November Newsletter

9th November 20179th November 2017
Welcome to our monthly newswire. We hope you find this newsletter useful. Please contact us if you would like to discuss any matters further. For a printer friendly version click Tax-Newsletter-UK-November-2017 (1). CHANGES TO PENSION TAX RELIEF IN THE BUDGET? There is again speculation about further restrictions to tax relief on pensions in the Chancellor’s Autumn Budget. With the Chancellor looking to increase tax revenues without increasing tax rates, a raid on pension savings is an easy target as the cost of pension tax relief is estimated to be in excess of £35 billion a year. Currently individuals can generally obtain tax relief at their marginal tax rate on up to £40,000 each tax year. Thus, for a higher rate taxpayer, a £10,000 gross pension investment costs only £6,000 after tax relief. Consider increasing your pension savings just in [...]

October Newsletter

3rd October 20173rd October 2017
Welcome to our monthly newswire. We hope you find this newsletter useful. Please contact us if you would like to discuss any matters further. For a printer friendly version click Tax-Newsletter-UK-October-2017 (1) ARE SPOUSES WAGES FULLY DEDUCTIBLE? HMRC have recently won a tax tribunal case where they were seeking to challenge the deduction for a wife’s wages in arriving at the profits of her husband’s business. The judge agreed with HMRC that the amount allowed as a deduction should be limited based on the hours spent and appropriate rate for the work done. The general principle here is that the expense must be incurred wholly and exclusively for the purpose of the trade. Traditionally when the personal allowance was fairly low (e.g. £6,475 in 2010) it was quite easy to justify the wages paid to the spouse at around that level. However, there have been significant [...]

September Newsletter

7th September 20177th September 2017
Welcome to our monthly newswire. We hope you find this newsletter useful. Please contact us if you would like to discuss any matters further. For a printer friendly version click Tax-Newsletter-UK-September-2017 (2) NEW COMPANY LOSS RULES TO GO AHEAD The Finance Bill due to be debated in early September will finally include the new rules for the set off of company losses that were originally announced in March 2016. As a result of the first Finance Act being rushed through due to the snap General Election the legislation to introduce the new company loss relief rules were dropped. This led to considerable uncertainty as to the start date of the new rules but it has now been confirmed that the new rules will apply from 1 April 2017 after all. So if your company diversifies into a new business activity the losses of one activity incurred after 1 April 2017 can be carried [...]

August Newsletter

2nd August 20172nd August 2017
Welcome to our monthly newswire. We hope you find this newsletter useful. Please contact us if you would like to discuss any matters further. For a printer friendly version click Tax-Newsletter-UK-August-2017. MAKING TAX DIGITAL FOR BUSINESS DELAYED The Government has responded to pressure from accountants and other interested parties and announced the delay of Making Tax Digital for Business to 2020 at the earliest. Quarterly VAT reporting using the new system will be mandatory from 2019. In a further U-turn, three million small businesses and buy to let landlords below the VAT threshold will now not be required to keep digital accounting records but will be able to move to the new system for keeping tax records at a pace that is right for them. For such businesses, Making Tax Digital will be voluntary. Mel Stride, the new Financial Secretary to the Treasury and [...]

July Newsletter

3rd July 20173rd July 2017
For a printer friendly version please click here     IMPLICATIONS OF HUNG PARLIAMENT The result of the General Election has left Teresa May and the Conservative Party clinging on to power with support from the Democratic Unionist Party (DUP) in Northern Ireland. This leads to a period of significant uncertainty for the country as the BREXIT negotiations are just about to start. Following the General Election there have been important Cabinet reshuffles. Although Philip Hammond retained his position as Chancellor of the Exchequer, Jane Ellison MP the Chief Secretary to the Treasury lost her seat in Battersea. Ms Ellison was day-to-day lead for Making Tax Digital, so it’s not clear if her demise might lead to another delay, while her replacement Liz Truss gets up to speed. David Gauke has also moved from the Treasury to become Work and Pensions Secretary. So what will [...]

Townend English are expanding!

14th June 201714th June 2017
Townend English are pleased to announce that we have merged with DGF Accounts. The company will move forward directed by James Foxton and Jane Frith as a two partner practice. The merger of the companies presents a strategic opportunity to develop the existing professional relationship established by working in such close proximity to each other over a number of years, to afford clients access to an approachable, driven and experienced team. James and Jane gained Chartered Accountant status whilst training with the highly regarded PricewaterhouseCoopers, before working in various business sectors, and going on to form successful accountancy practices within Pocklington. Now merged, the pair share a combined wealth of accountancy knowledge coupled with first-hand experience of what it takes to start-up and grow a business. Building upon the common goals and [...]

