The current rules to determine whether an individual is UK resident or not are very unclear and complicated. George Osborne announced on 23 March that the government would be looking to introduce a statutory definition of residence.
It was great to welcome the Gatwick Diamond Business Association and CADIA into our Horsham office for a pastries and networking event this morning.
It proved really popular and more than 50 businesses joined us to find out more about the impact the Budget announcements could have on them.
Lee-Ann Connor from the Gatwick Diamond congratulated Spofforths for being chosen as finalists in the 2012 Business Awards. It was a really nice surprise when she presented us with certificates to mark our achievement in two categories - The Award for Corporate Responsibility sponsored by THALES, and Business of the Year sponsored by pwc.
Chancellor George Osborne is set to deliver his Autumn Statement on Wednesday 5 December 2012 and we are preparing to review the impact new measures will have on businesses and individuals. The Statement will confirm government's plans for the economy, accompanied by the latest forecasts and analysis from the Office for Budget Responsibility.
The Chancellor has just finished his Autumn Statement. The highlight for small and medium sized businesses appears to be a substantial increase in the Annual Investment Allowance for investment in new plant and machinery.
As we eagerly await the Chancellor’s Budget report on Wednesday 20 March Spofforths Tax Partner Bryan Elkins is preparing to review the announcements. He will be providing the Sussex media with an overview of the impact the Budget may have on businesses and individuals.
George Osborne has delivered the 2013 Budget and our initial reaction is that there are significant changes being introduced by the government including the expected promise of anti-avoidance changes. The most surprising announcement is in fact not a tax matter, but assistance to home-buyers with a “Help to Buy” package.
In the Budget the Chancellor confirmed the new ‘employee shareholder status’ which will give a Capital Gains Tax exemption on a future sale of shares. The exemption will apply to shares worth up to £50,000 when they are received, but with no limit on the ultimate proceeds received on sale of the shares. In order to get the benefit, employees will have to waive some of their employment rights.
The Chancellor has confirmed that the Inheritance Tax threshold has been frozen at £325,000 until at least 5 April 2018. This means that any increase in the value of assets over the next 5 years will potentially be subject to Inheritance Tax without any increase in the tax-free amount for inflation over the period. This has been done to help fund the recently announced cap on care costs of £72,000. Thought should be given to removing assets from your estate that could increase in value over the coming years.
The anticipated £10,000 personal allowance which the government have hinted about for the last couple of years was confirmed today with the announcement that it will come into effect from 6 April 2014.
The Chancellor confirmed that the personal allowance (the amount of income you can have before you pay tax) is increasing to £10,000 with effect from 6 April 2014 and this will increase to £10,500 with effect from 6 April 2015.
The Chancellor has announced the crackdown on marketed tax avoidance will continue. Participants in notified schemes will be required to pay the disputed tax “up front”. They can only recover this when the litigation concludes in their favour.
In a demanding society our needs, both business and personal, are constantly changing and evolving, making it hard to predict the next step. The advancement of online accounting software has meant that the way in which we can now do business has changed beyond all recognition.
George Osborne will be presenting his pre-election Budget on Wednesday. This is unlikely to be the bearer of too much “bad news” as clearly he will not want to alienate voters prior to the election….indeed, it is often the case that such a Budget results in “sweeteners” to get voters on-side!
In today’s Budget the Chancellor announced two changes that are effective immediately that restrict the situations when Entrepreneurs’ Relief (ER) can be claimed. ER reduces the rate of Capital Gains Tax to 10% when the qualifying conditions are met.
From 6 April 2016 the maximum annual amount which can be claimed through the Gift Aid Small Donations Scheme has increased from £5,000 to £8,000 giving a charities and Community Amateur Sports Clubs, an income boost of up to £2000 a year.
The Chancellor announced that from April 2016 farmers will now be allowed to average their profits over 5 years as opposed to 2. This is welcome news for those in the agricultural sector whose profits are volatile due to uncontrollable factors such as the weather.
Set against a back drop of a largely unexpected majority government, pressure to reduce the deficit and maintain stability in the UK economy and the continued turbulence in the Euro zone, the emergency budget is likely to include a finely balanced set of measures.
A new National Living Wage will be introduced for workers aged 25 and above from next April. All such workers will be paid £7.20 (a rise of 70p relative to the current National Minimum Wage). The chancellor has promised that this will increase to £9 per hour by 2020.
