Since November 2017, more than 120,000 first-time buyers have saved £284,000 following the introduction of first-time buyers’ relief from Stamp Duty Land Tax (SDLT). SDLT is a tax on properties in England and Northern Ireland. It is estimated that, over the next five years, this relief will help over a million people get onto the property ladder.
The relief ensures that first-time buyers purchasing homes valued up to £300,000 do not incur a SDLT charge at all – with those paying up to £500,000 also benefitting from a reduction.
Mel Stride, MP, The Financial Secretary to the Treasury said, “once again, we can see that our cut to stamp duty for first-time buyers is helping to make the dream of home ownership a reality for a new generation – exactly as we intended…”.
He added, “In addition, we’re building more homes in the right areas, and have introduced generous schemes such as the Lifetime ISA and Help to Buy.”
Scotland and Wales
Those buying property in Scotland pay Land and Buildings Transaction Tax (LBTT), whilst those in Wales (since 1 April 2018) pay Land Transaction Tax (LTT). Earlier this year, Scotland introduced its own version of a new LBTT relief for first-time buyers of properties up to £175,000.
The Scottish relief raised the zero-tax threshold for first-time buyers from £145,000 to £175,000. It is estimated that around 80 per cent of first-time buyers in Scotland will pay not LBTT at all.
Furthermore, Scottish first-time buyers acquiring properties above £175,000 will also benefit from relief on the portion of the price below the threshold – meaning all first-time buyers will benefit from the relief by up to £600.
In Wales, where SDLT has been replaced by a LTT from 1 April 2018, the starting rate will be £180,000, benefiting not just first-time buyers but all home buyers in Wales.
HMRC warns: Declare offshore assets
As of 1 October, the new Requirement to Correct (RTC) rules are upon us. Previously, under HMRC Offshore Disclosure Facilities, taxpayers had been encouraged to come clean with an offer of lower penalties than would have been incurred if “the error” had been discovered by HMRC.
All that has now changed. Failure to Correct rules, introduced alongside RTC, leave non-compliant taxpayers facing penalties of up to 200% of the resultant tax liability – or even more. Where the tax involved exceeds £25,000 per tax year, an additional penalty of up to 10% of the value of the asset concerned may be charged.
RTC only applies if HMRC is able to raise an assessment to recover the tax unpaid on 6 April 2017. Normal assessing rules apply to decide whether HMRC is able to raise such an assessment.
The most common reasons for failing to declare offshore tax are in relation to foreign property and holiday homes, investment income, and moving money into the UK from abroad.
HMRC have said the following:
“Offshore non-compliance occurs when there is tax owed to HMRC as a result of tax non-compliance and that non-compliance involves either an offshore matter or an offshore transfer.
The tax non-compliance involves an offshore matter if the unpaid tax is charged on or by reference to:
• income arising from a source in a territory outside the UK
• assets situated in a territory outside the UK
• activities carried on wholly or mainly in a territory outside the UK, or
• anything having effect as if it were income, assets or activities of a kind described above.
The tax non-compliance involves an offshore transfer if it is not an offshore matter, but the income (or sale proceeds in the case of a capital gain), or any part of the income, was either received abroad or was transferred abroad before 6 April 2017.
For inheritance tax, the tax non-compliance involves an offshore transfer if it is not an offshore matter, but the disposition that gives rise to the transfer of value involves a transfer of assets, and after that disposition, but on or before 5 April 2017, the assets, or any part of the assets, are transferred to a territory outside the UK.
In all cases, references to the income, proceeds or assets transferred includes any assets derived from or representing the income, proceeds or assets.
If the non-compliance meets these definitions, the RTC rule applies and failure to correct the position will result in the new tougher FTC penalties.”
Mel Stride, The Financial Secretary said, “Since 2010 we have secured over £2.8 billion for our vital public services by tackling offshore tax evaders, and we will continue to relentlessly crack down on those not playing by the rules.”
