WE THOUGHT IT WAS A GOOD OPPORTUNITY TO BRING TO YOUR ATTENTION TO SOME MATTERS WE HAVE BEEN RECENTLY RAISING WITH OUR CLIENTS:
High Income Child Benefit Tax Charge
You may have to pay a tax charge, known as the ‘High Income Child Benefit Charge’, if you have an individual income over £50,000 and either:
- you or your partner get Child Benefit
- someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep
You can find a Child Benefit tax calculator to work out if you’re affected by the tax charge on the gov.uk website. It does not matter if the child living with you is not your own child. Feel free to get in touch if you think this impacts you, you can either stop claiming the child benefit if it is not beneficial to do so or pay the tax charge.
Earlier capital gains tax filing and payment dates for UK residential property disposals
The Government has passed legislation which will have a major impact on the filing and pay-ment obligations of UK resident taxpayers who sell UK residential property from 6 April 2020. This measure applies to individuals and trusts. The legislation applies to capital gains tax (CGT) only and does not apply to companies.
Currently, a UK resident individual or trust dis-posing of UK property that results in a taxable gain is required to report that gain on their annual UK self-assessment tax return. The deadline for
reporting the gain and paying the tax due is the 31 January following the year of the disposal (if you are not within self-assessment you are be required to register by 6 October).
From 6 April 2020, a UK resident individual or trust disposing of UK residential property will be required to file a ‘UK land return’ within 30 days of the completion date of the aforementioned disposal. Penalties will apply if the return is filed late.
The vendor will also be required to pay an estimate of the CGT 30 days from the completion date. This will be treated as a “payment on account” against their total income tax and CGT liability for that year when the annual self-assessment tax return is submitted.
Company cars – will you go electric?
When it comes to offering your staff company cars, the common drawback is that often they create more personal tax liability than they save on the company’s corporation tax bill, meaning many employees choose to opt out of having one altogether.
This is because employees taking company cars are liable to pay Benefit in Kind tax to reflect the monetary value of this perk. Whilst this varies depending on the vehicle, it can usually be more cost-effective for employees to use their own car and claim back the mileage instead.
This has meant low take-up and companies missing out on the benefits of offering company cars, namely attracting employees, deductible repair and maintenance expenses, capital allowance reliefs and reclaiming VAT if purchasing, branding and reputation reasons.
But this could all be set to change from 6 April 2020 until 5 April 2021, full battery electric vehicles will pay no Benefit in Kind rate. This compares to 37% at the opposite end of the emissions.
This 0% rate also applies to company car drivers in pure electric vehicles registered prior to April 6, 2020. Additionally, the 0% rate will also apply to company cars registered after April 6, 2020, with emissions from 1-50g/km and which have an electric mile range of 130 miles or more. Both will increase to 1% in 2021/22 and 2% in 2022/23.
If you would like to discuss any of the matters above, please get in touch to discuss further.
(Please be aware, we do not accept responsibility to any third party for any action or decision that they take based on the information included in our articles).
Allchurch & Co. Chartered Accountants
www.allchurchco.com / 07825 232218