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Employers Allowance Changes
More Great communication from HMRC resulting in panic.
From 6th April this year there are changes to the eligibility for claiming the Employers Allowance. This is worth up to £3,000 and is design to encourage employment. Will you be affected by the changes? Chances are, if you qualify now, probably not.
If you employ people over the primary NI threshold (currently £166pw), or have two directors both being paid above the primary threshold, you currently qualify for the allowance. This is not changing.
If your secondary NI liability for the previous tax year exceeds £100,000 or you receive other State Aid that take you over a defined de minis state aid limit based on your industry sector, then you will lose your EA or have it restricted. For these businesses, the EA does not make a lot of difference or provide the same incentives for which it was intended.
No need to panic!
https://www.gov.uk/guidance/changes-to-employment-allowance
Property Allowance
If your allowable expenses against property income is less than £1,000 you can elect to use the property allowance as partial relief against the income. This allows you to deduct £1,000 from your rental income and is beneficial if your costs are minimal. If the property is owned jointly then each of the joint owners can claim the allowance. If your rents are minimal (less than £1,000) then you can claim full relief and may not even need to complete a self assessment return. You can’t create a loss from the property allowance to carry forward but might be worth considering depending on your circumstances.
https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
Property Disposal Returns
Sneaking under the radar come the new tax year is the Property Disposal Return. These have been in place for non-resident landlords for a few years now but from the 6th April will affect all UK residential property owners making a disposal of a property that is not their main residence. The tax due remains unchanged ( subject to next month’s budget of course) but will be payable within 30 days of completion along with a Property Disposal Return. This means that where you had 9 months from the end of the tax year in which the disposal was made, tax will have to be paid within a month of the sale!
Back to Deadlines
Back now after a few days in Iceland. Amazing place. Very fortunate to see the Aurora so clearly. Back to VAT returns and everything else I put off until the end of January. Can’t wait!
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.
MTD for VAT
We have now reached the registration dates for MTD for VAT. For VAT periods starting on or after 1st April 2019 all VAT registered businesses over the VAT registration threshold must register for MTD and submit their next return under the new rules.
If you are using software that is MTD ready you will still need to register. If you do not yet have software in place, now is the time to get that organised. It doesn’t have to complicated. You can still use spreadsheets with bridging software and despite all th myths, you will not be sending HMRC all your transaction data, just the same boxes on the returns as previously.
Election 2017: Uncertainly the new norm for business
With so much confusion and uncertainty surrounding the result, at least in the near future, any tax changes are likely to be simple and symbolic. The Tories’ reduced majority puts plans to cut the corporation tax rate to 17% in doubt – Labour and the Greens want to increase it and the SNP has voiced its opposition to any further cuts. The Lib Dems, meanwhile, want to draw the line at 20%.
At least the DUP, potential coalition partners for May’s beleaguered party, have a similar stance on business taxation, with its manifesto calling for a reduction in corporation tax to at least 12.5% in Northern Ireland (something allowed under the Corporation Tax (Northern Ireland) Act of 2015), and cuts in VAT for businesses in the tourism industry.
The VAT rate is another one of those “lockdown” items that would be ripe for review, but given the uncertainty around Brexit and the hugely differing attitudes towards VAT cuts from the different parties, it seems unlikely the rate will move anytime soon.
There is now more uncertainty over taxation than there has ever been. The dropping of so much from FA2017, and with no idea who will be in charge and who will be setting the next budget, it’s impossible to even speculate about sensible tax planning”.
With no party able to command an overall majority in the House of Commons we could have a new Prime Minister within the next few weeks, and could yet face the prospect of another election campaign, potentially as soon as the Autumn. One thing is we can be certain about is that UK businesses shouldn’t be banking on stability any time soon.
More Property Tax and Mortgage Interest Relief but No Flying
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Episode 2 Uploaded to YouTube
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