Category Archives: Taxation

Business Update August 2019


Business Update August 2019

BUSINESS UPDATE

The latest edition of our Business Update series is now available

Whilst our politicians revel in their own inabilities to govern, just like father time tax changes march on.

EMPLOYER/EMPLOYEE TAX MATTERS

Our latest July/August newsletter address several work-related issues. In our feature story, we highlight recent changes in employment law including the right of all workers to detailed payslips recording their hours worked, helping to enforce compliance on weekly and nightly working limits. The status of EU nationals, consultation on the role of non-disclosure agreements in the workplace and pay and gender gap reporting are also under the spotlight.

IR35 AND OFF-PAYROLL WORKERS

The IR35 rules have also come under scrutiny as some major tribunal cases have found against HMRC and in favour of contractors. Although the examples we’ve seen are for TV presenters, the principles in each case set a precedent for workers in other industries. With IR35 still pegged to roll out to the private sector next year, there are still serious questions about the accuracy of HMRC’s tools and processes.

OFF-PAYROLL WORKERS NEW RULES FROM 6th APRIL 2019

There are important changes for individuals who supply their services through a personal service company and the contractors who engage them.  Read our article outlining the changes and making recommendations in preparation for them.  Download here: –

Off-Payroll Workers

MAKING TAX DIGITAL FOR VAT

Meanwhile Making Tax Digital for VAT has taken off, but not without a few complications. Some software packages may not deliver all you require for your digital reporting so make sure your IT system has the functionality you need.

OTHER STORIES

  • Could you be using simplified expenses? – Sole traders and partnerships can opt to use the simplified expenses rules. Find out if it could work for your business.
  • A question of property – Cuts to the tax relief rules for principal private residence and letting relief are coming in from next April in the latest round of changes to hit landlords.

Download a copy of our latest Business Update here:-

Business Update – Autumn 2019

If you have any queries arising ion connection with any of the issues covered, contact Paul Southward or your usual KSK contact.

Paul Southward


Tax Alert 30th April 2019 – should you invest in Furnished Holiday Letting?


Tax Alert 30th April 2019 – should you invest in Furnished Holiday Letting?

TAX ALERT

FURNISHED HOLIDAY LETTING – WHAT’s IT ALL ABOUT?

Residential landlords have certainly been taking a tax bashing over recent years.  Many landlords may now need to assess whether they can continue with so many tax charges now levied upon them.  It comes as no surprise that attention is focusing on different ways in which to invest in property.  One area that has been grabbing attention is Furnished Holiday Letting (FHL).

IS FHL THE ANSWER?

There is no question that if you have a property that can be let under the conditions to qualify for FHL, there are some attractive tax benefits.

Unfortunately, for many existing landlords FHL will not be a quick fix, as there are strict rules for meeting the FHL qualifying conditions.

The main clue lies with the description holiday letting, rather than having a few long-term tenants, the property must have multiple short lets.

NEW DIRECTION

Your existing property may not be suitable to qualifying for FHL but if you are a prospective investor or an existing investor looking to invest in a new property, FHL may be worth considering.  Perhaps you already own or have inherited a holiday property that you are not making full use of, with a bit of planning you may be able to turn it into a profitable business.

FURTHER INFORMATION

If you are looking for further information about FHL, Paul Southward has produced two guides to provide you with more information about FHL, the rules and the tax advantages.

The topic of FHL has recently become hot gossip at the moment but as is often the case they may not always be painting the full picture.

For a summary of the qualifying conditions for FHL, download Paul’s guide here:-

FHL – Qualifying Conditions

And for a summary of the main tax advantages see Paul’s guide here: –

FHL – Tax Benefits

For more information contact Paul Southward.

Paul Southward


Tax Alert – proposed changes to Capital Gains Tax and Personal Residences


Tax Alert – proposed changes to Capital Gains Tax and Personal Residences

Capital Gains Tax

TAX ALERT

Proposed changes to Capital Gains Tax and Personal Residences

Private residence relief consultation

HMRC is consulting until 1 June 2019 on changes announced at Budget 2018 and due to take effect from April 2020, which reduce the final-period exemption from 18 months to 9 months and limit lettings relief to circumstances where owners are in shared occupancy with their tenants. The consultation also considers changes to other ‘ancillary’ aspects of the private residence relief rules.

