Will you need to file a Tax Return by 31 January 2014?

Could we please remind anyone who reads this of the fact that you may need to file a Tax Return by 31 January 2014.

There will out there be the regulars who will have filed Tax Returns for many years and these people will be very aware of the Tax Return filing deadline that looms after Christmas, but this year there will be many first timers who have not previously filed Tax Returns who will come within the Self Assessment regime for the year to 5 April 2013 simply because they received Child Benefit after 7 January 2013.

Bear in mind that it is a requirement that we all “self assess” and HMRC will not consider it to be a reasonable excuse (for the avoidance of penalties) if you failed to file a tax return simply because you did not realise that you needed to.

HMRC have also reminded us that it can take up to 7 working days to complete an  online registration and so the need to file a tax return before 31 January 2014 needs to be considered now in order to avoid the rush to meet the 31 January deadline.

If you have received child benefit after 7 January 2013 and your child has a parent who earns over £50,000 or are in any doubt as to your responsibilities as regards self assessment then please contact us to discuss your position as soon as possible.


Autumn Statement 2013

The Chancellor is claiming that from April 2015 he will be closing a “property tax loophole” that allows overseas investors who purchase UK property to sell it free of capital gains tax on profits made after April 2015.

Here we go again on another PR campaign that attempts to brand those that abide by the legislation as people who are doing wrong. The proposal does not close a “loophole”; overseas investors in property in the UK who are accepted as being non-UK residents for at least five tax years do not pay UK capital gains tax on the sale of ANY UK assets that are sold at a profit whilst they are not resident in this country. This is NOT a loophole, it is the subject of widely accepted and long used legislation. Non-UK residents who sell assets at a gain are not evading UK tax, they are correctly applying the law which exempts those gains.

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Attention All Landlords

The autumn statement included news that landlords who have previously lived in the property that they own but have at some point let out will benefit from less tax relief in the future when they sell their property.

Currently, UK resident individuals pay capital gains tax (CGT) on profits they make from the sale of any property that has not throughout the period of ownership, been their main home. Basic rate taxpayers might pay 18% on all or some of the profit, whilst higher rate payers pay 28%.

The changes to private residence relief which will come into effect in April 2014 will mean that anyone selling a property they have not lived in for more than 18 months will face a higher tax bill. Furthermore, at the moment, anyone selling a house that has at some point been their main residence can claim that the last three years of ownership of the property is exempt from capital gains tax irrespective of occupation. It is intended that the three year period of exemption will be halved. The Treasury said it expected to make £360m out of the change by the 2018/19 tax year.

Pension news

The Chancellor has today announced his intention to introduce a scheme which will allow pensioners to top up their Additional State Pension by paying a new class of voluntary National Insurance contributions, to be known as Class 3A.

The opportunity is available to those currently in retirement and those who will reach state retirement age before April 2016 (when the single tier state pension will be introduced) but who have not worked enough years to be eligible for the full state pension. The top-up facility will not apply to the basic state pension but to the state second pension only, this being an earnings-related top-up that will be abolished with the introduction of the flat-rate pension.

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Did anyone see the Telegraph article this week about the property mogul who was asked to pay £5.5 million in tax “because of wife’s cooking”?

This shift in Revenue attitude is highly disturbing and leaves me wondering where it will all end. When are we going to stop this persecution of successful business people who have paid less tax than HMRC would like, not by doing anything illegal or even using artificial tax schemes, in fact there may not even have been a tax motivation to their actions at all, but the Revenue (encouraged by much of the media) seem to have simply decided that they should pay more!

The successful businessman in question year was James Glyn who moved to Monaco when he retired from a business that he was catapulted into running at the tender age of 21 following the early demise of his father. Thanks to his “meticulous and highly organised” mind and the support of his family, he led the business to phenomenal success and he was able to retire in 2005 after selling his company’s property interests.

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New £1.5m fund for small business capital projects opens

Welsh businesses are being invited to bid for grants from a £1.5m Welsh Government fund for capital projects that aims to encourage investment to support the creation of 250 jobs while also safeguarding and assisting several hundred more.

The SME Small Capital Investment Grant is open to eligible small and medium sized enterprise (SMEs) in Wales. Businesses have until 20th January 2014 to bid for grants of between £5,000 and £25,000 towards the cost of their project at an intervention rate of up to 50 per cent.

Economy Minister Edwina Hart said: “SMEs are vital to promoting economic growth. I want to ensure that they can access the finance they need to grow and create jobs.
“This fund is another example of how the Welsh Government is supporting businesses that are unable to access the finance they need through traditional sources. I would strongly advise any small business in Wales looking for investment to consider applying for support through this scheme.”

Contact us for more information if you have any capital projects in 2014

Tax Rules for Trusts to change again!

I am concerned that yet again we seem to have a proposed change in Trust rules that are disguised as simplification but do little more than further increase the amounts of tax that are potentially payable by Trusts. In my experience the decision to create a Trust is not taken lightly as they can be complex and do add another layer of administration in a person’s life.

And yes, there are no doubt a small minority of people who have used trusts to avoid tax but I would be interested to know what proportion of 1,500 Trusts that they receive Tax Returns from each year, HMRC believe have been set up for purely tax avoidance reasons. Every single one of the Trusts that we look after was set up for a genuine personal or commercial reason that had absolutely nothing to do with tax reduction yet the press (and government) seem to be striving to make people who use Trusts feel ashamed to do so.

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Small Business Saturday by HMRC

Are you a new business or thinking about starting a new business?  HMRC is providing a series of webinars on what it is calling “ Small Business Saturday” which may be of interest to you?

This series of Webinars will take place on 7 December, and will provide business start-ups with the opportunity to receive free tax advice in the format of four interactive, live webinars on that day.

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Exam Success

Well done to Natasha Rees on passing her ATT exam, she is now fully qualified ATT.

We take great pride at CST in making sure our staff take part in a wide range of training courses, Congratulations Natasha.

No definitive answer on CIS refund issue

There is still no “definitive answer” from HMRC as to why CIS refunds for limited company clients are being delayed by what are in some cases extensive periods, according to Tony Margaritelli.

The ICPA chairman said that the Revenue’s answer to the issue is “nothing short of laughable” and that it does not understand the consternation the delays are causing for accountants.

“What we’re seeing with our clients is that six months later in mid-October, they’re now receiving emails saying their refund is being put through – but now it’s being security checked.”

The Revenue said that they have cleared all repayment claims up to and including 9 September, unless they have written to the employer and are waiting for further information to progress the repayment.

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