Personal Taxes
Tax Planning Topics
Help To Buy ISA
The deadline for opening a help to buy ISA is 30th November. If you are between 16 and 39, don’t own your own home and haven’t yet opened one of these accounts, now is the time to do it.
You have up to 2030 to claim your bonus so don’t miss out. You only need £1 to open one of these accounts that you can claim up to £3,000 in government bonus for up to £12,000 saved.
Marriage Allowance
Marriage Allowance lets you transfer £1,100 of your Personal Allowance to your husband, wife or civil partner.
This can reduce their tax by up to £220 every tax year (6 April to 5 April the next year).
To benefit as a couple, your partner will need to have unused personal allowances that can be transferred to you (or visa versa). We’ll check this with you before completing your 2015/16 self assessment return.
Individual Tax Accounts
The intention is that all individual taxpayers will have access to an individual tax account by April 2016. This will contain details of relevant tax information already available to HMRC. Individual personal tax accounts are already available for many taxpayers, and contain payroll and pension information where relevant. Bank and building society interest are expected to be gradually made available from 2016. As more HMRC systems become aligned more tax information will be available on these accounts, and they will also be able to be used for other services, for example information regarding the state pension. Taxpayers who complete their returns on the HMRC online filing system will find this information already entered on their tax return pages.
Individuals will be able to access their tax account through their HMRC online self-assessment record, although an additional layer of verification will be needed. Those who do not have an online self-assessment record will be able to access the account directly through a new service ‘Gov.uk verify’. A note giving details of personal tax accounts is being included with employee Notices of Coding being sent out prior to the start of the 2016/17 tax year.
In due course it is expected that agents will be able to access clients’ tax accounts, and therefore we will be able to obtain details of information on the accounts directly, so that clients will not need to provide this information to us. However, this facility has not yet been fully developed and at present we will continue to ask clients to provide all tax return information to us directly.
Personal Tax Accounts
HMRC previously announced that they intend to move to a ‘digital tax system’ over the next few years. There has been a lot of debate in the press about exactly what this will mean for taxpayers, although as yet there is limited practical detail of how the new system will work. This note explains what we know so far and how we expect the changes to affect our clients.
HMRC’s main proposals are set out in the ‘Making Tax Digital’ roadmap published in December 2015 following the original announcement in the March 2015 Budget. This document confirms that the intention of the digitalisation is to make tax administration “more effective, more efficient and easier for taxpayers”.
By 2020, HMRC intend to have moved to a fully digital tax system where:
Form filling is eradicated – taxpayers should never have to tell HMRC information it already knows.
Unnecessary time delays are eliminated – the tax system should operate on more of a ‘real-time’ basis, which should reduce errors and under-reporting.
Taxpayers have access to digital tax accounts, with the information HMRC has automatically uploaded.
Bank Interest tax changes
‘A great many savers will have no idea that, from April, they may for the first time have to check whether they need to report or pay tax on interest they have received, rather than have their bank deduct the tax they owe.’
Chairman of the House of Lords’ Economic Affairs Committee, Lord Hollick, commenting on HMRC’s ‘inadequate’ communication strategy that has rendered taxpayers ‘unaware’ of key changes to the taxation of savings and dividends.
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Rental Property Tax changes
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You’ll already be aware that mortgage interest relief is being progressively restricted to basic rate tax credits. This will only affect those that are higher or additional rate tax payers.
From April next year some other changes will be applied to some tax reliefs that might affect you in certain circumstances particularly if you are renting out a property that you have previously lived in.
The second major change is the inheriting of historical use. Where you used to be able to transfer to a spouse and start afresh perhaps benefiting from private residence relief, from April the historical use will passed on upon transfer which may restrict the private residence relief. Worth some consideration before the end of the tax year.
This entry was posted in News and Comments, Personal Taxes.