Author: Glenn

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding the tax rules or because of deliberate tax evasion. Participation in the campaign is open to all residential property landlords with undisclosed taxes. The campaign is not suitable for those letting out non-residential properties.

Landlords who do not avail of the opportunity and are targeted by HMRC can face penalties of up to 100% of the tax due together with possible criminal prosecution. Taxpayers that come forward will benefit from better terms and lower penalties for making a disclosure. Landlords that make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% depending on the circumstance on top of the tax and interest due. There are higher penalties for offshore liabilities.

There are three main stages to taking part in the campaign, notifying HMRC that you wish to take part, preparing an actual disclosure and making a formal offer together with payment. The campaign is open to all individual landlords renting out residential property. This includes, amongst others, landlords with multiple properties and specialist landlords with student or workforce rentals. Once HMRC have been notified of the wish to take part in the campaign, landlords usually have 90 days to calculate and pay any tax owed.

The VAT Import One Stop Shop (IOSS) Scheme applies to goods imported in consignments with a value of £135 or less (known as low value goods) from countries outside the EU and Northern Ireland, to consumers in the EU, Northern Ireland, or both.

The IOSS Scheme can be used to report and pay VAT due on imports of low value goods to consumers (B2C sales) in the EU, Northern Ireland, or both.

To use the scheme your goods must:

• be located in a country outside the EU and Northern Ireland at the point of sale;
• have a consignment value of £135 or less; and
• be sold to a consumer in the EU or Northern Ireland.

If you only sell through an online marketplace, they should have already registered in their name for the IOSS. This means that the online marketplace is responsible for reporting and paying any VAT due.

The IOSS scheme is available to:

• businesses in Northern Ireland; and
• businesses in countries that the EU has concluded and recognises an agreement with, on the mutual assistance for the recovery of VAT — currently only Norway.

You must follow the normal VAT rules if you sell goods imported in consignments with a value of more than £135.

Ever wondered how your stake in your business is represented in your accounts?

The answer can be found at the bottom of your balance sheet. Simply put it is the value of your physical business assets less any liabilities; usually described as net assets.

But this is not the full story as there is a further intangible asset that is generally omitted from your accounts. It’s called goodwill. It is the extra value a buyer is willing to pay, over and above the net assets value of your business, for the rights to your customer lists and other non-physical assets that are generally left out of your accounts.

Ultimately, what you can sell a business for will be limited to what a buyer is willing to pay. But there is value in making a consistent estimate of what your business may be worth, especially if this exercise is undertaken annually, when your financial accounts are prepared.

In this way you will be able to see if the valuation is increasing or decreasing, and if increasing, is the increase at a sufficient rate to meet your planned future exit from your business?

Hopefully, many of you will already be monitoring your business value in this way, if not, please get in touch so we can figure out the best way to add this important indicator to your final accounts each year.

In the coming months we will start to see how our new government intends to change the UK tax rules to further its economic growth agenda.

Whatever they decide to do, readers who presently benefit from tax and/or business planning strategies, should be prepared to revise their plans as fiscal changes are announced.

For example, if you are considering the disposal of assets at a profit, then any gain may be subject to Capital Gains Tax (CGT). If the Chancellor changes the CGT rates, perhaps by treating capital gains as income for tax purposes – or by removing or reducing present CGT reliefs – your after tax profits may not be at a level to satisfy your plans.

The first opportunity to alter tax or other business related matters will likely be the Autumn Budget. This year will be Rachel Reeves first announcements at the despatch box, and she may introduce far reaching changes.

This does mean that there is a short period before the Autumn Budget when we will be subject to present legislation. If you are considering radical changes to your business or financial circumstances in the next year would it be sensible to consider moving transactions forwards as a hedge against negative changes come September/October 2024?

We recommend keeping a weather eye on your planning options. If you are about to buy or sell business or personal assets, please call so we can consider your options. Double guessing what the Treasury may or may not do is not an exact science, but we can be fairly confident that changes are on the way, the fiscal goal posts will be moving.

Whilst there are a large number of state benefits available, it is not clear which of these benefits are taxable and which are tax-free.

HMRC’s guidance provides the following list of the most common state benefits that are taxable, i.e., Income Tax is payable, subject to the usual limits:

• Bereavement Allowance (previously Widow’s pension)
• Carer’s Allowance
• contribution-based Employment and Support Allowance (ESA)
• Incapacity Benefit (from the 29th week you get it)
• Jobseeker’s Allowance (JSA)
• pensions paid by the Industrial Death Benefit scheme
• the State Pension
• Widowed Parent’s Allowance

The most common state benefits you do not have to pay Income Tax on are:

• Attendance Allowance
• Bereavement support payment
• Child Benefit (income-based – use the Child Benefit tax calculator to see if you’ll have to pay tax)
• Child Tax Credit
• Disability Living Allowance (DLA)
• free TV licence for over-75s
• Guardian’s Allowance
• Housing Benefit
• Income Support – though you may have to pay tax on Income Support if you’re involved in a strike
• income-related Employment and Support Allowance (ESA)
• Industrial Injuries Benefit
• lump-sum bereavement payments
• Maternity Allowance
• Pension Credit
• Personal Independence Payment (PIP)
• Severe Disablement Allowance
• Universal Credit
• War Widow’s Pension
• Winter Fuel Payments and Christmas Bonus
• Working Tax Credit