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industry related news

Reclaiming VAT on Mileage? New Advisory Fuel Rates effective from 1 March 2015

If you pay a mileage allowance to your employees for business journeys made in either their own vehicle or a company car, you can not only benefit from the tax allowable mileage expense, but you can also reclaim VAT on the fuel element of those mileage payments (assuming your business is VAT registered).

Mileage Allowance Expense Claim

The mileage allowance per HMRC for private cars is 45p per mile for the first 10,000 miles and 25p per mile for additional business miles driven in the same tax year. These rates are deemed to include an element of reimbursement for the vehicle’s other running costs. The mileage allowance for company cars is stated on the HMRC Advisory rates (below). For either situation, the good news is that the mileage allowance is a tax allowable expense.

Mileage VAT Reclaim

This is not the only tax relief businesses can obtain from a mileage claim - VAT registered businesses can reclaim a further amount from HMRC in input VAT on the fuel element of the vehicle.

To calculate the fuel only element, businesses should refer to the HMRC Advisory rates. The rates are renewed four times a year. You can use the previous rates for up to one month from the date the new rates apply. The new advisory rates are applicable from 1 March 2015 and are detailed below.

 

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Married or in a Civil Partnership? The New Marriage Allowance Tax Break Registration has Opened

This week the government has opened registration for the new Marriage Allowance, a tax break for married couples helping them to save up to £212 in tax per year.

A mere week after Valentines Day and David Cameron has released this policy based on the ‘valuing commitment’ of marriage to society. Perhaps this has encouraged men and women around the UK to propose based on the prospect of a potential tax break?

From April 2015, the allowance means that a spouse or civil partner who doesn’t pay tax - therefore not earning at all or is earning below the basic rate threshold (£10,600) – can transfer up to £1,060 of their personal tax free allowance to a spouse or civil partner, as long as the recipient of the of the transfer doesn’t pay more than the basic rate of income tax.

Therefore this is not relevant for those who are married/in a civil partnership with higher rate tax payers, as they will not be applicable.

 

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Fancy a festive rave for your employees? Christmas Parties and the Secret Santa named Tax Relief

As the festive season approaches, many businesses are looking forward to their Christmas parties and thinking about gifts for employees.

However, beware of the Christmas tax relief trap- only certain gifts are allowable from a tax relief aspect, and Christmas parties have certain rules and regulations to obey if tax relief is to be achieved.

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