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Effective tax planning is essential if you are to minimise your tax bills. Simple tax planning can significantly reduce your tax liabilities.

The self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have complicated income tax affairs.

Corporation tax is charged on a company's profits. If you trade as a limited company, ensure that paying this tax is as painless as possible.

National Insurance Contributions (NICs) are payable whether you are self-employed or employed by your own company, although different rates apply.

As well as your legal obligations, you’ll want to ensure that payroll is painless and that you use any opportunities to improve your tax-efficiency.

VAT

Effective VAT planning aims to ensure that VAT is relatively painless, and that you are reclaiming as much as possible of the VAT you pay.

Capital gains are made when you sell something for more money than you paid for it. As a result, you can be subject to tax. Take professional advice.

Business property taxes apply to businesses with commercial premises.There are two commercial property taxes: business rates and stamp duty land tax.

If you have tax problems or face a tax investigation, it pays to seek professional advice and you must act rather than just hoping for the best.

HMRC issues National Minimum Wage rate reminder for summer staff

13 July 2021

HMRC has provided a seasonal reminder that employers are legally obliged to pay students and other summer workers at least the National Minimum Wage (NMW). Traditionally, many students and other seasonal staff work in bars, hotels, shops and warehouses over the summer.

Employers who do not pay NMW beware. In 2020/21, HMRC helped 155,000 workers across the UK to recover more than £16m in pay that was due to them. Steve Timewell, director - individuals and small business compliance, HMRC, said: "We want to ensure that seasonal workers and students are being paid what they are entitled to and, as the economy reopens, help employers if they are unsure of the rules.

"Workers should check their hourly rate and look out for any deductions or unpaid working time that would reduce their pay. It could take them below the minimum wage." Reaching out to students and other seasonal workers Timewell added: "HMRC investigates every complaint made about the minimum wage, so whether you are selling sun cream, giving a hotel room a clean or serving a strawberry smoothie, if you think you are being short-changed, you should get in touch."

The National Minimum Wage hourly rates are:

  • £8.91 – Age 23 or over (National Living Wage)
  • £8.36 – Age 21 to 22
  • £6.56 – Age 18 to 20
  • £4.62 – Age under 18
  • £4.30 – Apprentice.

Anyone who is not being paid the wage to which they are entitled by law can make a complaint to HMRC via government website GOV.UK or phone the Acas Pay and Work Rights Helpline (0300 123 1100). Their call may be transferred to HMRC, which could result in action against the employer.

HMRC is responsible for enforcement of/compliance with the National Minimum Wage Act and by law workers must be paid at least the minimum wage for their age. Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates. They also face hefty financial penalties of up to 200% of arrears (capped at £10,000 per worker). 

According to HMRC, the two most common causes of minimum wage underpayment are deductions and unpaid working time. Employers who do not pay the NMW can be publicly named and shamed and those who blatantly fail to comply can face criminal prosecution, HMRC warned. Employers can get help and advice on paying the correct minimum wage from the  Acas Helpline (0300 123 1100) or from GOV.UK.

Written by Mark Williams.

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