- WELCOME TO A NEW MEMBER OF STAFF
- MAKING TAX DIGITAL FOR VAT
- SCOTLAND INTRODUCES RELIEF FOR FIRST TIME BUYERS
- ONE MILLION COUPLES STILL ELIGIBLE FOR £900 TAX BOOST
- HMRC WARNING: TIME TO DECLARE OFFSHORE ASSETS
- NON-RESIDENTS CAPITAL GAINS TAX ON UK RESIDENTIAL PROPERTY
- STAMP DUTY CUT: 121,500 HOUSEHOLDS SAVE £284 MILLION
- SOFTWARE SUPPLIERS – MAKING TAX DIGITAL FOR VAT
- ADVISORY FUEL RATES FOR COMPANY CARS
- HMRC LATEST GUIDANCE FOR EMPLOYERS
- ‘NO DEAL’ BREXIT GUIDANCE
This month we are pleased to announce the addition of a new member of our team.
Hollie Cox has joined Walker Thompson as a trainee accountant, having concluded her A level education at King Edward VI Sixth Form College. She will shortly commence studies for her AAT qualification, which will hopefully be followed by ACCA examinations.
Outside of work Hollie enjoys swimming, jogging and walking. She also expresses an aptitude for Sudoku and card games, so should excel at solving client problems.
HMRC has published further information on Making Tax Digital for VAT (MTDfV). The VAT notice sets out some further details of the MTDfV regime, which will ultimately require taxpayers to move to a fully digital tax system.
Under the rules, businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to keep digital records for VAT purposes using ‘functional compatible software’ and provide their VAT return information to HMRC via an application programming interface.
This notice explains:
- the digital records businesses must keep and the ways to record transactions digitally in certain special circumstances
- what counts as ‘functional compatible software’, and when software programs do and do not need to be digitally linked where a combination of programs is used.
The new rules have effect from 1 April 2019, where a taxpayer has a ‘prescribed accounting period’ which begins on that date, and otherwise from the first day of a taxpayer’s first prescribed accounting period beginning after 1 April 2019.
Please contact us for advice and support on the introduction of MTDfV.
Internet link: GOV.UK MTD
First-time buyers in Scotland will be helped to purchase their first home through a new tax relief which applies to Scottish Land and Buildings Transaction Tax (LBTT).
According to the Scottish Parliament approximately 80% of first-time buyers will pay no LBTT once the LBTT First Time Buyer relief takes effect. The change sees the zero-rated LBTT threshold raised to £175,000 for first-time buyers. Those purchasing property at a higher value will have their tax reduced by a maximum of £600. The Scottish Parliament expect that around 12,000 first-time buyers will benefit each year.
Minister designate for Public Finance and Digital Economy Kate Forbes said:
‘From today, around 80% of first-time buyers will pay no LBTT, helping thousands of people across the country buy their first home.’
Internet link: GOV.SCOT news
HMRC has highlighted that three million UK couples have already taken advantage of Marriage Allowance but a million more are still eligible for the tax break.
The Marriage Allowance allows certain couples, where neither pay tax at more than the basic rate, to transfer 10% of their unused personal allowance to their spouse or civil partner, reducing their tax bill by up to £238 a year in 2018/19. The allowance was introduced in 2015 and it is possible to backdate the claim to earlier tax years.
Please contact us if you would like to know more about this allowance and whether you are eligible.
Internet link: GOV.UK news
HMRC is warning that taxpayers could face penalties if they fail to declare their income on foreign assets before new ‘Requirement to Correct’ legislation comes into force.
HMRC is urging UK taxpayers to come forward and declare any foreign income or profits on offshore assets before 30 September to avoid higher tax penalties.
New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax. The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. HMRC has stated that over 17,000 people have already been in contact to notify they have tax due from sources of foreign income, such as their holiday homes and overseas properties.
The Financial Secretary to the Treasury, Mel Stride MP, said:
‘Since 2010 we have secured over £2.8bn for our vital public services by tackling offshore tax evaders, and we will continue to relentlessly crack down on those not playing by the rules.’
‘This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now.’
Common Reporting Standard (CRS)
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the CRS. It is expected that the CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received.
Taxpayers can correct their tax liabilities by:
- Using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility or any other service provided by HMRC as a means of correcting tax non-compliance.
- Telling an officer of HMRC in the course of an enquiry into your affairs.
- Or any other method agreed with HMRC.
Once a taxpayer has notified HMRC of their intention to make a declaration, by the deadline of 30 September, they will then have 90 days to make the full disclosure and pay any tax owed. To ensure there is an incentive for taxpayers to correct any offshore tax non-compliance on or before 30 September 2018 there are increased penalties for any failures to correct by that date.
If taxpayers are confident that their tax affairs are in order, then they do not need to worry. However if you are unsure, please contact us.
Internet link: GOV.UK news
Non-residents are reminded that they have to inform HMRC within 30 days of completion of the conveyance of a UK residential property. You must report the disposal online using the non-resident Capital Gains Tax return even if:
- you’ve no tax to pay
- you’ve made a loss
- you’re registered for Self Assessment
- you’re registered with HMRC for Corporation Tax
- you send HMRC Annual Tax on Enveloped Dwellings (ATED) or ATED-related Capital Gains Tax returns
If a property was jointly owned, each owner must tell HMRC about their own gain or loss. Special rules apply if you give a UK residential property to your spouse, your civil partner, or to charity.
