Category: Tax News

Having legal forms for your business in order will be more essential than ever from next month as heftier fines will be levied on firms found to be evading tax.

HM Revenue and Customs (HMRC) revealed that as of April 6th, new penalties up to 200 per cent higher than those at present will be imposed on anyone found to be dodging tax.

Offshore non-compliance for income tax and capital gains tax will be assessed in relation to the country where the money is stored.

Dave Hartnett, permanent secretary for tax at HMRC, commented: “We have made significant progress tackling international tax evasion and closing in on tax havens in recent years.

“This is the next step in increasing the deterrent against offshore non-compliance.”

Also from next month, there will be a number of changes in the way corporation tax is both filed and paid for.

• Money and Tax News from Lawpack: tax saving tips and business loan agreements

 

Published on: March 29, 2011

by Nadine de Souza

In his Autumn Statement the Chancellor, George Osborne, announced that from midnight on 3rd December the way in which Stamp Duty is charged has changed.

Previously, Stamp Duty was charged at successively higher rates on the whole purchase price and had been called a ‘slab tax’ because of this. So, if you had bought a property for £250,000, you would have paid 1% Stamp Duty, but if you paid only £1 more on the purchase price you would have paid 3% on the purchase price, which is an extra £2,500 in tax.

As of 3 December, it’s now more like Income Tax, so the tax now rises progressively, and you will only pay tax on the amount of the purchase price that falls within the tax bracket. So, if you buy a house for £200,000, you will pay no Stamp Duty on the first £125,000 and then 2% on the next £75,000. This will mean a lower tax bill for most people.

The new rates are as follows:

• Up to £125,000 – 0%
• £125,001 – £250,000 – 2%
• £250,001 – £925,000 – 5%
• £925,001 – £1.5million – 10%
• Above £1.5 million – 12%

The Government has said that anyone buying a property for less than £937,500 will now either pay less tax or the same amount of tax under the new rules.

Replacement of Stamp Duty in Scotland

In Scotland things are changing too. From April 2015 Stamp Duty is being replaced by Land and Building Transaction Tax (LBTT). There will be a tax-free allowance of £135,000. Then there are three bands:

• Between £135,001 to £250,000 – 2%
• Between £250,001 to £1million – 10%
• Above £1million – 12%

With a house sold for £300,000, the first £135,000 would be tax free, then the next £114,999 would be subject to 2% tax and the rest would be subject to 10% tax. If you’re buying a property under £325,000, you would be better off, but if you were buying a property higher than this price then you would be worse off under the new system.

Other information

• Autumn Statement 2014: the key points that affect you

 

External links

• Gov.uk: Stamp duty land tax rates
• HMRC: Stamp duty land tax calculator for new rules
• The Scottish Government: Land and Buildings Transaction Tax

 

Published on: December 5, 2014

by Sarah Ashcroft

More than four in ten landlords have chosen to rent out properties in a bid to raise as much money as possible for their retirement.

A new survey conducted by the Property Investors Network (PIN) found that 42.4 per cent of landlords said that they bought rental accommodation to cover their pension pot, while 49 per cent admitted that it will provide a major part of their income in the future, reports the Dover Express.

With many people known to be getting a bad deal from more traditional investments and annuities, renting out a home can be a more appealing option.

Simon Zutshi, founder of PIN, said that there has been a loss of faith in certain financial institutions, leading many to believe that investment in bricks and mortar is the best way forward.

“The tales we’ve heard in recent years of highly paid bankers being utterly reckless with the futures of many, plus other tales of woe by those looking after our money, shows that the public should be entrusted with more control over their futures and self-invested personal pensions should allow residential property as part of a solid portfolio,” he explained.

Mr Zutshi went on to note that state pensions are “on the decline” and private pensions are generally not being invested in as much as they should be. This is causing a gap in the amount of money available to people in later life.

By investing in property and renting it out to tenants, people can be assured of a regular income. As long as it exceeds any mortgage payment they need to make, they will have some cash to put away each month towards retirement.

The performance of property has been impressive and gives individuals confidence they are safeguarding their future by acquiring it at the current time, Mr Zutshi noted.

Published on: March 7, 2014

by Sarah Ashcroft

Landlords operating within the private rental sector may want to warn their tenants about the dangers of failing to pay the correct tax on their rental agreements.

A new taskforce created by HM Revenue and Customs (HMRC) and launched in the south-east of England today (November 19th) is set to drive home the importance of keeping up-to-date with payments.

The body claims that it expects to recover almost £4 million as part of the investigation, which aims to ensure that individuals are unable to slip under the net by failing to part with the correct sum of money.

It comes as part of a governmental £917 million spending review investment to tackle tax avoidance, fraud and evasion in a bid to raise an additional £7 billion every year by 2014-15.

The move also includes task forces to investigate the alcohol industry in Scotland, as well as the rag trade – including wholesale, retail, textile recycling and manufacturing – in the north-west, North Wales and the Midlands.

Commenting on the launch of the scheme, exchequer secretary David Gauke said while the majority of people play by the rules, the HMRC will not tolerate the minority who fail to do so.

In addition, the official revealed that the body is currently on target to collect more than £50 million as a result of task forces launched in the UK in the last 12 months.

Landlords or residents who know of anyone who is deliberately avoiding paying tax have been urged to contact HMRC through its hotline, or via email or post.

Jennie Granger, director of general enforcement and compliance at HMRC, said: “HMRC is serious about tackling people who are not paying what they should. Anyone deliberately evading tax should watch out – HMRC is closing in on tax cheats.”

• Landlord and Tenancy News from Lawpack: Get expert advice on how to avoid landlord taxes

 

Related articles

• Are you liable to pay property income tax?
• 5 ways to slash your property income tax bill

 

Published on: November 19, 2012