RTC is supported by the Common Reporting Standard (CRS), an international legal framework permitting the automatic exchange of information, between different country’s tax authorities, regarding financial accounts and investments held by non-residents, in order to help stop tax evasion. CRS came into force in the UK in 2016. In excess of one hundred countries are already signed up to CRS and are starting to share information. It has already significantly increased HMRC’s ability to detect UK taxpayers’ overseas non-compliance.
If you would like to discuss this, or any other matter further, then please contact us.
New Fuel Rates published for Company Cars
New company car advisory fuel rates were published, on September 1st, with the guidance indicating that the previous rates may be used for up to one month from the date the new rates applied. This only effects employees using a company car. The listed rates are shown below.
Petrol Engine size
12p 1400cc or less
15p 1401cc – 2000cc
22p Over 2000cc
LPG Engine size
7p 1400cc or less
9p 1401cc – 2000cc
13p Over 2000cc
Diesel Engine size
10p 1600cc or less
12p 1601cc – 2000cc
13p Over 2000cc
Latest guidance from HMRC in Employer Bulletin
HMRC Employer bulletins are magazines published every two months, giving up-to-date information on payroll topics for employers and agents.
The latest edition has useful information on reporting payroll information, information on the National Living Wage and the National Minimum Wage, and also information on fully electric company cars. There are also articles on Construction Industry Scheme (CIS) webinars and Welsh Rates of Income Tax. The Employer Bulletin is used to inform you about new products and any changes which may affect your employees. This information provides information on the following:
- Reporting your payroll information accurately and on time.
- Irregular payments and your completion of Full Payment Submissions.
- Starter Declaration on a Full Payment Submission (FPS).
- PAYE Settlement Agreements and Scottish Income Tax.
- National Living Wage and National Minimum Wage.
- Advisory Electricity Rate for fully electric company cars.
- Welsh Rates of Income Tax.
- Construction Industry Scheme (CIS) webinars.
- Postgraduate Loans.
- Benefits and Expenses: Company cars.
- Tax avoidance loan schemes.
- Completing an EYU in respect of employee’s National Insurance Contributions
- Employment Income: Draft Legislation
- Deadline for post-16 Child Benefit.
Hold tight for Brexit! Business guidance in the event of no deal
With less than six months to go until the UK leaves the EU – and with no post-Brexit deal yet on the table – there’s no doubt that we are entering unchartered waters. So, what should we do?
Chequers statement
The UK’s Government insists that preparations for a no-deal scenario are part of its overall Brexit preparation strategy. Indeed, the Prime Minister’s Chequers statement, issued after her cabinet’s infamous July away day, included a pledge to step up preparedness for all possible outcomes to the negotiations, including a no deal scenario.
August technical notices
On the 23 August, a little over a month after May’s statement, the Department for Exiting the EU published 25 ‘technical notices’.
The documents covered such diverse areas, as:
• Applying for EU-funded programmes
• Driving and transport
• Farming
• Money and Tax
• Importing and exporting
• Regulating medicines
The notes were supported by guidance entitled “UK government’s preparations for a ‘no deal’ scenario”. Its aim was to put the technical notices in context by explaining the Brexit negotiation’s progress to date and what might happen if the UK were to crash out of the EU.
September White paper
In early September, the House of Commons joined the party by publishing a briefing document (white paper) called “What happens if there’s no Brexit deal?”
At 172 pages, it’s not exactly a bedtime read. Nevertheless, its fifteen chapters cover all areas from “how could no deal happen?” through to “external relations”, and it is an excellent source of no-deal Brexit information.
HMRC publish a letter
In an unprecedented move, HMRC wrote to 145,000 businesses across the UK about the ramifications of a no-deal Brexit, should Britain crash out of the EU and the Customs union on the 29 March 2019.
The letter, written by HMRC’s Deputy Chief Executive Jim Harra and published on the 17 September, started positively by acknowledging:
“The UK government has reached agreement with the EU on the vast majority of withdrawal issues, including the terms of an implementation period. Full agreement on this will mean that trading with the EU during the implementation period would broadly stay the same until 31 December 2020.”
It then sought to give a degree of reassurance by stating “The approach of continuity does not mean that everything will stay the same, but the priority is maximising stability at the point of departure.”
