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January Questions and Answers
Newsletter issue – January 2023
Q. We hire casual labour to work alongside our permanent staff over busy periods such as Christmas. If an individual works only one shift and earns say £90, do we need to add that person to the payroll to process their pay?
A:As you run a PAYE scheme to pay your permanent staff, you do need to include any casual labour in that payroll, even if you only pay the person on one occasion.
Q. I let out a room in my home to a lodger, and I also run my self-employed business from another room in the same property. When I sell the property, will I be taxed on a portion of the gain that relates to the rooms that have been used for my business and by the lodger?
A:The gain you make from selling your own home is generally free of capital gains tax (CGT) if you have occupied the property for the entire period of ownership, with an exception for the last nine months of ownership. You are right to assume that where part of the property is used for business purposes, a proportional amount of the gain may be taxable.
However, this only applies if part of the property is used exclusively for business purposes. Where your workroom is sometimes used for another purpose, say as a space for your children to do their homework, the room will not be exclusively used for business, so the gain on that portion of the house is exempt from CGT.
Where the lodger shares some living space with you, such as the kitchen, the letting of the room to the lodger is fully covered by the exemption from CGT.
Q. While I was unemployed, I trained to be an HGV driver. I have now been employed as an HGV driver. Can I claim the cost of the training course and the HGV licence against my wages to reduce the tax due on that income?
A:The tax law specifically allows you to claim a deduction for the cost of the HGV license and any medical examination you may have had to undertake in order to be granted that licence. However, you can‘t claim a deduction for the cost of the training course.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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