June 2023 | DSK Partners LLP

What you can and cannot patent

Posted on June 12, 2023 by

The GOV.UK website offers the following guidance if you are considering a patent application.

A UK patent may help if you want to take legal action against someone who uses your invention without your permission. For example, if they sell or manufacture your product in the UK.

A patent lasts 5 years. If you want it to stay in force after that, you must renew it every year, up to a maximum of 20 years.

What you can patent

Your invention must be:

new – it must not have been made publicly available anywhere in the world, for example it must not be described in a publication
inventive – for example, it cannot be an obvious change to something that already exists
either something that can be made and used, a technical process, or a method of doing something

What you cannot patent

Things you cannot patent include:

literary, dramatic, musical or artistic works
a way of doing business, playing a game or thinking
a method of medical treatment or diagnosis
a discovery, scientific theory or mathematical method
the way information is presented
‘essentially biological’ processes like cross-breeding animals or varieties of plants
software that has a ‘non-technical’ purpose

Only software with a technical purpose can be granted a patent. For example, software to control a driverless car could have a patent, while a chess playing app could not. If your invention is software, you may need professional advice whether it can be patented (for example, by consulting with a patent attorney).

Source: Other Mon, 12 Jun 2023 00:00:00 +0100

Complexity may be double-edged sword

Posted on June 12, 2023 by

There does seem to be a trend to replace human interactions with automated AI systems. This is especially evident in the management of our tax system.

There was a time, many years ago, when each taxpayer’s tax affairs would be managed by a local tax inspector and all records were kept in paper format in a physically located paper-based filing system.

Now, all tax records are kept electronically. Unless your affairs are being formally investigated by HMRC – in which case a tax person may be making decisions – the only human interaction will be with a call centre operative, and it is unlikely that they will ever have seen your data prior to your call.

It is a small step from a call with a human being, to a desktop exchange with an AI system.

HMRC staff will consist of specialists who pursue tax avoiders, but even they will be prepped by AI data.

Automation is an efficient way to process huge volumes of data in double quick time. And the days of human involvement in that process are probably numbered.

Younger generations who are stepping into the world of work would be wise to consider how AI is likely to impact their chosen occupation. In the future, complexity may be the realm that quantum computers monopolise. Their inventors may need to sit back and witness the effects of their self-learning progenitors, and perhaps with some trepidation.

Source: Other Mon, 12 Jun 2023 00:00:00 +0100

Tax Diary July/August 2023

Posted on June 8, 2023 by

1 July 2023 – Due date for corporation tax due for the year ended 30 September 2022.

6 July 2023 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2023 – Pay Class 1A NICs (by the 22 July 2023 if paid electronically).

19 July 2023 – PAYE and NIC deductions due for month ended 5 July 2023. (If you pay your tax electronically the due date is 22 July 2023).

19 July 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2023.

19 July 2023 – CIS tax deducted for the month ended 5 July 2023 is payable by today.

1 August 2023 – Due date for corporation tax due for the year ended 31 October 2022.

19 August 2023 – PAYE and NIC deductions due for month ended 5 August 2023. (If you pay your tax electronically the due date is 22 August 2023)

19 August 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2023.

19 August 2023 – CIS tax deducted for the month ended 5 August 2023 is payable by today.

Source: HM Revenue & Customs Mon, 05 Jun 2023 00:00:00 +0100

HMRC tax credits scam warning

Posted on June 8, 2023 by

Fraudsters often try to take advantage of the 31 July deadline for submitting tax credits renewal information.

The fraudulent emails, texts or calls claim to be from HMRC and often promise money back in the form of a tax rebate together with a click-through link to a replica of the HMRC website. The fraudsters then try and steal personal details such as bank or credit card details of unwitting recipients who in some cases even transfer money for a bogus overpayment.

As the deadline approaches, HMRC is warning around 1.5 million tax credits customers to be alerted to scams that mimic government communications to make them appear genuine. In the 12 months to 30 April 2023, HMRC responded to more than 170,234 referrals of suspicious contact from the public. More than 68,437 of these offered bogus tax rebates.

