A number of suggested reforms to the CGT have been accepted by the government. In May 2021, the Office of Tax Simplification published a report that included 14 recommendations. The government’s response was published on 30 November. While any major changes, such as aligning CGT rates with income tax were ruled out, five of the OTS recommendations have been accepted. Some of these are concerned with improvements to guidance or access to the CGT service, but some technical changes will also be made.
Firstly, the window for…
The tax rules property businesses have changed considerably since 2010, for example the restriction of relief for financing costs to the equivalent of a basic rate tax reducer (at best). Almost all these changes have been made with the aim of making property letting less attractive. This makes it all the more important to ensure legitimate deductions are correctly identified and claimed.
One area where there is often confusion is the issue of whether work done on a property constitutes a repair, in which case the cost is allowable…
The enterprise investment scheme (EIS) is a collection of tax incentives aimed at encouraging private investment into younger trading companies. EIS is well established; however, the rules have been subject to various changes and additions over the years.
In summary, the reliefs available on a qualifying investment are:
– income tax relief of 30%;
– capital gains tax reinvestment relief;
– capital gains tax exemption for the EIS shares themselves;
– automatic share loss relief against income (subject to adjustment for income tax relief given).
Of course, as the reliefs…
The old low value import VAT threshold of €22 was abolished in June 2021. All exports (which now include sales of goods to the EU) are subject to VAT. Where the total value of the shipment doesn’t exceed €150, the seller can opt to charge VAT at the point of sale in order to avoid the customer needing to pay import VAT in their member state, which can lead to delays.
The new Import One-Stop-Shop (IOSS) can be used for these sales, which can simplify reporting. If a business…
The first tax sites in the Freeports announced at the Spring Budget have now been designated, meaning that businesses operating within them can now access some of the reliefs.
The sites are located in three of the eight Freeport sites; namely Humber, Thames and Teeside as follows:
– Humber – Hull East and AMEP
– Teeside – Teesworks East and West, and Wilton International
– Thames – Dagenham, Tilbury and London Gateway
As a brief reminder, the tax breaks now available will include 100% first year allowances for plant and…
There were rumours that CGT rates were going to be increased at the Budget. These eventually proved to be incorrect, but there are still commentators that feel it is only a matter of time before changes are made with the huge COVID-19 related borrowing to finance for years to come.
As a result, many individuals may be contemplating selling assets to lock in the existing rates. Some may have already done this ahead of 27 October without seeking advice. As a result, a refresher on the way relief for…
The discovery assessment provisions in s. 29 of TMA 1970 permits HMRC to make an assessment for underpaid tax in certain situations. The time limit for raising the assessment depends on the behaviour that led to the underpayment. The standard time limit is four years from the end of the relevant tax year, but this increases to six years in cases of carelessness. Where there has been deliberate behaviour leading to an underassessment, the time limit is 20 years.
A discovery assessment is a valuable tool in HMRC’s arsenal,…
When a supply of services is from one business to another, i.e. a B2B supply, the general rule is that supply is treated as taking place wherever the customer is located, rather than the supplier. As an example, if a website design business is located in Belgium and they provide services to a VAT-registered business in the UK, it does not charge Belgian VAT as the supply takes place in the UK. This has always been the case, so the situation has not changed following Brexit, but some…
The 2021 Autumn Budget was relatively quiet in terms of tax-related announcements, and the Finance Bill 2021/22 published on 4 November was similarly thin on new changes, consisting to some extent of measures that had already been announced, e.g. the abolition of basis periods.
Part 2 of the Bill introduces the draft legislation for the new Residential Property Developer Tax (RPDT). Businesses falling within the remit of the new tax will pay 4% on relevant profits, subject to an allowance of £25 million (or a pro-rated amount where…
When buying a commercial building, the price may include VAT if the vendor has opted to tax the property. If the buyer is VAT registered and will be using the building wholly for the purposes of the trade it will be able to reclaim this input tax. However, this can mean that a large amount of money needs to be lodged with HMRC temporarily, which can affect working capital in the short term. In addition, the claim for input tax could be restricted if the business is partially…