Welcome to our Autumn newsletter of 2017. These newsletters are designed to keep you informed of the latest tax issues.
We hope you enjoy reading the newsletter; remember, we are here to help you so please contact us if you need further information on any of the topics covered.
NEW COMPANY LOSS RULES TO GO AHEAD
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 forward and set off against future profits of the new business. Previously such losses would have been ring fenced against future profits of the activity that incurred the losses.
There are new restrictions for companies and groups with profits in excess of £5 million and also changes to the set off of losses within a group.
We can of course assist you in ensuring that relief for losses is obtained in the most beneficial way.
REPORTING VAT ONLINE – AREN’T WE DOING THAT ALREADY?
Last month we reported that the government had announced the delay of Making Tax Digital for Business (MTDfB) to 2020 at the earliest but that quarterly VAT reporting, using the new system will be mandatory from 2019.
Surely we are doing that already you might say. However, currently businesses are only required to complete 9 boxes when they submit their quarterly, monthly, or annual VAT return online. Under the latest proposal for MTDfB the business will be required to submit the detailed transaction data supporting the output tax and input tax figures on a quarterly basis. This will therefore require those businesses affected to keep their accounting records digitally from the 2019 start date.
These changes won’t affect business that are not VAT registered such as buy to let landlords for whom MTDfB will not apply until 2020 at the earliest, and even then only if their gross rental income exceeds the VAT registration threshold.
CHANGING YOUR COMPANY CAR? WHAT ABOUT A HYBRID NEXT?
The next Finance Bill will include legislation to reduce significantly the taxable benefit on the provision of low CO2 emission cars from April 2020.
From 2020 there will be a 2% benefit in kind for company cars that emit no CO2 such as electric and hydrogen powered cars. At the same time the system for taxing hybrid company cars will also be significantly changed. For example a hybrid car emitting less than 50g CO2 per kilometer will also have a 2% P11d benefit provided it has a range on its electric motor of at least 130 miles. For example a BMW i3 hybrid costing £30,980 has a range of 181 miles so will qualify for the 2% benefit rate resulting in a taxable benefit of just £620 a year. Such a vehicle would also qualify for a 100% first year allowance which means that the £30,980 cost of the company car would be deducted in full against business profits.
Contact us if you would like to discuss the tax implications of your next business vehicle.
Every quarter Alan Patient will be introducing a fellow member of BNI Infinity London. This quarter I would like to introduce Lia Choi, from Marybow Property.
We are an independent lettings agency based in Bow, East London. We find lovely tenants, manage the relationship and the property, and project manage refurbishments in the East postcodes. We offer a personal service to landlords, tenants and properties, bringing peace of mind and a caring ethos to all.
TAX DIARY OF MAIN EVENTS
Corporation Tax for year to 30/11/16
PAYE & NIC deductions and CIS return and tax, for month to 5 September 2017 (due 22 September if you pay electronically.
Corporation tax for year to 31/12/16
Deadline for notifying HMRC of chargeability for 2016/17 if not within Self Assessment and receive income or gains on which tax is due.
PAYE and NIC deductions, and CIS return and tax for month to 5/10/17 (due 22 October if you pay electronically).