Typical scam examples include:

emails or texts claiming an individual’s details aren’t up to date and that they risk losing out on payments that are due to them;
emails or texts claiming that a direct debit payment hasn’t ‘gone through’;
phone calls threatening arrest if people don’t immediately pay fake tax owed;
claims that the victim’s National Insurance number has been used in fraud; and
emails or texts offering spurious tax rebates or bogus grants or support.

HMRC’s Director General for Customer Services, said:

‘Tax scams come in many forms and we’re urging customers to be alert to the tactics used by fraudsters and never to let yourselves be rushed. If someone contacts you saying they’re from HMRC and asks you to give personal information or urgently transfer money, be on your guard. Search ‘HMRC scams’ advice on GOV.UK to find out how to report scams and help us fight these crimes.’

Universal Credit is expected to fully replace tax credits, and other legacy benefits (including Income-Related Employment and Support Allowance, Income-Based Jobseeker’s Allowance) by the end of 2024.

Source: HM Revenue & Customs Mon, 05 Jun 2023 00:00:00 +0100

Help with childcare costs

Posted on June 8, 2023 by

HMRC is reminding parents that they may be eligible for Tax-Free Childcare (TFC) to help pay for childcare costs. The scheme was used by almost 650,000 families during the 2022-23 tax year. This represented a significant increase over the previous year.

The TFC scheme can help parents of children aged up to 11 years old. The TFC scheme helps support working families with their childcare costs. There are many registered childcare providers including childminders, breakfast and after school clubs and approved play schemes signed up across the UK. Parents can pay into their account regularly and save up their TFC allowance to use during school holidays.

The TFC scheme provides for a government top-up on parental contributions. For every £8 contributed by parents an additional £2 top up payment will be funded by Government up to a maximum total of £10,000 per child per year. This will give parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the 1 September following their 16th birthday) in childcare costs.

The TFC scheme is open to all qualifying parents including the self-employed and those on a minimum wage. The scheme is also available to parents on paid sick leave as well as those on paid and unpaid statutory maternity, paternity and adoption leave. In order to be eligible to use the scheme parents will have to be in work at least 16 hours per week and earn at least the National Minimum Wage or Living Wage. If either parent earns more than £100,000, both parents are unable to use the scheme. The scheme is also not available if the parents or carers are in receipt of tax credits, Universal Credit or childcare vouchers.

Source: HM Revenue & Customs Mon, 05 Jun 2023 00:00:00 +0100

Check text messages from HMRC

Posted on June 8, 2023 by

HMRC has issued an updated version of their online guidance entitled ‘Check if a text message you've received from HMRC is genuine’. The guidance provides a current list of genuine text messages issued by HMRC.

The list has been updated to include details of a text message HMRC is sending to some taxpayers about a Self-Assessment tax check.

HMRC is also sending certain taxpayers a text message if they call an HMRC helpline from a mobile phone. These messages might include a link to relevant GOV.UK information or webchat.

Although these communications are genuine, taxpayers should still be wary of receiving phishing texts, emails and phone calls that are purported to come from HMRC. Messages from HRMC will never ask for personal or financial information.

Fake messages can appear to be genuine but clicking on a link from within the message or email can result in personal information being compromised and the possibility of computer viruses affecting your computer or smartphone. If you are unsure as to the validity of any message it should not be opened until the sender can be verified. Any suspicious text messages can be sent to 60599 or by email to phishing@hmrc.gov.uk.

Source: HM Revenue & Customs Mon, 05 Jun 2023 00:00:00 +0100

Using Capital Gains Tax losses

Posted on June 8, 2023 by

If you sell an asset for less than you paid for it, you would make a capital loss. As a general rule if the asset would have been liable to CGT had a gain taken place, then the loss should be an allowable deduction.

These allowable losses are deducted automatically from gains in the same tax year. It is not necessary to make a claim for set-off of losses. However, it is possible to claim that losses are allowable, and preference be given to such losses.

If a taxpayer’s total taxable gain is still above the tax-free allowance, they can deduct unused losses from previous tax years. When unused losses remain and that cannot be set against gains of the same year, then these losses are carried forward to be set against future gains. It is only possible to use losses brought forward if net gains exceed the annual CGT exempt amount for the year.

In most circumstances, allowable losses and the annual exempt amount can be deducted in the way that is most beneficial to the individual. This will usually be against gains that are charged at the highest rate. A claim for losses does not have to be made straight away and can be made up to 4 years after the end of the tax year that the relevant asset was disposed.

