Keep up to date with all the latest tax and financial news from CKLG

CKLG

Latest News From CKLG Accountants

Making tax digital for VAT registered businesses

May 3, 2018

 

Making Tax Digital (MTD) will transform the way tax is administered.

From 1 April 2019, VAT registered businesses with turnover exceeding the VAT threshold of £85,000 should record all transactions digitally using MTD compatible software.  You will no longer be able to submit your VAT Returns through the VAT portal; instead they will be submitted to HMRC through their Application Programming Interface (API) via your software, bridging software or API enabled spreadsheets. You must also be able to receive information from HMRC using the API.  

From April 2019, if you reach the VAT registration threshold, MTD will also apply from the date of your VAT registration.  If, however, your turnover falls below the VAT threshold, MTD must continue.  Once you’re in, you’re in! 

Although not legislated for, it is intended that there will be a ‘soft landing period’ whereby HMRC will not charge penalties for incorrect digital record keeping and data transfer.  It is thought that HMRC may accept some data being transferred manually for one year but the submission of the VAT return must be completed via API. 

Businesses undergoing formal insolvency procedures, those run by religious societies whose beliefs are not compatible with electronic communication as well as the ‘digitally excluded’ (i.e. by age, disability or remoteness of location) will be exempt from MTD for VAT. 

It is intended that MTD for Income Tax and Corporation Tax will apply from April 2020. 

MTD is not changing what you do; it’s how you do it.  Please call Alex or Chloe at CKLG on 01223 810100 if you need help transitioning your manual bookkeeping into digital form or assistance in determining if your software is compatible with MTD.


Are your tax affairs up to date?

April 16, 2018

Ever feel like you are being watched?

Did you know that HMRC receives vast quantities of data from letting agents, land registry records and platforms such as Amazon, Apple and Airbnb? HMRC has access to more information and technology than ever before!  They can piece together networks and spending patterns to detect and pursue underpaid tax.  

This is why HMRC run incentives and campaigns offering individuals and businesses the opportunity to come forward and pay any unpaid tax they owe, before HMRC come to them.  For example, the HMRC Let Property Campaign offers landlords the opportunity to declare rental income they missed off their Tax Returns; maybe because they did not realise they had a tax liability.  HMRC discount penalties for an unprompted disclosure; an incentive to go to HMRC before they find you. 

Moreover, with the global crackdown on tax evasion, the days of sheltering assets overseas are very much a thing of the past.  New ‘information sharing’ powers under the Common Reporting Standard mean that HMRC now receive data about overseas cash and assets held by UK individuals in over 100 jurisdictions.  

If you have overseas assets producing income or gains not previously declared to HMRC, you have until 30 September 2018 to make a full disclosure under the Worldwide Disclosure Facility and put things right going forward.  

From October 2018, new penalties come into force; including a penalty of 200% of the tax due and penalties based on the overseas asset value.  Details of deliberate defaulters may also be published. 

Now is the time to bring your tax affairs up to date.  If you do need to make a disclosure to HMRC, we can help you through this process.  Call CKLG Accountants on 01223 810100 and ask to speak to one of our private client tax specialists.  


Reducing your inheritance tax burden

March 16, 2018

We’ve heard the Chancellor taking stock of the British economy in his Spring Statement.   It was brief; 20 minutes of discussion around growth and productivity, public finances and new tax consultations on VAT, Corporation Tax and Trusts.   

In January 2018, the Chancellor wrote to the Office of Tax Simplification to review Inheritance Tax (IHT).  Simplification, smoother processes and a review of routine estate planning opportunities is on the cards!

Did you know that the

  • £3,000 annual IHT gift exemption has been the same since 1981?
    This would be around £11,000 had it increased with the cost of living.
  • IHT-free allowance on death has been £325,000 for the last 9 years?
    Had it risen by inflation, it would be over £400,000.  

It’s no wonder booming house prices and rising stock markets have increased the IHT take. 

To help ease your IHT burden 

  1. Consider IHT exempt gifts of capital and spare income during your lifetime. 
  1. Larger sums can be given away but remain ‘potentially chargeable to IHT’ until 7 years have lapsed; be mindful of other tax implications. 
  1. The ‘Residence Nil Rate Band’ may help if you leave your family home to your descendants. It’s an additional IHT free sum of £125,000 from April 2018 (capped at £175,000 from April 2020) but it’s complex and not available to everyone. 
  2. Consider funding your retirement by cashing in ISAs which are liable to IHT rather than spending pension savings which may be exempt.
  3. Bank Business and Agricultural Property Reliefs by gifting qualifying assets.

There are over 200 tax consultations in progress. Those alongside changes to your family circumstances make it important to plan ahead; call CKLG on 01223 810100 and ask to speak to one of our private client tax specialists.    