The changes are to ensure the reliefs are properly targeted at owner-occupiers.

The final-period exemption currently means that where a property has been occupied as the owner’s only or main residence, the final 18 months of ownership always qualifies for relief regardless of the property’s use. The 36-month final exemption for disabled persons and those resident in a care home will not be affected by the changes.

Lettings relief, which applies where part or all of a main residence is let as residential accommodation, will not be available after April 2020 for periods where owners move out of the property and no longer share occupation with tenants, unless covered by one of the ancillary reliefs, such as job-related absences.

The other changes being considered include:

  • extending job-related accommodation relief to service personnel in accommodation not technically provided by the MOD, but rented in the private sector as part of the MOD’s future accommodation model pilot due to take place in 2019;
  • legislating for the concession, which allows an extension of the period for individuals to nominate one property as a main residence, where they have an interest in more than one property having only a negligible capital value, and they were unaware that such a nomination could be made;
  • legislating for concession, which allows for short delays in taking up residence, such as where an individual acquires land on which they have a house built, or have alterations or redecorations carried out before moving into a property purchased as an only or main residence; and
  • reforming the rules on spouse/civil partner transfers, which currently allow the receiving spouse to count any period where the residence was occupied as a main residence by their spouse as their own, and instead treat the receiving spouse as having inherited the ownership period and the use to which the property had been put in the past, regardless of whether it is a main residence at the time of transfer.

Following this consultation, the government expects to publish its response and draft legislation in the summer.

To keep up to date with all the latest tax issues, contact Paul Southward.

Paul Southward


News update extra Friday 5th April 2019


News update extra Friday 5th April 2019

NEWS UPDATE EXTRA

TAX NEWS

IFS hits out at stealth taxes

Institute for Fiscal Studies (IFS) analysis has found that around 1m people are losing more than £1bn in tax allowances. The research shows that the Government freezing the salary threshold at £100,000 has seen an extra 340,000 people have their income tax personal allowance withdrawn over the past decade, taking the total number affected to 986,000. If ministers had increased the £100,000 threshold in line with inflation these people would have been paying more than £1bn less in tax. The figures also show that the threshold being frozen at £150,000 since 2008 means 110,000 extra people have been pulled into the highest 45% tax rate, taking the total to 428,000. The IFS said “stealth” taxes have moved from being the “rare exception to being commonplace.” The IFS added the “most perverse case of all” was the reduction in the pension annual allowance for high-income individuals, saying: “In some cases, people with pension contributions in excess of £40,000 can face a marginal tax rate of more than 100%,” adding that they “would actually be worse off if they increased their earnings.” IFS director Paul Johnson said: “Recent governments have, rather stealthily, increased tax rates on high earners and the number of people facing high marginal rates of tax. If government thinks there is a case for more high-income people to pay more tax, it should be upfront about that view.” Elsewhere, City AM calls for a rethink of tax bands, saying that while a “long-overdue attempt” to prevent workers with modest lifestyles from falling into the 40p tax bracket by lifting the threshold should be applauded, “static thresholds continue to trap a growing number of employees.”

The Daily Telegraph, Page: 8 Daily Mail, Page: 75 City AM, Page: 2

Threshold change widens tax gap

Scottish workers earning under £27,000 – which equates to around 55% of the country’s taxpayers – will contribute less income tax than their counterparts elsewhere in the UK when new income tax thresholds are implemented on April 6. However, those earning more than this will pay more than taxpayers south of the Border. While Chancellor Philip Hammond raised the top rate of income tax to earnings over £50,000, Scottish Finance Secretary Derek Mackay announced in October that the point at which the higher rate kicks would be frozen at £43,430. The change effectively widens the gap between Scotland and the UK for higher rate taxpayers, who pay 41% in Scotland compared to 40% in the UK.

Daily Express

Loan charge delay call

A number of MPs have backed calls for a six-month delay to the loan charge and an independent inquiry, with Justine Greening saying: “The approach HMRC has taken has been punitive rather than proportionate.” Elsewhere, Dawn Register of BDO commented: “This controversial tax charge has not received sufficient Parliamentary scrutiny.” She added: “With MPs’ time dominated by Brexit it is hardly surprising, however the flurry of evidence and activity in recent weeks suggests that more time is needed to consider the impact of the measure.” Meanwhile, the Loan Charge Action Group has called for the charge to be forward-looking rather than retrospective.

