Tax E-News

Diary of main tax events

January/February 2020

Conservative party elected with working majority

Now that Boris Johnson and his Conservative party have won the General Election will we finally “Get Brexit Done”? More importantly, can the Government now get on with running the country and sorting out urgent issues such as the NHS?

Finance bill should now proceed

Now that the General Election is out of the way, the tax changes in the draft Finance Bill scheduled to take effect from April 2020 are now more likely to go ahead.

Advisory fuel rate for company cars

These are the suggested reimbursement rates for employees' private mileage using their company car from 1 December 2019.

Don’t forget there may be tax to pay on your dividends in January

The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers that means more tax to pay on dividends on 31 January each year.

Pension planning

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer.

Gifts out of surplus income

Inheritance tax only applies to gifts of capital. There is currently a very generous exemption from inheritance tax for regular gifts out of income.

Passing on the family home

The Labour party were proposing to reverse the recent Tory party inheritance tax cuts if elected. They were referring to the additional nil rate band for passing on the family home. This additional relief should be taken into consideration when drafting your Will and we can work with your solicitor to make sure your Will is tax efficient.

New Year’s resolutions to save tax

At this time of year we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April.

Be patient and plan ahead!

Patience is out of fashion in the modern world. It tends to suggest passivity, tolerance and even resignation. We believe now more than ever; patience is vital for effective business performance!

Apply for more time for MTD digital links

For VAT periods starting on or after 1 April 2020 (or 1 October 2020 for deferred businesses) your accounting systems must use digital links for any transfer or exchange of data between software programs, products or applications used as functional compatible software. That is the end of the current 12 month “soft landing” extension.

Gifts to charity

Where possible, higher rate taxpayers should “Gift Aid” any payments to charity to provide additional benefit to the charity and for the individual to obtain additional tax relief on the payment.