Spring Statement 2018: At a glance

March 15, 2018

Tuesday's Spring Statement saw Chancellor Phillip Hammond taking stock of the British economy. It was a brief affair; 20 minutes of discussion around growth and productivity, public finances and a handful of new tax consultations.

In time, we may see changes to VAT, Corporation Tax payable by big tech companies and the taxation of trusts being made simpler, fairer and more transparent. A consultation on the introduction of a levy on ‘single use’ plastic is expected to address the huge concern over the damage plastic does to our environment. 

On 19 January 2018, the Chancellor wrote to the Office of Tax Simplification to order a review of Inheritance Tax. Simplification and smoother processes; combined with a review of routine estate planning (including gifting) is also on the cards.

 

There are over 200 consultations already in progress; please call us on 01223 810100 to discuss how these could affect you.


CKLG Accountants sponsors Newmarket Hockey Club

February 22, 2018

We are delighted to be sponsoring Newmarket Hockey Club and their training bibs this season.
We're also very much looking forward to cheering on our very own Stef Heslop and Sarah Haird in their upcoming matches.

Visit the Newmarket Hockey Club website for match fixtures and club updates

 


VAT on rewards for crowdfunding

February 6, 2018

If you have used a crowdfunding arrangement to raise money for your business, you may need to account for VAT on the reward packages offered to your investors. The VAT treatment varies according to exactly what the investor is entitled to receive as a reward. 

HMRC treats the rewards as pre-payments, or as vouchers to exchange for your products or services. The voucher is treated as being “sold” to the investor either when the money is invested, or when the reward is given. There may be a long period between these two events, so it is essential to look at the detail of the transaction in each case. 

Our VAT experts can help you get the VAT reporting right for your business from day 1, please conatct us on 01223 810 100.

 


Gifts liable to Inheritance Tax

February 3, 2018

When you make a significant donation to an organisation, rather than an individual, you should check whether any inheritance tax (IHT) is payable on that gift. Contrary to popular belief IHT is payable on gifts made during a person’s lifetime, if the gift is not covered by a specific exemption.

There are exemptions for gifts made to; political parties, charities, housing associations, and made for national purposes or maintenance of historic buildings. The gift may fall within your annual exemption of £3,000, or be covered by your nil rate band of £325,000. In other circumstances IHT at 20% may be due.

Please contact us to discuss any inheritance tax planning concerns you have.


Are you making the most of your tax allowances

January 23, 2018

With the end of the 2017/18 tax year fast approaching CKLG Accountants Cambridge are pleased to be able to share with you our Year End Tax Guide. The Guide highlights the potential tax planning measures that you may wish to consider or take for yourself or your business before 5 April 2018.

  • Personal Allowances and Relief's
  • ISA's
  • Pension Contributions
  • Inheritance Tax
  • Capital Gains
  • Corportation Tax
  • Entrepreneurs’ relief

Download our Year End Tax Guide 2017/18


Are you able to claim the Marriage Allowance?

January 17, 2018

Where an individual does not have sufficient income to utilise their Personal Allowance (PA) in full, the Marriage Allowance enables them to transfer 10% of their PA to their spouse or civil partner. It is only available if both individuals were born after 5 April 1935 and neither spouse is a higher rate taxpayer.

The Personal Allowance for the current 2017/18 tax year is £11,500. Therefore, the Marriage Allowance is worth £230 for this year (£1,150 x 20%). However, it has to be specially claimed and many people have been put off by the online application process. In fact, you can claim the allowance by calling HMRC on 0300 200 3300, or can make the claim in writing.

Once the claim has been accepted, it remains in place for future tax years while the marriage continues, unless the claim is revoked. The claim for Marriage Allowance can also be backdated to cover all years from 2015/16 if the couple were married in those earlier years.

 


UK Tax Rates for 2018/ 2019

January 15, 2018

Make sure you are fully aware of any changes to UK tax rates, reliefs and allowances affecting you and your business for 2018/ 2019.

Download our Tax Card for 2018/ 2019


Tax changes to your dividend allowance

January 9, 2018

For the current 2017/18 tax year, the first £5,000 of dividends you receive are taxed at 0%, as that amount is covered by your Dividend Allowance. This allowance will be reduced from £5,000 to £2,000 with effect from 6 April 2018.  This may affect the amount of tax you pay on the dividends you receive in the 2018/19 tax year. 

Where your company’s shares are held by a number of your family members, to take advantage of the Dividend Allowance, you may need to review this share structure and amend it if necessary before 6 April 2018. Changing share ownership can give rise to tax charges, so please ask us for advice before cancelling or issuing new shares.