Skip to main content Skip to search

Archives for Accountancy

2019 General Election Tax Tracker

As we enter the final run-up to polling day, we have pulled together a helpful spreadsheet to enable you to compare the tax policies of the main parties contesting the General Election in Scotland, England and Wales.

The 2019 CIOT/ATT tax tracker allows you to see proposals from the Conservatives, Labour, SNP, Liberal Democrats, Greens, Brexit Party and Plaid Cymru.

Click here to see the full comparison – General Election Manifesto Tracker

 

In summary this is how the parties compare:

Income and capital gains – Labour and the Greens would wrap capital gains and dividends into income tax and tax them at income tax rates. The Lib Dems would wrap capital gains in but not dividends. Labour propose income tax increases for those earning more than £80,000 a year. The Lib Dems would increase each income tax rate by a penny. The Conservatives promise no increases in income tax or national insurance rates, but would increase the employee national insurance threshold. The SNP, also backing no increases in National Insurance, want NI to be devolved to the Scottish Parliament.

The Conservatives and Plaid Cymru would keep the Corporation Tax rate at 19 per cent. Lib Dems would raise it to 20 per cent, the Greens to 24 per cent and Labour to 26 per cent, with a lower 21 per cent rate for small profits. The Brexit Party propose a new zero rate for the first £10,000 of profits. A number of parties plan changes to R&D reliefs, most radically Labour who would phase out R&D tax credits for large corporations over the Parliament.

Various sector-specific tax proposals have been put forward, the most headline grabbing of which is Labour’s plan for a windfall tax on the oil and gas industry. Labour and Lib Dems would place a levy on the gambling industry to tackle problem gambling. Labour plan a Financial Transactions Tax. Lib Dems would increase the digital services tax rate.

Small businesses would be particular beneficiaries of a series of other business tax measures, including a more generous Employment Allowance (Conservatives, SNP and Greens) and reforms to the Apprenticeship Levy (Conservatives, Labour and Lib Dems). A Labour government would target high-paying employers with a new excessive pay levy on earnings over £330,000.

On international tax measures, all parties want measures to tackle profit-shifting by multinationals, but while the Conservatives only offer unspecified ‘further measures’ Labour propose to bring in unitary taxation of non-UK multinational companies via apportionment, based (it appears) on some combination of sales, assets and labour. Lib Dems would broaden the rules for determining whether a multinational has a UK establishment. SNP want an online retailer tax.

Explicit pledges not to increase VAT can also be found across the political spectrum, with a series of measures aimed at maintaining or ending VAT on a variety of products and efforts by the SNP, Plaid and Greens to boost the hospitality industry. Lib Dems and SNP also plan lower VAT rates for home insulation.

Further indirect tax measures are focused on boosting the environment, including taxes on plastic and flying, and, for the Greens, taxes on meat and dairy products to encourage a shift to plant-based diets. The Conservatives, SNP and Liberal Democrats all hint at plans to cut duty on Scotch Whisky.

On property and land taxation the Greens propose a land value tax, while Lib Dems would introduce this for commercial landowners only, replacing business rates. Labour would consider this change. The Conservatives would review business rates and propose reductions for some categories of business. A number of parties propose tax measures targeted at owners of second homes, empty properties and overseas purchasers of UK property. Labour would reverse Conservative inheritance tax cuts while the Brexit Party want to scrap IHT altogether.

As usual at election time there are lots of proposals to strengthen tax compliance, including plans from Labour, Lib Dems and Greens to replace the current General Anti-Abuse Rule with a General Anti-Avoidance Rule (or principle, in the Greens’ case) . Labour have a 35 point programme in this area, including increasing transparency with public filing of tax returns for big companies and high earners. They would also scrap non-dom status and massively increase HMRC’s programme of tax audits. The Conservatives plan tougher sentences for tax fraud and a new Anti-Tax Evasion unit in HMRC. Lib Dems and SNP would review the current IR35 proposals and Lib Dems want to end retrospective tax changes like the loan charge. Labour promise not to extend quarterly reporting to businesses below the VAT threshold.

For more information, click here

Read more

Say ‘I do’ to Marriage Allowance this Valentine’s Day

HM Revenue and Customs (HMRC) is sharing the love this Valentine’s Day and encouraging married couples and those in a civil partnership to sign up for Marriage Allowance.

More than 3.5 million couples are already benefitting from Marriage Allowance, which was introduced in April 2015, but HMRC estimates around 700,000 couples are still eligible for the free tax break worth up to £238 this year. If their claim is backdated, they could receive a lump-sum of up to £900.

Financial Secretary to the Treasury, Mel Stride, said:

“For more than 3.5 million married couples and those in a civil partnership, we are putting up to £238 this year back into their wallets, and it is encouraging to see so many people taking advantage of the tax relief.

“Married couples who are yet to sign up for this great scheme – you too can benefit – it is quick to register and any back-dated allowances will be paid as a lump-sum.”

