New 30-Day Rules for Capital Gains on Residential Property
New rules have now come into force in relation to capital gains made on disposals of UK residential property*. Several key actions are now required if a taxable capital gain has arisen, including some that now need to be made fast:
- Taxpayers need to report the property’s disposal within 30 days of the actual disposal;
- They will need to pay the estimated Capital Gains Tax (‘CGT’) to HMRC within 30 days of the disposal.
- Those who fill in and submit a Self-Assessment tax return will also need to include details of the disposal on their return.
Who Do the New CGT Rules Apply To?
The new rules apply whether you’re an individual, joint property owner, trustee, partner in a partnership or LLP, or a personal representative.
What Counts as a Residential Property Disposal?
The new rules apply to all UK residential property that was disposed of (taken as the date of the exchange of contracts) since 6 April 2020 inclusive, where a capital gain was made that will require payment of CGT.
To fall within the rules, a UK residential property must be one that:
- is suitable for use as a dwelling, or;
- is being built or adapted for use as a dwelling.
It can be one in which the the owner has never lived or has lived for only part of the period they owned it. It can also be a rental property or a holiday home.
Where a property has been used for mixed purposes, only the capital gain that’s equivalent to Read more
SEISS: The 5th & Final Round
HMRC has already started contacting possible eligible sole traders and partnerships for the 5th and final Self Employed Income Support Scheme grant announced by the Government last year.
HMRC’s online access for applications is due to open later this month (July) and the grant will cover the period 1st May 2021 through to 30th September 2021. You can claim the 5th grant if you believe that your business profit will be impacted by coronavirus between these dates.
This round of grants requires turnover calculations to be done by the applicant, following four stages to determine the two turnover figures required in the application and hence, how much they will be eligible for.
- You will first need to work out your turnover (money received) for a 12-month period starting from any date between 01/04/20 to 06/04/20. Your figure must include the turnover from all your businesses. You can ask us at Taxfile for your figure if we have submitted your 20/21 tax return. If you haven’t yet done your 2020/21 tax return, it might be an opportunity to contact your tax agent at Taxfile and bring in your financial data for the period, so we can give you an accurate figure, as HMRC will be able to check the figures once you do submit your tax return.
- The second stage is to adjust the 12-month turnover figure by removing the monies received from any SEISS grants or COVID relief grants from the council/government. Although these grants are viewed as subject to income tax and national insurance, they will not be considered as part of your 12-month turnover figure for the 5th SEISS grant.
- The third stage requires you to calculate a previous year’s turnover to use as a reference figure. This is the 2nd figure you will need for the application. HMRC states that in most cases you must use the 2019/20 tax return as your reference year. If for any reason 2019/20 was not a normal year, you can use the turnover reported in your 2018/19 tax return. For ‘not a normal year’, HMRC has stipulated the following examples; being on carers or sick leave for a prolonged period, losing a large contract, reservist duties, or being eligible for the 5th SEISS grant but not having submitted a 21019/20 tax return. The turnover for your reference figure can be found on the tax return summary we would have issued you. If you need this figure, please do not hesitate to contact your tax agent on 020 8761 8000.
- The fourth stage is to compare the two turnover figures. Only when the figure from stage 3 (the reference year) is greater than that obtained for the 20/21 figure will you be eligible for the 5th SEISS grant. Furthermore, if the 2020/21 turnover figure has reduced by 30% or more when compared to the reference turnover figure, the grant will be 80% of the 3-month average profits, with the maximum grant payment capped at £7,500. If the 2020/21 turnover is less than 30%, the grant will be 30% of the 3-month average profits, capped at £2,850.
Faiz from Taxfile – Helping the Community with Tax Problems
Hello; I’m Faiz Mazloumiar. I have been working for Taxfile since May 2005, mostly doing tax returns for subcontractors, self-employed individuals, partnerships and landlords. I specialise in helping clients who, for whatever reason, have fallen behind in their tax affairs, assisting in making disclosures to HMRC whilst trying to minimise the penalties imposed on them over the years. I always aim to put our customers first by calling HMRC to try to cancel recent years’ penalties, then I submit any outstanding tax returns. When I submit the tax returns I also do an appeal for older years’ penalties to be revoked. In many cases HMRC accept my appeals and clients get their money back for anything they have had to pay. I am always fighting for my clients and I have been known to battle on behalf of them for over a year.
