by David Watkinson
What a perverse world we live in. In my younger days we used to wait with baited breath in March to find out how much tax we would be paying from the following month.
Then 10 years ago they started announcing changes in tax rates at least one budget earlier, which sort of took half the fun of it all away. Now we are only half way through July as I write this, and we already have the draft Finance Bill that will result from next November’s budget. Not sure why they bother to switch the boilers on at the Commons, but I suppose the predictable heckling makes interesting news!
The draft bill contains 33 pieces of quite significant changes. Clearly, we cannot go into details in an article of this length, so keep an eye out for our usual newsletter that we send by e-mail each year after the budget which will go into more detail. If you don’t currently receive this and wish to do so please register via our website. However, listed below are a couple of the changes that will probably affect most people.
There are changes being made to the Rent A Room scheme. This was introduced several years ago to encourage people to let out spare rooms in their main home. The changes are designed to counter the apparent growth in abuse of the scheme, and requires that the recipient of the income should share occupancy of the residence for at least part of the year that the relief is claimed for.
If you dispose of a property there is a reduction in the time allowed to declare and pay the Stamp Duty Land Tax before penalties are imposed. On the question of penalties, the government has confirmed that penalties will be imposed on tax remaining unpaid under the Making Tax Digital regime more than 15 days after the due date of payment.
The government is proposing to extend VAT grouping to unincorporated bodies, eg individuals. Essentially, this means that if one of these bodies owns or is owned by another body in such a way that if they were companies they would be within a group relationship, then they can be included in that group for VAT purposes. This exempts from VAT transfers between those bodies that would normally be chargeable. As the VAT paid is (almost) invariably reclaimed then the cost or benefit to the exchequer of this measure is (almost) zero, indicating the stupidity of VAT which would be inconsequential except for the complexities of the tax resulting in many businesses making unintentional errors and thus incurring penalties, the size of which are soon to be increased in size and frequency (see previous paragraph).
WatkinsonBlack have considerable experience in all areas of taxation and business services, including the provision of a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any business matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.
*This article is to inform rather than advise and you should always take professional advice before taking any action.