Posts Tagged ‘Personal tax’

Budget 2014: More changes expected for non-residents

Posted on: April 3rd, 2014 by Jane Mellor No Comments
Jane Mellor, Tax Manager, MHA Broomfield Alexander

Jane Mellor, Tax Manager, MHA Broomfield Alexander

Many non residents with UK income may have missed the recent budget announcement that the tax free personal allowance is set to be reviewed in relation to non UK residents.

The government’s aim is to consult on whether and how the allowance could be restricted to UK residents and those living overseas who have strong economic connections in the UK.

The current personal allowance stands at £10,000 which means that a non resident couple both receiving the benefit of a personal allowance could currently have £20,000 of UK rental profit without being subject to tax.  Without the personal allowance they could potentially face a UK tax bill of £4,000 between them as basic rate taxpayers.

At present we await the issue of the consultation document for further details of the proposals so watch this space!

HMRC issues penalties for missing self assessment returns

Posted on: August 15th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Harsh penalties for late filing of self assessment (SA) forms come into force today and HMRC has started sending out penalty letters to half a million people who have not returned their 2010/11 tax returns.

The deadline for online returns this year was 2 February, while paper returns would need to have been submitted by the end of the previous October.

The number of outstanding returns has almost halved in 2012, down to 5.9%, compared to 10.7% in 2011. This means 518,000 fewer penalties are being issued. HMRC has also taken 273,000 people out of self assessment this year.

Stiff new penalties for late filing were introduced in April 2011 and, as a result, anyone who ignores their SA filing obligations is now liable to higher penalties than in previous years.

(more…)

High Income Child Benefit Charge

Posted on: July 26th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Background

Currently, a parent can claim £20.30 a week in child benefit for their eldest or only child, and an additional £13.40 a week for each subsequent child regardless of their income levels.

The money is not taxed and the system is geared towards paying the mother.

The payments apply to all children aged under 16 and in some cases until their 20th birthday.

Changes announced in the Budget

This year’s Budget announced that legislation will be introduced in the Finance Bill 2012  that imposes a new tax charge on taxpayers whose ‘adjusted net income’ exceeds £50,000 in a tax year, where either they, or their partner, is in receipt of child benefit.

(more…)

New HMRC taskforces launched

Posted on: June 29th, 2012 by LeightonReed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

HMRC won’t be taking a break over festivities this summer; it is instead launching new taskforces in the hope of recovering up to £30 million from traders who are paying the incorrect amount of tax.

Its taskforce programme specifically targets those they deem as ‘high risk’ sectors and areas of the country. The aim of taskforces is to end tax evasion among SMEs, by focusing on a ‘high-risk’ trade, where cash in hand transactions are common.

The specialist teams will investigate businesses with powers allowing them to carry out spot checks and examine business records. The latest scheme will particularly focus on:

  • Indoor and outdoor market traders in London
  • The motor industry in South Wales, Yorkshire, Nottinghamshire and the North East
  • Scottish pubs and clubs
  • Hairdressers and beauticians in Northern Ireland
  • Taxi firms in Yorkshire and East Midlands
  • Property landlords in East Anglia, London, Yorkshire
  • Restaurants owners in the Midlands, South West and South Wales.

(more…)

HMRC visits: Trouble in store?

Posted on: May 24th, 2012 by LeightonReed No Comments

 

Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Many businesses dread a visit from HMRC.  There is always the worry that something may come out results in paying more tax but there is also an understandable sense of dread at the potential disruption it could cause in the run up to the visit, during the visit and even following the visit.   However, there are a number of things you can do to make the experience far less stressful.

Preparation    

  • Most HMRC visits are pre arranged either by telephone or letter – If the appointment is made by telephone, ask the officer to confirm in writing the details of the visit – not only date and time but the expected length of the visit.
  • Ask for confirmation of who will be coming, what their roles are in the enquiry overall and exactly what records if any they want to see.
  • Ask at the outset are there any particular risk areas they have identified in selecting you for an inspection.
  • Have all of the requested records ready for the visit.
  • If they are to be left in a room make sure it is clean and only has the information requested in it.
  • Of course it may not be possible to prepare in advance if HMRC don’t give warning of a visit.