Financial Times BBC News

Pension tax break cuts risk crippling the NHS

The FT looks at the impact regulations restricting tax relief on pension contributions for higher earners are having on the NHS, with senior doctors opting to reduce hours or retire early.

Financial Times, Page: 10

UC impact on tax credit claimants revealed

A study by HMRC and the Department for Work and Pensions into how tax credit claimants coped with a shift to universal credit found that 60% of those who reported struggling financially said their difficulties began when they made the move.

The Guardian, Page: 23 Daily Mirror, Page: 2

SUMMARIES OF ALL THE NEW TAX YEAR CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019-20 Personal Tax Changes

Business tax changes

2019-20 Business Tax Changes

CORPORATE NEWS

BBC criticised over pay arrangements

The Commons Public Accounts Committee has said the BBC’s “muddled and chaotic” handling of freelance pay arrangements caused misery and hardship for staff. The report comes amid claims the BBC told freelancers to set up personal service companies so it could avoid paying millions in national insurance, with HMRC subsequently chasing staff over unpaid tax bills. The BBC’s attempt to reach an agreement with HMRC that would see it settle all outstanding cases with a lump-sum payment is taking longer than expected, the committee noted.

The Times, Page: 48 The Guardian, Page: 15 The Sun, Page: 4

Stores hit by online rivals

The Daily Mail reflects on a report which shows that one in eight high street stores are empty, saying “ruthless competition from tax-avoiding internet firms” has taken its toll. The editorial says such firms “pay microscopic sums to HMRC” and as they operate out-of-town warehouses “they avoid the suffocating business rates”.

Daily Mail, Page: 16

Pottery firm collapses

Pottery manufacturer Dudson has collapsed, with over 300 jobs lost. Of the 390 staff employed at the firm, 72 “will be retained to support the closing down of the business”. Administrator PwC said “a deterioration in sales and increased costs” had hit the business.

The Times, Page: 48

SMEs NEWS

Late payment pain for small firms

Sathnam Sanghera in the Times looks at the impact late payment has on SMEs. He notes Federation of Small Businesses analysis which suggests about 50,000 businesses fail every year due to larger firms neglecting to settle bills, while Lloyds Banking Group research suggests that 65% of firms which report their payment practices took more than 30 days to settle invoices and 21% took more than 50 days. Mr Sanghera also points to a Small Business Commissioner report showing that a third of payments to small businesses are late, 20% of small firms have experienced cash flow problems due to late payments, and that the economy would see an annual boost of £2.5bn if bills were settled promptly. Meanwhile, the Cabinet Office has written to Government suppliers saying they risk being barred from future public sector work if they fail to pay subcontractors on time.

The Times, Page: 43 Financial Times, Page: 2

ECONOMY NEWS

Sales up but dip not offset

The latest BDO high street sales tracker shows that like-for-like in-store sales rose by 4.8% in March, with the increase not strong enough to rebound from a 10.1% dip seen in March 2018. The data also shows that online sales rose 18.7%, up on the 11% growth recorded a year ago. BDO’s Sophie Michael commented: “Retailers continue to trade on paper-thin margins and the impact of further increases in business rates and staffing costs will only add to the fears of further possible high street casualties.”

The Times, Page: 42 City AM, Page: 3 Yorkshire Post, Page: 9

Hiring slows

The monthly Report on Jobs by KPMG and the Recruitment and Employment Confederation shows that the number of permanent job appointments in March fell to its lowest level since immediately after the 2016 referendum. The survey of 400 UK employment consultancies found that permanent appointments dropped for the second time in three months in March and at the steepest rate since July 2016, with political uncertainty said to have played a part. James Stewart, vice chair at KPMG, said: “Brexit has been sapping business confidence for months, and now it is causing the jobs market to grind to a halt.” “With unclear conditions ahead, many companies have hit the pause button on new hires,” he added.

The Times, Page: 48 The Sun, Page: 51 Yorkshire Post, Page: 4

Contact Paul Southward.