I also help many people in our local community who are on PAYE but perhaps do not know if they are paying the right tax and NI contributions. It is a little like charity work. When people from the local community bring in their P60, I will check it and give them advice on how to contact HMRC and ask for a refund if they have overpaid. When new clients come with any problems, they are usually very stressed and anxious and sometimes don’t understand the intricacies of the UK tax system. We aim to help them with their tax problems, so they can leave us feeling relieved and a little happier. When I help clients they trust me and I have grown my client base only through recommendations. It is very exciting and satisfying for me to be able to help my clients and community as a whole.
Contact Taxfile, South London’s Favourite Tax Accountants
For any tax- or accountancy-related needs, contact us. We’d love to help! Call Faiz direct on 020 8655 7891 or speak to our main switchboard on 020 8761 8000. Alternatively message us your tax-related query here. We also offer a free 20-minute introductory appointment and this is available in person, through a video call (Zoom, Teams etc.) or via telephone — whichever you prefer. We are accountants and tax advisors in Tulse Hill and Dulwich, South London.
This post was brought to you by Faiz at Taxfile.
Peace of Mind from Using an Experienced Tax Team
When using Taxfile, you are using an experienced team that will make dealing with your tax affairs seamless. A lot of clients start by coming into our office stressed and overwhelmed, not knowing where to start. Using your current position and needs, we plan a step-by-step approach to keep you on top of your affairs and the relationship between you and HMRC harmonious. Once you are officially on board with us, we will have access to your HMRC record and, with our dedicated agent lines to HMRC, we’ll be able to speak to them on your behalf. This way, you are free from having to call them yourself and wait longer than we do for a call handler. You can also have any issues or queries explained to you in an easy to understand way by our friendly team. If you receive any letters that from HMRC and you don’t understand anything, we will be able to take a look for you and explain what it’s all about.
Any fee you pay Taxfile is tax deductible, so will be put on your tax return and result in a reduction of tax.
Our up-to-date knowledge of the tax system will give you peace of mind, alleviate any anxiety you may have and make the whole experience very different to how a lot of people find it when they are not using a team like ours. We know the best way to approach a tax situation that, without our experience and knowledge, could otherwise result in a lot more time and money being spent unnecessarily. From something as small as missing a tax return deadline, it can spiral into something a lot bigger, potentially including penalties, late payment interest, debt collection agencies being involved and so on. We inform all our clients of upcoming deadlines, for their particular tax situation, and let them know what needs doing and when, avoiding this situation and many more.
Unlike a lot of other companies, our tax experts and accountants are approachable, accessible and happy to help. We’re a unique tax advisor and accountancy practice like no other, with offices in Tulse Hill and Dulwich. We can help with any tax-related issues, including bookkeeping, filling in a tax return, limited company accounts, help accounting for property lettings, tax refunds and anything accountancy-related. Call Taxfile on 020 8761 8000, book a free 20-minute appointment with us (remote or in-person options available) or simply email us your tax-related query here.
This post was brought to you by Julie at Taxfile.
4th SEISS Grant Available THIS Week
If you are self-employed or a member of a partnership and have been impacted by coronavirus (COVID-19), the 4th Self-Employment Income Support Scheme (SEISS) grant will be available to those eligible from this week (w/c 19 April 2021), and the online service for the fourth SEISS grant is now online HERE
The grant covers the period from 01/02/2021 – 30/04/2021 and eligibility for the fourth grant is dependent on you having traded for both tax years:
- 2019 to 2020 and submitted your tax return on or before 2 March 2021
- 2020 to 2021
You must either:
- be currently trading but are impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus
- intend to continue to trade
- reasonably believe there will be a significant reduction in your trading profits
The same criteria that were applied for the first 3 SEISS grants still apply & this grant will be 80% of your average trading profits for up to 4 tax years (2016/17, 2017/18, 2018/19, & 2019/20) for 3-months.