After referring to the government’s focus “on securing a future partnership with the EU following the end of the implementation period in December 2020”, the letter’s tone changed. Harra referred to a no-deal eventuality being unlikely and continued to reassure readers: in the event of no-deal, the government is committed to prioritising stability for businesses.
He added that:
“we will continue to work closely with industry to ensure that interventions in a no deal scenario are conducted in a way which minimises delays and additional burdens for legitimate trade, while robustly ensuring compliance.”
If a disorderly exit happens there would, of course, be immediate changes to the way British businesses trade with the EU. Jim’s letter set the position out very clearly:
“If we leave the EU without a deal in March 2019, there would be immediate changes to the way UK businesses trade with the EU that impact on your business.
This includes:
• UK businesses having to apply customs, excise and VAT procedures to goods traded with the EU, in the same way that already applies for goods traded outside of the EU.
• Trading partners in the EU having to apply customs, excise and VAT procedures to goods they receive from you, in the same way that they do for goods received from outside of the EU.
In particular, if your business currently trades only with the EU then you’d have to start completing customs declarations from March 2019 and customs checks would apply to your business for the first time.”
The letter concludes by saying, “there is no need to contact HMRC at this stage”. However, it suggests, “If you’re a member of a trade body, they might have useful information on their website. VAT advisers, customs agents, freight forwarders and other businesses also have services to help you to follow customs rules”.
There are many sources of information on Brexit, from listening to the TV and radio through reading newspapers to searching the web. However, some are more reliable than others. To get a balanced and informed view of what is going on, it is wise to access information from more than one source.
Government sources of information
• GOV.UK “Brexit” pages – you can sign up to receive regular updates.
• Government has published technical notices across a range of topics on GOV.UK to explain what will apply if the UK leaves the EU without a deal, including:
o The House of Commons published a white paper in early September
o HMRC’s Jim Harra’s “advice and guidance” letter
To discuss how this may impact your business, please contact us.
Blog: 5 Steps to Resilience
Running and managing your own business can be one of the hardest challenges of your life. The ups, the downs, the cash flow challenges, finding the right people – the list is endless. Likewise, though, are the ups in terms of success: winning the next deal, finding the best employees to help you.
However, one common trait business leaders possess is their ability to battle through the hard times, by way of resilience – a heroic struggle that is not for all. Resilience is not something we are born with, but instead is something we develop during our lifetimes. Below are the five essential tips on how to become more resilient.
- Keep a positive attitude.
This is key to deflecting stress scenarios, to restructuring your pessimistic or negative thoughts. You need to ask yourself whether there is any rational basis to feel negatively about a situation.
It is also important to recognize that you are in control as to whether the glass is half-empty or half-full. Reframing your thoughts can also help you to be positive, so that you can alter the perceived value of the challenging event by accepting it and recovering from it.
- Develop your moral compass.
Altruism is strongly related to resilience – and strengthening your set of core beliefs can help. The authors note that there is a strong correlation between faith and religious or spiritual beliefs and resilience. - Find a resilient role model and develop your coping skills.
Consider taking a resilient role model, such as a world leader or a successful business or sports star, so that you can consider how they would respond to stress. Also consider how spiritual beliefs help towards a deeper management of challenging times.
Rather than withdrawing and surrendering to your stress situations, the most resilient individuals use active rather than passive coping skills. You could minimise the self-questioning caused by the stress situation by creating positive thinking and in turn facing the fear directly.
- Build your social network and physical fitness.
Rather than going solo, it is important to build a safety net of friends and family to help cope with stress situations. Regular exercise is one of the keys to cleansing your mind of stress – as it has been linked to improvements in mood, cognition, regulation of emotion, immunity, and overall self-esteem. Try to think of exercise as a welcome reprieve rather than a task, framing your mindset in a positive way. - Remember the 8-8-8 rule.
On a typical day, many people are over-worked, with lack of sleep and limited social or personal time. By breaking the day into thirds – eight hours for work, eight hours for personal / family time and eight hours for sleep – is recommended as a suitable routine to help you keep on top of the mental daily stresses.