Hosts who rent out a spare room could soon see themselves being straddled with an unexpected tax bill if companies like ‘Airbnb’ are forced to share data with UK authorities.
Airbnb, the website that allows you to list, find or rent a room in a private residence, has announced that it now has to share details of its users’ rental profits with the tax authorities in Ireland. Airbnb was already required to share this information in America but, until now, has not been required to do so in the UK. However, HMRC are cracking down on unpaid tax from hidden income and this may result in companies like Airbnb soon having to share details of income earned by its UK customers.
Airbnb, which has headquarters in Ireland and America, say they are not currently governed by the same legalities in the UK and so will not be reporting income automatically in the UK but, as part of its crack-down on unpaid taxes, HMRC has said it will be approaching intermediaries like Airbnb for data on their clients. Read more
https://www.taxfile.co.uk/wp-content/uploads/2015/09/airbnb.png200200Markhttps://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.pngMark2015-09-23 19:52:382021-10-31 20:07:13Hosts renting out rooms to be targeted by HMRC
The Summer Budget was announced last week and in this blog post we’ll take a look at only those changes which will affect ordinary taxpayers and SMEs.
In his opening remarks, the Chancellor of the Exchequer, George Osborne, promised:
A Budget … to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country.
So, taking each of those goals in turn …
Higher Minimum Wages
With regard to the higher wages promise, Osborne announced that there would be a new National Living Wage of £7.20 per hour from April 2016 for those aged over 25 and over, rising to more than £9 per hour by the year 2020.
Lower Tax
With regard to the lower tax promise, the Personal Allowance (the amount people can earn before paying any tax) will increase – as anticipated – from £10,600 in the financial year 2015-16 to £11,000 in 2016-17. A longer term plan is to increase this still further to £12,500 by 2020. The ultimate ambition is pass a law to make sure that those working 30 hours a week and earning the National Minimum Wage will pay no tax whatsoever, although clearly this will need further clarification in due course.
Dividend tax will also be reformed. Here the existing dividend tax credit (this reduces tax paid on dividends from shares) will be replaced by a new £5,000 tax-free allowance on income from shares from April 2016 and this will be available to all taxpayers. To offset the cost of this to the Exchequer, those with more significant dividend income will see an increase in the tax rate they pay.
Inheritance tax will also be subject to changes from 2017-18. The idea is to allow individuals to each have a ‘family home allowance’ which they can pass on to their children or grandchildren, tax-free, when they die. This allowance will be added to the existing Inheritance Tax threshold currently set at £325k and will potentially allow property up to the value of £1m to be passed down from 2020-21 (see table below). For those with estates valued over £2m the allowance will be gradually withdrawn.
This is how the effective Inheritance Tax thresholds will look in 2020-21: Read more
In what, for most of us, is very welcome news, the Chancellor announced a significant tidy-up of Stamp Duty in his Autumn Statement yesterday. The changes will mean that 98% of those who pay Stamp Duty will save money — and potentially a significant amount. We believe that this is a fairer system, with the richest contributing the most and, in effect, counterbalancing the savings which will be made by those buying any property for less than £937,500.
So how will this affect you?
HM Treasury have released a rather useful infographic which, with the aid of examples, gives you a good idea of the savings you will make if the property you are buying costs less than £937,500 … or for richer people the extra you’ll pay if the property price is above that threshold.
So how does it work?
In the old Stamp Duty rules you had to pay a single Stamp Duty rate based on the entire value of the property being purchased. This meant sometimes hugely differing amounts of Stamp Duty being levied for sometimes similar property prices (depending on which side of the tax band threshold an individual house price fell). With the new tax bands, however, buyers will pay Stamp Duty at a rates applied to only the part of the property price falling within each tax band, rather like happens with income tax.
https://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.png00Markhttps://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.pngMark2014-12-05 09:15:152021-10-31 20:27:52Infographic: Stamp Duty Changes: Good News for Most!
HMRC are constantly reviewing who has and has not declared income properly from letting out property, whether that’s from short-term lets, long-term lets, holiday lets, letting rooms to students or to workforces. And with new, sophisticated, data sharing systems now in full force across many agencies, authorities, online, via tip-offs and surveillance, the Government has its sights on an estimated 1.5 million landlords who they think have under-paid tax.
Taxfile are here to help landlords get their tax right and to make sure all genuine expenditure is offset against their final tax bill. They can also help out when things have become complicated by liaising with HMRC on behalf of the landlord under fire. Contact Taxfile for an informal chat, without obligation (you can even book an appointment online) or ask for a copy of our ‘Landlords Beware’ information sheet.
https://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.png00Markhttps://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.pngMark2014-10-23 09:25:192021-10-31 20:29:24HMRC are clamping down on landlords
Download our jam-packed Autumn Newsletter right here for up-to-the-minute news, ways to save money, tips, new developments and tax information from Taxfile. Includes important news regarding tax return deadlines, refunds for C.I.S. sub-contractors working in the construction industry, key dates, ways to save money, HMRC tax news for landlords, imminent price changes plus an interesting mind map showing information about our lovely multi-lingual staff! Download the newsletter here (Acrobat PDF format – right-click to save the PDF to your hard drive then open it in Acrobat Reader or alternatively left-click the link to view the newsletter directly in most browsers).
https://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.png00Markhttps://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.pngMark2014-10-15 18:40:282021-10-31 20:31:13Taxfile Autumn Newsletter Now Available
By midnight on 31st January 2014, you will need to have submitted your self-assessment tax return to HMRC and have paid them any tax due for the 2012-13 financial year. It doesn’t matter if you have zero tax to pay – you still need to submit your tax return on time or you will be hit with an automatic penalty of £100 (delaying even further can, in the worst case scenario, increase this fine to as much as £1,600).
In view of this, for the month of January you can get help 7 days a week from Taxfile in Tulse Hill, South London.
Our team of tax advisers and accountants can help you with your return whatever your employment status. We can help you register with HMRC if you are not already registered, check your form and help fill it in where necessary, make sure you’ve claimed for any allowable expenses to offset tax, make sure you haven’t missed anything or claimed for something you shouldn’t have claimed, compute any tax due (or due to be refunded), and submit your tax return on-line (the only option available this late into January – paper returns are already too late!). Read more
https://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.png00Markhttps://www.taxfile.co.uk/wp-content/uploads/2020/03/taxfile-logo-2020.pngMark2014-01-14 17:33:232021-10-31 20:39:25Tax return help 7 days a week!
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