Monthly Archives: August 2023

0 Oyster and TFL Travel

Transport for London travel evidence

I get a lot of queries about TFL Oyster card travel and TFL contactless travel, with people stating they don’t know how much their business spend is on their cards as they don’t have any detail.

Well, we can deal with that. It’s very, very simple. All you need to do is register your Oyster card or your contactless payment card at the TFL website (https://oyster.tfl.gov.uk/oyster/entry.do) . That way when you register it, you’ll be able to go in each month and download a copy of your statement which will show you every single trip that you have done in that month. When you download it, you can highlight the ones that are business and leave the ones that are personal.

Sometimes I suggest to people, you might want to get two Oyster cards or two different payment cards. That way you use one for business and one for pleasure. There is a downfall to that, in that if you are doing travel for a day, and some of it is business, some of it is personal, using two different cards mean you have the potential of not breaking the threshold to get your travel free after a certain amount. So there is a downside to that.

Now, I did mine years ago, that’s because I’m old. I get an email every Wednesday showing me what my travel was in the previous week. I can go through, print that off and say, “Here you go. This is how much I’ve travelled and that is business.” Luckily, I don’t live in London, so it’s not that much of an onerous task. But for those people who do, I really recommend keeping the diary to say what you are doing, whether you are auditioning, rehearsing, whatever you might be doing for your business, and register your contactless cards and Oyster cards at TFL, and that way you’ll be able to pull the data.

Beware though, the data does not remain on the TFL website forever. I thought originally it was six weeks, then someone said it’s six months, and then somebody else said it’s a year. So always check it. I suggest pulling the data at the start of the next months just to make sure you get the data.

Vital evidence – get it and keep it.

0 Beware about on-line stock trading

Online stocks & coin trading and UK tax

I want to give you a bit of a health warning about online trading and UK tax issues.

I’ve seen a massive increase in people playing on online platforms for bits of spare money they might have. Be it Bitcoin, Chip, Coinbase, Trading 212, interactive investors, eToro and various other platforms like it, including playing on platforms within the EU.

The problem you’ve got is that these platforms may not keep adequate records in order for you to complete your UK tax return. A lot of people think, “Well, it’s EU trading. I don’t need to worry” or “I’ve not made much or any profit, so I don’t have anything to declare”. Unfortunately, yes, you do.

You need to make sure that whatever platform you can use, they can provide an end of year consolidated tax statement for the UK. It has to be in the year 6th of April to the following 5th of April, not a European year. Some of the platforms do provide this, but not all.

The statement should include dividends paid to you, any interest paid, but more specifically, the capital gain & loss per sale and a summary for the year.

If this is not provided, you will have to keep very detailed records of when you buy an investment as to when you sell it, and if you partially sell it, how much of the individual investment did you sell?

You may only make a small profit or maybe a loss, but you need to tick the box that you had capital gains. If you sold over £49,200 worth of stocks and shares in the tax year, even if the initial investment you have played with is a small amount that you have just reinvested lots of times, you must report it on your UK tax return and detail out the sales proceeds, purchase costs, losses and gains, plus attached back up to the calculation.  You might’ve produced a loss which you can carry forward. You might’ve produced a profit and it could be covered by the capital gains tax threshold, so you may not think it’s important. It is important and must be declared even if no tax to pay.

One thing that’s been picked up very recently is HMRC get reports from UK and European trading platforms, and it will show if people in the UK have been dabbling on these markets and what income they have received. The problem being is HMRC only get to know the income. So if you’ve sold some investments, they just know how much you sold it for. They don’t get the information about how much it was purchased for. Therefore, it looks like you could have had an income of, let’s say, £100,000, but they don’t know you actually spent £95,000 to get that income. They just know the income and they will open an investigation if you end up on the naughty person list.  it’s up to you to collect these records to prove that you don’t have that £100,000 stashed away.

If you received any dividends from European trading platforms, then foreign dividends need to be declared either in the foreign box on UK dividends page if less than £2000, or in the foreign section of the tax return.

It may take a couple of years for those reports to come through, but they will be followed up with.

This is just a heads-up. Some of these online platforms are pretty useless at keeping the information. So unfortunately, it is down to you to keep detailed records of what you’ve purchased, what you’ve sold, when you sold it, did you get any other income for those returns.

0 What’s new with class 2.

What’s new for Class 2 National Insurance for tax year 22/23 onwards?

For those of you that have already completed your tax return for this year and didn’t have a high level of self-employed profit, you may notice something strange is going on.

You always have an option to pay Class 2 National Insurance if your self-employed profits are under £6,725. It means you do not have to pay the £3.15 a week for the 2022/23 tax year. It is optional.  I always encourage it as it goes towards a few state benefits, but more importantly it adds a year towards your state pension.

This is the same that has been all the time if you’re below a small profits threshold. No change there.

Should your self-employed profit be over £11,908, then you have to pay the full Class 2 amount. Again, no difference with that. For 23/24, it will be £12,570 because the government brought Class 4 National Insurance thresholds in line with income tax threshold. Yay. Makes things so much easier.

Where it gets strange is if you have self-employed profits between £6,725 and £11,908, then the government says you don’t have to pay Class 2 National Insurance and they’ll give you something called a notional credit and add that year to your National Insurance record. You get the full year that goes towards your state benefit, but you don’t have to pay for it. Woo hoo. No, they don’t actually pay you back the £163.80, it is notional. I have been asked that several times.

So this is something to think about. If you have no other income and your self-employment profit is low, try and get your profits between £6,725 and £11,908. That way you won’t have to pay Class 2 National Insurance and you’ll get the credit.

But beware, there is no point in increasing your self-employment if you breach the threshold of income tax with other income such as PAYE income, rental income, etc because increasing your self-employed profits to save the National Insurance will actually then push you up and more pay income tax. So that’s just the heads up.

There is a bit of tax planning you can think about, but don’t think too hard about it. It all depends if you have other income apart from self-employment.