Source: HM Government Mon, 05 Jun 2023 00:00:00 +0100

What you must tell HMRC

Posted on June 8, 2023 by

If your personal details change you may be required to notify HMRC as this can affect your entitlement to certain tax breaks and or benefits.

For example, you need to tell HMRC if:

you get married or form a civil partnership; or
you divorce, separate or stop living with your husband, wife or partner.

The sooner you advise HMRC the better as the change could result in you paying too much tax or paying too little and owing HMRC more money.

If you receive tax credits or Child Benefit you also need to tell HMRC separately about changes to your relationship or family.

In the sad event that your spouse or civil partner dies, it is also a requirement to report the death to HMRC as well as notifying of changes to your income. For example, the death of a spouse would mean that the surviving spouse was no longer entitled to claim the Married Couple's Allowance.

If you move home, it is advisable to let HMRC know as soon as possible so they can update your contact details. HMRC should also be informed if you change gender although the process is usually automatic when you change gender legally by applying for a Gender Recognition Certificate.

You must also notify HMRC about certain changes to your income such as when you start or stop receiving:

income from a new source, such as money from self-employment or rent from property;
taxable benefits, such as State Pension, Jobseeker’s Allowance and Carer’s Allowance;
benefits from your job, such as a company car;
income above your Personal Allowance;
money over £85,000 from self-employment (you must register for VAT over this amount);
lump sums from selling things you pay Capital Gains Tax on, such as shares or property that’s not your main home; and
income from property, money or shares you inherit, such as dividends from shares or rent from property.

Source: HM Revenue & Customs Mon, 05 Jun 2023 00:00:00 +0100

Overview of IHT agricultural relief

Posted on June 8, 2023 by

There are a number of reliefs available that can reduce liability to IHT. Of most interest to farmers is the Agricultural Property Relief (APR). Relief is available at a rate of 100% or 50% depending on who farms the land and how long the land has been owned.

The APR can be claimed on assets including farming land or pasture that is used to grow crops or to rear animals intensively, working farmhouses, farm workers’ cottages, barns and stud farms. There is no agricultural relief for farm equipment but the equipment itself may qualify for another relief known as business relief.

The APR is available for working farms in the UK, Channel Islands, the Isle of Man or the European Economic area. It is important to note that the relief is based on the agricultural value if the land. For example, a farmhouse is valued as if it could only be used for agricultural purposes rather than open market value. The valuations of farmhouses in particular is often the subject of debate.

It is important to ensure that any claim for APR is realistic as HMRC’s refusal to accept an APR claim could result in a significant amount of IHT being due together with the possibility of penalties being levied. There can also be issues where the faming business has diversified into non-farming activities such as wind farms, holiday lettings and farm shops.

There are special conditions to prevent exploitation of the relief by a person switching their assets into agricultural property shortly before death or making a transfer.

Source: HM Revenue & Customs Mon, 05 Jun 2023 00:00:00 +0100

Voluntary “give-aways”

Posted on June 6, 2023 by

In a recent post we warned of the likely loss of billing opportunities if you give away service advice just to demonstrate how informed you are.

In this post we outline when it may be appropriate to volunteer information or other free offers in order to secure additional sales.

For example, when you deliver goods to your customers, do you insert information about other goods or services that they might find of interest? A car dealership may be the place where you go to purchase or lease a car, but once you have chosen your vehicle you will likely be offered insurance or service plans as add-on sales.

Fishermen will “give-away” bait by broadcasting it in areas of water where it expects fish to reside. This process is an invitation. Invite your customers to sample more of your goods and services, don’t be shy.

Don’t assume that customers will know what is on offer, tell them.

You have done the hard work and converted business prospects into business customers. Be sure that each sales point is also a business development opportunity.

Source: Other Tue, 06 Jun 2023 00:00:00 +0100

Month: June 2023

What you can and cannot patent

Complexity may be double-edged sword

Tax Diary July/August 2023

HMRC tax credits scam warning

Help with childcare costs

Check text messages from HMRC

Using Capital Gains Tax losses

What you must tell HMRC

Overview of IHT agricultural relief

Voluntary “give-aways”

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