident, you will normally have to pay UK income tax on DO YOU KNOW HOW TAX RELIEF ON YOUR PENSION CONTRIBUTIONS With the introduction of ‘auto-enrolment’, more and more people are saving towards a pension. Most – but not all – people get a government top up to their pension savings in the form of tax relief on their contributions. The way it is given differs depending on what kind of pension scheme you are in or whether you are in a salary sacrifice arrangement. ANY QUESTIONS? I THINK MY FURLOUGH PAY IS WRONG: WHAT Question: I work for an employer who has furloughed me. The problem is that I don’t think they have calculated my furlough pay correctly. My wage varies from month to month – I get a basic amount and an extra amount for each day worked. My boss is only paying me (and therefore, I assume only claiming for) 80% of the basic element but

the

MY FAMILY HAS GIVEN ME SOME MONEY: MIGHT I NEED TO PAY TAX pension contributions paid by your parents on your behalf. Your parents can contribute up to £2,880 tax-free and the Government tops up your pension pot by 25%, up to a maximum tax-free pension contribution of £3,600 each tax year. So even if you do not pay tax you will still get the benefit of the extra tax being added to the

payment.

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