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Late filing of self-assessment tax returns

16 Feb, 2017

Taxpayers that have not yet filed their 2015-16 self-assessment returns will have been charged an automatic £100 penalty for late submission. The penalty applied from 1 February 2017 even if no tax was due or the tax due was paid on time.
However, taxpayers who were meant to file online by 31 January 2017, and have still not filed their 2015-16 return, are reminded that they will face far greater penalties. A daily penalty of £10 per day, up to a maximum of £900 (90 days) will be charged from 1 May 2017. 

Tax avoidance – Spotlights

16 Feb, 2017

HMRC Spotlights identify specific tax avoidance schemes that HMRC have become aware and which they consider are not likely to have the legal effect desired by those thinking of using them. According to HMRC, the Spotlights series is designed to help taxpayers avoid unwittingly entering into arrangements that HMRC are likely to see as tax avoidance.

In the Spotlights series HMRC:

Pension auto-enrolment penalties

16 Feb, 2017

Automatic enrolment into workplace pensions has been rolling out across the UK since 2012 beginning with the largest employers in the country. The first batch of small and micro employers started to enrol in the scheme in mid-2015. There are estimated to be 1.8 million small and micro employers in the UK.  It is expected that all employers will be part of the scheme by early 2018.

Tax codes to use from 6 April 2017

08 Feb, 2017

The P9X form is used to notify employers of what tax codes to use for employers. The form has been updated with tax codes to use from 6 April 2017. The basic personal allowance for the tax year starting 6 April 2017 is £11,500 and the tax code for emergency use is 1150L.

As a result of the increase in the basic personal allowance, there is a general uplift of tax codes with suffix 'L' which have increased by 50. Employers should add 50 to any tax code ending in L, for example 1100L becomes 1150L. Form P9X is available online to download or print.

Housebuilder loses tribunal case

08 Feb, 2017

A recent tribunal case examined a VAT refund claim in respect of the VAT DIY Builders scheme. The scheme is a set of special VAT rules which allow the qualifying construction costs of new homes and certain conversion works to be zero-rated.

Pensions Advice Allowance

08 Feb, 2017

A new Pensions Advice Allowance will come into force from April 2017. The allowance will allow those nearing retirement to take up to £1,500 out of their pension pots tax-free to put towards the cost of financial advice. The advice provided can relate directly to the pension as well as to other financial products that help build retirement income such as multiple pension pots and other assets like ISA savings.

Making Tax Digital

08 Feb, 2017

Making Tax Digital (MTD) is likely to be the most wide ranging change to the UK tax system since the introduction of Self Assessment many years ago and will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The introduction of MTD over the coming years will see HMRC move towards a fully digital tax system by 2020. The introduction of MTD was first announced as part of the March 2015 Budget measures.

Tax credits renewal reminders

08 Feb, 2017

The child tax credit has been designed to help lower income families with children. Credits are available to families with low to moderate income. Child tax credit is paid directly to the main carer in the family either weekly or monthly and is usually paid directly to a designated bank or building society account. The working tax credit assists taxpayers on low incomes by providing top-up payments. The rules for claiming working tax credits are complex.

Draft regulations to increase the National Minimum Wage published

07 Feb, 2017

The draft National Minimum Wage (Amendment) Regulations 2017 have been laid before Parliament and are due to come into force on 1 April 2017. The regulations will increase the various rates of the National Minimum Wage (NMW) and National Living Wage (NLW) as follows:

Tax relief changes for buy-to-let landlords

02 Feb, 2017

It is now only a couple of months until the changes to tax relief for buy-to-let landlords start to take effect. From April 2017, tax relief on mortgage costs is to be gradually restricted to the basic rate of tax. Landlords of residential properties have benefited from unrestricted tax relief on finance charges, such as mortgage interest for many years.

Private Residence Relief

02 Feb, 2017

One of the most often used and valuable of the Capital Gains Tax (CGT) reliefs is on the sale of the family home. CGT is a tax on the profit made from selling certain assets such as property, shares or other investment e.g. antiques and fine art. There are a number of exemptions available which can reduce or remove a taxpayer's liability to CGT.

In general there is no CGT on a property which has been used as the main family residence. An investment property which has never been used will not qualify. This relief from CGT is commonly known as Private Residence Relief.

Claiming the Annual Investment Allowance

02 Feb, 2017

The Annual Investment Allowance (AIA) was permanently set at £200,000 for all qualifying expenditure on or after 1 January 2016. The prior limit had been £500,000 but was set to revert to its original limit of £25,000 from 1 January 2016 until the new permanent level was announced.