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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.

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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.

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1,773 happy returns at Christmas

HM Revenue and Customs (HMRC) received 1,773 online tax returns on Christmas Day – a 13 per cent increase on last year’s total of 1,566.

HMRC’s Christmas data logs reveal the busiest time for online returns on 25 December was between midday and 1pm, when 148 Yuletide returns were delivered electronically.

Christmas Eve, traditionally a much busier day for festive filing than the big day itself, saw 17,644online returns successfully submitted. This was up 4 per cent on the 17,000 received on 24 December 2013.

Another 4,811 online returns ticked all the boxes on Boxing Day – a 7 per cent increase on the 4,493 received last year.

In total, 24,228 online returns were received over the three-day festive period – up 5 per cent on the 2013 total of 23,059.

HMRC Director General of Personal Tax, Ruth Owen, said:

“You can file your online return at any time of day or night – even Christmas Day, if it suits you. But don’t leave it too late. Give yourself plenty of time to resolve any problems and if you need to call us, do it now, as our phone lines get much busier as the 31 January deadline approaches.”

The deadline for sending 2013/14 tax returns to HMRC, and paying any tax owed, is 31 January 2015.

All outstanding 2013/14 tax returns must now be submitted online, as the 31 October paper-filing deadline has passed.

For help with your tax return, contacts Davenports today on Faringdon 01367 602011 or Swindon 01793 230472

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HMRC turns attention to horsebox owners in evasion clampdown

Horsebox owners dishonestly claiming horseboxes worth hundreds of thousands of pounds as company expenses are set to be the subject of HM Revenue & Customs investigation, as it continues its clampdown on tax evasion.

Top 50 firm UHY Hacker Young believes HMRC suspects some farmers and rural business owners of buying horseboxes through their company, either falsely claiming the cost as a business expense for tax purposes, or failing to declare personal use of the horsebox and paying tax on it as a “benefit in kind”.

Horseboxes can be valuable assets, with the one used by Zara Phillips at the 2012 Olympics valued at around £500,000 – albeit complete with capacity for six horses and its own bedroom, kitchen and living room complete with satellite television. There is no suggestion that Phillips has evaded tax.

HMRC officials can now identify connections and discrepancies between an individual or company’s official tax records and information from multiple third party sources via the department’s computer system, Connect.
UHY Hacker Young says that HMRC uses DVLA databases, and even Google Streetview, to monitor the lifestyle of suspected tax evaders.

UHY Hacker Young partner Charles Homan said: “Underpaid tax relating to horseboxes is a drop in the ocean but HMRC seems to be focussing attention in this area because they can now be such valuable assets.”
“It shows how determined HMRC are to close down every little loophole and capture every mistake made in tax returns. Without the correct documentation, even owners of horseboxes who have done nothing wrong could find themselves on the receiving end of a lengthy and uncomfortable tax investigation.”

Story from Accountancy Age

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EU VAT CHANGES FOR 2015

There are two new directives, first for the fast reaction mechanism aimed towards preventing VAT fraud. Second one is for the optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services. Quick Reaction mechanism provides the legal basis to the countries that are members of the EU to integrate an emergency measure in they are in position to serious case of sudden and massive VAT fraud.

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FUNDAMENTAL ACCOUNTING

Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that

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SAVE ON TAXES

Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the National Government. It was introduced in 1973 and is the third largest source of government revenue after Income Tax and National Insurance. It is administered and collected by HM revenue and customs, primarily through the Value Added Tax Act 1994. VAT is levied on most goods and services provided by registered businesses in the UK and some goods and services imported from outside the European Union.

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Solicitors targeted in new tax clampdown

Solicitors are being given the chance by HM Revenue and Customs (HMRC) to bring their tax affairs up to date or face tougher penalties, as part of a new tax campaign.

The Solicitors’ Tax Campaign is the latest voluntary, intelligence-led disclosure opportunity giving specific groups of taxpayers the chance to get their tax affairs in order on the best terms available.

Previous campaigns have included medical professionals, plumbers, tutors and coaches, electricians, online traders, landlords and health professionals. This approach has so far raised almost £1 billion from voluntary disclosures and follow-up activity by HMRC.

Solicitors have until 9 March 2015 to tell HMRC that they would like to take part in the campaign, and until 9 June 2015 to disclose the tax they owe and pay it.

By using this campaign to come forward voluntarily, any penalties they might have to pay will be lower than if HMRC has to approach them first.

Caroline Addison, Head of Campaigns, HMRC, said:

“Information gathered by HMRC has allowed us to identify solicitors who thought they could operate without declaring income and paying the taxes that others have to pay.

“If you have not declared all of your income, you need to put your tax affairs in order. Take this chance to come forward and put things right in a straightforward way and on the best possible terms. It will be easier and cheaper for you to come to us than for us to come to you.

“Those who make a deliberate decision not to pay the taxes due could face a penalty of 100% or more of the tax due, or even a criminal prosecution.”

Solicitors can take part in the Solicitors’ Tax Campaign by:

  • Telling HMRC they want to take part in the campaign by 9 March 2015
  • Disclosing details and paying what they owe by 9 June 2015

For more details, plus help and support on the campaign, solicitors can phone a dedicated helpline on 0300 013 4749 or visit www.gov.uk/solicitors-tax-campaign online.

For independent help and support contact Davenports Accountancy today on 01367 602011

 

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PROPER INVOICE INFO

Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that

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PROPER INVOICE INFO

Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that

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