Paul Southward


Tax Alert Friday 5th April 2019


Tax Alert Friday 5th April 2019

TAX ALERT

CAPITAL GAINS TAX FOR NON-UK RESIDENTS

Non-UK Resident owners of UK property need to be aware of new changes

With effect from 6th April 2019 non-UK residents must pay tax on all UK land disposals – both residential and commercial.

They must file a non-resident capital gains tax return and pay any tax due within 30 days of sale.

NEED TO BE AWARE

All non-UK residents who own interests in UK land or property need to be aware of theses changes.  Professional advisers: Solicitors, Estate Agents and Land Agents need also need to be aware so that they can provide the necessary guidance.  KSK are able to assist with all UK tax matters relating to the disposals of property and should be your first point of call if queries arise.  Prospective sellers need to be aware that they will have to file a non-residential capital gains tax return with HM Revenue & Customs (HMRC) and pay any tax due within a very tight time frame.

PENALTY CHARGES

HMRC will seek to charge penalties for late returns and payments of tax.

COMMERCIAL PROPERTY

For disposals of commercial property, as the new rules only come into effect from 6th April 2019, it is only the growth in the property value from 6th April 2019 that will be taxable.  Non-UK resident owners of UK commercial property may wish to consider obtaining valuations at 6th April 2019 so as to accurately calculate any future capital gains tax and possibly avoid later disputes with HMRC.

NIL RETURNS ARE REQUIRED

The new legislation applies to all disposals of UK property owned by non-UK residents.  A non-resident capital gains tax return is required even where there is a capital gains tax due.  HMRC will impose penalties even for “NIL” returns.

WE ARE HERE TO HELP

Professional advisers and non-UK resident owners of UK properties who have any queries regarding the new rules can contact Paul Southward for further guidance.

Paul Southward

SUMMARIES OF ALL THE NEW TAX CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019-20 Personal Tax Changes

Business tax changes

2019-20 Business Tax Changes

 

 

 


News Roundup Thursday 4th April 2019


News Roundup Thursday 4th April 2019

NEWS ROUNDUP

TAX NEWS

Half a million over-65s pay too much tax

Around 520,000 older workers could be paying unnecessary tax on their state pension as they have not taken up the option of deferring it until they stop work, analysis from insurance specialists Royal London shows. It is suggested that those who defer can potentially get an extra 5.8% a year on their pension for the rest of their life for each year they defer. Sir Steve Webb, director of policy at Royal London, said: “There has been a huge increase in the number of people working past 65, and most are claiming their state pension as soon as it is available. If their earnings are enough to support them, it makes sense to consider deferring taking a state pension so that less of their pension disappears in tax.”

The Independent, Page: 59 The Daily Telegraph, Page: 2 The Times, Page: 4 I, Page: 11 Daily Mirror, Page: 24 Daily Mail, Page: 21 Daily Express, Page: 2 Yorkshire Post, Page: 4

Super-rich pay 10% IHT

Analysis of HMRC data following a freedom of information request by asset manager Canada Life shows that estates worth £10m or more paid an average of 10% inheritance tax in the 2015/16 tax year compared with 20% tax paid by estates worth £2m to £3m. Neil Jones, market development manager at Canada Life, said the richest people often had access to “myriad potential solutions in an adviser’s kitbag” to help mitigate IHT, adding that the difference in net tax rates “isn’t always down to the value of the estate or the type of assets held … It’s often about a willingness to plan.”

The Guardian, Page: 35

EU: Britain gave illegal tax breaks to multinational firms

The European Commission has ruled that a tax scheme introduced in 2012 by then -chancellor George Osborne gave illegal tax breaks to some multinational companies. Officials say the scheme “unduly exempted certain multinational groups from… UK rules targeting tax avoidance”. Margrethe Vestager, competition and policy boss for the European Commission, said a probe into the Group Financing Exemption found that the UK “gave certain multinationals a selective advantage by granting them an unjustified exemption from UK anti–tax avoidance rules. This is illegal under EU State aid rules. The UK must now recover the undue tax benefits.”

City AM Financial Times, Page: 3

Probate changes will see ‘death tax’ on shares

Critics say changes to probate fees could discourage investment in shares listed on the LSE’s Alternative Investment Market, wherein certain stocks qualify for “business relief ” and so are exempt from inheritance tax.

