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George Osborne has delivered his final Autumn Statement before the General Election next year

Stamp Duty Land Tax (‘SDLT’) has been changed and a progressive tax rate will apply to residential sales completed after midnight on Wednesday 3rd December. The ‘break even’ point is £935,000, purchases below that will be subject to lower SDLT than before whereas purchases above that will be subject to higher SDLT.

Research & Development Tax Credits paid to small and medium sized companies will increase from 125% to 130% of ‘qualifying expenditure’ incurred after 1 April 2015. The credit for large companies will also increase from 10% to 11%.

Income Tax Personal Allowance will increase to £10,600 for the 2015/16 tax year – this is higher than previously advised by the government.

Resident non-domiciles will see an increase in the annual charge payable if they wish to retain the remittance basis of taxation. A new scale will apply from £30,000 for those resident in 7 out of 9 tax years up to £90,000 for those resident 17 out of 20 tax years. A consultation is also being proposed to make the election apply for a minimum of three years.

Diverted profits tax is a new tax to counter the use of aggressive tax planning techniques used to divert profits away from the UK. The tax will be levied at 25% from 1 April 2015 although exact details on how this will be applied have not yet been released.

Air Passenger Duty is being scrapped on economy flights for those under 12 years old with effect from 1 May 2015. The relief will extend to under 16’s from 1 March 2016 and tickets will be expected to display the amount of duty payable to ensure that the savings are passed on.

The amount held in an ISA at the time of death of an individual can now be used by a surviving spouse to invest into their own ISA. Although no IHT was payable on the transfer of assets between spouses on death the funds can now be reinvested in full into an ISA.

Entrepreneurs’ Relief will be removed for individuals in respect of the transfer of goodwill to their own company and Corporation Tax reliefs will be restricted for payments in respect of these intangible assets.

National Insurance employers contributions are abolished for apprentices under 25 with effect from 1 April 2016 (unless the apprentice earns more than circa £42,000).

A new ‘aggravated’ penalty loading of 50% will apply in addition to existing behavior related penalties for individuals who move hidden funds to circumvent tax transparency agreements

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Let Property – Repairs or Improvements

If you let out residential property you need to know whether you can receive a tax deduction for the cost of replacing or repairing furniture and fittings provided inside that property. The cost of equipment used to maintain the outside of a property, or used in the communal areas of a building containing multiple dwellings, is always deductible.

When you fit something for the first time to a property, such as a fitted kitchen, that cost will form part of the capital cost of the building and will only be deductible when you sell the property. If you repair a fitting or replace the fitting with something of the same quality, the cost counts as a repair which can be deducted from the rental income.

If the fitting is replaced with items of a higher quality, the whole cost must be treated as a capital improvement, which is only deductible from the proceeds of selling the property. This does not apply if the replacement is superior just because the modern equivalent of an outdated material or design is used. For example when you replace an old central heating boiler with a new condensing boiler, which does the same job but with greater energy efficiency, that will be a tax deductible repair not an improvement

Annual Investment Allowance‏

Vans, computers and most office furniture can help reduce your tax bill

Do you know that there are a range of tax reliefs/allowances that you may be able to claim that could help save your business money?

Whether you are thinking of investing or buying assets for your business, or simply thinking of employing someone, there may be a tax relief or allowance that you are entitled to.

 contact us now at Cloudbookkeeper for more help info@cloudbookkeeper.co.uk

VAT on Sale of Van bought privately

The sale of the Van should be dealt with as a Standard Rated Sale for VAT purposes, but under the Second Hand Goods (Margin Scheme).

Example

Purchase price of Van 5,000

Sale Cost of Van 10,000

Profit on Van 5,000

VAT Payable on Profit 833.33 (Vat on 5,000 – Net to Gross)

 

 

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Tax reliefs can help businesses save money

Do you know that there are a range of tax reliefs/allowances that you may be able to claim that could help save your business money?

Whether you are thinking of investing or buying assets for your business, or simply thinking of employing someone, there may be a tax relief or allowance that you are entitled to.

See what reliefs/allowances you or your business could benefit from and whether you can claim by checking out the information on the BIS GREAT  website.

Buying an Art invesment through a company

If the artwork is kept at their home there will be a taxable benefit in kind, which needs to be declared on the annual form P11D.
Say the artwork cost £30,000:
Your client will pay income tax on 20% x £30,000 = £6,000 at their marginal rate, each year. The company must also pay class 1A NICs of 13.8% x £6,000 = £828 per year.

If the artwork is to be kept in a bank vault as a pure investment, there won’t be a benefit in kind charge for you. However, the business must pay the insurance and storage costs, for which there will be no tax deduction. There is also no tax deduction for the cost of buying the artwork as it is not an item used for the business.

If the company closes, any creditors will be able to access the value of that art, just as if it was cash. If the business is solvent when it closes holding significant investments, it may not qualify for entrepreneurs’ relief, which would otherwise reduce the tax you pay on any gain made on the liquidated asset of the company down to 10%.

Are you employing staff for the first time

There are 6 things you need to do when employing staff for the first time.

  1. Decide how much to pay someone – you must pay your employee at least the National Minimum Wage.
  2. Check if someone has the legal right to work in the UK. You may have to do other employment checks as well.
  3. Apply for a DBS check (formerly known as a CRB check) if you work in a field that requires one, eg with vulnerable people or security.
  4. Get employment insurance – you need employers’ liability insurance as soon as you become an employer.
  5. Send details of the job (including terms and conditions) in writing to your employee. You need to give your employee a written statement of employment if you’re employing someone for more than 1 month.
  6. Tell HM Revenue and Customs (HMRC) by registering as an employer – you can do this up to 4 weeks before you pay your new staff.

HMRC delays RTI penalties

From 6 October 2014, HMRC was due to include smaller employers in the penalty regime for late filing of Real Time Information (RTI) payroll returns for 2014-15.
HMRC have announced that this penalty process will be delayed for a number of smaller employers.
They will now start from:
  • 6 October 2014 for employers with 50 or more employees
  • 6 March 2015 for employers with fewer than 50 employees
The size of the late filing penalties depends on the number of employees within the PAYE scheme.
Number of employees   Penalty per PAYE scheme
1 to 9 £100
10 to 49 £200
50 to 249 £300
250 or more £400
HMRC will use the latest information available to determine the number of employees, and the size of the filing penalty for each period where a return is late.