Wind of tax changes
It is the politicians' prerogative to meddle with the tax law – and the larger the majority Government has, the greater its propensity to meddle! Cut free from the restraints of the Coalition, the Conservative Government is turning out corners of the tax fabric which have escaped scrutiny for decades.
In the next few years we will need to prepare for upheaval in the taxation of:
- residential property letting
- travel and subsistence expenses
- interest received
- benefits in kind
- non-domiciled individuals
We address the first three of those topics in this newsletter, as if your business is affected you may need to restructure your financing, reconsider which contracts to accept, and review your profit extraction policies. We can help with all of these complex problems.
In the meantime, hang onto the straps, as there is a shake-up of IR35 on the way. The Government has asked for ideas for alternative approaches as it is clear that the current IR35 rules don't work. However, scrapping those controversial rules is not an option – the Government's goal is to strengthen them. We will keep you informed of changes in this area.
Finally, the moral march against tax avoiders shows no sign of slowing. Tax schemes which claimed to avoid Stamp Duty Land Tax (SDLT) on the purchase of property almost certainly didn't work, and now HMRC require the duty to be paid.
If you are caught up in such a tax tangle you should consider whether to pay up now. HMRC has new tax collection powers and is not afraid to use them. It can issue an estimated tax demand called an Accelerated Payment Notice (APN), which has to be paid without argument, before the tax disputed is determined by the Courts. This is a 'pay now, check later' approach.
We are here to help you through the tax jungle, but we need to start that journey together – talk to us about your future plans.