Our July business update includes a reminder on previously announced government updates as well as more recent announcements. We also look at some important business considerations within the current market.
The new Non-Domestic Rating Bill, announced on 29 March, will support businesses by incentivizing property investment and introducing more frequent valuations, aiming to make business rates fairer and more responsive to changes in the market.
HMRC has shut down the self-assessment tax hotline for three months over the summer with the aim to redistribute resourses to prioritise urgent calls and taxpayer correspondance.
We delve into some of the complexities of Stamp Duty Land Tax and the Non-Residents Charge, and include a redirection to our recent blog post, ‘Is now a Good Time to Buy-To-Let?’.
Finally, the Government has yet again extended the voluntary National Insurance deadline, meaning taxpayers now have until April 2025 to make additional payments to help increase their state pension entitlement.
If any of the information within this newsletter affects you or your business, please get in touch by calling 01454 619900 or emailing email@example.com.
New Business Rates Bill Aims To Help Communities Thrive
The Government has introduced a new bill to modernise business rates across the country. Following feedback from businesses calling for a fairer system, the new Non-Domestic Rating Bill, announced on 29 March, will support businesses by incentivising property investment and introducing more frequent valuations.
A new business rates improvement relief will remove barriers for businesses to extend or upgrade their property. Businesses undertaking qualifying building improvements will not face higher rates for a year. According to Melanie Leech of the British Property Federation, this relief could also support the UK’s journey to net zero as businesses work to future-proof older buildings.
Furthermore, valuations will now take place every three years instead of every five years, meaning businesses with falling values could see their bills drop earlier than expected. The Government says these new measures will make business rates in England fairer and more responsive to changes in the market. The bill will build on recent measures from the 2022 Autumn Statement, which saw £13.6 billion announced in business rates support.
Victoria Atkins, Financial Secretary to the Treasury, said: “I want businesses to know that the Government is on their side. Businesses have asked for changes to the business rates system, and we are acting, including more frequent revaluations to make the system fairer and more responsive.”
Self Assessment Tax Helpline Closed For Three Months
HMRC has shut down the self-assessment tax hotline for three months over the summer. In order to provide HMRC time to handle other, more urgent phone inquiries, all calls to the hotline will be routed to digital services during this time.
From Monday, June 12 through Monday, September 4, the helpline will be unstaffed. HMRC stated that it will “trial directing SA queries from the helpline to the department’s digital services, including its online guidance, digital assistant, and webchat” at this time.
The number of advisors available via webchat, the online service hotline, and the additional support team helpline will increase to meet demand, however this is approximately 50% lower summer months.
Although HMRC has previously restricted access to helplines, this is the first time a service has been shut down entirely for an extended period. HMRC said the move would free up 350 advisers to take urgent calls on other lines and reply to taxpayer correspondence. Long phone line waits and a decline in the quality of HMRC services have been the subject of complaints from tax advisors and accountants for months.
Adam Harper, director of professional standards and policy at the Association of Accounting Technicians (AAT), said: ‘The need for such a pilot, in order to redirect staff elsewhere, highlights the much bigger challenge that HMRC faces in balancing competing priorities with a constrained budget. Ultimately, the government must address the root problem that more investment is needed.’
In order to provide support to taxpayers in the five months leading up to the self-assessment deadline on January 31, 2024, the helpline will reopen on September 4 of this year.
SDLT and the Non-Residents Charge
You usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price when you buy a residential property. But what is the SDLT surcharge for non-UK residents?
Properties will be subject to SDLT at the residential rates, with the additional 3% for second properties. These rates can be found here Stamp Duty Land Tax: Residential property rates – GOV.UK (www.gov.uk)
Properties owned by an incorporated company and valued at more than £500,000 may be required to pay the flat 15% rate applied to residential property acquisitions by non-natural persons. Additionally, UK based companies owned by non-UK residents need to also consider their eligibility for the non-resident surcharge of 2%.
The conditions that this depend on can be complex and different factors which determine eligibility include: when the company was incorporated, whether the company was incorporated in the UK, and whether the non-UK resident and owner of the company resides in a country with a double taxation agreement for corporation tax purposes.
SDLT only applies to properties over £250,000. The amount you pay depends on:
- When you bought the property
- How much you paid for it
- Whether you’re eligible for relief or an exemption
Use the Stamp Duty Land Tax Calculator to work out how much tax you’ll pay
The conditions and regulations in the area can be complex, and reliefs are available in qualifying situations – If you would like to discuss the restructuring options available on your property portfolio, please contact your client partner or email firstname.lastname@example.org
Is now a Good Time to Buy-To-Let?
As house prices start to fall and rents rise across the UK, 2023 may look like a good year to get your foot on the property ladder. However, making that decision is far from straightforward.
While a buy-to-let investment strategy can provide you with a regular rental income, it also comes with additional costs and responsibilities. Recent economic factors such as soaring mortgage rates and reduced tax relief could also negatively impact your profits as a landlord, so it’s essential to weigh up your options carefully.
In our recent blog post, we discuss the pros and cons of buy-to-let in 2023.
National Insurance Deadline Extended (Again!)
The voluntary National Insurance contributions deadline has been extended again, to April 2025, giving taxpayers more time to fill gaps in their National Insurance record. This is in response to public concerns over the prior deadline of 5 April 2023 which was initially extended to 31 July 2023.
There is now even more time for anyone with gaps in their National Insurance history dating back to April 2006 to determine whether to close the gaps to increase their new State Pension.
Individuals should take this opportunity to check their NI record to identify any shortfalls in their NI history, check that their record includes NI contributions paid through PAYE, self-assessment, and NI credits, and contact HMRC to have any errors corrected. It may be beneficial to make voluntary NI contributions at this time, potentially increasing the amount of state pension received.
The ICAEW has provided a useful list of actions for taxpayers to take, and a short webinar which explains these changes:
- Check your NI record
- Identify any discrepancies between NI contributions paid and those showing on HMRC’s system
- Identify any NI credits that are missing from periods in which they should have been received (eg, on receipt of universal credit or child benefit)
- Identify any shortfalls in contributions
- Contact HMRC if you think there are any errors
- Decide whether to make voluntary NI contributions
- TAXbite: Check your NIC record! | ICAEW
Deadline to top up national insurance contributions extended | ICAEW
Specific financial advice is recommended when deciding to make voluntary NI contributions.
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- Making Tax Digital
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- Outsourced Finance Team
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