Restricting Finance Cost Relief for Individual Landlords

New provisions will take affect from April 2017, which will see tax relief for finance costs on residential properties being gradually restricted over a period of three years, until, by 2020/21, all financing costs incurred by a landlord will be restricted to the basic rate of income tax. Such finance costs include mortgage interest, interest...

Dividend Allowance

Legislation included in Finance Bill 2016 implements the new 0% rate for dividend income, as well as changing the rates of tax for dividend income. Once enacted, the changes will apply from 6 April 2016. Broadly, the new nil rate applies to the first £5,000 of a person’s dividend income and is available annually.  ...

SEED EIS RELIEF DENIED

The Enterprise Investment Scheme (EIS) and the recently introduced Seed EIS provide generous tax breaks for investors who subscribe for shares in qualifying companies provided the correct procedures, and in particular the correct forms, are used to claim tax relief. Seed EIS provides income tax relief of 50% of the amount invested and EIS 30%...

NEW RULES FOR BUY-TO LET LANDLORDS

The 2016 Finance Bill sees the introduction of important tax changes for property investors that were originally announced in the 2015 Budget. From 6 April 2016 onwards there are important tax changes affecting the replacement of furnishings for buy to let landlords. 6 April 2017 will see the start of mortgage interest being restricted to...

BREXIT – WHAT ARE THE TAX IMPLICATIONS?

  One of the main reasons that individuals voted “leave” was to restore fiscal sovereignty to the UK so that we are able to set our own laws, in particular tax law, without interference from Brussels. Significant tax changes currently require “State Aid” approval and we have seen many recent tax changes forced on us...

COMPANY CAR ADVISORY FUEL RATES

  These rates are the suggested reimbursement rates for employees’ private mileage in their company cars and are reviewed each quarter on 1 March, 1 June, 1 September and 1 December. In line with an increase in fuel prices, the rates that apply from 1 June 2016 are shown below: engine size                                ...

REPORTING BENEFITS IN KIND AND SHARES ISSUED TO EMPLOYEES AND DIRECTORS

It’s that time of year again when the annual return of benefits in kind and expenses paid on behalf of directors and employees needs to be made to HMRC. Unless the employer holds a dispensation, this includes expenses such as travel and subsistence that are reimbursed to employees and directors. Note however that from 2016/17...

THINKING ABOUT INCORPORATING YOUR BUSINESS?

Where a sole trader, partnership or LLP has established a significant value for the goodwill of their business it was possible up until 3 December 2014 to transfer that goodwill to a limited company and pay just 10% capital gains tax by claiming entrepreneurs’ relief. The former owner(s) could then draw down on the loan...

SHOULD I USE THE VAT FLAT RATE SCHEME FOR MY SMALL BUSINESS?

The VAT Flat Rate Scheme is intended to simplify VAT accounting and reporting for small businesses, and some may even find that they pay less VAT than using normal VAT accounting.   To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC to use the...

SUPPLYING DIGITAL SERVICES TO CUSTOMERS IN OTHER EU COUNTRIES?

The VAT place of supply rules changed on 1 January 2015 where digital services are supplied to non-business customers. The place of supply changed from where the supplier was based to where the customer is located as some companies were avoiding UK VAT. This rule change had serious implications for small businesses supplying digital services...