Digital records will be compulsory

May 23, 2016 -

The government intends to force all businesses, large and small, to keep records electronically. When will this happen and how can we help you to prepare for the changes?

If you keep records manually then you will need to start planning for a change now. It is the governments plan to “make tax digital” for all businesses whether incorporated or not if you have an income of £10,000 or more. This may have serious consequences for many businesses.

In the governments manifesto about the future of tax administration you could be fooled into thinking that “making tax digital” was a vague policy. Well, you would be mistaken as the government is now in full consultation with the software houses and tax industry as a whole.  Although the deadline is 2020 for full implementation there will be a transition period where some businesses will be required to keep all records digitally by  April 2018.

So what will it mean for you?

If your income is over £10,000 and you operate a business (including landlords) you will need to use software in order to keep your records. There is some good news in that the government will provide free applications to help businesses. However, the software is likely to be very basic and it is likely that it will not be sophisticated enough to meet the requirements of all but the very basic businesses. The other issue is that in order to use the software the tax payer may need a basic understanding of double entry book keeping.

Park Lane Accountants is able to help you by assessing your needs and recommending the best software that suits your business. We are able to train you in the use of the software or offer comprehensive book keeping services. Our prices are reasonable and start at £25 per year for a basic cloud based system or £55 per year for a fully functioning system.

Give us a call on 01247 247160 to discuss your requirements.

Tax Changes – Autumn Statement

November 29, 2015 -

Park Lane Accountants Summary of key changes affecting our clients

  • 3% added Stamp Duty Land Tax to second homes including Buy To Let with a starting threshold of £40k from April 2016.
  • Apprenticeship levy to be introduced in 2016 to raise £3bn from businesses.
  • From 2019 Capital Gains Tax on the disposal of residential property will be payable 30 days following disposal of the property instead of 31st January in the year following the tax year that the transaction takes place.

Our View

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Private Residence Relief

May 1, 2015 -

Private Residence Relief is granted automatically on the sale of property that you have always lived in as your home meaning that Capital Gains Tax is not payable on any gain made on the property. You can also claim PRR for periods of time that you have lived in the property and until recently if you had ever lived in the property, then for the last 36 months of ownership you would have been deemed to have lived there. This was reduced to 18 months in the 2014 Autumn statement.

If you wish to claim a main residence exemption you need to compile evidence in support of this, especially if you own multiple properties. The occupation of a property does not necessarily make a person “resident” there for tax purposes. We look at the evidence and recommendations to come out of the case of Alison Clarke vs HMRC.

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No more employers National Insurance (NI) for under 21’s

March 26, 2015 -

As of 6th April 2015 employers with employees aged under 21 years will no longer pay class 1 secondary national insurance in respect of those employees provided the earnings are below the upper earnings limit of £815 per week. The change in legislation was part of the Autumn statement of 2013 and is designed to encourage employers to employ youth, a sector of society that has been significantly affected by the recession that began in 2007.

Currently class 1 secondary national insurance would be payable by the employer at the rate of 13.8% above £156 per week and this will be the case for those over 21.

In practical terms it means that those businesses running their own payroll systems or tax advisers running payroll systems on behalf of clients must ensure that they identify employees under the age of 21 and apply the correct NI category letter to avoid paying too much National Insurance.

If you need any advice on Payroll Services or Taxation then please contact Park Lane Accountants on 01249 247160. We support entrepreneurs in Chippenham, Bath and the surrounding Wiltshire towns and villages and are friendly and approachable.