Tax Returns 2015/16
The deadline for submitting your Tax Return has now passed. You are liable for a £100 penalty if your tax return has not been submitted. However, it is important to submit your return before the end of April to avoid daily penalties. Contact us immediately for expert help and advice.
Flat Rate Scheme VAT changes from 1 April 2017
From 1 April 2017 there will be a new category of trader introduced. This is a ‘limited cost trader’, which will have a flat rate scheme percentage of 16.5%. For further details we have produced a separate fact sheet. Click here to read.
Additionally HMRC have confirmed that an on-line tool will be available to help scheme users decide if they need to use the new rate from 1 April 2017. Click here to view further updates.
Changes to Property Rental Mortgage Interest Deductions
The way that mortgage interest can be deducted is changing and will be introduced gradually from 6 April 2017 until 2020, when landlords will only be able to offset mortgage interest at basic rate tax, currently 20%. Up to 6 April 2017, landlords pay tax on the rental profit, where mortgage interest and associated fees and charges have been included with other letting expenses. Tax is then charged on the profit in line with normal tax rate bandings (20% basic rate, 40% higher rate and 45% for additional rate tax payers). The new rules mean that landlords will not be able to deduct all of the financial costs from the property income to ascertain the rental profit.
Landlords will be able to obtain relief, for further information click here.
In 2017 to 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
In 2018 to 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
In 2019 to 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
From 2020 to 2021 all financing costs incurred by a landlord will be given as a basic rate tax reduction.
National Living Wage
The new rates from 1 April 2017 will be:
25 years old and over £7.50 per hour
21 – 24 year olds £7.05 per hour
18 – 20 year olds £5.60 per hour
16 – 17 year olds £4.05 per hour
Apprentices* £3.50 per hour.
*Apprentice rates are for those under 19, or if over 19 are in the first year of apprenticeship.
As from April 2019, when you come to sell a second property any Capital Gains tax has to be paid within 30 days of completion, rather than including it in your tax return and paying by 31 January, following the end of the tax year concerned. Solicitors will now be dealing with this as part of the sale procedures.
If you are married and own two properties, one property will be considered as your main residence, while the other will be a ‘second property’. However , if partners own two properties they will be considered as a main residence for each and there is no ‘second property’ involved.
1st – Corporation tax due for companies with year end accounting date of 31 May 2016
2nd – Deadline for payment of any outstanding income and capital gains tax in respect of personal tax returns for 2015/16 to avoid 5% surcharge (ie 30 days after 31 January)
7th – Due date for VAT Return and payments for January period ends (electronic payments)
19th – Pay any PAYE/NI due for the month ended February
21st – EC Sales list deadline for on-line monthly return filing
31st – Filing date for submission of corporation tax returns for year ends of 31 March 2016
31st – Companies House filing date for year ends of 30 June 2016.