Marriage Allowance lets lower income workers transfer £1,190 of their Personal Allowance to their husband, wife or civil partner – if their income is higher. This reduces their tax by up to £238 for 2018/19 tax year.

Customers can benefit from Marriage Allowance if all the following apply:

  • you’re married or in a civil partnership
  • you do not pay income tax or your income is below your Personal Allowance (usually £11,850)
  • your partner pays income tax at the basic rate, which usually means their income is between £11,851 and £46,350

The personal tax allowance is increasing to £12,500 in April 2019. The increase in non-taxable earnings means eligible couples will be able to transfer up to £1,250 from the lower income to the higher income earner – reducing their tax by up to £250 a year.

Couples can find out more and apply for Marriage Allowance at GOV.UK. Couples are guaranteed 100% of their eligible entitlement, if they apply directly through HMRC. There is no need to reapply for Marriage Allowance every year because it is automatically renewed. However, couples should notify HMRC if their circumstances change and they want to cancel it.

Read more

National minimum wage to rise by 20p an hour to £6.70

The National minimum wage to rise by 20p an hour to £6.70

 

The changes will benefit more than 1.4 million workers.

 

The hourly rate for younger workers will also rise, and for apprentices it will go up by 20% – or 57p – to £3.30 an hour.

 

The rates were recommended by the Low Pay Commission but the government has gone further than the 7p an hour increase suggested for apprentices.

 

Prime Minister David Cameron said the across-the-board increases would offer “more financial security” to workers.

 

Labour said the minimum wage had been “eroded” since 2010 while unions said the increases would not address “in-work poverty”.

 

The 3% increase in the national minimum wage for adult workers is the biggest real-terms rise in seven years.

 

Story from BBC

Read more

New Bank of England banknotes to be printed on polymer

The Bank of England is today announcing that the next £5 and £10 banknotes will be printed on polymer, a thin flexible plastic film, rather than on the cotton paper used for notes currently in issue.

The new polymer notes will retain the familiar look of Bank of England banknotes, including the portrait of Her Majesty the Queen and a historical character.  The first polymer note will be the £5 note featuring Sir Winston Churchill and will be issued in 2016.  It will be followed around a year later by a polymer £10 note featuring Jane Austen.

The decision follows a three-year research programme by the Bank looking at the materials on which banknotes are printed, and which concluded that there were compelling reasons to move to printing on polymer.  In particular, the research indicated that:

  • Polymer banknotes are resistant to dirt and moisture so stay cleaner for longer than paper banknotes.
  • Polymer banknotes are secure. They incorporate advanced security features making them difficult to counterfeit and further enhancing the strong security of Bank of England banknotes.
  • Polymer banknotes are more durable. They last at least 2.5 times longer than paper banknotes so will take much longer to become “tatty”, improving the quality of banknotes in circulation.

In addition, polymer banknotes are more environmentally friendly and, because they last longer are, over time, cheaper than paper banknotes. Being thin and flexible they fit into wallets and purses as easily as paper banknotes.

Despite these benefits, the Bank announced in September that it would print notes on polymer only if persuaded that the public would continue to have confidence in, and be comfortable with, notes printed on polymer. A programme of public consultation was therefore a vital part of the assessment of the merits of polymer notes.The response to that consultation was overwhelmingly supportive of polymer notes.  Over the course of two months, the Bank hosted events across the United Kingdom to give the public the opportunity to learn more about polymer banknotes, to handle the notes, and to provide feedback.  Nearly 13,000 individuals gave feedback during the public consultation programme.  87% of those who responded were in favour of polymer, only 6% were opposed and 7% were neutral.Support for polymer was broadly consistent across geographic regions, demographics and socio-economic groups.  The most notable difference in feedback was that people who had the opportunity to see and handle the notes were 20% more likely to support polymer than those responding on the internet.


Further detail on the public consultation programme can be found on the Bank’s website
http://www.bankofengland.co.uk/banknotes/polymer/Pages/pcp.aspx.In parallel with the public consultation, the Bank engaged with a wide range of stakeholders in the cash industry.  A new polymer note would require greater change to cash handling practices than a new paper note so the Bank will continue its dialogue with the industry and work collaboratively towards a smooth introduction of the first polymer note.  The Bank will host an Industry Forum in February 2014 to initiate this work.The new polymer notes will be slightly smaller than their existing paper equivalents, but the current practice of note size increasing with note denomination will be maintained.  Bank of England notes are currently large compared with their international counterparts, making the largest denomination notes harder to fit into cash handling technology and less convenient for everyday use.  Smaller notes will also reduce printing and storage costs.

The contract for printing the Bank of England’s notes from April 2015 is currently being tendered.  Notes will continue to be printed at the Bank’s printing works in Debden, Essex. The Bank expects to enter a contract with Innovia Security to supply the polymer material for the new-style £5 and £10 notes, in which case Innovia would establish a polymer production plant in Wigton, Cumbria, in 2016.