The Daily Telegraph

Cuts to UK pension tax breaks drive NHS doctors to retire early

Health Minister Jackie Doyle-Price has revealed that the 2016 cuts to pension tax breaks for high earners resulted in 2,000 NHS GPs taking early retirement between 2016 and 2018.

Financial Times, Page: 2

Workers boosted by allowance increase

The Daily Mail’s Sylvia Morris looks at the start of the new tax year, noting that the personal allowance for income tax is rising to £12,500, with Deloitte calculating that around 26m workers who pay the basic rate of tax will keep an extra £130 in their pockets over the year.

Daily Mail, Page: 47

Tax warning for royal baby

Fox Business host Ashley Webster has warned that Meghan Markle and Prince Harry’s child faces US tax liabilities as an adult if it has US citizenship.

Daily Express

TAX CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019/20 Personal Tax Changes

Business tax changes

2019/20 Business Tax Changes

INDUSTRY NEWS

Reeves accuses the Big Four of ‘anti-competitive’ behaviour

Rachel Reeves, chair of the business select committee, has accused EY, PwC, KPMG and Deloitte of “anti-competitive” behaviour, saying under-pricing has made it “very difficult for challenger firms to compete”. Writing in City AM, Ms Reeves also says the audit and consultancy arms of the Big Four should be divided to address a “lack of competition and quality.” She calls for a tougher regulator to replace the “passive and ineffective” Financial Reporting Council. In a counter argument, Maggie McGhee, executive director of governance at the ACCA, says dividing the audit and consultancy arms of the Big Four “will hinder access” to the specialist expertise they need to audit complex multinational companies.

Financial Times, Page: 2 City AM, Page: 19

Professor: Break up the Big Four

Karthik Ramanna, professor of business and public policy at Oxford University’s Blavatnik School of Government, agrees that the BEIS is right to champion the return of prudence to corporate reporting. Elsewhere, James Moore in the I looks at calls for EY, PwC, KPMG and Deloitte to be broken up, saying that while there are compelling arguments for doing so, “they’ve been that way for years and people have been talking about it for years.” He says that while the matter seems to be regularly up for discussion, “when it comes to action … Now is never the time.”

Financial Times I, Page: 39 The Independent

Debt repayment policy questioned

The Sun reports that people who owe money to HMRC are being left to pay more upfront than they need, saying a “deliberately misleading policy” is seeing tax officials fail to mention the minimum amount they would accept to set up instalment plans for outstanding tax bills. Patrick Sullivan, of the Parliament Street think tank, said “bullying” tax chiefs are “raking in cash from those who are struggling the most.” He added that staff “should be instructed to give honest advice in the best interests of the taxpayer.” John O’Connell, of the TaxPayers’ Alliance, commented: “A twisted and complicated tax system means people sometimes fail to make payments, especially the self-employed. Staff must not force people into doing something they don’t need to.”

The Sun, Page: 11

CORPORATE NEWS

Office Outlet closures announced

Stationery retailer Office Outlet has confirmed 16 store closures following its collapse into administration – leaving 161 jobs at risk. Office Outlook stores set to close on April 7 include those in Newcastle, Plymouth and Stratford, while those set to close on April 10 include outlets in Cardiff, Manchester and Old Kent Road in London. Deloitte’s Richard Hawes, joint administrator, commented: “While we are still open to a sale of the business in part or in whole, we cannot continue trading all the stores indefinitely in an administration process.”

I, Page: 39 Daily Mail, Page: 69 City AM

Bolton in High Court fixture

Bolton Wanderers are due in the High Court today where they face a winding-up petition from HMRC for £1.2m in unpaid tax and other debts.

The Times, Page: 65 The Guardian, Page: 47 The Daily Telegraph, Sport, Page: 7 Daily Star, Page: 42 Daily Mail, Page: 78 Daily Mirror, Page: 51

SMEs NEWS

Banks could extend small business disputes scheme

The banking industry will consider extending the scope of a new redress scheme for business owners. As well as a dispute resolution service , on which banks are working with representatives of small businesses, a new scheme will allow the owners of small companies to ask for past grievances against banks to be examined where their complaint has not been assessed by a previous compensation scheme. A spokeswoman for UK Finance, the banking industry trade body, said that the steering group setting up the schemes would consider looking at complaints going back to January 2000. Lewis Shand Smith, the independent chairman of the dispute resolution service implementation steering group, said that the service would be “key to rebuilding a relationship of trust between banks and their small business customers”.

