Archives / 248 post/s found
SDLT on second homes
Stamp Duty Land Tax (SDLT) is payable on the purchase of residential property in increasing portions of the property price above £125,000. Current rates of SDLT on individual and additional properties are as follows: Purchase price up to £125,000 - SDLT rate Zero; additional property rate 3% The next £125,000 (portion from £125,001 to £250,000) - SDLT rate 2%; additional property rate 5% The next £675,000 (portion from £250,000 to £925,000) - SDLT rate 5%; additional property rate 8% The next £575,000 (portion from £925,000 to £1.5m) - SDLT rate 10%; additional property rate 13% The remaining amount (portion above [...]
Mileage rates for electric and hybrid cars
Some confusion has been reported over how businesses should calculate mileage expenses rates for electric and hybrid company cars. This confusion has arisen largely because HMRC's advisory fuel rates, or approved mileage allowance payments, only cover petrol and diesel cars. There are no separate 'approved' rates for electric or hybrid vehicles. Currently, whilst HMRC do recognise that employees should be reimbursed for costs incurred for business travel, they do not currently recognise electric charging costs as a 'fuel' expense and do not therefore, currently publish separate rates. HMRC's advisory fuel rates can be used to work out mileage costs in certain [...]
VAT: zero-rating of adapted motor vehicles
Finance Act 2017 introduced legislation designed to end perceived abuse of the VAT relief on substantially and permanently adapted motor vehicles for disabled wheelchair users. The amended rules, which took effect from 1 April 2017, now specify a limit on the number of vehicles within a specified period of time that an individual can purchase under this relief. An eligible individual will be able to purchase one vehicle every three years. There are some instances when this limit can be exceeded, so if an individual's car is written off or stolen or if the vehicle has ceased to be suitable for the [...]
August 2017 Q & A
Q. My wife has a part time job but doesn't earn enough to pay tax. Can she get tax relief on contributions made to a pension scheme? A. Yes, even if you are not earning enough to pay income tax, you still qualify to have tax relief added to any contributions you make to a pension plan. However, the maximum you can pay in is £2,880 a year, or 100% of your earnings, subject to the 'annual allowance' restrictions. Tax relief is added to the contributions at the basic rate of tax (currently 20%), so if you pay in £2,880 net, tax [...]
Rent a room scheme
Although Budget 2017 announced that the Government intends to review the rent-a-room scheme, it currently remains a tax-efficient way of letting out a spare room. Broadly, HMRC's rent-a-room scheme is an optional exemption scheme, which allows individuals to receive up to £7,500 of tax-free gross income (income before expenses) from renting out spare rooms in their only or main home. The exemption is halved where the income is shared with a partner or someone else. Broadly, as long as income is below the annual threshold, it does not need to be reported to HMRC. If income exceeds the threshold, it needs to [...]
New state pension and contracted-out NICs
Most people will be aware that the state retirement pension system has changed for people who reach state pension age on or after 6 April 2016 - that is men born after 5 April 1951 and women born after 5 April 1953. The full new state pension is currently £159.55 per week, but the amount that employees who have previously paid National Insurance contributions (NIC) at the contracted-out rate may be affected under the new system. The introduction of the new state pension from 6 April 2016 brought an end to the contracting-out rules. In very broad terms, to qualify [...]
Working from home
Over recent years, it has become increasingly popular for employers to allow their employees to work from home, and in doing so, pay an amount to cover any additional household costs incurred. What are the tax implications of such expenses for the employee? Broadly, no tax liability will arise where an employer makes a payment to an employee for reasonable additional household expenses, which the employee incurs in carrying out duties of the employment at home under 'homeworking arrangements'. 'Homeworking arrangements' are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties [...]
July 2017 Q&A
Q. Can I give my house to my children and continue to live in it and avoid inheritance tax? A. It may be possible if you pay a full market rent for your home, but if you do this, then your children will have to pay income tax on the rent they receive. Capital gains tax may also be payable at some time in the future if they sell the house. The new inheritance tax residence nil rate band (RNRB), which is being phased in from April 2017 over a 4-year period, is designed to help people in your position to pass [...]
IHT: main residence nil-rate band
From April 2017, each individual spouse or civil partner will be offered a residence nil rate band (RNRB), which is designed to help pass on a home to 'direct descendants', including children or grandchildren, tax-free after their death. The rules governing the inheritance tax (IHT) nil rate band are complex and it is always recommended that prior professional advice is considered. Phasing in of RNRB The RNRB is being phased in over a four-year period as follows: £100,000 in 2017-2018 £125,000 in 2018-2019 £150,000 in 2019-2020 £175,000 in 2020-2021 Broadly, the new RNRB will be added to the existing £325,000 [...]
Reform of landlords’ taxation?
The government's plans to allow landlords to use the cash basis for tax purposes were confirmed in the 2017 Spring Budget, but although the proposed legislation was included in Finance Bill 2017, it did not appear in the much reduced Finance Act 2017, which received Royal Assent on 27 April 2017. It is likely that the proposals have been temporarily shelved, pending the outcome of the General Election, and are expected to reappear in a second Finance Bill later this year. If the provisions are subsequently enacted, they are expected to apply retrospectively from 6 April 2017, i.e. for the [...]