Possible tax pitfalls of owning property outside of a company

Investment in property requires careful consideration, in order to avoid unexpected and unwanted costs later down the line. Trevor discusses the advantages and disadvantages of owning properties personally and through a company, including ownership options, tax considerations, loan relief, VAT and more.

Read Trevor’s article in full in Property Wire.

For further enquiries, contact Trevor directly or email a member of our Property team.

Corporate VAT and Tax Exchange

We're sorry, but all tickets sales have ended because the event is expired.

  •  April 5, 2023
     2:00 pm - 3:00 pm

The Spring Budget will set the agenda for helping to resurrect the UK economy. Corporate organisations are being significantly impacted in terms of how they deliver their services and support their employees, often on reduced income streams. Our tax experts at haysmacintyre will provide you with their thoughts following the Spring Budget, together with other (more…)

Get ready for the Capital Gains Tax exemption cut

A cut to the CGT exemption, from April 2023, is expected to make CGT payments even busier than usual in the first few months of the year. Currently, investors can make profits of £12,300 a year before being subject to CGT. However, that annual exemption will reduce to £6,000 on 6 April 2023. From April 2024 onwards, there will be a further reduction to the exemption to £3,000.

Katharine says: “The 18% spike in CGT over the past year is a clear sign of the times. With scores of investors having exited the buy-to-let sector over the past year, and inflation causing house prices and asset values to soar, HMRC is reaping the rewards from people’s capital gains, collecting £18 billion in the past year alone – a rise of 102% in the last five years.

Year CGT
Feb 2022-Jan 2023 £18 billion
Feb 2021-Jan 2022 £15.2 billion
Feb 2020-Jan 2021 £10.8 billion
Feb 2019-Jan 2020 £9.6 billion
Feb 2018-Jan 2019 £8.9 billion

If you are considering selling a valuable asset, you may want to consider doing so by 5 April. Katharine comments that “tax should not dictate any big financial decisions, but if you are going to sell in a few months’ time anyway, then doing it now instead will mean you keep more of your gains.”

You can read Katharine’s comments in full in The Sunday Times (subscription needed) and Accountancy Age.

If you would like to find out more about how we can help you to plan for CGT, please contact Katharine Arthur or a member of the Private Client & Trusts team.

Careless penalties and deliberate tax errors: Accountancy Daily

In January 2023, Mr Zahawi reached a settlement with HMRC in respect of undeclared Capital Gains Tax relating to disposals of shares in YouGov, the polling company which he co-founded in May 2000. The settlement amount is unknown but is believed to be in the region of £5m including a 30% penalty. It also led to him losing his job as the Conservative Party Chair.

Danielle and Riocard provided an analysis on Mr Zahawi’s case. Their analysis highlights that expert advice should be sought with careless penalties, as these can often be mitigated and even suspended.

In their Accountancy Daily article, Danielle and Riocard deep dive into HMRC’s position on careless penalties, why careless penalties are unique in having suspension conditions, and whether Mr Zahawi could still have his job as Conservative Party Chair if his penalty was mitigated.

Read Danielle and Riocard’s insights in more detail in the full Accountancy Daily article here (subscription needed).

If you have any kind of dispute with HMRC then please contact Danielle or Riocard. Our team have a proven track record in representing our clients in tax disputes with HMRC to reach the best possible outcome for them.

Year End Tax Planning Guide 2023

This year, such a review may be even more beneficial than usual. Major changes to tax bands and allowances have been announced over the course of 2022. This means some last-chance opportunities to make use of allowances at current rates and to access current tax bands. Similarly, there may be areas where you have discretion over the timing of income and it is worth establishing whether income is better taken this year or next. Here again, a review before 5 April 2023 could have a significant effect on your tax position. For Scottish taxpayers, for whom higher and top tax rates are set to increase as well, there is even more to think about.

As your accountants, we have the all-round vision of your circumstances that can really help make an impact. To make the tax rules work to your advantage, it’s best to start the discussion as soon as possible before 5 April 2023. We look forward to being of assistance.

