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Reporting residential property gains – the timing is tight

A chargeable gain may arise on the sale, disposal or transfer of a residential property if that property has not been the seller’s only or main home throughout the period of ownership. Here we are looking at investment property, such as a buy-to-let, a holiday let, or a second home. Any UK resident, trust or estate who sells or gifts UK residential property at a gain is required to calculate, report and pay any capital gains tax (CGT) due within 60 days of completion of the sale. Companies…

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Are directors liable for their dissolved company’s unpaid bills?

On 15 December 2021 the government passed an Act which at the time was effectively ‘under the radar’ for many company directors but could have far reaching implications should their company be dissolved with outstanding tax liabilities.

The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 was enacted to enable the Insolvency Service to apply for a court order requiring a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to a director’s…

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Latest News Round Up

Making Tax Digital – it’s getting nearer.

In exactly two years time the most fundamental change to the administration of the UK tax system for at least 20 years will have commenced. Making Tax Digital for income Tax (MTD for ITSA) will apply to all self employed businesses and landlords with business and/or property income of at least £10,000 as from April 2024. The first quarterly updates will be due for filing by 5 August 2024, covering either the quarter ended 5 July 2024, or…

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Where does HMRC get its information from?

With tax revenues down and a significant budget deficit arising from the Covid-19 pandemic, it will not come as a surprise to learn that HMRC are looking to undertake more enquiries into taxpayer’s affairs than ever before. For example, HMRC has a specialist ‘Offshore Co-Ordination Unit’ department staffed with analysts, technical tax experts and experienced investigators.

However, not only persons with offshore interests can attract HMRC’s unwanted attention. The ability of HMRC’s Connect database to identify links between businesses, shareholders, properties, families and across different…

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Tax relief for rental property losses post Covid

Landlords could have been said to be the ‘forgotten business’ of the Covid pandemic – granted, they were able to take a three month ‘holiday’ from mortgage payments but were not given any direct help from the government (apart from business rate holidays and grants for Furnished Holiday Lets). Despite assistance via the furlough scheme for employees and the self-employment income support scheme for those running their businesses, some tenants fell into rent arrears such that many landlords are currently sitting on losses (although the tenant remains liable…

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Can employing a family member save tax?

Regardless of your business structure (sole trader or limited company) employing a spouse/ civil partner (or any other family member) can be one of the more efficient ways of reducing tax for your business. Such employment can take advantage of lower tax rates and personal allowances that may be available to your family member. If they are a shareholder of the company and also employed, a mixture of salary/bonuses, benefits, and dividends, could be paid thereby reducing the overall tax bill.

The work undertaken by the family member must…

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When should a business register for VAT?

The rules regarding VAT registration appear relatively straightforward — a business must register if its VAT taxable turnover exceeds the VAT registration threshold (currently £85,000, remaining at this level until at least 31 March 2024). A business which makes taxable supplies is liable to register if, by the end of any month, the value of such supplies in the previous 12 months or less is more than the VAT registration threshold; or at any time, where it is expected that the value of taxable supplies in the next…

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Latest News Round-Up

Paying employees more than HMRC’s approved mileage allowances

It seems as though the price of fuel is increasing every day. If you have employees for which you pay their business fuel you may be finding that paying at the HMRC’s set mileage rates does not cover the cost to the employee. Paying above that rate has tax and NIC consequences.

These days few employees have petrol or diesel driven company cars or vans because the tax charged on the benefit in kind generally means that it is not cost-effective to…

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Tax relief for losses – Coronavirus concession

Those businesses that have struggled through the pandemic may find that when they come to do their accounts where usually there is a profit, the business made a loss. Whether and how that loss can be utilised depends on whether the accounts are prepared using the ‘cash basis’ (recording revenue when cash is received, expenses when they are paid) or the ‘accrual basis’ (recording revenue when earned and expenses when incurred).

The ‘cash basis’ is how many businesses with turnover of less than £150,000 prepare their accounts. This method…

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