You might also have to pay any non-resident Capital Gains Tax due within the same 30 day period, although there are exceptions to the pay now rule if you already have an existing relationship with HMRC – for example, through Self Assessment. If you do, you can either:
- pay when you submit your return
- defer payment until your normal due payment date
You have 30 days from the date of conveyance to report your disposal on the non-resident Capital Gains Tax return, and pay any tax due. You’ll get a late filing penalty and be charged interest if you do not do this by the 30 day deadline.
If you miss the deadline by:
- up to 6 months, you will get a penalty of £100
- more than 6 months, a further penalty of £300 or 5% of any tax due, whichever is greater
- more than 12 months, a further penalty of £300 or 5% of any tax due, whichever is greater
If you have to pay any non-resident Capital Gains Tax within the same 30 day period, late payment penalties and interest may also be due if you miss the deadline.
If any non-resident Capital Gains Tax remains unpaid after 31 January after the end of the tax year of the disposal, a late payment penalty of 5% of the tax outstanding will be charged.
According to the latest statistics 121,500 first-time buyers have saved a total of £284,000,000 following the introduction of a relief for first-time buyers under the Stamp Duty Land Tax rules which apply in England and Northern Ireland.
Over the next five years, it is estimated that this relief, part of the UK government’s housing policy will help over 1 million people getting onto the housing ladder.
First-time buyers purchasing homes of £300,000 and under pay no stamp duty at all, and those who bought properties of up to £500,000 will also have benefitted from a stamp duty cut.
Financial Secretary to the Treasury, Mel Stride, said:
‘Once again, we can see that our cut to stamp duty for first-time buyers is helping to make the dream of home ownership a reality for a new generation – exactly as we intended.’
‘In addition, we’re building more homes in the right areas, and have introduced generous schemes such as the Lifetime ISA and Help to Buy.’
Those purchasing properties in Wales (since 1 April 2018) pay Land Transaction Tax and those in Scotland pay Land and Buildings Transaction Tax. First-time buyers in Scotland also benefit from a relief for first-time buyers.
Internet link: GOV.UK news
HMRC is working with more than 150 software suppliers who have said they will provide software for Making Tax Digital for VAT (MTDfV) in time for April 2019.
From 1 April 2019, businesses will be mandated to use the MTDfB system to meet their VAT obligations under MTDfV. Only businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to use MTDfV, however HMRC is piloting the new system, on a small scale, from April 2018.
HMRC has advised that more than 40 suppliers have said they will have software ready during the first phase of the pilot and other software suppliers are expected to follow. HMRC will open up the pilot to allow more businesses and agents to join later in 2018.
HMRC has advised that the list will be updated as more software meets the criteria. HMRC are advising businesses to check with their existing software supplier to find out if they will be supplying suitable software.
Contact us for help with Making Tax Digital for VAT.
Internet link: GOV.UK software suppliers
New company car advisory fuel rates have been published which take effect from 1 September 2018. The guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 September 2018 are:
|1400cc or less||12p|
|1401cc – 2000cc||15p|
|1400cc or less||7p|
|1401cc – 2000cc||9p|
|1600cc or less||10p|
|1601cc – 2000cc||12p|
The guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars
- require employees to repay the cost of fuel used for private travel
You must not use these rates in any other circumstances.
If you would like to discuss your car policy, please contact us.
Internet link: GOV.UK AFR
HMRC has published the latest edition of the Employer Bulletin. This guidance for employers, and their agents, includes articles on:
- Reporting your payroll information accurately and on time
- Irregular payments and completion of Full Payment Submissions
- Starter Declaration on a Full Payment Submission (FPS)
- PAYE Settlement Agreements and Scottish Income Tax
- National Living Wage and National Minimum Wage – are you paying the correct rate?
- Advisory Electricity Rate for fully electric company cars
- Welsh Rates of Income Tax
- Construction Industry Scheme (CIS) webinars
- Postgraduate Loans
- Benefits and Expenses: Company cars
- Tax avoidance loan schemes – settle now
- Completing an EYU in respect of Employee’s National Insurance Contributions
- Employment Income: Draft Legislation
- Deadline for post 16 Child Benefit looms.
For help with payroll matters, please contact us.
Internet link: Employer Bulletin
The government has issued some ‘no deal’ Brexit technical notices, with the aim of helping both businesses and individuals to prepare in the event of a UK-EU agreement not being realised.
The government has published the first 25 notices. Brexit Secretary Dominic Raab was keen to emphasise that reaching a deal remains the ‘overriding priority’. However, until a Withdrawal Agreement is ratified by the UK and European Parliaments, the possibility of the UK leaving the EU without a deal on 29 March 2019 remains.
The 25 documents cover a range of different areas, including VAT and trading, financial services, farming and workplace rights.
Josh Hardie, Deputy Director General at the CBI, said:
‘It’s right and responsible that the government has supplied information to businesses on issues from financial services passporting to food labelling, all of which will help lower the risks of the harshest outcomes from a ‘no deal’ Brexit.’
The government has confirmed further technical notices will be issued in September.
Internet link: GOV.UK no deal brexit collection