Capital Gains Tax Changes

The proposed change to the administration and payment of capital gains tax on the disposal of residential properties is due to come into force from 6th April 2020.

From this date, where CGT is due on a residential property disposal a return will need to be filed with HMRC, and also the CGT must be paid within 30 days of the date of completion. Where a property comprises both residential and commercial, the gain arising must be apportioned on a just and reasonable basis.

For UK resident individuals and trustees, a return will need to be filed with HMRC where a disposal of residential property gives rise to a chargeable gain or an allowable loss, unless the gain is fully covered by a relief such as the principal private residence relief, or where the gain is covered by the annual exemption, or by losses brought forward.

Whilst legal advisors should be aware of this change in filing and payment requirements, ultimately the responsibility, as always, will be on the taxpayer to ensure compliance.

National Living Wage Increase

The national living wage will increase from 1st April 2020 for employees aged 25 and over, and the national minimum wage will also increase from the same date for employees under 25 years old.

The new ( hourly ) rates are compulsory, and must be followed to avoid penalties and back payment to the employees. The new rates are :

Aged 25 +            :       The rate will increase from £8.21 to £8.72

Aged 21 to 24      :        The rate will increase from £7.70 to £8.20

Aged 18 to 20      :       The rate will increase from £6.15 to £6.45

Aged 16 & 17       :       The rate will increase from £4.35 to £4.55

Apprentices under 19 or in their first year        :        The rate will increase from £3.90 to £4.15

Happy New Year

At the end of 2019, and the decade, all that is left for us to say here at Anthony Marshall Ltd to all our clients, both past and present, along with all our relationship partners, is to wish you all a very happy new year from all our staff.

The new year promises to be more stable, now that we have a Government with a majority to work. The economic outlook is quite positive for a few years to come. And Brexit will finally be delivered, meaning we can get on with agreeing trade relations with not only the EU, but also the rest of the world.

Wishing you and your families a VERY HAPPY NEW YEAR!!!!!

December 2019 Fuel Rates

HMRC have announced new fuel rates for journeys on or after 1st December 2019. For one month from the date of change, either the old rates or the new rates can be used. Hybrid cars are treated as either petrol or diesel cars for this purpose.

The rates can also be used for VAT recovery purposes, but employers will need to keep supporting invoices/receipts to cover the VAT reclaimed. In addition, the rate for full electric cars is 4p per mile, and electricity is not a fuel for company car fuel benefit purposes.

The new rates based on engine size are :

Petrol       :   1,400cc or less 12p; 1,401cc to 2,000cc 14p; over 2,000cc 21p

Diesel      :   1,600cc or less   9p; 1,601cc to 2,000cc 11p; over 2,000cc 14p

LPG         :    1,400cc or less  8p; 1,401cc to 2,000cc  9p; over 2,000cc 14p

Revised CEST Tool Launched

HMRC has updated its check employment status for tax ( CEST ) tool recently. This tool will check whether the IR35 intermediaries legislation applies to a particular engagement in both the public and private sectors.

Around 30 new questions have been updated or included. Up until now, only 85% of cases gave an answer. The updates will hopefully increase this number.

CEST is the only device which produces a result which HMRC will stand by. This is, however, on the caveat that the information which is input is both accurate and the tool is used in accordance with the guidance.

We would strongly recommend that any contractor who is concerned that IR35 may apply to them, should use the tool and if the answer shows that the contract is outside of IR35, then the results be printed off and stored as part of the official records.

Office Closure

Our offices will be closed on Friday 6th December from 11:00am, as we are having our staff Christmas function on that day. Our offices will re open on Monday 9th December at 9:00am.

We would like to take this opportunity to wish all our clients, both past and present, along with our associates, advisers, and introducers a very merry Christmas and a wonderful and healthy new year.

September 2019 fuel rates

HMRC have announced new fuel rates which apply to all journeys on or after 1st September 2019. For one month from this date, either the old rates or the new rates can be used. Hybrid cars, for this purpose, are treated as either petrol or diesel.

These amounts can also be used for VAT recovery purposes, but the employer must retain receipts.

In addition, the advisory rate for a full electric car is 4p per mile, and electricity is not a fuel for car fuel taxable benefit purposes.

The new rates are :

 

Petrol       :    1,400cc or less 12p; 1,401cc to 2,000cc 14p; over 2,000cc 21p

LPG         :    1,400cc or less   8p; 1,401cc to 2,000cc 10p; over 2,000cc 14p

Diesel      :     1,600cc or less 10p; 1,601cc to 2,000cc 11p; over 2,000cc 14p

Grant funding for brexit costs

HMRC have recently announced that a £16m fund is available for businesses to cover certain costs associated with Brexit. The grants cover both IT costs and training costs, relating to the completion of Customs declarations for imports/exports from/to the EU.

A business is eligible to claim up to 200,000 euros for IT costs, and up to £250 per person for in house training or £2,250 per course. Eligible businesses must have a UK establishment and a good tax record, with 250 or fewer employees and annual turnover less than 50m euros.

Applications should only be made when a business is prepared, but the opportunity for funding closes on 31st January 2020 at the latest.

If you feel that a claim may be made by your business then applications are made online at www.customsintermediarygrant.co.uk

Domestic Reverse Charge and VAT

The introduction of the domestic reverse charge for construction services has been delayed for 12 months until 1st October 2020.

HMRC made the change after industry representatives raised concerns that some businesses were just not ready. They have stated that where genuine errors occur because some businesses have already made changes to their invoicing, and these changes cannot easily be changed back again, then the change of date will be taken into account by HMRC. Also, if businesses had opted for monthly VAT returns on the back of the change in legislation, then this can be reversed on HMRC website.

So, in summary, it is as you were…………………until next year.

Tax Payable on Sale of Private Residence

It has long been part of the capital gains tax exemptions/reliefs that no capital gains tax would be payable on the sale of a persons sole/main private residence. This principal private residence exemption also included the final 36 months of ownership as deemed occupation, and therefore also exempt from charge, up until a few years ago. This final period of deemed occupation was then reduced to 18 months.

From 6th April 2020 the final period exemption will be shortened further from the 18 months down to only 9 months ( although the 36 month exemption period will continue to be available to disabled persons or those in a care home ). In addition to this reduced period, lettings relief will only apply when the owner of the property is in shared occupancy with the tenant.

It becomes more possible therefore that a chargeable gain could arise where an individual has to sell their home, before they can buy a new one. Any capital gains tax on disposal would also need to be paid within 30 days of completion. A failure to disclose the tax due, and the failure to pay the tax by the due date, would potentially lead to additional penalty costs.

Anyone selling their principal private residence after 5th April 2020 should be conscious of these changes to the exemption.