In recent years there have been various tax measures – such as restrictions on the tax deduction for mortgage interest or increased SDLT rates – that have worsened the tax position regarding investment properties. A further raft of changes are due to take effect from 5 April 2020 – that may mean that some tax payers consider that now is a good time to sell investment properties.
The changes due to take place from April 2020 include adjustments to what is known as ‘Lettings Relief’, a restriction on the periods qualifying for Principal Private Residence Relief and a change in the tax payment dates.
Here we review the potential impact of these changes by way of a case study based on an illustrative property purchase. (more…)Read More
Recent months have seen significant changes to the VAT system in the UK with the introduction of Making Tax Digital (MTD) and further changes are due to be implemented later in the year including a new domestic reverse charge system for the construction sector.
The new Making Tax Digital regime is however intended to be only an initial staging point on towards the transformation of the VAT system through the use of digital technology.
The next step? Transactional Data through MTD Filings
The logical next step will be an extension of MTD to include transactional data. Currently MTD filings include only the numerical entries from the nine boxes on the VAT return but a relatively straightforward addition is likely to be the submission of transactional data in MTD filings. This would, potentially, allow HMRC to review individual transactions through MTD filings.
The main challenge here for HMRC will be developing the ability to process huge volumes of transactional data. (more…)Read More
Later this year changes to the VAT system will come into effect that will have an impact on many businesses operating in the construction sector. These changes will add an additional layer of complexity to the already complex system of VAT in the construction sector. Here we look in more detail at how these changes will work.Read More
The deadline for Disguised Remuneration (DR) scheme users to reach a settlement with HMRC to ensure that the 2019 Loan Charge does not apply is now only six weeks away. Users of DR schemes must settle historic tax liabilities or repay the relevant loans ahead of 5 April to avoid the 2019 Loan Charge.
DR schemes are a wide variety of structured, and complex, tax avoidance schemes where income was drawn as some form of loan rather through traditional routes such as dividends or salaries. HM Revenue and Customs have put in place various measures to restrict the use of these schemes over recent years and the most recent measure is what is termed the 2019 Loan Charge. (more…)Read More
The current system is that capital gains tax (CGT) is payable on residential property in line with normal income tax payment dates. This can mean that any CGT due is paid up to 21 months from the date of the transaction. From 2020 #HMRC propose to collect a payment on account of the CGT within 30 days of the transaction.Read More
‘Tax Gap’ is the difference between what HMRC thinks the total tax collected should be and what is actually collected
Up from £32bn in 2015/16
The expected tax collection is calculated based on estimated levels of economic activity
Tax Gap due to criminal activity, tax evasion and errors.
- The EMI scheme was effectively withdrawn from April 2018 as EU State Aid approval had expired.
- On 15 May 2018 the State Aid approval was reinstated by the EU.
- The EMI scheme now continues as it was pre 5 April 2018
- EMI schemes are tax-advantaged HMRC approved share option schemes
- Very useful for growth companies looking at long term incentive plans for employees.
Making Tax Digital (MTD) is the most fundamental change to the administration of the tax system for at least 20 years. This change might seem daunting, but we’ve compiled everything you need to know so your journey into digital tax recording is as easy going as possible.
• Paper records will no longer be sufficient. Almost all businesses and landlords will now be legally required to use digital software or a spreadsheet to keep accounting records.
• Accounting records will be required to be submitted to HMRC directly from accounting software within one month of the end of each quarter.