Tax Advice

Making Tax Digital

More than a million VAT-registered businesses have now been mandated into the Government’s Making Tax Digital (MTD) programme, which came into force on 1 April 2019.

Under the scheme, businesses that are registered for VAT with a turnover of more than £85,000 are required to keep digital records and submit their VAT returns using MTD-compatible software.

According to HMRC, only around 100,000 VAT-registered businesses had signed up to the new regime by 1 April 2019.

Since then, businesses with VAT reporting obligations have been signing up at a rate of 4,000 a day. More…

Making Tax Digital – it’s here………

MTD zero-hour is here.

The moment has come: if your business has a taxable turnover above the VAT-registration threshold, which is currently £85,000, you’re now obliged to keep records in digital form and to file your VAT returns using HMRC-approved software.

You probably got a bit fed up of being reminded about the deadline for the first wave of the Government’s Making Tax Digital (MTD) scheme in the course of the past year or so, and who could blame you?

Adverts from Revenue were appearing all over our favourite websites and social media, alongside agenda-laden reminders from software providers, banks, and anyone else with a stake in this project. MTD even started to pop up in commercial breaks during prime time TV, and on colossal posters on the London Underground. There was simply no escaping it. More…

IHT and the probate charge

Affluent families in England and Wales face paying probate charges of up to £6,000 from this month after ministers confirmed it as a fee rather than a tax.

Families have been used to paying flat fees of up to £215 to obtain the grant of probate needed in England and Wales to administer estates worth more than £5,000.

Critics had labelled the move as a “stealth tax”. Taxes are usually introduced in parliamentary bills, before going through a committee stage, and being voted on by MPs and Lords.

Ministers, however, circumnavigated this by classifying the charges as a fee, which saw the legislation narrowly approved by MPs and passed as a statutory instrument.

Instead of the flat rate, which is in place until 5 April 2019, the proposed system sets fees on the following sliding scale based on the value of an estate. More…

The politics of tax breaks

How did we end up with such a complex system of tax reliefs?

If there’s one thing accountants love, it’s identifying obscure tax reliefs to which you may be entitled and using them to reduce your tax bills.

Tax reliefs, or tax breaks as they are sometimes called, aren’t without controversy, however. There are too many of them, say critics, and they deny the public purse much-needed funds.

In January this year, think tank the Resolution Foundation published the results of its own annual review on the cost to the nation of tax reliefs and suggested the bill had grown to £164 billion in 2018/19, equivalent to £6,000 per UK household.

Attempts to tot up the number of individual reliefs in recent years consistently put the number well above 1,000. More…

Making Tax Digital for VAT: one month to go

The first batch of VAT-registered businesses have less than a month to go until they enter into the Government’s Making Tax Digital (MTD) regime.

All VAT-registered businesses turning over more than £85,000 will be mandated into MTD by 1 October 2019, with the majority of firms adopting the scheme by 1 June 2019.

Firms with a VAT return quarter ending on 30 June 2019 will be the first to begin operating under the regime on 1 April 2019.

A month later, VAT-registered business with a return quarter ending on 30 April 2019 will be the second batch of businesses to go through MTD. More…

Changes to probate in 2019

Controversial fee increase set to take place from April.

From April 2019, some estates in England and Wales could be required to pay almost £6,000 for a service that currently costs less than 4% of that amount.

This is because of a proposed change to the fees families must pay to administer the estate of someone who has died.

This process, more generally referred to as probate, involves gathering the assets of the deceased, valuing the estate, paying any tax and bills, and distributing the estate according to the will.

Subtle procedural differences exist in Scotland, where you need to obtain confirmation before inheritance tax can be deducted and what’s left of the estate is distributed to beneficiaries.

The proposed changes to probate fees will not take effect in Scotland from April 2019.

At the time of writing, obtaining the document needed to carry out these tasks – called a grant of probate in England and Wales – costs £215, or £155 if you apply through a solicitor, but there’s no fee if the estate is under £5,000.

However, the Government has announced plans to restructure the way the fees work, which would see some estates paying significantly more than they do now. More…

Think tank proposes tax changes to save £7bn

A think tank suggests that tightening up some existing wealth taxes and subsidies could help the Government save almost £7 billion a year by 2022/23.

Scrapping the lifetime and help-to-buy ISAs, reforming or replacing council tax, and clamping down on inheritance tax loopholes are among the suggestions made by the Resolution Foundation.

Other recommendations include making pensions tax relief more progressive and limiting entrepreneurs’ relief.

It suggests abolishing the two ISAs would save up to £900 million a year, while increasing the top council tax bands in England would generate around £1.4bn a year.

On top of that, it argues that capping the tax-free pensions allowance at £40,000 a year would raise around £2bn, and £1.6bn a year would be fetched by returning the lifetime entrepreneurs’ relief limit to £1m. More…

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