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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