Spring Budget 2024 – Addressing the tax gap

These changes include:

  • Investing a further £140 million to improve HMRC’s ability to manage tax debts. This is on top of the £163m already announced in the Autumn Statement 2023 and is clearly seen as a key area of investment for HMRC. This investment is expected to bring in over £3bn of additional funds from those who owe debts to HMRC.
  • Legislation in the Spring Finance Bill 2024 closing what HMRC perceives to be a loophole in the Transfer of Assets Abroad (ToAA) legislation, whereby individuals have been using a company to bypass the current provisions. It has been announced that these measures will take effect from 6 April 2024, leave a one-month window of grace, however there may be anti-forestalling provisions contained within the legislation to catch transactions and income in the interim, as there has been with other recent anti-avoidance legislation.
  • Updates to HMRC’s digital services for self-assessment, which will be implemented from September 2025. This will automate the process for those requiring a Time To Pay arrangement, and also add a Budget Payment Plan option for individuals to make instalment payments in advance towards their tax liability, which may operate in a similar to PAYE deductions, on a real-time basis.
  • HMRC’s focus on raising standards in the tax advice market. This has no doubt been brought on by bad actors and promoters of tax avoidance arrangements. A consultation will be published on the regulatory framework for tax advisors and potential ways to strengthen this, including the requirement for tax advisors to register with HMRC if they are to communicate with HMRC on a client’s behalf. This is not a new topic, with the Chartered Institute of Taxation (CIOT) having previously advised members not to undertake Code of Practice (COP) 9 work if they do not have the necessary experience. However, it is new territory for HMRC to be publicly exploring this area.
  • Tackling non-compliance in the umbrella company market and protecting workers employed by said companies. The Government’s aim is to ensure fair and genuine competition and prevent tax losses which are a result of non-compliance. More information will follow on 18 April 2024, with new guidance being released in the summer.
  • The next Tax Administration and Maintenance Day is to take place on 18 April 2024 to “bring forward a further set of tax administration and maintenance announcements”. Whilst no further detail has been published at this stage, in line with previous years, we expect this to be a mini-Budget of sorts but focussing solely on the powers and activities of HMRC. We expect the announcements to cover a range of taxes, in addition to trailing new consultations, and setting out next steps for previous consultations which have closed.

For further information on the above, contact Danielle Ford, Partner and Head of Tax Disputes & Resolutions, or Riocard Hoye, Senior Manager.

Year End Tax Planning Guide 2024

The freezing of many tax rates and thresholds continues to increase the Government’s tax take, but there are still many useful ways to arrange your affairs tax efficiently, and we provide an overview of some of these in this tax planning guide.
For example, where you have discretion over the timing of income, you can establish when that income is best taken — in this tax year or the next. A review before 5 April 2024 could therefore have a significant effect on your tax position. For Scottish taxpayers, to whom higher tax rates and thresholds apply, this is particularly true.

Each year brings its own tax challenges, and this year is no exception. Although the 2023 Autumn Statement was low on dramatic announcements, there are a number of important changes pre-dating this which will take effect shortly. These will merit consideration as part of a year-end review for many people, and include:

  • Further reduction to the Capital Gains Tax (CGT) annual exempt amount.
  • A further cut in the Dividend Allowance.
  • The introduction of basis period reform for unincorporated businesses.

Our Private Client team work to have the all-round vision of your circumstances that can really help make an impact, and we look forward to being of assistance.

Download our Year End Tax Planning Guide below.

Employment Taxes newsletter – October 2023

See below for the topics covered in this edition:

  • Employment taxes roundup:
    • Salaried members update: BlueCrest Capital LLP
    • HMRC compliance team increases in size
    • Upper Tier Tribunal (Tax and Chancery) IR35 case hearings
    • Veezu to go before employment tribunal
    • Bank of England interest rates
    • Rise in National Living Wage
    • HMRC compliance activity
    • Check Employment Status for Tax (CEST) tool
  • Consultations:
    • IR35 off-payroll working rules
    • Construction Industry Scheme (CIS) reform
    • Umbrella companies
  • Other points of interest:
    • Home to work travel expenses
    • Christmas costs

To download the full publication, click the link below.

Charities and Not for Profit eNews

This edition of our Charities and Not for Profit eNews covers the following topics:

  • Gift Aid Awareness Day 2023
  • Charity Commission guidance on social media
  • Charity Commission Trustee quiz
  • Charity Retail Association guidance
  • Guide to social investments
  • Charity Commission collections

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

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

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  •  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.

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