November

2 November 2017

Welcome to the Exceed monthly newsletter.

  • Landlords’ finance charges restrictions
  • Self-assessment e-filing deadline
  • Buying an electric or low emission car
  • Non-residents selling UK home
  • Do you pay tax on assets or cash you inherit?
  • Is it a car or a van?
  • Tax implications on divorce or separation
  • Overdrawn director’s loan account
  • Christmas party and other social events
  • Land Registry property alert service
  • Gazumping may become a thing of the past
  • Tax Diary November/December 2017
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    Landlords’ finance charges restrictions Income Tax

    The government’s move to restrict the tax relief landlords receive on finance charges started to take effect from April this year. This is the first year that finance charges are being restricted. The tax relief on mortgage costs used to buy investment properties is gradually being restricted to the basic rate of tax. Landlords of residential properties had benefited from potential higher rate tax relief on finance charges, such as mortgage interest, for a number of years, but for many landlords these days are coming to an end.

    This phased reduction in relief will have the most impact for...

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    Self-assessment e-filing deadline Income Tax

    As existing self-assessment tax filers will be aware, the deadline for online submission of your 2016-17 self-assessment tax return is 31 January 2018. This is also the date that the payment is due for the balance of any self-assessment liability for 2016-17, and the due date for any payment on account due for the current 2017-18 tax year.

    There are penalties for late self-assessment returns including an automatic £100 penalty for submitting a late return even if there was no tax to pay or the tax due was paid on time.

    The following additional penalties apply to self-assessment returns that are...

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    Buying an electric or low emission car Capital allowances

    Businesses can claim a 100% first-year allowance (FYA) on the purchase of certain qualifying Plant and Machinery (P&M). In certain circumstances they can also claim FYA’s on the purchase of low CO2 and electric vehicles. The generous Annual Investment Allowance (AIA) does not apply to cars.

    There are FYAs available for purchasing a new electric car, or a new, unused car within the threshold for low CO2 emissions (currently 75 gms/km or less). From April 2018, the emission threshold below which cars are eligible for the FYA will be reduced from 75 gms/km to 50 gms/km.

    These FYAs are...

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    Non-residents selling UK home Capital Gains Tax

    A capital gains tax (CGT) charge on the sale of UK residential property by non-UK residents was introduced in April 2015.

    A UK non-resident that sells UK residential property needs to deliver a non-resident capital gains tax (NRCGT) return within 30 days of selling a relevant property. When such a sale is made a NRCGT return must be submitted to HMRC within 30 days of the conveyance of the property. The return must be made whether or not there is any NRCGT to be paid, if there is a loss on the disposal, and where the taxpayer is due to report the disposal on their own personal or corporation...

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    Do you pay tax on assets or cash you inherit? Inheritance Tax

    As a general rule, inheritance tax (IHT) is collected from a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. There is normally no tax to be paid if the value of the estate is below the IHT nil rate threshold of £325,000. There is also a new IHT main residence nil-rate band (RNRB) that was introduced in April 2017. The RNRB will ultimately allow for a £175,000 per person transferable allowance for married couples and civil partners when their qualifying main residence is passed down to children after their death. The RNRB is in...

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    Is it a car or a van? Employee Benefits

    The First-Tier Tribunal recently heard three appeals that examined whether vehicles supplied to employees were vans or cars. The main appellant in this case was Coca-Cola European Partners GB Ltd (Coca-Cola) who supplied vehicles to a number of their employees.

    Until 1997, Coca-Cola’s technicians had used estate cars but the amount of equipment that the employees needed would no longer fit in an estate car and Coca-Cola moved to supplying a choice of three different types of vans to its employees.

    The taxpayer contended that the vans were within the definition of 'goods vehicles' but HMRC...

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    Tax implications on divorce or separation HMRC notices

    When a couple is separating or divorced it is unlikely that they are thinking about the tax implications. However, as the dust begins to settle it is important that the tax consequences of the break-up are given proper consideration.

    Whilst income tax does not automatically cause an issue for separating couples, as it is an individually assessed tax, there are other taxes that should be examined. For example, when a couple are together there is no capital gains tax (CGT) payable on assets gifted or sold to your spouse or civil partner. However, if a couple separate and didn’t live together for...

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    Overdrawn director’s loan account HMRC notices

    An overdrawn director's loan account is created when a director (or other close family members) ‘borrows’ money from their company. Many companies, particularly 'close' private companies, pay for personal expenses of directors using company funds. Where these payments do not form part of a director’s remuneration they are usually posted to the director’s loan account (DLA).

    The DLA can represent cash drawn by a director and payment of other personal bills and expenses.

    Whilst it is quite common for small company accounts to show an overdrawn position on a DLA, this can create some unwelcome...

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    Christmas party and other social events General

    In a recent newsletter we looked at the tax implications of giving Christmas gifts to your staff and the complications that can arise. In this newsletter, we will take a look at the tax breaks available for staff Christmas parties or similar annual events.

    In general, the cost of a staff party or other annual entertainment is allowed as a deduction for tax purposes. However, there are some important criteria that must be followed to ensure that there will be no taxable benefit charged to employees.

    • An annual Christmas party or other annual event offered to staff generally is not taxable on...
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    Land Registry property alert service General

    HM Land Registry's property alert service is a free (for up to 10 registered properties) service to help protect property from fraud. The counter-fraud security measure was introduced by the Land Registry to monitor registered properties, where there is a concern that it might be subject to a fraudulent sale or mortgage.

    The property alert service can be used to monitor any property in England or Wales that is registered with the Land Registry. Once registered, owners or other interested parties will receive email alerts when certain activity occurs on their monitored properties, allowing them...

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    Gazumping may become a thing of the past General

    The Communities Secretary Sajid Javid has announced plans to make the process for buying a home 'cheaper, faster and less stressful'. This includes looking at new measures to tackle gazumping where a seller accepts a higher offer from a new buyer after already accepting an offer for less money.

    The government will also examine ways of increasing confidence in the housing chain and look to significantly reduce the number of sales that fall through. There will also be moves to modernise the home buying process by making greater use of digital technologies as well as ensuring that homes are 'sale...

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    Tax Diary November/December 2017 Tax Diary

    1 November 2017 - Due date for corporation tax due for the year ended 31 January 2017.

    19 November 2017 - PAYE and NIC deductions due for month ended 5 November 2017. (If you pay your tax electronically the due date is 22 November 2017.)

    19 November 2017 - Filing deadline for the CIS300 monthly return for the month ended 5 November 2017.

    19 November 2017 - CIS tax deducted for the month ended 5 November 2017 is payable by today.

    1 December 2017 - Due date for corporation tax due for the year ended 29 February 2017.

    19 December 2017 - PAYE and NIC deductions due for month ended 5 December 2017. (If...

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    Best wishes,

    The Exceed Team
    Exceed CA Limited     Bank House, 81 St Judes Road, Englefield Green, Surrey, TW20 0DF, United Kingdom
    Tel (UK): +44 (0) 1784 439 955  |  Tel (World): 0370 060 0996  |   |  www.exceedca.com

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