Keep up to date with all the latest tax and financial news from CKLG
Latest News From CKLG Accountants
Changes to Dividend Tax 2016/17
April 26, 2016
On 6 April 2016, the 10% dividend tax credit was abolished and replaced with a new dividend tax allowance of £5,000 per year. This allowance does not reduce total income for tax purposes and only applies to dividend income.
Dividend income exceeding the £5,000 allowance and the personal allowance for income tax will be taxed at the following rates:
- basic rate taxpayers: 7.5%
- higher rate: 32.5%
- additional rate: 38.1%.
Dividends paid within pensions funds and those received in shares from ISAs will stay tax-free. The £1,000 savings allowance (£500 for higher rate taxpayers) due to come into effect in April 2016 excludes dividend income.
No tax will be deducted at source; it will be paid through self-assessment. How the changes affect your tax planning will depend on your individual circumstances and other sources of income.
Please contact our Business Services Team on 01223 810 100 to discuss your how the changes to dividend tax credit will affect your tax position.
Stamp Duty supplement on a 'granny annex'
April 19, 2016
When you buy a residential property and end up owning two or more homes, you must pay a 3% stamp duty land tax (SDLT) supplement on the purchase. Where a home has an annex which can be occupied independently from the main building, such as a“granny annex”, the SDLT supplement could apply, as the whole property could be considered to be two dwellings.
David Gauke, Secretary to the Treasury, clarified this matter in the House of Commons stating, 'the SDLT supplement won’t apply to properties that are replacing a main home, and where the annex to the new home can’t be sold separately and is worth less than one third of the main property'.
An amendment will be made to the Finance Bill 2016, and HMRC will publish further detailed guidance before the Finance Bill is passed in July 2016.
Please contact our Private Client Team on 01223 810 100 for more advice on Proptery Tax
April 18, 2016
If you reach state pension age on or after 6 April 2016 you should receive the new single-tier state pension in place of the old style basic retirement pension. For 2016/17 the single-tier pension is worth up to £155.65 per week, and the basic state pension is £119.30 per week. However, the basic state pension can be topped-up by pension credits or expanded by other entitlements.
To qualify for the full single-tier pension you need to have made or received credits for NIC for 35 full tax years. If you have at least 10 years of contributions on your NI record you will receive at least some of the single-tier pension. Those people who contracted out of NIC for the second state pension may receive less than the full amount of single-tier pension.
Contant our Private Tax Team on 01223 810 100 for pension tax advise.
Tax Rates, reliefs and allowances for 2016/ 2017
April 14, 2016
Make sure you are fully aware of any changes to UK tax rates, reliefs and allowances affecting you and your business for 2016/ 2017.
Capital Gains Tax relief for long-term investors
April 13, 2016
A new form of capital gains tax (CGT) relief will be available for gains made on ordinary shares issued by unquoted companies from 17 March 2016.
Investors who subscribe for those shares will pay CGT at 10% on any gains they make on disposal, if they hold the shares for at least three years, counting days from 6 April 2016 onwards.
This looks like an attractive way to reward investors in small trading companies, where the investor doesn’t already qualify for entrepreneurs’ relief.
However, the investor won’t qualify for this new CGT relief if he is an employee or director of the company he invests in, or is related to any employee or officer of that company.
Contact our business services team for advice on whether you will qualify for entrepreneurs’ relief or investors’ relief on any planned disposal of shares.
Small Business Rate Relief
April 6, 2016
The business rates payable on commercial properties can be a huge burden for small businesses. Where the rateable value of the property is no more than £6,000 the business rates bill can be reduced to zero on a claim for small business rate relief (SBRR). This upper limit for Small Business Rate Relief will be doubled to £12,000 from April 2017.
Also where the rateable value of the building is between £12,000 and £15,000 a tapered SBRR will apply.
We can help you check how much you should be paying in rates for your business premises. There are many exceptions and special reliefs for particular types of businesses, contact our Business Services team for advice.
Director’s loan corporation tax charges
April 3, 2016
If you borrow money from your company, even as an over-drawn director’s account, the company may have to pay a corporation tax charge equivalent to 25% of the loan. For loans taken out on and after 6 April 2016 this charge will increase to 32.5%.
The corporation tax charge can be avoided if the loan is repaid within 9 months after the end of the accounting year in which it was advanced. It is essential to know exactly what you owe the company and what it owes to you, to avoid this tax charge becoming due, and to reclaim the tax charge after the loan is repaid.
We can help you plan your business finances an corporation tax calculations more effectively, please call the business services team today on 01223 810 100 for advice.