Resources

Let property campaign

HMRC’s Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities, whether due to misunderstanding the tax rules or because of deliberate tax evasion. HMRC’s guidance on making a disclosure has been updated for the 2017-18 tax year.

Employer P11D, P11D(b) and P9D deadline

Employers are reminded that the deadline for submitting the 2016-17 forms P11D, P11D(b) and P9D is 6 July 2017. P11D forms are used to provide information to HMRC on certain benefits and expenses that employees and directors receive during the tax year such as company cars, loans and private medical insurance.

Working Tax Credit

The Working Tax Credit (WTC) assists taxpayers on low incomes by providing top-up payments including to those who do not have children. There are extra amounts available for qualifying childcare expenses and working households in which someone has a disability. The basic amount of WTC for 2017-18 remains unchanged at £1,960 a year.

Business tax changes for 2017-18

A number of changes to business taxation have come into effect with the start of the 2017-18 tax year. These changes include the following:

Corporation Tax

The Corporation Tax rate from 1 April 2017 has been reduced to 19% and set at this rate for 2018 and 2019. From 1 April 2020, the Corporation Tax rate will be further reduced to 17%.This rate will be the lowest in the G20 and benefit over 1 million businesses in the UK.

Business rates

VAT Flat Rate Scheme

HMRC has introduced an additional test from 1 April 2017 that will help determine the VAT flat rate percentage used by VAT registered businesses that use the Flat Rate Scheme. It appears that HMRC considers the benefits obtained by certain businesses to be excessive.

Adding new employees to the payroll

Employers that take on a new employee need to work out which tax code and starter declaration to use in their payroll software. Incorrect tax codes can lead to the new employee paying more tax than is due.

The necessary information can be collected by asking the new employee to complete HMRC's new starter checklist and / or from the employee’s P45. This information must be held in the employer's payroll records for the current year and the 3 following tax years. Once the information has been collated, HMRC’s online tool can be used to work out the employee’s tax code.

Mortgage relief restriction for landlords

The tax relief available to residential landlords has been reduced from the start of the 2017-18 tax year. The new rules mean that tax relief on mortgage costs will be gradually restricted to the basic rate of tax. Landlords of residential properties have benefited from full tax relief on finance charges, such as mortgage interest for many years. However, these changes will significantly reduce the amount of tax relief for many buy-to-let landlords.

Legislating for the UK’s withdrawal from the EU

Following the UK Prime Minister, Theresa May, giving notice under Article 50 of the Treaty of the European Union of the UK’s intention to leave the EU, the government has published a White Paper on “Legislating for the United Kingdom’s withdrawal from the European Union”. This confirms that a new Great Repeal Bill will:

Help to Buy sales update

The latest statistics on the uptake of the government’s flagship Help to Buy schemes were published on 30 March 2017. The figures show that over 259,000 homes have been bought since the schemes were first launched in October 2013. The portfolio of Help to Buy schemes include: ISA, Shared Ownership, Mortgage Guarantee, Equity Loan and London Help to Buy. The average house price across the schemes is almost £193,000.

Personal tax changes for 2017-18

A number of changes to personal taxation have come into effect with the start of the 2017-18 tax year. These changes include the following:

National Living Wage and the National Minimum Wage rates

New Investment Bond

It was announced as part of the last autumn statement that a new National Savings and Investments (NS&I) product called the NS&I Investment Bond will be launched. It has now been confirmed that the product will be available for 12 months from April 2017 for a 3-year fixed term. The new Investment Bond offers a reasonable rate for savers who have been hard hit by low savings rates for a number of years.

Money Laundering Regulations

The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists.

Many businesses are monitored by the Financial Services Authority or certain professional bodies. However, businesses that HMRC is responsible for supervising should be aware of the requirement to register with HMRC and the penalties for not doing so.

HMRC is responsible for supervising the following five business types: