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Newsletter Autumn 2016

Sorting out interest receipts On 6 April 2016 a new allowance – the Savings Allowance – was introduced into our tax system. The Savings Allowance applies a new 0% rate for up to £1,000 of interest receipts for a basic rate taxpayer and up to £500 for a higher rate taxpayer. The introduction of the Savings Allowance will mean that the majority of taxpayers will not pay tax on their interest. The government has therefore removed the requirement (from 6 April 2016) for banks and building societies to deduct tax from account interest they pay to customers. This has not been extended to private companies paying interest on directors loan accounts so the CT61 regime still applies and basic rate tax will still be deducted at source from some forms of savings income such as interest distributions from unit trusts and OEICs. The government proposes to remove this requirement from April 2017. Of course if your interest income exceeds the Savings Allowance, there will be extra tax to pay and if you are a higher rate taxpayer, you are more likely to be in this position as the Savings Allowance is only £500. Brexit and tax The EU referendum result will, of course, have significant long term economic consequences for the UK and many areas of law will need to be adapted to the new era. What are the possible tax consequences of the UK ceasing to be a member of the EU? The main point to note is that many areas of taxation such as personal and corporate tax rates have been matters which the UK has been...

Newsletter Summer 2016

Minimum Wage rates increases rescheduled The National Living Wage (NLW) came into effect in April 2016 for workers aged 25 and over and has caused many businesses to consider their remuneration policies for employees. The initial rate of £7.20 is a 50p increase in the rate that used to apply. In terms of detailed rules, the NLW is really just a new category rate for the National Minimum Wage (NMW). However there is an important difference of principle in the setting of the rates. Changes to the NMW rates have been recommended by the Low Pay Commission in an annual report. Amongst the 368 pages of the latest report are the recommendations for changes to the NMW rates to apply from 1 October 2016. The rate for 21 to 24-year-olds will increase by 25p to £6.95 for example. The Commission will continue to recommend rates for those aged under 25 and apprentices that will not damage the employment prospects of these groups. It will also recommend rates for NLW but focused on the government target of reaching 60% of median earnings by 2020 (on latest forecasts this would mean £9 in 2020). The government has announced that the NMW and NLW cycles will be aligned with effect from April 2017 so that both rates are amended in April each year. Four reasons to add social media to your marketing plan The use of social media in businesses has rocketed over the last few years as it is a great way to communicate with a wide audience. If you’re not an active user you could be missing out on vital...

Newsletter Spring 2016

Marriage allowance – guide your employees in the right direction The Marriage Allowance lets certain individuals transfer 10% of their personal allowance to their spouse or civil partner. This reduces the tax bill of the recipient of the transfer by up to £212 in 2015/16. The main scenario in which the transfer is allowed and worthwhile is where: one of the spouses has little income and is therefore not using the personal allowance the other spouse does not pay tax at the higher or additional rate.   The default route for applying is online. If you are an employer, it is a good idea to signpost your employees to gov.uk/marriage-allowance-guide. This link gives full information as to eligibility, how to apply and a link to the online application. As we get towards the end of the tax year, couples may have a better idea as to whether they qualify. If a successful application is made, changes to the personal allowances are backdated to 6 April 2015. In future years the personal allowance will transfer automatically to the spouse until either of the couple cancels the Marriage Allowance or there is a change in circumstances. New tax dangers when buying residential property The Chancellor announced in his Autumn Statement in November 2015 that he would be introducing new rates of Stamp Duty Land Tax (SDLT) on purchases of buy to let properties or second homes. Few perhaps realised how much more complicated property transactions may well be as a result. At the end of December the government launched a consultation paper which revealed the proposed details of the regime. SDLT...

Hart Parry Winter Round Up.

HMRC gone phishing? Phishing is the fraudulent act of emailing a person in order to obtain personal or financial information. HMRC has issued guidance to help recognise fraudulent emails. HMRC are increasingly providing online services for taxpayers and their agents but this means a higher risk of phishing and bogus emails. These emails often ask for personal information such as date of birth, bank details or passwords. With a Self Assessment tax payment date coming soon on 31 January 2016, this may be the time to be wary of online fraudsters. HMRC have confirmed that they will never send notifications of a tax rebate by email and will also never ask people to disclose personal or payment information by email. In addition HMRC have responded to these attacks by issuing guidance on how to tell if an email is fraudulent. How to tell if an email is fraudulent Often the fraudster will create an email address which looks similar to HMRC’s email address for example ‘refunds@hmrc.gov.uk’. More examples of false email addresses can be found in a list provided by HMRC – https://goo.gl/3QLfie Another risk area is a link to a bogus website in an email or text. The page may look genuine but it often contains links, display fields or boxes which ask for bank or credit card details and passwords. HMRC have warned that some phishers also add links to genuine HMRC websites to try and make the emails appear genuine. Fraudsters often send high volumes of phishing emails in one go and they may therefore start the email with generic greetings for example ‘Dear Customer’ rather...

Tax investigations update

Following the outcome of the General Election, the victorious Conservative Party is now planning to deliver the manifesto pledges it made during the campaign. One of those key pledges included a promise to collect at least an extra £5bn from tax evasion and tax avoidance. In this update we highlight HMRC’s approach, existing targets and latest published results, as well as some of the risks which trigger a tax enquiry …. Read...