The Times, Page: 47

PROPERTY NEWS

CBRE: Brexit fails to daunt inward property investment

Martin Samworth, international president of commercial property services group CBRE, believes that inward investment in property is “as strong as ever”. He says that despite Brexit uncertainty, international investment in the UK continues thanks to a strong appetite from Korea, America and the Middle East. He adds that international investors are increasingly setting their sights on regional cities such as Manchester and Birmingham in both commercial real estate and residential, while new infrastructure is also gaining in popularity.

Daily Mail

ECONOMY NEWS

UK inflation highest of G7 countries, OECD says

Britain’s annual inflation rate was the highest of the G7 countries in February, according to data from the Organisation for Economic Co-operation and Development (OECD), due partly to the fall in the value of the pound pushing up the cost of imported goods. The UK inflation rate hit 1.8% in February, compared to the Eurozone’s 1.5%.

City AM

Brexit puts the brakes on UK construction

The UK construction sector contracted again in March, according to IHS Markit and the Chartered Institute of Purchasing and Supply (CIPS) construction purchasing managers’ index, which stood at 49.7 for the month – down from 49.5 in February and the first consecutive fall in output since August 2016. Notably, commercial construction was the worst performing area – with widespread reports of continuing Brexit uncertainty leading to lower client demand. Jonathan White at KPMG said: “It’s going to be a similar story for the months to come as we wait for more clarity to help make informed business decisions.”

City AM Financial Times, Page: 3 The Daily Telegraph, Business, Page: 3

OTHER NEWS

No charge for striker

Brighton footballer Glenn Murray and his wife will face no criminal charges over an alleged £1.1m tax fraud, although HMRC have not ruled out a further investigation into the matter.

Daily Star, Page: 17 The Sun, Page: 11

Contact Paul Southward.

Paul Southward


Tax Changes from 6th April 2019


Tax Changes from 6th April 2019

NEW TAX YEAR CHANGES

The new tax year begins on 6th April 2019 and with comes some changes to personal taxes.  In our latest download we highlight some of the more important changes.

THE CHANGES

The changes include: –

  • Increase to the personal allowance
  • An extension to the higher rate threshold
  • Inheritance tax changes
  • Increases to the student loan thresholds
  • Junior ISA increase
  • Workplace pensions get a revamp,
  • The changes affecting private resident [buy-to-let] landlords continue.

TAX CHANGES PUBLICATION

To get a full summary of the changes just click on the link below:

Tax Changes 6 April 2019

MAKING TAX DIGITAL FOR VAT

Making tax digital (MTD) for VAT officially started from 1st April 2019

MTD is the long-term project to modernise the UK tax system and to bring tax compliance fully into the digital age. The ultimate goal is for all regular transmissions of data between taxpayers and HMRC to be performed digitally, and where possible automatically, through accounting software.

This will take many years to achieve. HMRC needs to improve its own internal systems and provide new digital services to taxpayers for full digitisation of the tax system to be achieved. MTD for business is being introduced tax by tax, not by business size or type. Eventually, each business will have to submit separate MTD reports for the taxes it pays to HMRC.

To find out more about MTD for VAT just click on the link below:

MTD – VAT

CAPITAL GAINS TAX – ENTREPRENEUR’S RELIEF

For disposals after 6th April 2019, the minimum period for which certain conditions must be met to qualify for entrepreneur’s relief will be two years.

The one-year rule remains where the claimant’s business ceased, or his personal company ceased to be a trading company before 29th October 2019

Personal Company – new definition (for shares disposed of from 29th October 2018)

In addition to the existing share capital and voting rights conditions, a company will also have to satisfy two further conditions to qualify as an individual’s personal company.

The new conditions require the individual to be beneficially entitled to at least 5% of the company’s distributable profits and at least 5% of its assets available for distribution to equity holders in a winding-up.

