Finance & Banking, Tax Manager, Accounting & Finance

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

Income tax is applied via PAYE to income which counts as ‘employment income’. This note sets out the basic definitions of what is employment income, who it applies to and when. It also sets out the rates of income tax.

Tax via PAYE applies to employees and office holders in their earnings from that employment or office. Wherever the term ‘employee’ is used throughout the employment taxes module, this will include office holders unless specifically stated otherwise. The definition of an office holder is not simple, but broadly an office is ‘any position which has an existence independent of the person who holds it’.

It applies to all statutory directorships. For other cases, consideration should be given on a case by case basis. See Simon’s Taxes E4.201–E4.204 for more.

The definition of an office holder should therefore be regarded as including a limited company director, a point which was underlined in the 2023 First-tier Tribunal case of Purple

Allowable expenses for property businesses. General items. Many of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are

14 Jul 2020 13:26 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more

Gifts out of surplus income

A valuable exemption from inheritance tax (IHT) applies to gifts out of surplus income. This exemption applies only to lifetime gifts and is therefore a key part of lifetime planning. The exemption applies to both outright gifts and gifts into trust. Gifts which meet the

14 Jul 2020 11:48 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Owner-Managed Businesses

Trade or hobby Interaction of hobby farming rules and commerciality Farming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more