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Tax / 90 posts found

Practical implications of the dividend tax allowance

by M Tombs
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The new rules governing the taxation of dividends are set to take effect in relation to dividends received after 5 April 2016. The changes include: a £5,000 dividend nil rate (also known as the 'dividend tax allowance' (DTA)), which will effectively tax at the nil rate, the first £5,000 of taxable dividend income (i.e. after deducting the personal allowance, but treating dividends as the top slice of income, so the personal allowance is used last against dividends). Any dividends above the first £5,000 will be taxed as if the £5,000 used up either the basic rate band or the higher [...]

March 2016 Q&A

by M Tombs
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Q. What are the implications of selling my Scottish home? I own and live in a property in Scotland. What are the implications of me selling the house to a relative, who will buy it using a buy-to-let mortgage, and allow me to stay in it and pay rent to her as a tenant? A If the house has always been your main residence, there should be no capital gains tax implications for you. Depending on the purchase price, your relative may have to pay the Scottish land and buildings transaction tax (LBTT), which replaced the previous stamp duty land [...]

Stamp Duty Land Tax (SDLT) on additional properties

by M Tombs
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Proposals to bring in higher rates of stamp duty land tax (SDLT) on purchases of additional residential properties are expected to be finalised in time for the forthcoming Spring Budget on 16 March 2016. SDLT is paid on the purchase of residential property in increasing portions of the property price above £125,000. Current rates are as follows: SDLT for a property with purchase price of up to £125,000 is currently 0%; the proposed additional properties rate in this band is 3%. SDLT on the next £125,000 of the purchase price is currently 2%; the proposed additional properties rate in this [...]

National Living Wage starts in April

by M Tombs
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The government has recently launched its campaign to promote the introduction of the new national living wage (NLW), which will take effect from 1 April 2016. From that date workers in the UK aged over 25 earning the minimum rate of £6.70 per hour will see a 50p increase in their minimum hourly rate, which is set to rise to £7.20 per hour. The NLW will be enforced by HMRC alongside the national minimum wage (NMW), which they have enforced since its introduction in 1999. The NMW is the minimum pay per hour most workers are entitled to by law. [...]

Simplification of VAT MOSS for small businesses

by M Tombs
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HMRC Brief 4/2016 entitled VAT MOSS - simplifications for businesses trading below the VAT registration threshold, outlines simplifications available to businesses trading below the UK's VAT registration threshold (currently £82,000) that make supplies of digital services (telecommunications, broadcasting or electronically supplied services) to consumers in other EU member states. Some simplifications are already in place and Brief 4/2016 announces two new areas of help for the smallest businesses. Businesses need to determine where their customer is located. There are specific rules in place for certain types of transactions (see the gov.uk website here for further details). For all other supplies [...]

Can you still clam the Employment Allowance?

by M Tombs
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The Chartered Institute of Taxation (CIOT) has recently warned that Government plans to exclude one-person businesses from claiming the national insurance Employment Allowance (EA) from April 2016 will be too easy to dodge. The Institute says that the planned curbs are easily avoided, either by appointing another director, such as a spouse, civil partner, other family member or friend, and paying that person a token wage; or by arranging payments of earnings so that the worker is not a director when at least one of the payments is made. The CIOT suggests that the legislation should include a connected persons [...]

February 2016 Q&A

by M Tombs
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Q. Did my extended leave constitute a cessation of trade? I have been the sole director of a trading limited company for many years. Last year, I decided to take a long holiday and travelled around the world with my wife - indeed, we got on so well that we stayed away for around 12 months! Whilst I was away the company continued to collect outstanding payments, but it received no other income. I have now taken on another director/shareholder (50%) and company trading has resumed. Should I have informed HMRC that I was going away and how should the [...]

Making Tax Digital: PTA’s

by M Tombs
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As part of a £1.3bn investment to transform HMRC into one of the most digitally advanced tax administrations in the world, HMRC have published a report and discussion paper setting out how new procedures for interacting with HMRC and paying tax will be implemented under the Making Tax Digital banner. It is intended that by April 2016, every individual and small business will have access to their own secure digital tax account that enables them to interact with HMRC digitally. By 2020, businesses and individual taxpayers will be able to register, file, pay and update their information at any time [...]

Innovative Finance ISAs

by M Tombs
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From 6 April 2016, a new type of Individual Savings Account (ISA) will be launched – the Innovative Finance ISA. This new ISAs will be able to hold peer-to-peer (P2P) loans, which often pay significantly higher returns than cash accounts. Broadly, P2P lenders act as middlemen by matching people who wish to invest cash with those who want to borrow money. From 6 April 2016, interest and gains from P2P loans will qualify for tax advantages where these loans are made through an Innovative Finance ISA. There are currently two types of ISA – cash ISA and stocks and shares [...]

2016 Fuel & Van Benefit Rates

by M Tombs
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The Van Benefit and Car and Van Fuel Benefit Order 2015 (SI 2015/1979) comes into force on 31 December 2015 and takes effect for the tax year 2016-17 and subsequent tax years. The Order contains provisions for the following: the cash equivalent of the van benefit will rise from £3,150 to £3,170 for 2016-17; the van fuel benefit will increase from £594 to £598; and the cash equivalent of the benefit of fuel for a car is calculated by applying the 'appropriate percentage' (normally calculated by reference to the CO2 emissions of the car) to the figure in ITEPA 2003, [...]