Commenting today, Mark Carney, Governor of the Bank of England, said: “Ensuring trust and confidence in money is at the heart of what central banks do.  Polymer notes are the next step in the evolution of banknote design to meet that objective.  The quality of polymer notes is higher, they are more secure from counterfeiting, and they can be produced at lower cost to the taxpayer and the environment.”

Chris Salmon, Executive Director for Banking Services and Chief Cashier, said: “We are grateful to the thousands of people who came to talk to us about polymer banknotes. We know that the public care greatly about their banknotes and the feedback we received provided an invaluable input into our final decision.”
The issue of the new notes will be supported by a comprehensive education programme which will include information about the new security features for authentication of the banknote as well as details of how the current paper £5 and £10 banknotes will be withdrawn from circulation.
Read more

Small business owners fail to claim back expenses

Less than three in ten small business owners claim back all their expenses and only a third feel fully confident they are paying the right amount of tax

Just over a quarter (26%) of small business owners say they reclaim all of the expenses they incur personally for their business, while more than a fifth (21%) claim back half of their expenses or less, according to a YouGov survey commissioned by FreeAgent.

Not placing enough value on expenses is the most common reason for people not claiming them, with more than four in ten (41%) saying that they wouldn’t claim back an expense if they didn’t think it was worth claiming. In addition, 35% of business owners admitted that lost or forgotten receipts were a major reason for them not claiming back all of their expenses, while 13% say they didn’t claim expenses because they are put off by the admin required to do so.

Meanwhile, more than a fifth (22%) are worried that they may claim back the wrong amount and 19% admit they didn’t claim all their expenses because they feared being challenged by HMRC.

Business owners stumped by taxes

Fewer than a third (32%) of businesses feel fully confident that they pay the right amount of tax, while a quarter (25%) think they pay too much tax as a result of not recording expenses properly.

The poll also reveals that nearly three-quarters (73%) of small business owners have wider concerns about their taxes, saying they feel anxious about the current UK tax system.

Ed Molyneux, CEO and founder of FreeAgent, said: “It’s clear that expenses and tax are big issues for people who run small businesses. Nearly three quarters of small business owners admit to feeling anxious about the tax system and many of them are also failing to claim back all of their business expenses. This means they are effectively subsidising their own work, potentially paying too much tax and could be losing thousands of pounds.”

Davenports Accountancy can assist you with your day-to-day bookkeeping and make sure you’re claiming everything you’re entitled to. For further information please contact us on 0845 351 0381 or visit our website www.davenportsaccountancy.co.uk

Read more

Call to action – Government tells business ‘prepare for 21st century tax reporting’

Real Time Information (RTI) will be better for employers, better for employees and better for Britain. It is time we replaced a tax reporting system that is not fit for purpose.

From this week, all employers will receive a letter from HMRC telling them what they need to do to get ready for the introduction in April of RTI, the biggest reform of business tax reporting in 70 years.

Under RTI, every employer in the country will move to a new way of reporting tax and national insurance deductions from employees’ wages and salaries. This updates the PAYE system so that it is quicker, easier and more accurate.

Employers will benefit from much simpler requirements for reporting to HMRC and from the abolition of the extensive annual tax return that the old system required. Savings to business will total £300 million in reduced administration costs once the system is up and running.

Employees, particularly the million people in the UK who have multiple jobs, will benefit from HMRC getting details of their tax every time that their wages are paid,rather than just once a year. This will make HMRC’s records more accurate and up-to-date and will begin to reduce the number of cases where someone is found to have under or overpaid tax during the year.

Britain will benefit from HMRC getting the right tax in on time, receiving the £3 billion that is currently not paid until the end of the year.

When the new Universal Credit system comes in, it will be underpinned by RTI, ensuring it always pays to work and the system is responsive to individuals’ changing circumstances. Until then, RTI will increase the accuracy of HMRC’s information about tax credits claimants, enabling better detection of fraud and error in the system and potentially saving the UK hundreds of millions of pounds.

Lin Homer, Chief Executive of HMRC, said:

“PAYE directly affects every employee in the country and that is why it is vital that it reflects, on time and accurately, the tax circumstances of the millions of employees who depend on the system to get their tax right.

“RTI delivers on all fronts. Business costs will be cut by £300 million a year, employees will be taxed more accurately and fraud and error in the tax credit system will be reduced by hundreds of millions of pounds every year.

“Employers can find all the information they need on our website about moving onto the new system, and small businesses can download our free software to help them get ready. Businesses should act now to be ready for April, when RTI comes in.”

Diane Jones, practice manager, Yorkshire Street Doctor’s Surgery, said:

“After the first time, it’s straightforward every month. It’s just an extra click at the end of your usual routine.”

Barbara Dunn, centre manager, Horden Youth and Community Centre, said:

“It’s just a case of clicking another button.”

We are already RTI compliant and can assist you with your payroll, taking the headache away. For further information please contact us on 0845 351 0381 or visit our website www.davenportsaccountancy.co.uk

Read more