Tax News

Don't be Late in Paying Your Personal Tax Bill

Individual’s 2017/18 income tax, CGT, class 2 and 4 NIC liabilities should have been paid by 31 January 2019.

Note that if the balance is still unpaid at the end of February 2019 a 5% surcharge penalty is added in addition to the normal interest charge unless a time to pay arrangement has been agreed with HMRC.

Welcome CGT Entrepreneurs' Relief Change for Shareholders

In December, we alerted you to important changes to CGT entrepreneurs’ relief included in the latest Finance Bill that could have the effect of denying the relief to certain employee shareholders. As the result of lobbying by the professional bodies, the government have made a late change in the Finance Bill to the definition of “personal company” so that fewer shareholders will be denied the relief when they dispose of their shares. 

Corporation Tax Relief Back for Acquired Goodwill

A further late change to the Finance Bill will re-introduce relief for acquired goodwill on the acquisition of businesses with eligible intellectual property from 1 April 2019.

This relief was withdrawn back in July 2015 and the restoration of relief for goodwill and customer-related assets is very welcome although the new form of relief will be more restricted.

Advisory Fuel Rate for Company Cars December 2018

These are the suggested reimbursement rates for employees' private mileage using their company car from 1 December 2018.

Where there has been a change the previous rate is shown in brackets.

Pension Planning

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers contributions by both the individual and their employer.

Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the current year, but then lapses if unused.

New Year Resolution to Save Tax

At this time of year we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April.

An obvious tax planning point would be to maximise your ISA allowances for the 2018/19 tax year (currently £20,000 each). 

New Capital Allowance for Commercial Buildings

The Autumn 2018 Budget announced a new 2% straight line tax deduction for the cost of construction or renovation of commercial buildings and structures. HMRC have now issued a technical note setting out the details for the operation of the new relief. 

Unlike the old Industrial Buildings Allowance the new relief is available for the construction of shops and offices as well as factories and warehouses.

Tax Returns Deadline Approaching

The tax return deadline is approaching and the first questions you need to ask yourself are:- 

Stamp Duty Land Tax (SDLT)

How does it work? As an investor, it is important to take account of all of the costs of your investment, and with the changes in the tax legislation over the last few years, Stamp Duty has become a main cost. The key therefore for any investor is finding ways to reduce the impact of this cost.

Not All Shares Qualify for CGT Entrepreneurs' Relief Now

As the result of changes announced in the Autumn Budget, and now incorporated into the latest Finance Bill, not all ordinary shares necessarily qualify for the 10% CGT entrepreneurs’ relief rate on disposal.

As mentioned in last month’s Budget newsletter the definition of a personal company was tightened up so that from 29 October the shareholder must have entitlement to at least 5% of the company’s ordinary share capital, voting rights, profits available for distribution, and assets available on the winding up of the company.

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