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Did Truss Get It Right On Tax…?
…sort of! Cutting through all of the political hyperbole and potentially poor timing of the previously announced tax cuts and freezes proposed by ‘Liz and Kwasi’ as I’ll now refer to them, I think the real underlying question which needs asking is “What sort of country do we want to live in? One controlled by…
Budget Summary March 2023
Hunt for growth Jeremy Hunt opened his first full Budget speech by declaring that it was a ‘budget for growth’. He emphasised that this would be ‘long term, sustainable, healthy growth’; after all, Kwasi Kwarteng’s ill-fated September speech at the same despatch box was titled ‘the Growth Plan’. The Office for Budget Responsibility reported that…
Business Asset Disposal Relief – Have You Had Too Much Of A Good Thing?
Key Points HMRC are now issuing letters to taxpayers whom they believe have made claims for Business Asset Disposal Relief (BADR), formerly Entrepreneurs’ Relief, on their 2021/22 tax returns in excess of their lifetime allowance. Agents will also be sent a copy of the letter. What is BADR? BADR is a capital gains tax (CGT)…
Annual Tax on Enveloped Dwellings (“ATED”)
Key Points Revaluations of property are required based on Market Value on 1 April 2022Properties within ATED require reports to be filed before 30 April 2023Failure to comply with the revaluation requirements could result in penalties and interest. What is ATED? ATED has been with us since 1 April 2013 and was introduced to deter…
The New R&D Tax Relief Enquiry Landscape
HMRC has recently recruited additional technical resource which has resulted in a dramatic rise in the number of enquiries opened into claims. Enquiries are now longer and more involved, with the requirement to provide substantiating evidence far greater than ever before. HMRC are increasingly likely to open enquiries into claims that have, in the past,…
Under the Radar – the Relevant UK Earnings Tax Charge
Under UK law, pension contributions are an attractive and tax efficient way of saving for one’s retirement. However, there are several restrictions which apply to effectively cap the amount of tax relief one can obtain. Restrictions to Pension Contributions There are three main restrictions that can apply to pension contributions. These are known as the:…
Super-Deduction Withdrawal Or, A Tale Of Two Donovans
Last year was certainly a rollercoaster. From the highs of the Platinum Jubilee, the Lionesses winning the Euros, and a successful Commonwealth Games – to the lows of the war in Ukraine and the death of the Queen. Of course 2022 also saw the cancellation of the long-running Australian soap opera Neighbours, but whether that…
Winning Tactics To Adopt In Your Dispute With HMRC
Sarah Scala is an Associate Partner and Head of the Tax Dispute Resolution Team at Claritas Tax. Sarah also founded the Contentious Tax Group (CTG), hosted monthly by Claritas, and attended by Tax Dispute Resolution experts and Specialist Lawyers from across the UK. In this article, Sarah draws from her ten years of working full…
Employee Ownership Trusts (EOTs) – A silver bullet?
Whilst the legislation governing EOTs was first introduced back in 2014, I’d say the term has only established itself in the modern M&A adviser’s lexicon over the last few years as EOTs have gained popularity. This is no doubt partly due to the significant reduction in (what was) the 10% Entrepreneur’s Relief lifetime limit from…
What are the changes to overseas R&D?
Under the current rules for both schemes, companies are able to claim relief on R&D activity that is conducted overseas. Claimants under the RDEC scheme are restricted on certain subcontracted costs, but the location of where the work is performed on both schemes is irrelevant. However, from April 2023, this will change. Where companies subcontract…
HMRC & “NUDGE” LETTERS – How Does Your Tax Fee Protection Policy Respond – If At All!
As the UK Government looks to fill the black hole caused by the Covid-19 Pandemic and the current financial crisis, H M Revenue & Customs (HMRC) is now continuing to increase its enquiry activity across all areas of taxation. Whilst its main focus will remain on those they believe to be fraudsters and deliberate tax…
R&D TAX RELIEF – IT WILL NEVER BE A BETTER TIME TO CLAIM
One area which has been widely scrutinised in recent weeks, and has become a target area for clamping down on abuse, is that of research & development tax relief. It has been well documented that Rishi Sunak has been an advocate of the large company “RDEC” scheme, whilst questioning whether the SME scheme (for small…
100,000 taxpayers fined by HMRC for inaccurate tax returns
Volume of fines paints stark picture of non-compliance, in timely warning to the self-employed. In the 2021/22 tax year, over 100,000 workers were issued with fines by HMRC, according to a Freedom of Information (FOI) request lodged by RSM, an audit, tax and consultancy firm. In total, the tax office issued 101,045 financial penalties in the…
New Late Return and Payment Penalty System
In the past, many businesses will have been subjected to the Default Surcharge regime that penalised them for either submitting or paying VAT returns after the due date or the date they were due to be paid in full. That penalty regime was significantly ‘black and white, as it took no notice of how late…
MTD Update: Government announces more time to prepare for MTD for ITSA mandation
Please can we draw your attention to the important update below, issued by HMRC in respect of Making Tax Digital and its delayed implementation. Written Ministerial Statement Written statements - Written questions, answers and statements - UK Parliament The UK Government has announced that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA)…
Autumn Statement 2022
The new chancellor, Jeremy Hunt, delivered his Government’s Autumn Statement on 17 November 2022, having previously reversed almost all the previously announced changes in his predecessors mini-budget statement. The previously announced direct tax changes that are to remain in place are: Reversing the 1.25% increase in National Insurance from November.No Stamp Duty Land Tax on…
The High Income Child Benefit Charge – An Unexpected Cost For Those With ‘High Income’
With the rise in living costs, child benefit will become more important than ever to enable families to provide their children with the food and clothes they require. However, receiving child benefit can cause complications for those who are classed as earning a ‘high income’. Background to the High Income Child Benefit Charge The High…
SEIS / EIS – What Is It And What Could Possibly Go Wrong?
You’ve found an investor who sees the potential in your company and wishes to invest, however they will only do so if they can benefit from valuable tax reliefs via Seed Enterprise Investment Scheme (“SEIS”) or Enterprise Investment Scheme (“EIS”). Unless you’ve been involved in these schemes before, you’re probably wondering what this means and…
The National Living Wage (NLW) will rise to £10.42 from 1 April 2023, an increase of 92 pence or 9.7 percent!
In the autumn budget on the 17 November 2022, it was announced that the living wage would increase from £9.50 to £10.42 from 1 April 2023, but what does this mean for people on low income and how will it really help? If you earn under £12,570 then you are likely to see an extra…
When someone dies and their residential property is sold, should the disposal and capital gain be reported on the deceased’s Tax Return for the year of death?
Was the property sold before the individual died? If the property was sold before the individual died, the disposal was made by that individual and unless any gain realised was fully covered by Private Residence Relief, should be reported on the Self-Assessment Tax Return that will need to be prepared for the period from 6th…
Annual Investment Allowance for accounting periods straddling 1 April 2023
Currently the maximum Annual Investment Allowance (AIA) available on expenditure incurred on plant and Machinery (P&M) is £1,000,000. From 1 April 2023 this drops to £200,000 – so how will the affect claimants whose accounting period straddles this date? First, we need to understand what happens to the AIA for short accounting periods. If a…
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