Hello
HMRC published draft legislation ahead of next year's Finance Bill this week. We can confirm that the new dividend tax will go ahead as planned, and we now know more about the treatment of other forms of distributions. There is a new consultation on Company distributions.
Controversially, this aims to prevent company owners extracting funds as capital and it is likely to cause quite a stir amongst many company owners and advisers. Looking at the recent and proposed tax changes it seems that the government has got it in for small business. Apparently, the only way that HMRC think that you may exit is via a share sale and even then the new measures may still target you. Bizarely, if you are non-domiciled or prepared to move abroad you may avoid the problems. Moving abroad has a number of attractions especially if you were unlucky enough to be flooded out this week; we'll take look at some of these benefits in the new year.
Radio 4 Moneybox looked at pensions and the self employed last week. Speaking to the self employed about their lack of pension provisions, I generally find the same response which is broadly "I have saved all my life and my pension is worth no more than the cash that I have invested". Given that funds have almost always been invested by professional fund managers this is a shocker; the only winners being the the fund managers who, to be frank do not appear to offer any value for money. It seems that pension savers need a lower cost solution. There are ISAs, although these offer little return on your capital and we have the savings allowance in any case, so it is unsurprising to find that people prefer to put their trust in bricks and mortar. This time we have updated our buy-to-let guides, our property toolkit, and we have a key guide to the return of replacement cost relief.
In passing, I 'attended' HMRC's webinar on Property Profits yesterday and we could hear via the comments made how confused people were about the tax treatment on the cost of furniture and white goods. Maybe the most sensible thing for HMRC would be to back date the return of replacement cost relief. I bet that 9/10 unrepresented landlords are getting this wrong and it is was a mistake to have withdrawn the concession back in 2013 only to revive it in 2016.
Back soon
Nichola Ross Martin FCA Tax Director
Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers
Quick News
Company distributions: new measures
A new consultation seeks to extend the Transactions in Securities provisions in order to block the extraction of close company funds as capital. The proposals are controversial as they may affect planning undertaken for purely commercial reasons.
Dividend tax (proposals what's new?
Draft legislation for Finance Bill 2016 is now published
Replacement furniture relief
This relief replaces the wear and tear allowance from April 2016
HMRC changes position on non doms and offshore loans
HMRC have confirmed that they will not now seek to assess offshore loans which are secured using offshore income and gains as being remitted to the UK where the amounts were brought into the UK before 4 August 2014.
Government to assist those affected by floods
Relief from business rates and council tax will be available for some businesses and households, and HMRC have opened a telephone helpline to assist with practical tax matters.
VAT & lack of funds: good weather provides a reasonable excuse
In Farmyard Funworld Ltd v HMRC [2015] TC04741 the First Tier Tribunal (FTT) agreed that a lack of funds caused by an unexpected heatwave could constitute a reasonable excuse for a late VAT payment.
NEW Practical Tax Guides & Updates - for subscribers
Landlords
Buy-to-let: personal or company?
UPDATE: for new SDLT measures, new section on profit extraction.
Property profits and losses toolkit
UPDATE: a practical checklist for preparing property income
Wear & Tear Allowance and Replacement Furniture Relief
UPDATE: the new rules apply from April 2016, in this guide we compare the current rules to the proposals and explain the changes for you.
Directors
Dividend tax: subscriber guide
This guide explains how dividends are to be taxed from 6 April 2016. It features HMRC's examples from its own factsheet together more detailed examples provided by this webservice.
Transations in securities
UPDATE: links to new condoc to block extraction of cash as capital and TAAR to prevent phoenixing.
Companies
Losses
NEW: what you can and can't do with trade and non trade losses
Company tax claim checklist
Time limits and details of claims for all the main CT reliefs.
New UK GAAP
NEW: an overview of the changes to UK GAAP and their impact
Employers
What's On: from April 2016
UPDATE: changes to subsistence rates from 2016/17, this guide details the new benefits and expenses regime from next year.
Private Clients
ISA Guide
UPDATE: new Innovative Finance ISA
CPD: for lunch
These are 30 minute structured CPD webcasts available for you direct from our cloud: view when you like from any device
NEW: Property letting
Restriction on relief for interest and finance costs
Editor's Choice
Dividend Tax: client briefing
A briefing note to go over with your clients to explain and illustrate the new rules for the taxation of dividends from 2016/17.
Missed last time's update?
Nichola's SME Tax Update 3 December 2015
Features updates on:
- Autumn Statement 2015: the small print
- Small company tax & OMBs: what's new
- Pensions: tax rules and planning
- SDLT & residential property
- Help to Buy ISA
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