CHW Bolton Accountant, Nicola Roby, looks at what the snap election means for your business.
Whilst this was big news in the accountancy world, and no doubt your accountant will have mentioned it, it’s essentially been delayed.
‘Making Tax Digital’ effectively meant filing once per quarter, and once at the year end, all done online. It was scheduled to come into effect from April 2018 for large businesses, and April 2019 for self-employed, and buy-to-let landlords with income in excess of £10,000.
Since its announcement it was widely debated as to how it would work operationally. It’s no great surprise it was delayed, and wouldn’t be completely surprising if it was either significantly delayed or revoked completely.
Amongst small businesses there was a mutual sigh when the Chancellor announced in the recent Budget that the dividend allowance would reduce from £5,000 to £2,000 from 6 April 2018. However, due to the lack of time for this to be debated in the Finance Act, the £5,000 allowance has been retained (for now!).
Another measure that wasn’t able to be passed, was the £1,000 income allowance. Strictly speaking, all income (including those sales on eBay) would have to have been reported to HMRC, and taxable, however due to the lack of time to debate, another U-turn.
In the Autumn Statement, the Chancellor announced that he was cutting the MPAA (Money Purchase Annual Allowance) in more than half – from £10,000 to £4,000.
The MPAA is the amount that you can contribute to a defined contribution pension scheme, after you’ve accessed a pension on a flexible basis. Drawing a pension from a final salary scheme is not classed as accessing a pension flexibly and therefore doesn’t cause the MPAA to apply.
However this has been scrapped – but again, it is well worth considering if you’re currently subject to the MPAA, but still receiving earned income (not savings, dividend or property income etc.) – it’s worth making sure you’ve maximise the current allowance, as this may be the last tax year that the allowance is this generous.
It’s worth remembering that after the election, they could all potentially end up back on the agenda. Think of this time as a freebie and make sure that you’re utilising the allowances – who knows what will happen after the election.
For more advice please view our top ten tax planning tips here.
Want to find out how we can help you and your business? Get in touch today and let's have a chat.
11 November 2019
Even in this digital age some businesses remain heavily reliant on cash transactions. HMRC views these as high risk and as a result targets cash businesses with VAT enquiries, using special techniques to justify investigating them.
6 November 2019
The first big deadline for MTDfV is history and whilst there was a fairly high failure rate, it was not as bad as originally feared.
29 October 2019
BPR shelters the value of your business from the HMRC. The trouble is though, when you retire from your unincorporated business, the relief disappears immediately. CHW explain how you can preserve it.
22 October 2019
New rules will apply to employment termination payments from 6 April 2020 meaning that some settlements will be subject to NI in addition to tax. With this in mind, CHW look at how you can you improve the tax and NI efficiency of a termination settlement.
14 October 2019
You’ve engaged the services of a non-executive director (NED) who has experience in growing companies. The NED is freelance and has asked for her fees to be paid free of tax and NI. CHW explain whether that’s ok or if trouble with HMRC is on the horizon.