Tax

The scheme was announced to help both small and medium sized business recover from the negative financia

There is no doubt that 2020 is proving to be massively different to any of the predictions given by tax advisers at the start of the year. After three years of wall to wall Brexit coverage, a worldwide pandemic has changed the business landscape beyond recognition and there is the inevitable speculation amongst business leaders that there will need to be an increase in taxes… but what will this look like? 

In July, Chancellor Rishi Sunak commissioned the independent Office of Tax Simplification to review how Capital Gains is paid by individuals and smaller businesses. This has naturally led to a nervousness around whether this will lead to a Capital Gains Tax increase. Of course, this is purely speculation and every year around the presentation of the annual tax budget, rumours of tax changes are rife, many of which never materialise.

Other areas which might see changes are the various reliefs available for selling our main residences, our businesses and certain other assets, such as vintage cars, which at the moment are exempt.

We should not forget that there have already been some changes in April 2020 to Capital Gains Tax on residential properties, with the key change being that tax is now due to be reported and paid within 30 days of the completion date. In the grip of the pandemic, the Government did announce a relaxation to this rule with penalties only being charged for completions after 31st July 2020.

What should the public do to prepare?  

Firstly, there is no doubt that the Government will be watching the economy very carefully before making changes to taxes. It is important not to take action based on speculation or rush into a decision without all of the facts. 

Our advice is that people should take the opportunity to review their affairs and seek professional help if needed. 

How can we help?

We have dedicated Personal & Corporate Tax departments, who offer a free no obligation meeting.  In our initial meeting we learn about your plans for the future and identify areas in which we can help you to meet your short and long-term financial goals.  

If you would like to arrange a meeting, please contact us on our details below. 

 (E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

Am I eligible for the Childs Trust Fund?

If you were born between 1^st September 2002 and 29th January 2011 you may be entitled to receive some money from HMRC! 

Who are the HMRC?

HMRC stands for Her Majesty’s Revenue and Customs and they are essentially a team within the Government that is responsible for collecting peoples taxes and make sure everyone is paying the correct amount of tax and simply collection of all the money that pays for the UK’s public services. These public services include paying police officers, firemen and nurses and doctors working for the NHS.

What is a Childs Trust Fund?

A Childs Trust Fund is a pot of money that the HMRC created for babies born between 1^st September 2002 and 29th January 2011 in order to help make sure they have some form of savings for when they reached the age of 18 and became an adult.

This week marks the first day, 18 years later, from when the first Childs Trust Fund was made available, and therefore those turning 18 will be able to claim their money saved in their ‘pot’.

Do I have a ‘pot’ waiting for me?

If you were born between the above dates then there will be a savings pot saved for you! If you ask your parents or guardian they may have the details but do not worry, if they weren’t aware of the scheme you may still be able to receive a sum of money to receive on your 18^th birthday! HMRC automatically enrolled eligible babies to the scheme and puta minimum of  £250 into the account.

How to I make the most out of the Childs Trust Fund?

If you are not 18 yet, it is still possible to save more money in to the account.

With the trust fund the more you put in creates potential for the money you will get out. Some people might choose to invest their pocket money or ‘spend half and save half’ of their Birthday or Christmas gift money. The fund is an investment, meaning it may grow in value over time and the amount you put in may or may not have increased by the time you come to cash it in.

I want to have more control of my Trust Fund

If you are 16 you are able to take over control of the Child Trust Fund account and whilst you cannot withdraw any money until you are 18, you will be able to meaning you would be responsible for putting money into the account instead of your parent or guardian. You would also be responsible for contact your Child Trust Fund provider should you ever have any questions.

I am about to turn 18, what happens next?

On your 18^th Birthday you will be allowed to take out the money from the account. It is then your choice what you do with the money! You may choose to spend it on supplies for uni or you may choose to reinvest it into an adult savings account.

For more information click here.

(E) enquiries@advaloremgroup.uk  (T) 01908 219100

Stamp Duty

The Chancellor announced that he will enforce temporary reductions in residential property Stamp Duty Land Tax Rates (SDLT) between 8^th July 2020 – 31st March 2021, which is of great benefit to those currently looking to get onto the property ladder or purchase a new property. You will only pay SDLT on the amount that you pay for the property above £500,000. This rate applies to both first time buyers and existing homeowners. The temporary SDLT rates are:

Property or lease premium or transfer value	SDLT Rate
Up to £500,000	Zero
The next £425,000 (Costing £500,001 to £925,000)	5%
The next £575,000 (Costing £925,001 to £1.5 million)	10%
The remaining amount (Costing above £1.5 million)	12%

The existing rules for first time buyers are temporarily replaced by the reduced rates shown above. 

If purchasing an additional property, there is a 3% higher rate, which applies on top of the above rates. For example, on a buy-to-let or second home, the temporary rates become:

Property or lease premium or transfer value	SDLT Rate
Up to £500,000	3%
The next £425,000 (Costing £500,001 to £925,000)	8%
The next £575,000 (Costing £925,001 to £1.5 million)	13%
The remaining amount (Costing above £1.5 million)	15%

Businesses buying residential property worth less than £500,000 will also benefit from these changes at the additional 3% SDLT rate.

As of the 1st April 2021, the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

For further details on the SDLT temporary changes click here:

https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates

Green Homes Grant

The Government has set aside £2 billion for homeowners in England to make green home upgrades. Homeowners in England will be able to apply for vouchers from the  The Green Homes Grant scheme, to pay for improvements such as loft, wall and floor insulation. This could save some households hundreds of pounds a year on their energy bills and create thousands of jobs for tradespeople. This is aimed to help to boost home efficiencies.

The Government has not yet announced a timescale for this scheme. 

(E) enquiries@advaloremgroup.uk  (T) 01908 219100

Since lockdown, those working from home have found themselves saving money on daily expenses such as travel, lunches and the daily coffee purchasing. However, these costs may have been reattributed to other outgoings that align with working from home, such as business telephone calls or electricity and heating bills.

If you have been forced to work from home (not if you’ve chosen to work from home), then you may be able to claim tax relief on some of the bills you have had to pay, due to working from home on a regular basis. 

How much can I claim?

HMRC have put in place a ‘blanket’ costing approach in order to pay everyone as quickly and efficiently as possible, rather than working out exact electricity bill costs vs usage. 

HMRC now allows you to claim up to £6 per week of expenses without having to provide bills or paperwork as evidence. This doesn’t directly mean you save £6 a week but instead you save the tax you would have paid on it. From 6^th April 2020, this works out to be £1.20 a week for a basic rate taxpayer, or £2.40 a week for a higher rate taxpayer. 

In order to make a claim you must have had to work from home (haven’t chosen to do so) and incurred extra costs due to working from home. It is also possible to claim more than £6 per week, but you have to provide paperwork to support your claim. 

If your employer does choose to provide a ‘working from home allowance’, that would be tax free up to £6 per week, which means you can’t make an additional claim for tax relief on top. 

How can I claim?

If you normally complete a Self-Assessment tax return, you can include your claim details on there. If you do not complete a Self-Assessment, you can claim by completing a P87 form, either online or by post. 

These allowances have been available for years, but awareness has grown since the pandemic forced many offices to close.

For further details, please see the Government Guidance on Employees Working at Home 

(E) enquiries@advaloremgroup.uk  (T) 01908 219100