IMPORTANT UPDATE! On 06/09/2019 HMRC announced that the Domestic Reverse Charge will be postponed for 12 months and will come into effect 01/10/2020. Their official statment; “To help these businesses and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October […]
This author has yet to write their bio.Meanwhile lets just say that we are proud Taxfile contributed a whooping 99 entries.
Entries by Taxfile
HMRC expects people to do tax returns for various reasons; Those that have an income outside of a PAYE scheme (i.e. self-employed) High earners on PAYE schemes, earning above £100K Company Directors & Shareholders Landlords who have rental incomes The tax returns calculated generally run between the dates 06/04/xx through to 05/04/xy, the calculation, submission, […]
In December 2018, the Financial Action Task Force (FATF), an organisation founded on the initiative of the G7 to develop policies to combat money laundering, stated; ‘…the UK had a well developed & robust regime to effectively combat money laundering & terrorist financing. However, it needed to strengthen its supervision, & increase the resources of […]
HMRC delays the rollout of Making Tax Digital (MTD) for businesses & individuals beyond 2021: Even though MTD for VAT has been rolled out, the wider extension of the MTD scheme for individuals & businesses has been delayed till at least 2021. The Chancellor’s 2019 Spring Statement mentioned; “The focus will be on supporting businesses […]
The Construction Industry Scheme (CIS) is where a construction contractor deducts, at source, a portion of the money due to their subcontractor. Whatever amount is deducted is then passed directly to HMRC which is then counted towards the tax and National Insurance of a subcontractor. This effectively pays the tax element in advance. How much […]
From 1st of April 2019 HMRC’s VAT Notice 700/22 will come into effect; Making Tax Digital (MTD) for Value Added Tax (VAT). The MTD initiative is believed to benefit HMRC on two levels. It will help to ensure the correct VAT is being paid to HMRC, & seeing that VAT accounts for the highest unpaid […]
Please take a look at the calendar above and note our opening times over Christmas and New Year. As you can see, we’re closed on several days over the festive period. This is particularly important for those who need to come to see us for help with time-sensitive accounting and tax-related services in the run-up […]
What does this mean for me?
If you are a taxpayer with overseas assets which are undeclared as regards income tax, capital gains tax or inheritance tax, you have an obligation to sort things out by 30 September 2018.
People who ignore this requirement and whose income or assets subsequently come to light will face much, much higher penalties and sanctions after the deadline.
Why bother now?
The United Kingdom has signed up for information exchange with a whole host of other countries. The information it receives from them will be input into its intelligence system known as Connect. This increases the likelihood of undeclared sources coming to light.
What if I do nothing?
After the deadline date, if your undeclared sources of income or gains come to light, you will face potential penalties as follows:
- A tax geared penalty of between 100% and 200% of the tax due;
- A potential asset based penalty of up to 10% of the asset value where the relevant tax at stake is over £25,000 in any one tax year;
- Adverse publicity from being publicly named as a tax cheat where the tax is over £25,000;
- A further potential penalty of 50% of the standard penalty if the Revenue show that assets or funds have been moved in an attempt to avoid the requirement to correct.
If you have a reasonable excuse for failing to correct your tax position, such as failing health for example, then penalties may be reduced or not charged in exceptional circumstances.
If you think you might be affected or are in any doubt, we suggest you act now to avoid any problems before the deadline.
Call Taxfile on 0208 761 8000 for a no-obligation discussion if you want to put things right. Alternatively, book an appointment here. We have a wealth of experience in dealing with voluntary disclosures and negotiating settlements with HMRC, so can definitely help you. We offer tax advice and accountancy services from our offices in Tulse Hill, Dulwich and Battersea in South and South West London along with tax experts in Exeter, Plymouth, Poole, Dorset, Devon, Yorkshire and Carlisle.
Owners of second properties and let properties need to be aware that HMRC is planning to introduce new rules from 6 April 2020 to require payment of Capital Gains Tax much, much earlier! The window of payment will be reduced from 31 January following the year of the gain to a mere 30 days from the date of the sale.
Effectively, ‘in year’ reporting of the estimated gains – and payment of the tax – is mandatory under the new rules. Failure to report the gains and pay the tax will lead to penalties for landlords and second home owners.
You will only be able to offset losses accrued at the time of the disposal, so losses later in the year will not be available against the payment on account.
- If you make a capital gain in 2018/19 (before the new rules kick in) you will pay the capital gains tax on or by 31 January 2020.
- For the sale of a house that is let, or a second property, with exchange of contracts occurring on, say, 15 April 2020 with completion happening on 15 May 2020, the Capital Gains Tax (CGT) has to be paid by 14 June 2020. This accelerates the payment of the tax to the Exchequer by 7 months.
- So, perversely, the later year requires the Capital Gains Tax payment before the earlier year, as you can see above!
The other difficulty is knowing what rate to apply because a higher rate taxpayer has to pay 28% on a gain but a basic rate taxpayer has to pay tax at 18% up to the limit of the basic rate band that is unused. This is, of course, one situation where Taxfile can help to work out the tax implications for its customers. Tax calculations are what we do best and we’re here to help you!
Note that Scottish tax rates may vary.
HMRC is currently assessing feedback on their consultation, which closed on 6 June 2018.
If you believe this change of rules is wrong, one option is to write to your MP to complain.
Professional Help with Tax & Accountancy – for Landlords & More
For help with accountancy and tax for any property, lettings or any capital gains situation you may find yourself in, contact your nearest branch of Taxfile. We have London offices in Tulse Hill (SE21), Dulwich, Battersea (SW8) and another in the Exeter in the South West along with additional tax consultants in Carlisle in the North of England, Yorkshire in the North East, Poole/Dorset and Plymouth in the West Country. Call 0208 761 8000 for an introductory chat or appointment, contact us here or click the bold links for more information. We’ll be happy to help and to get your tax affairs in order.
Are you making the most of your tax allowances for small trading? If you have small earnings from self employment, then it may be advantageous to make a claim for Trading Income Allowance i.e. to claim a flat rate deduction of £1,000 for expenses instead of claiming the actual expenses incurred.
Christina has income of £2,360 and expenses for web hosting of £204, software of £103 and publishing costs of £430
(total expenses £737).
As her expenses are less than £1,000 she can claim £1,000 Trading Income Allowance in preference to claiming the actual expenses.
Her taxable profit therefore becomes £1,360 instead of £1,623. So, she pays less tax!
This is just one simple way in which Taxfile’s knowledge of the tax system can help its customers pay less tax in a totally acceptable way from HMRC’s perspective.
Contact your nearest Taxfile branch
Please do contact us for any accountancy work that you or your business(es) require. We’re tax experts and are also very well trusted by HMRC because we deal with them on a daily basis on behalf hundreds of clients. We have several UK branches including in Tulse Hill, Dulwich and Battersea in London, Exeter and Plymouth in the South West along with our tax specialists in Poole (Dorset), Carlisle in the North of England and Yorkshire in the North East. Call 0208 761 8000 or contact us here for more information — we’ll be happy to help you to get your tax affairs in order in the most tax-efficient way.