Archive for June, 2019

Holiday entitlements

Wednesday, June 5th, 2019

As we are approaching the annual holiday season it would seem to be a suitable time to set out employees’ rights to receive holiday pay.

Almost all workers are legally entitled to 5.6 weeks’ paid holiday per year (known as statutory leave entitlement or annual leave). An employer can include bank holidays as part of statutory annual leave.

Most workers who work a 5-day week must receive at least 28 days paid annual leave per year. This is the equivalent of 5.6 weeks of holiday.

Part-time workers are entitled to less paid holiday than full-time workers. They are entitled to at least 5.6 weeks of paid holiday but this amounts to fewer than 28 days because they work fewer hours per week.

Statutory paid holiday entitlement is limited to 28 days, and so staff working 6 days a week are still only entitled to 28 days’ paid holiday.

Bank holidays or public holidays do not have to be given as paid leave. An employer can choose to include bank holidays as part of a worker’s statutory annual leave. An employer can also choose to offer more leave than the legal minimum. They don’t have to apply all the rules that apply to statutory leave to the extra leave. For example, a worker might need to be employed for a certain amount of time before they become entitled to the additional entitlement.

Paid annual leave is a legal right that an employer must provide. If a worker thinks their right to leave and pay are not being met there are a number of ways to resolve the dispute.

Do you own a holiday let property?

Wednesday, June 5th, 2019

There are a number of tax incentives that you can take advantage of if you own and let a Furnished Holiday Lets property (FHL). They include:

  • you can claim Capital Gains Tax reliefs for traders (Business Asset Rollover Relief, Entrepreneurs’ Relief, relief for gifts of business assets and relief for loans to traders),
  • you are entitled to claim capital allowance deductions for items such as furniture, equipment and fixtures, and
  • any profits earned from holiday lets count as earnings for pension purposes.

You will need to account for your holiday lets properties separately from any other rental properties and you will need to comply with the various FHL rules. They include:

There are also strict rules on occupancy. To secure the FHL tax benefits you will need to let your FHL for a certain, minimum number of days each year. The occupancy rules, set on a tax year basis, are:

  • Your property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year.
  • You must let the property commercially as furnished holiday accommodation to the public for at least 105 days in the year.

Do not count any days when you let the property to friends or relatives at zero or reduced rates as this is not a commercial let.

Do not count longer-term lets of more than 31 days, unless the 31 days is exceeded because something unforeseen happens. For example, if the holidaymaker either: falls ill or has an accident and cannot leave on time or has to extend their holiday due to a delayed flight.

If you do not let your property for at least 105 days, you have two options (known as elections) that can help you reach the occupancy threshold.

As you can see, there are a few hoops to climb through to achieve FHL status, but the tax rewards for doing so are significant.

Mileage rates and tax relief

Tuesday, June 4th, 2019

If your employer asks you to use your own car or van to undertake a journey on their behalf, you may be entitled to a payment from your employer to cover your petrol and wear and tear costs.

Let’s say that your employer pays you 35p per mile. You may feel that this is an adequate sum to cover your costs, and indeed this may be so, however, HMRC would have a different opinion.

HMRC would allow you to receive up to 45p per mile tax-free for the first 10,000 business miles you drove in your own car on behalf of your employer, and thereafter at 25p per mile. The clock resets to zero at the beginning of each tax year (6 April).

Additionally, if you take a passenger (a co-worker) on a business trip, you can claim 5p per mile.

What happens if you are paid at different mileage rates?

If you are paid at rates per mile greater than HMRC’s 45p (25p) rates, then any excess over these rates will be taxed as a benefit.

If you are paid less than HMRC’s approved rates, you can claim the difference as an expense on your tax return. For example, if your employer pays you 35p per mile and you claimed for 8000 business miles in 2018-19, you will have received £2,800 (8,000 x 35p) in expenses. HMRC would allow you 8,000 miles at 45p, £3,600, and would allow you claim the difference £800 (£3,600-£2,800) on your tax return for 2018-19. If you don’t submit a tax return you should call HMRC with the details to register your claim.

What if I use my motorcycle or bicycle?

The same principles apply but the rates of mileage are different. They are currently:







In both cases the above rates apply whatever your annual mileage.