The closing date for the 4th SEISS Grant is 01 June 2021.
By now you should have received an email form HMRC stating when you can claim your 4th SEISS grant from. If you need any assistance with your claim, please do not hesitate to contact us on 020 8761 8000 or email/message us here.
Tax “Payment Plans” are ENDING – Act NOW if you Owe Tax!
Are you late paying your tax? Do you owe unpaid tax for the last financial year, or earlier? Are you struggling to pay it?
Taxfile has recently been helping some of our customers with tax debts from 2019/20 and earlier. In particular, we’re helping them to arrange payment plans with HMRC as part of their ‘Time to Pay‘ scheme. This spreads the cost of those tax debts instead of paying them off in one go. This is really useful to those who are struggling financially following the pandemic. The new payment plans are only available until 1 April 2021, though, so really you should apply by 31 March 2021. Our advice is to act now if you are in a position to take advantage of the payment plans while they’re still — just about — available.
The benefits of arranging a tax payment plan now
Agreeing a payment plan with HMRC will help avoid the 5% late payment penalty that’s usually charged on outstanding tax not paid by the deadline. And, of course, spreading the cost helps those who might otherwise struggle to get together the full amount in one transaction. The HMRC interest rate seems relatively low too.
How Tax Payment Plans have gone so far
What we’ve found so far is that Read more
Late Filing Penalty Calendar
If you needed to have submitted a self assessment tax return for 2019/20 but have not done so by 28/02/2021, you will now be receiving a letter from HMRC stating that you owe a £100 late filing penalty fee.
Please do not ignore this, as from 29th of May you will see an exponential growth in the penalty.
From 29th May you will receive a £10 per day fine for up to 3-months, meaning you can potentially get an additional £900 added to the initial £100 fine you have received.
On the 30th July you will then receive an additional £300, making the grand total for late filing £1,300 if not done by 30/07/2021.
If you have a tax return to file, please contact us on 020 8761 8000 so we can help you avoid any additional penalties you may incur.
5% Late Payment Penalty Relief Announced by HMRC
HM Revenue and Customs (HMRC) has announced that Self Assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1st April 2021.
Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3rd March. But this year, because of the impact of the COVID-19 pandemic, HMRC is giving taxpayers more time to pay or to set up a payment plan.
Taxpayers have until 28th February 2021 to file any pending tax returns and prevent being charged a late filing penalty (of £100). They then have until 01/04/2021 to pay any outstanding tax or make an arrangement with HMRC for a payment plan before they receive a late payment penalty.
We encourage any of our clients that are struggling to meet their tax obligations to set up a payment plan to spread the cost into monthly instalments. More information can be found on the Government website HERE. You will be able to spread the cost of their self assessment tax bill through to January 2022.
If you have any questions, please do not hesitate to contact us on 020 8761 8000 or, if you still have a 2019/20 tax return to submit, then we can help you get this in on time to avoid the £100 late filing penalty. We will be open on Saturday the 27th & Sunday 28th February.
Latest News on Gov. Grants, Support, Loans, Deadlines & More
Don’t miss our latest newsletter. Published just this week, it includes several updates on the latest Government support for small businesses during the pandemic, including:
- a possible 4th SEISS grant coming for the self-employed and …
- extensions of both the Job Retention Scheme (‘furlough’) ….
- and Bounce-Back Loan Scheme.
- There’s also a useful link where you can check what help may be available to you using a simple but genius interactive interface.
The newsletter also includes imminent deadlines that may affect you and news about a significant VAT change that will affect the entire Construction Sector.
Have you submitted your Self-Assessment tax return for the year 2019-20? It’s due in a few days! Learn more in the newsletter or get the ball rolling here.
Have you paid any tax you owe for the same period? It’s now overdue if not. Also see the newsletter for more information contact us using the yellow buttons below.
Learn much more about all these topics and more in our latest e-Newsletter, which can be viewed here. For help with any tax or accounting related issue, simply contact us and we’ll be happy to help. Choose an option below …