The second change, expected to apply to disposals on or after 6 April 2019, is that the minimum period throughout which the relevant conditions (depending on the type of disposal) must be satisfied is to be increased from one to two years, although the new two year rule will not apply to businesses that ceased before 29 October 2018 where entrepreneurs’ relief is claimed in respect of the sale of an asset or shares within three years of the cessation.

Alphabet Shares?

There were concerns that the new rules would create issues for companies with alphabet shares.  After lobbying a late amendment was introduced.

The new test asks: “will the shareholder be entitled to at least 5% of the proceeds in the event of the disposal of the whole company?”

The new hypothetical sale test only applies to disposals made from 21st December 2019.

Entrepreneur’s “banking” from 6th April 2019

  • Applies when individual loses entitlement to ER as holding falls below 5% threshold due to a new share issue.
  • Elect to treat shares as disposed of immediately.
  • Deemed disposal at MV [with no discount for minority holding].
  • Resulting gain eligible for ER.
  • Shares reacquired at same MV.
  • Can postpone the ER gain until the year you actually sell the shares.

KEEPING UP TO DATE WITH TAX

Not only are our tax rules complex but they are constantly changing.  To ensure that you do not get caught out with an unnecessarily excessive tax bill you should always consult with an expert before making changes that may give rise to tax charges.  To ensure you do not get caught out, contact Paul Southward.  Initial consultations are without charge or obligation.  You have nothing to lose and potentially lots to gain form talking with us first.


Key Guides January 2019


Key Guides January 2019

KEY GUIDES JANUARY 2019

Updated Key Guides now available

We are delighted to make available to you our updated and freshly designed Key Guides.  There are eleven updated Key Guides publications, covering a wide range of topics that we hope you will find interesting.

Each guide offers you an essential introduction to a key topic of financial planning, covering the latest developments announced in the 2018 Budget, and coming in to effect in April with the new tax year.

With key headline announcements coming into effect in April, such as the personal allowance increasing ahead of schedule, it is just as important as ever to make sure you are getting the latest advice. With the new tax year bringing deadlines for key allowances, you should make sure you’re making the most of the opportunities available to you.

Our updated Key Guides include: –

  • The 2018 Budget: With changes announced to the personal allowance, income tax thresholds, capital gains tax, property transaction taxes and more, our full set of guides covers the latest tax situation.
  • Updated planning points: Our handy pop-out tips have been updated across the range, helping you to ask the right questions about your financial planning.

The Key Guides are designed to give an insight into each topic covered and highlight some of the more important issues.  If you need any further information on any of the topics covered, contact Paul Southward or your usual KSK contact.

The download to each of the updated Key Guides can be found here: –

INVESTING TAX EFFICIENTLY

Key Guide – Investing Tax Efficiently

MAKING TAX DIGITAL

Contact: Paul Southward direct for the latest news and updates on preparing your business for Making Tax Digital

PENSION TAX PLANNING FOR HIGH EARNERS

Key Guide – Pension Tax Planning

MAKING THE MOST OF FRINGE BENEFITS

Key Guide – Fringe Benefits

STARTING AND SELLING A BUSINESS

Key Guide – Starting and Selling a Business

STRATEGIES FOR A HIGH TAX ENVIRONMENT

Key Guide – Strategies for a High Tax Environment

TAX ALLOWANCES FOR BUSINESS INVESTMENT

Key Guide – Tax Allowances for Business Investment

COMPANIES – TAX EFFICIENT PROFIT EXTRACTION

Key Guide – Accessing your Company Profits

TAXATION OF PROPERTY

Key Guide – Taxation of Property

WORKING THROUGH PERSONAL SERVICE COMPANIES

Key Guide – Personal Service Companies

ESTATE PLANNING FOR YOU AND YOUR FAMILY

KEY Guide – Estate Planning

If you have any difficulties accessing the Key Guides or have any queries, contact Paul Southward.

Paul Southward

Paul Southward


Business Update Winter 2018


Business Update Winter 2018

BUSINESS UPDATE

The latest edition of our Business Update series is now available

Unsettled weather ahead!

The weather this year continues on its topsy-turvy course very much like the current economic climate with all the political shenanigans and continued uncertainty over Brexit.

Making Tax Digital

Given the wide-ranging potential consequences of the negotiations with the EU, it is perhaps understandable that HMRC has just announced a new delay in the timetable for Making Tax Digital (MTD).

