Many people don‘t realise that they have significant gaps in their National Insurance Contribution (NIC) record, and as a result they won‘t be entitled to the full state retirement pension. This can come as a shock when you start to receive your state pension, but by that time it may be too late to fill the gaps in your NIC record.
A taxpayer needs 35 complete NIC years (as payments or national insurance credits) in order to receive the maximum state retirement pension,…
Read MoreIn his Autumn statement in November 2022 Chancellor Hunt announced cuts to the dividend allowance and the additional tax rate threshold, where individuals start to pay tax at 45%. You need to take these changes into account when planning how and when to extract profits from your company.
Many family companies spread the shareholding over various family members to take advantage of the dividend allowance which allows an individual to receive up to £2,000 of dividends tax free in a tax year.
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Online platforms such as Airbnb are now obliged to provide HMRC with data about the payments it makes to individuals who let rooms on a short-term basis. HMRC is matching that data to tax returns and writing to taxpayers who have apparently not declared their rental income correctly.
If you receive such a letter don’t be alarmed by the aggressive tone, as HMRC is asserting that you owe tax, but that may not be the case.
If you…
Read MoreAs an individual landlord you can’t deduct finance costs, including interest, from your residential property rents for tax purposes. Instead, you get tax relief for those costs as a basic rate tax credit calculated as 20% of the lower of:
– finance costs for the year plus any unused finance charges brought forward;
– your property income profits with no deduction for finance costs,
– or your adjusted total income for the year that exceeds your Personal Allowance.
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HMRC is writing to online sellers, gig economy workers, and influencers, asking them for unpaid taxes.
There are two versions of the HMRC letter.
– This letter is directed to those who sell goods, or their own services, through an online marketplace. This will include people who sell items on eBay or Etsy, as well as taxi drivers who find their customers through apps such as Uber.
– This letter is addressed to people who have created…
Read MoreHMRC defines crypto assets as: “cryptographically secured digital representations of value or contractual rights that can be transferred, stored, and traded electronically”. The various ‘tokens’ that have been created including Bitcoin, Litecoin, and Ether are all virtual, they exist only on computer servers.
The tax law hasn’t been written to cope with crypto assets, but that doesn’t mean the profits made on investing in crypto are tax-free. HMRC expects most individuals who buy and sell crypto assets to be treated as investors rather than traders,…
Read MoreThe PAYE system should deduct approximately the right amount of tax from your salary so that you do not have further tax to pay on that income. However, it assumes that your income remains steady from year to year. This may not be the case.
If you have a PAYE code including the letter K, this means your personal allowance has been reduced to zero and a notional amount of income has been added to your salary to be taxed. The imposition of a K…
Read MoreIf you have claimed lettings relief to reduce the capital gains tax (CGT) payable on the disposal of a let property after 5 April 2020, you should expect to receive a letter from HMRC asking you to amend your tax return to remove that claim.
The conditions for lettings relief to apply were altered on 6 April 2020, with a retrospective effect. For disposals on or after that date, lettings relief can only apply where both the following conditions are met for residential property:
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The new penalty regime for late payment of VAT is fairer to those who miss the VAT payment deadline by a few days.
For Vat due in relation to periods beginning on and after 1 January 2023 you will have up to 15 days to pay, or arrange a time to pay agreement, without incurring a penalty. For the first year of this new system, you will have 30 days to pay the VAT liability in full instead of 15 days.
From 2024 onwards the new…
Read MoreVAT registered businesses must now use MTD-compatible software to file VAT returns, as the old online form where you typed in your VAT figures has been closed.
To encourage businesses to file on time under the MTD regime the late filing penalties are being separated from the late payment penalties for VAT periods beginning on and after 1 January 2023.
Late filing penalties will be based on points awarded for each late submission. A penalty is levied only when the appropriate points threshold is reached, which…
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