Download our Year End Tax Planning Guide below.

Nudge letter theory: STEP Journal

Whilst HMRC has access to more information than ever before, it lacks the resources to open full investigations into each taxpayer it identifies as a risk. Therefore, nudge letters are a cost-effective way for HMRC to communicate with a large number of taxpayers when it believes that a taxpayer’s affairs are not in order, and has identified a potential loss of tax. Our STEP Journal article explains why taxpayers with connections to Euro Pacific Bank must act quickly and seek professional advice as soon as possible.

There are some key things to note with nudge letters:

  • An advisor may not always receive nudge letters on behalf of their client.
  • A nudge letter is not a statutory enquiry into a taxpayer’s affairs.
  • Making a disclosure before receiving a nudge letter from HMRC leads to the most favourable outcome.

Read Danielle and Riocard’s insights in more detail in the full STEP Journal article here (subscription needed).

HMRC’s use of nudge letters is ever expanding and they have used nudge letters to cover a wide range of topics. We recommend that taxpayers immediately seek professional advice following receipt of an HMRC nudge letter, statutory enquiry or where a taxpayer has found a mistake in their filings to HMRC.  If you have any kind of dispute with HMRC then please contact Danielle Ford or Riocard Hoye.

Corporate and Private Client eNews

The latest edition of our Corporate and Private Client eNews is now available and covers the following topics:

  • City of London Chamber launched
  • IR35 cases: a tale of two (fly) halves
  • Michael Lynagh v HMRC: caught offside
  • S & L Barnes Limited v HMRC: stayed onside
  • The best or worst of times?
  • False accounting to be a criminal offence
  • London still the top spot
  • R&D reliefs under attack
  • Are Organix and Nakd bars confectionery for VAT purposes?
  • And finally… tax return record

Click the button below to download this week’s edition, or read our previous editions here.

HMRC compliance activity greatly increasing

We have seen a huge increase in enquiries issued by HMRC since the turn of the New Year.

Enquiries by HMRC can be stressful, intrusive and long running. In addition, enquiry settlements can be costly and present financial challenges.

We strongly recommend seeking professional advice upon receipt of an enquiry notice. The right professional advisor can guide you through the process and ensure HMRC are acting within their legal boundaries. In addition, an experienced professional advisor will mitigate and suspend penalties where possible.

If you, your company, trust or charity receives an enquiry notice, then please contact Danielle Ford, head of Tax Disputes or Riocard Hoye, Senior Manager for a confidential initial discussion. Our team has a proven track record in successfully representing our clients in disputes with HMRC, resulting in the best possible outcome for them.

For more on HMRC’s recent enquiries and our analysis, read on below:

Employment Taxes newsletter – January 2023

Welcome to haysmacintyre’s first Employment Taxes newsletter, designed to bring clients up to date employment tax news. The newsletter will be published on a quarterly edition but may be more frequent should we consider there are important updates to share.

To start, there’s only two months until the end of the 2022-23 tax year. Within the newsletter, we have listed some tasks you should undertake to remain compliant. See below for the topics covered in this quarter’s edition:

  • Christmas costs: event exemptions and trivial benefits
  • Reduction in Class 1 NI rate
  • Payrolling benefits
  • Changes to company car tax from April 2025
  • Termination payments
  • Intermediaries legislation (also known as IR35)
  • Employment status

To download the full publication, click the link below.

Corporate VAT and Tax update – Q4 2022

“Happy New Year and best wishes for 2023. The second half of 2022 has been very quiet from the point of view of the usual raft of case law developments. However, it has been characterised by some very disappointing behaviour by HMRC.”

Stephen Patey – January 2023

The topics covered within the update are:

  • VAT registration chaos at HMRC
  • Making Tax Digital (MTD) for all
  • Options to Tax on non-residential property
  • New interest and penalty rules
  • Take care with capital expenditure timing
  • Where are we on the IR35 rules?

To download the full publication, click the link below.

Get in touch