As widely publicised before the Budget, the Chancellor has announced a new Inheritance Tax allowance. The additional allowance will apply when a residence is passed on death to either children or grandchildren. The additional allowance will come into effect from April 2017 initially at £100,000, increasing to £175,000 by April 2020.
From 6 April 2016 rent a room relief will increase to £7,500 per annum. This is the amount that an home owner can receive, tax free, from the letting of individual rooms in their home. This tax free sum was originally set at £ 4,250.
One cost which a landlord is able to use to reduce their taxable profits is mortgage interest. The amount of relief was based on the money borrowed, restricted to the original cost of the property, or the market value of the property when it was first let.
From April 2017, individuals who have been resident in the UK for more than 15 out of the last 20 years will automatically be taxed on their worldwide income on an arising basis. This means they will no longer be able to claim the remittance basis and pay the £90,000 charge.
From April 2017 the government intends to bring all UK residential property held directly or indirectly by foreign domiciled individuals into charge for UK IHT, even if the individual is non-UK resident at the time of their death.
The tax free Personal Allowance is set to increase to £11,000 in 2016/17 (and £11,200 in 2017/18). This tax free amount is reduced for taxable income in excess of £100,000, with the Personal Allowance fully retracted for taxable income in excess of £122,000 in 2016/17.
We have prepared this summary to outline the issues that are most likely to be of interest to you. We have included informative comments to help you assess the likely effect that the proposed changes may have on you personally and their significance.
If you have a question concerning any of the issues covered in this summary, or would like advice on the best possible course of action in a particular area, please contact us.
In the Summer Budget, George Osborne announced fundamental changes to the way in which dividends are taxed. The changes take effect for dividends received from 6 April 2016. Some individuals who extract profits from their company as dividends may want to consider taking additional dividends payments before this date.
The Chancellor has announced that from 1 April 2016 people purchasing additional properties such as a buy to let or second home will pay an additional 3% SDLT charge. This is on top of the interest relief changes announced in the Summer Budget.
The Chancellor has confirmed that two previously announced tax relief restrictions will indeed come into effect from 1 April 2017. First, those groups with a UK net interest expense in excess of £2M will see their interest deductibility capped at 30% of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) (or a group ratio rule if this yields a more favourable result). This legislation effectively implements the recommendations of BEPS Action Plan 4, and represents a contribution to combatting the perceived tax abuse engaged in by multi-nationals.
In today’s Autumn Statement the government committed a further £102 million of baking fines over the next four years to support Armed Forces and Emergency Services charities as well as other related good causes. This money comes directly from the fines paid by banks found to have been involved in the Libor fixing back in 2012 and the government has been handing out this revenue to charities since 2012.
In recent years rates of Corporation tax have been falling; a policy to support business set up and expansion in the UK. Some individuals have taken advantage of this to lower the overall tax payable on their own affairs.
When the Chancellor Philip Hammond stood up to deliver his first Autumn Statement, I would imagine a number of landlords were holding their breath, to hear whether or not they would see yet more changes.
To alleviate concerns about Brexit’s impact on the UK’s life sciences industry, the Chancellor, in his first (and last!) Autumn Statement reiterated the government’s commitment to investing in UK technology and innovation.
Disappointingly, there was no real boost to the education sector in the last ever Autumn Statement earlier today. School leaders hoping for additional cash to address the severe funding pressures have been left empty-handed – unless they’re looking to expand their grammar school of course! Therefore the “perfect storm” will continue and schools will have to continue to manage their budgets and resources carefully – if they can?! With curriculum being cut and some sixth forms closing already, the future does not look good
“The employment rate is at a record high and the deficit has fallen by almost two thirds. But more needs to be done.” So says the Executive Summary of the 2016 Autumn Statement. The government’s aims are to reduce the deficit further and increase productivity. The backdrop to these ambitions is a more uncertain economic outlook following the decision to leave the EU.
While the housing gap was mentioned early on in the Chancellor’s speech, surprisingly the tax gap was not. However, buried in the detail of the 72-page Autumn Statement, the tax gap is mentioned under “Avoidance and Evasion” and while the UK’s tax gap remains one of the lowest in the world, the Government are committed to reducing the perceived gap and also to raising further revenues given that tax receipts were lower than expected this year.
The Chancellor announces a £400m injection into venture capital (VCTs) funds to help start up companies. This is a boost for VCTs, and evidences, continued support for this form of investment and the tax incentives that it provides to investors.