Autumn Statement

Yesterday’s Autumn statement mainly focused on the Governments budget deficits and borrowing, the economic recovery and tackling tax avoidance. It did however, contain some good points for Welsh businesses and families.

For full details please go to www.clayshawthomas.com/autumn-statement for our autumn statement summary. The summary contains a host of autumn statement changes that could affect you, your business or your tax planning strategy.

Please contact us as tellmemore@clayshawthomas.com for any advice regarding the autumn statement or any other matters.

HMRC targets tax-evading landlords and rag traders

The rag trade, the alcohol industry and the rental property market are the latest targets of HMRC’s crackdown on tax cheats in businesses across the UK.

Taskforces have been launched and will be carrying out spot checks and analysing the records of rag traders in the Midlands, North Wales and the North West as well as those involved in the production, distribution and selling of alcohol in Scotland.

Several MPs who are facing fresh public scrutiny over profits made from renting out tax-payer financed accommodation could come under the spotlight as the taxman as landlords of property in the South East will also be targeted.

HMRC expects to recoup an estimated £17m in unpaid tax from the three taskforces and Jennie Granger, director general enforcement and compliance at HMRC, said:

‘HMRC is seriousabout tackling people who are not paying what they should. Anyone deliberately evading tax should watch out – HMRC is closing in on tax cheats.’

According to David Gauke, the Exchequer secretary, HMRC is ‘on target’ to collect more than £50m from taskforces since their launch last year. He said:

‘The vast majority of people play by the rules. We will not tolerate tax evasion and will crack down on the minority who choose to break the rules.’

Machine Games Duty – Does it Apply to You?

From the 1st February 2013 income from certain gaming machines will become subject to new form of duty known as Machine Games Duty (“MGD”), which replaces Amusement Machine Licence Duty and VAT.

Machines that will be subject to the change are those where at least one of the available prizes is or includes cash which is more than the cost to play the machine. MGD is payable at (normally) 20% on the money from such machines and the takings will become exempt from VAT.

Read more

Exit Planning

There is a stage in the development of any business where some or all of the shareholders will want to crystallise some or all of the value they have created. To maximise your exit multiple and hence business valuation, the process of exit planning (often referred to as grooming your business for sale) needs to be implemented carefully.

Read more

Companies House – Filing Fee Changes

From the 1st October 2012 the charges for filing various forms at Companies House changed.

For example the Annual Return fee dropped from £14 to £13

For details of all other changes please see http://companieshouse.gov.uk/toolsToHelp/proposedFeeChanges.shtml

Audit Exemption Changes

The Government has announced changes to reporting and auditing requirements that will allow more small companies and subsidiaries to decide whether or not to have an audit. Current UK rules state SMEs must both have a maximum balance sheet total of £3.26m and less than £6.5m turnover to qualify for an exemption. The new regulations mean SMEs will be able to obtain an exemption if they meet two out of three criteria relating to balance sheet total, turnover and employing no more than 50 staff.

The Government will also exempt most subsidiary companies from mandatory audit, as long as their parent company guarantees their liabilities. These regulations are expected to come into force for accounting years ending on or after 1 October 2012.

 

New way to register for VAT

H M Revenue & Customs has introduced a new way to register businesses for VAT.

It has also introduced a new variations service which mean more tasks can be performed online.

They include being able to register for VAT, attach documents, such as the VAT 50 and VAT 51 forms or submitting notification of an option to tax (form VAT 1614A). Other elements include making changes to the principal place of business and contact details.

More details are available from http://www.hmrc.gov.uk/news/news011112.htm

Child Benefit Scares

The clawing back of child benefit in situations where one partner has an income of over £50,000 (in the current tax year) starts on 7 January 2013. Until then, there are plenty of scare stories doing the rounds; what is clear is that the system is likely to be an administrative nightmare if you find yourself caught in this trap.

HMRC admit that no fewer than 1.2 million families are likely to be affected, with no less than 500,000 expected to start having to file an income tax return. Remember, all of this is to merely claw back child benefit through the tax system. If either partner has an income of at least £60,000, there is no child benefit to enjoy. In cases where an income is between £50,000 and £60,000, a muted benefit applies.

Some commentators estimate that over 350,000 mothers who do not work could be hit further. Full time mothers receive national insurance credits towards their state pension as recognition of their responsibilities to care for children under 12. The worry is that, in cases where their partner earns an income of £60,000, these mothers will not claim their child benefit entitlement as it would be clawed back via the income tax bill. This would mean that they would not receive their national insurance credits. The Treasury has denied this, but it would be good to have this confirmed officially!

If you would like advice on this or any other aspect of your personal taxation please contact sarahc@clayshawthomas.com

HMRC has recently published new guidance on inheritance tax (IHT)

The toolkit which applies to deaths from 6th April 2012 provides guidance on how to prepare inheritance tax account form IHT400.

The IHT checklist, includes:

  • Checking that any pension scheme lump sum death benefits have been included;
  • Applying the reduced rate of inheritance tax where the deceased leaves at least 10% of their net estate to charity (introduced in Finance Act 2012 and applying to deaths after 6th April 2012); and
  • Full details of all lump sum death benefits paid from the deceased’s pension schemes should be reported on form IHT409 whether or not they are chargeable to Inheritance Tax. This is frequently overlooked.

The toolkit can be found at http://www.hmrc.gov.uk/agents/toolkits/iht.pdf

Should you require any assistance with the completion of forms IHT400 or any other aspect of inheritance tax please do not hesitate to contact us at tellmemore@clayshawthomas.com or call 01656 867167