(more…)

10% reduction in IHT rates…

Posted on: May 10th, 2012 by LeightonReed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

If you leave at least 10% of your net estate to a recognised charity this may reduce the amount of Inheritance Tax paid by your estate to 36% instead of 40%.

The following notes explain some of the factors that need to be taken into account.

  1. The net value of your estate is the value of your taxable assets less qualifying debts, exemptions, nil-rate band and any other reliefs or liabilities.
  2. A qualifying charity is one recognised by HMRC that has been granted a charity reference number.

If by chance your IHT planning does not qualify your estate for the 10% rate reduction, your beneficiaries can arrange an instrument of variation to increase charitable donation to an appropriate level.

Needless to say the rules are complicated in all but the simplest circumstances so do talk to us if you want to introduce this feature into your estate planning.

Why not follow @BroomfieldWales on Twitter to keep up with the latest information on Tax and other business and financial topics, or simply register for our monthly newsletter.

Potential tax refunds for smart phone users

Posted on: May 10th, 2012 by LeightonReed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

HMRC have at last woken up to technological advances in recent years, and in particular, to the so-called smart phones.

Until recently HMRC decreed that smart phones were not mobile phones and therefore subject to tax as a benefit in kind. Users of iPhones, Blackberries and other “Android” devices, who have suffered a benefit in kind charge in recent years, can now reclaim any tax paid. Claims can be backdated to the tax year 2008/09.

In order to be considered a tax free benefit, the smart phone contract must be between the employer and the phone operator. As with mobile phones there is no restriction or tax charge if private calls are made.

This change of tack by HMRC does not apply to tablet devices such as the iPad.

Why not follow @BroomfieldWales on Twitter to keep up with the latest information on Tax and other business and financial topics, or simply register for our monthly newsletter.

State pensions subject to PAYE?

Posted on: May 10th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Apparently, 60% of pensioners are unaware that their State Pension is taxable income. Historically this assumption is probably based on the way in which their pension is paid without deduction of tax.

This may be about to change!

The Office of Tax Simplification has come up with an idea to streamline the taxation of pensioners. They are seriously considering bringing the State Pension into the pay-as-you-earn system.

If this happened HMRC would issue a code number to the Department of Works and Pensions who would calculate any tax due and deduct it before making the net of tax payment to a pensioner’s bank account.

If you have no other income apart from your State Pension you are unlikely to be affected. However, if your personal allowances are already used against other income (including other pensions) you would likely suffer a tax deduction. No change is proposed before April 2013.

(more…)

Tax enquiry service success!

Posted on: March 23rd, 2012 by MarkJones No Comments

We have just successfully concluded a lengthy tax enquiry which did not cost our client a penny in fees!

Having subscribed to our low cost tax investigation service all the bills were met on their behalf. This enabled us to defend our client without them having to worry about how much it was costing them.

Often a client will give in because costs are an important factor in enquiry cases which can run for months and even years. Our clients are often unaware of the complexities of running an enquiry with many hours being spent on researching tax statutes and tax cases for precedents which support our clients’ case.  The average cost is in the region of £5,000  for a full enquiry case so the annual premium is a very good investment.

Our clients are delighted with the result we have achieved and even happier that they did not have to pay for it!

(more…)

Business succession – tax planning and potential pitfalls

Posted on: February 14th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

For all family businesses, succession planning is a must, given that sooner or later everyone wants or needs to retire.

However, if you own a family business (whether that be in whole or in part), there is more to retirement than just deciding not to go into the office any more. Aside from ensuring that you have sufficient funds to retire, the question of what happens to the business becomes paramount.

Key issues for consideration include, who will manage the business after you retire and how will ownership be transferred?

There are a number of potential exit strategies for a retiring business owner, such as an outright sale, a management buyout or a transfer of ownership to other family members.

Another key issue to consider is tax, with careful planning required to ensure that any potential tax exposure is minimised. Two of the key tax implications for succession planning are briefly discussed below. In addition, some of the potential pitfalls are also identified, which highlights the need not only to obtain specialist advice but also to start the planning process as soon as possible.

(more…)