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Personal Tax News

Tenancy Deposit Protection

From 6 April 2007 if you have assured shorthold tenancy buy to let properties any new deposits taken from tenants must be protected in a government-authorised tenancy deposit scheme.

The idea behind this is to protect tenants from unscrupulous landlords who refuse to pay back deposits at the end of the tenancy.

This new rule applies if the tenancy is an assured shorthold tenancy.

There are three schemes available and the ruling applies to both private landlords and agents.

30/3/07

» More information can be found on the DirectGov website.

National Insurance Contributions 2004/05

H M Revenue & Customs recently admitted that letters have been sent out in error to what could be as many as 700,000 taxpayers . . .

» See full article in the National Insurance Tax news page.

Your 2005/2006 Self-Assessment Tax Returns

The annual deadline of 31st January is fast approaching. If you haven’t submitted your 2005/06 Tax Return yet – why not? Returns must be with H M Revenue & Customs by 31st January or fines will be imposed. Call us if we can help although at this late stage we can’t guarantee completion by 31st.

11/12/06

Husband and wife businesses

A recent legal case (the Artic Systems case) has focussed Revenue attention on husband and wife businesses where one spouse may not work in the business but draws a disproportionate benefit - either payroll, benefits or dividends. This is being undertaken under S660 tax legislation. The Revenue in the High Court won the case but they have now lost in the Court of Appeal. The Revenue have lodged an appeal with the Law Lords, but the backers of Mr & Mrs Jones (the owners of Artic Systems Ltd) have said they will go to Europe if they lose in the Lords. Action against others is unlikely until the case is finally resolved but there are things we strongly suggest you do to differentiate yourselves from this case and thus avoid the worst-case tax position.

Do contact us if you wish to discuss your personal position.

Updated 25/01/06

Pensions - New rules from 6 April 2006

After 6 April you can contribute the following amounts per year but you only qualify for tax relief up to your earned income level (exc dividends). The company can contribute but only where contributions are wholly and exclusively for the trade.

There are also maximum fund values detailed below. If you are over these you must talk to your IFA (or we can recommend one), as there are severe tax costs.

There are different rules in the year in which you start to draw benefits, and I think everyone now knows residential property; property abroad and fine wines do not qualify.

09/01/06

Wills

Well have you made one? Yes, then that’s a good start but is it up to date and does it take account of your current situation, available allowances and gifting abilities?

If no, well we will be polite and just say please do one. We work with the Wills Department of a first class firm to help clients do so. PLEASE call if you are now willed.

Single, divorced, married or in a Civil Partnership, this is equally important to your family.

06/01/06

Offshore Bank Accounts and Credit Cards

If you are a UK resident and taxpayer you have to add interest earned on offshore bank or other accounts into your Tax Return. Failure to do so is a criminal offence. An agreement between "tax haven" countries and the EU will see your personal details communicated to National Governments - and then onto the Inland Revenue. So be aware, and please let us have ALL your income details for the next tax return.

HMRC have won a legal case that requires overseas financial institutions to report to the UK tax authorities details of all bank accounts AND credit cards used by UK residents. If you have undeclared income from overseas now is the time to declare it to HMRC if it effects previous tax years and add the details to the next tax return. They will follow up on overseas undeclared income streams

Updated 06/01/06

Income Tax Refund - Gift Aid

In your Self-Assessment tax return you can nominate to send part or all of any Gift-Aid related tax refund directly to a charity. Gift Aid will also be added on top of your refund too. The relevant form is on the HMRC Website (formerly the Inland Revenue).

Updated 21/07/05

Child Tax Credits

Introduced in the 2004 Budget was a tax repayment to the main carer of children up to 16, or 18 year olds in full-time education, replacing the Children's Tax Credit seen in previous tax years. The maximum CTC of roughly £500 is paid to the main carer if the family income is less than £50,000; up to £58,000 the allowance is scaled back and above £58,000 there is no payment made.

We cannot claim this for you so you need to contact your Tax Office directly in order to obtain an application form and initiate a claim.

Updated 21/07/05

Did you know?

Student loans are repaid at 9% of monthly earnings over £888.33 (after a form SL1 is received).