May Newsletter

9th May 20179th May 2017
Welcome to our newsletter for May 2017. We hope you enjoy reading this newsletter and find it useful. Please contact us if you would like to discuss any matters further.
U-TURN ON SELF-EMPLOYED NICs - FOR NOW In his first Budget on 8th March, the new Chancellor Phillip Hammond announced that he would level the playing field between employees and the self-employed by increasing Class 4 National Insurance Contributions (NICs) from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019. His justification is that the self-employed are now entitled to more generous State Benefits than in the past, and thus NIC rate should be increased towards the 12% Class 1 NIC employee rate. However, this was contrary to the Conservative Party manifesto pledge not to raise national insurance contributions during the life of the Parliament and the Government have bowed to political [...]

Spring Budget 2017 Round Up

13th March 201713th March 2017
On 8th March Chancellor Philip Hammond presented the Spring Budget. Here’s a quick summary of the pertinent features: Dividend Allowance During 16/17 the dividend allowance applies a zero rate of tax on the first £5,000 of dividends received by each individual UK-resident taxpayer. This allowance will be cut to £2,000 from 6 April 2018 and will cost most owner-directors £225 in extra tax per year. National Insurance The main rate of Class 4 NIC (paid by the self-employed) will increase from 9% to 10% from 6 April 2018, and will increase again to 11% from 6 April 2019. Although this sounds like bad news, self-employed individuals won’t pay Class 2 NIC of £148.20 per year anymore, and as Class 4 NIC is only payable on profits over the lower profits limit (£8,164 for 2017/18), individuals with self-employed profits of less than £16,250 should pay less NIC from [...]

Auto enrolment pensions

17th June 201617th June 2016
If you are an employer, you should have received a letter from the Pensions Regulator in connection with the new obligation for employers to set up a pension scheme for their employees. There is no way of escaping having to do something here. Even if you, as Director of your own company, are the only employee, you still need to take some form of action with regard to auto enrolment. As a firm of accountants, we are not allowed to provide pensions advice, however we can provide you with an outline of your auto enrolment obligations, and actions you need to take. In addition, we work closely with a firm of Financial Advisors who are currently willing to help my clients on a no-fee basis. Don’t delay, as the longer you leave this, the more risk there is of missing your deadline and receiving penalty notices from the Pensions Regulator. For a free no obligation chat, please don’t hesitate to contact me.

First staff member joins the team

15th June 201615th June 2016
I am delighted to announce that Jo McCorrie has been appointed as Accounts Assistant at Townend English. Jo brings a wealth of experience gained in accounts and office roles over the last 25 years. Jo has just returned to the UK after spending the last 8 years living in Australia where she achieved a degree in Law (Hons) and spent 3 years working as a Lawyer in Brisbane. Jo is currently studying towards her ICB in Bookkeeping and will be supporting the practice with accounts preparation, bookkeeping, VAT and payroll.

Buy to let landlords – Restriction of loan interest relief

15th June 2016
If you are a buy to let landlord, you should be aware that income tax relief will be restricted to the basic rate of tax in the future. This is being phased in from 17/18 to be fully implemented in 20/21. What does this mean? - if you are a higher rate (40%) tax payer, and you have a buy to let on which you have a mortgage, you won't get the same tax relief for the interest on your mortgage payments you used to get. This means your taxable profits on the buy to let will be higher, and you will pay more tax. If the above is a concern for you, and you would like to discuss what options you may have, then please don't hesitate to contact me.

Ltd company dividends

18th December 201518th December 2015
Anybody who is currently operating as a limited company, and who has been extracting profits through a combination of dividends and salary needs to be aware of the impending changes to how dividends are taxed from the 6th April. This could have serious implications on the amount of income tax you pay. Up until April 16, divis in the basic rate band were notionally “tax free” – these will now be subject to 7.5% on anything over £5000 and 32.5% for higher rate tax payers. If this affects you, you may consider paying a dividend before these changes come into place on the 6th April 2016. This will need some planning however. If you would like to discuss this, or any other tax or accounting topic, please don’t hesitate to give me a call.

Help to Buy ISA

18th December 2015
The government has recently announced a new product to help first time buyers. In summary, people saving for their first home can do so through a Help to Buy ISA. You can save up to £200 per month and the Government will then top this up by 25% (up to £3,000). This seems like a no brainer – why wouldn’t you want £3,000 towards a deposit on your first home? If you would like to discuss this, or any other tax or accounting matter, then please don’t hesitate to contact me.

Transferable allowance for (some) married couples

18th December 2015
If you are a basic rate (i.e. 20%) tax payer, and your husband, wife or civil partner isn’t using all of their personal allowance (i.e. earning less than £10,600), be sure to make use of the transferrable allowance for married couples and reduce your overall tax bill. Basically, by taking 10 minutes to complete an online form to HMRC, your partner can switch £1,060 of their personal allowance to you, thus increasing your own personal allowance and reducing the tax you pay by up to £212. If you would like to discuss this or any other accounting or tax matter, then please don’t hesitate to contact me.