Students that have finished their studies and entered the workforce, must begin to make loan repayments from the April after they have finished their studies or when their income begins to exceed the annual threshold.

The annual threshold amounts for 2019-20 have been confirmed by the Department of Education. The thresholds will increase to £18,935 (2018-19: £18,330) for plan 1 and to £25,725 (2018-19: £25,000) for plan 2.

The terms of loan repayment for courses of study started before 01 September 2012 are referred to as ‘Plan 1’, and those started after 01 September 2012, are referred to as ‘Plan 2’. Repayments are deducted at a rate of 9% of income over the threshold.

The loans are also subject to varying levels of interest. The interest rates for Plan 2 repayments are based on the Retail Prices Index plus a variable rate dependent on income. The interest rates for Plan 1 repayments are significantly lower than for Plan 2 repayments.

Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK.

The Student Loans Company (SLC) is directly responsible for collecting the loans of borrowers outside the UK tax system. Maintenance grants are also available under certain circumstances. The grants do not have to be repaid but do reduce the amount of maintenance loan a student is entitled to.

If a taxpayer owns a business as a sole trader or in partnership, a capital gain will be deemed to arise if the business is converted into a company by reference to the market value of the business assets including goodwill. This may give rise to a chargeable gain based broadly on the difference between the market value of the assets and their original cost.

A number of options exist in such situations. One of these involves arranging the incorporation of the business so that it satisfies the conditions necessary to secure incorporation relief. One such condition is that the entire business must be transferred as a going concern in exchange for shares in the new company. It is important to note that where the necessary conditions are met, incorporation relief is given automatically and there is no need to make a claim. The relief works by reducing the base cost of the new assets by a proportion of the gain arising from the disposal of the old assets.

However, there may be certain circumstances where this relief may not always be advantageous, and it is possible to make an election in writing for incorporation relief not to apply. An election must be made before the second anniversary of 31 January next following the tax year in which the transfer took place e.g. an election in respect of a transfer made in 2018-19 must be made by 31 January 2022. The election deadline is reduced by one year if the shares are disposed of in the year following that in which the business was incorporated.

There are special rules for businesses that import goods from non-EU countries. Whilst most smaller businesses importing goods will use a courier or freight forwarder it is still important to be aware of the duties and VAT implications. Businesses importing goods must be able to distinguish between importing goods from outside the EU or within the EU. Intra-EU movements of goods that are imported are referred to as ‘acquisitions’ and goods that are exported to the EU are known as ‘dispatches’.

Businesses that start to import goods from outside the EU are required to apply for an Economic Operators’ Registration and Identification System (EORI) that helps businesses communicate with customs officials. Businesses also need to ensure they correctly classify any imported goods, declare the goods to customs and pay any VAT and duty that is due.

Currently, it is more straightforward to handle acquisitions from within the EU, and there are no import duty implications. However, the VAT accounting can be complex especially where multiple countries are involved. There is also a separate requirement to complete Intrastat declarations if the total value of goods exceeds £1.5 million annually. 

It remains to be seen what changes will happen for goods imported from Europe especially if we get a no deal Brexit. In fact, if the UK leaves the EU on 29 March 2019 without a deal there would be immediate changes to the procedures that apply to businesses trading with the EU as the rules that allow for the free circulation of goods would cease. This means that we could see a similar process to that currently in place for imports from non-EU countries applied to EU imports.

The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take a taxpayer’s donation and provided all the qualifying conditions are met, can reclaim the basic rate tax allowing an extra 25p on every £1 donated to charity.

HMRC has published a press release to remind fundraisers that they can boost donations by an extra 25%, if they ask for donations rather than charging for food and drink at events such as Macmillan Cancer Support’s ‘World’s Biggest Coffee Morning’.

Treasury Minister Robert Jenrick has confirmed that charities asking for donations instead of charging for food and drink, can make the contributions go further. In fact, the charity Macmillan has said that if everyone claimed Gift Aid on their Coffee Morning donations this year an extra £2 million could be raised.

The Exchequer Secretary to the Treasury, Robert Jenrick, said:

‘Too many are missing out on an extra 25 per cent boost to donations, which is costing good causes dearly. That’s why I’m clarifying the Gift Aid rules for anyone running a Coffee Morning. If you ask people to make a donation and offer them a coffee or cake, you could be making 25 per cent more on the funds you raise.’

In addition, higher rate and additional rate taxpayers are eligible to claim tax relief on the difference between the basic rate and their highest rate of tax. This can be actioned through their Self Assessment tax return or by asking HMRC to amend their tax code.

To add Gift Aid to a donation, the donor must have paid Income or Capital Gains Tax in the relevant tax year to at least cover the value of the Gift Aid being added, and to have completed a Gift Aid declaration. The Gift Aid Small Donations Scheme (GASDS), allows charities to claim a top-up equivalent to Gift Aid on small donations of up to £20 without the need for a Gift Aid declaration.

There are four tax-advantaged Venture Capital Schemes currently available:

• The Seed Enterprise Investment Scheme (SEIS)
• The Enterprise Investment Scheme (EIS)
• Venture Capital Trusts (VCTs) and
• The Social Investment Tax relief (SITR)

There are a significant number of qualifying conditions that must be met by companies looking to use any of these schemes. One of the more popular services offered by HMRC is the ability for companies to seek advance assurance that a planned Venture Capital Schemes share issue will meet qualifying conditions. This can help businesses to secure funding by showing potential investors they may be able to claim tax relief.

There are application forms available on GOV.UK for SEIS and EIS advance assurance. For VCTs and SITR there is no specific application form and HMRC should be contacted directly for further assistance. If an application isn’t approved, HMRC will explain why and if possible, a new application can be made for approval.

Since January 2018, HMRC no longer provide an advance assurance on speculative applications. This change was put in place to help reduce the time it was taking for applications to be processed. HMRC does not require a company applying for advance assurance to have formalised offers of investment but rather to have some potential investors on board, who are likely to invest if advance assurance is granted.