New horizons

As announced on 16 October 2018, the filing deadline for MTD for VAT has been moved to October 2019 for certain specialist and complex businesses. The April 2019 deadline is still in place for some VAT-registered businesses to submit their first reports using the digital system. At the same time, HMRC opened up the VAT pilot scheme for most businesses.

Unsettled front ahead!

With the Brexit deadline set for 29 March – and the possibility of a no deal departure still in the mix – this could mean that businesses are making their first filings at the same time as the VAT rules affecting customers and suppliers change. With such a potent mix of change, it is perhaps understandable that HMRC are taking some more time to prepare for the more difficult cases.

Business Update Highlights

The feature story in the new Winter 2018 edition of our newsletter, Making Tax Digital starts to take shape, looks at the new system, which will apply to all businesses whether they face the April or October deadlines. The sensible thing is to prepare your systems now. Being ready for MTD for VAT will leave you free to deal with whatever next year brings, when it brings it.

Other articles:

Other stories we cover include:

  • Closing loopholes around write-offs of director loans – If you are writing off a director’s loan, make sure you don’t incur unnecessary tax.
  • Intestacy and business continuity – We all know it is very important to make a will, but do you know what will happen to your business if you don’t?
  • Government cracks down on phoenixing – After some high-profile collapses, directors will have new responsibilities to failing companies.
  • Transforming remuneration in disguise – HMRC is bringing new controls to crack down on disguised remuneration schemes.

DOWNLOAD

You can download the latest edition of Business Update here:-

Business Update Winter 2018

We will bring you another update in a few months. Please do get in touch with Paul Southward or your usual KSK contact if you think you may be affected by any of the topics raised.

Paul Southward


Updated Key Guides published 23rd August 2018


Updated Key Guides published 23rd August 2018

UPDATED KEY GUIDES

Whilst most of us bask in the hottest summer for over half a century, the government is busy running consultations and trying to prepare for what Brexit will eventually mean. But that is no reason for us not to be busy, whilst we await the announcements of the Budget, and the result of the negotiations.

The latest update for our Key Guides series brings you fully revised guides giving you essential explanations of key topics across business, tax and retirement planning. We understand how confusing it can be to get a clear understanding of how complex rules and reliefs affect you, so our guides will give you everything you need to get started in one place.

Our current update includes new examples, tables, graphics and case studies throughout, to make each topic as accessible and easy to get to grips with as possible. The new range will give you real world examples of complex rules and calculations, including fresh advice on inheritance planning and gifts.

Investing tax-efficiently

  •  New example on timing of CGT gains and losses
  •  Added reference to the OTS review of savings and investment income tax

 Making Tax Digital

  • Updates on latest timetable announcements from HMRC
  • Updated section on MTD pilot schemes
  • Restructured to focus on VAT and preparing for MTD

Pensions tax planning for high earners

  • New clarification and example on tax on pension withdrawals
  • New example on SIPP borrowing for property investment
  • Clarification on income tax relief on contributions in Scotland

Starting and selling a business

  • New tables covering:
  • Business financing options
  • Advantages and disadvantages to limited company structure
  • Payment options on sale of a business
  • Loan notes
  • VAT treatment of going concerns

Strategies for a high-tax environment

  • New example highlighting differing CGT rates between residential property and other assets
  • New graphic on maximum tax-free income allowances
  • Updated OBR forecasts

Working through personal service companies

  • New table summarising tax deadlines for deemed salary under IR35 rules
  • Restructuring of ‘Tax planning and pitfalls’ section
  • Summaries of recent IR35 rulings
  • New section on consultation on IR35 rules in the private sector

Estate planning

  • New example on the application of lifetime gifts and gifts from normal income

The latest Key Guides can be downloaded here:-

Tax Planning for High Earners

Tax Planning for High Earners

Estate Planning

Estate Planning

Making the most of Fringe Benefits

Making the most of Fringe Benefits

Strategies for a High Tax Environment

Strategies for a High Tax Environment

Investing Tax Efficiently

Investing Tax Efficiently

Making Tax Digital

Making Tax Digital

Personal Service Companies

Personal Service Companies

Starting and Selling a Business

Starting and Selling a Business

For more information contact Paul Southward or your usual KSK contact.

Paul Southward