431047ca c7fa 4ea4 9df8 eb931b1b42c0 800x380 - Transferring assets during separation and divorce

Transferring assets during separation and divorce

When a couple separate or divorce it is unlikely that they are thinking about any tax implications. However, apart from the emotional stress, there are also tax issues that can have significant implications.

For example, when a couple are together there is no Capital Gains Tax (CGT) payable on assets gifted or sold to a spouse or civil partner. However, if a couple separate and do not live together for an entire tax year or get divorced, then CGT may be payable on assets transferred between the ex-partners.

This effectively means that the optimum time for a couple to separate would be at the start of the tax year so that they would have up to a year to plan how to transfer their assets tax efficiently. Obviously, in the real world most couples will have far more on their minds than deciding to get separated on a certain day, but these issues should be considered.

It is also important to make a financial agreement that is agreeable to both parties. If no agreement can be reached, then going to court to make a 'financial order' will usually be required. The couple and their advisers should also give proper thought to what will happen to the family home, any family businesses as well as Inheritance Tax implications.

Source: HM Revenue & Customs Tue, 08 Mar 2022 00:00:00 +0100
d6b835f4 e5dd 4eef bce5 c8e48ab328d4 800x380 - Latest on COVID restrictions in England

Latest on COVID restrictions in England

The government has published its latest guidance on COVID restrictions and specifically on the new phase we have entered of ‘Living with COVID-19’. This has effectively moved the country into a new phase of living with COVID and marked the end of legal restrictions in England (since 24 February). 

These changes include the removal of the legal requirement to self-isolate although adults and children who test positive continue to be advised to stay at home and avoid contact with other people in line with the existing rules. There are different timescales for the removal of restrictions in Scotland, Wales and Northern Ireland.

The other main changes that have taken or will take effect are as follows:

  • No longer asking fully vaccinated close contacts and those under the age of 18 to test daily for 7 days and removing the legal requirement for close contacts who are not fully vaccinated to self-isolate.
  • The end of self-isolation support payments and national funding for practical support. The medicine delivery service will no longer be available. People who were instructed to self-isolate before 24 February can still claim support payments until early April.
  • The revoking of The Health Protection (Coronavirus, Restrictions) (England) (No. 3) Regulations. Local authorities will continue to manage local outbreaks of COVID-19 in high-risk settings as they do with other infectious diseases.
  • From 24 March, the COVID-19 provisions within Statutory Sick Pay and Employment and Support Allowance regulations will end. 
  • From 1 April, the government will update guidance setting out the ongoing steps that people with COVID-19 should take to minimise contact with other people.
Source: HM Revenue & Customs Tue, 01 Mar 2022 00:00:00 +0100
a6f09071 7b62 4ad7 b515 68dd100b5da8 800x380 - Challenging your council tax band

Challenging your council tax band

The Valuation Office Agency (VOA) is a government body in England and Wales and an executive agency of HMRC. The Agency values properties for the purpose of Council Tax and for non-domestic rates in England and Wales. The council tax bands were set on 1 April 1991 for England and on 1 April 2003 for Wales and range from Band A – F. 

If you believe that your council tax listing is incorrect you can challenge this with the VOA. A recent press release from the VOA has highlighted that some 70,000 households are expected to contact them over the coming months to ask for a review of their Council Tax band. 

An appeal against your current band can be made online and you need to give a reason for your challenge and provide supporting evidence. Legally, the VOA can only review Council Tax bands where the claimant provides certain types of evidence to show their banding is wrong, or if it meets certain criteria. 

This includes:

  • You disagree with an alteration to your properties banding made by the VOA.
  • You are new to the property in question and feel the valuation band too high or low.
  • The property is no longer a dwelling.
  • The local area has changed.
  • The property is new or has only recently become used for domestic purposes.
  • Change in a property e.g., flats merged into a house of vice versa.
  • The valuation band does not take into account a relevant decision of a local Valuation Tribunal or the High Court. 

When submitting an appeal, you should include the reasons why you think the Valuation List should be altered and include documentary evidence where possible. You can also appoint someone else to challenge your council tax listing on your behalf. 

If you live in Scotland, then you need to use the Scottish Assessors portal website to check your Council Tax band and if necessary, lodge a claim with them (known as a proposal).

Source: Other Tue, 15 Feb 2022 00:00:00 +0100
b1987b25 11f2 4269 9cd7 2df9b6409b32 800x380 - Support with rising energy bills

Support with rising energy bills

The Chancellor, Rishi Sunak delivered a statement to the House of Commons on 3 February 2022 announcing a number of measures to help people cope with fast rising energy costs.

Record increases will see a 54% jump in the energy price cap from 1 April 2022 affecting some 22 million customers across the UK. This will mean the average consumer paying by direct debit will face an annual increase of £693 from £1,277 to £1,971 per year with those paying by prepayment facing even higher costs. The price cap is updated twice a year and tracks wholesale energy and other costs that have seen.

The emergency package of measures announced by the Chancellor will see the government offer support with energy bills worth £9.1 billion in 2022-23.

This includes:

  • A £200 discount on their energy bill this Autumn for domestic electricity customers in Great Britain. This will be paid back automatically over the next 5 years starting in 2023-4 when wholesale gas prices are expected to come down.
  • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.
  • £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate.

The devolved administrations will receive around £715 million funding through the Barnett formula where UK Government support doesn’t cover Scotland, Wales or Northern Ireland.

Source: HM Treasury Tue, 08 Feb 2022 00:00:00 +0100
082a7934 8b07 465e a387 9327e01b6d03 800x380 - Extending MTD for Income Tax to businesses and landlords

Extending MTD for Income Tax to businesses and landlords

The introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) is now set to commence from April 2024. MTD for ITSA will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The regime will require businesses and individuals to register, file, pay and update their information using an online tax account. The rules will initially apply to taxpayers who file Income Tax Self-Assessment tax returns with business or property income over £10,000 annually.

General partnerships will not be required to join MTD for ITSA until a year later, in April 2025. The date other types of partnerships will be required to join will be confirmed in the future. A new system of penalties for the late filing and late payment of tax for ITSA will be aligned with the introduction of MTD for ITSA.

The MTD regime started in April 2019 for VAT purposes only when businesses with a turnover above the VAT threshold were mandated to keep their records digitally and provide their VAT return information to HMRC using MTD compatible software. From April 2022, MTD will be extended to all VAT registered businesses with turnover below the VAT threshold of £85,000.

Source: HM Revenue & Customs Tue, 08 Feb 2022 00:00:00 +0100
8ed5f6c3 d616 4b12 8da4 893530d1265e 800x380 - HMRC “sweetheart” deals

HMRC “sweetheart” deals

HMRC has issued an interesting press release stating that ‘Fact: HMRC does not do ‘sweetheart deals’. HMRC makes sure every taxpayer, no matter what their size, pays everything they owe.’

This denial could be in response to many claims that have been made over the years in Parliament and the press suggesting that HMRC offers better settlement terms when dealing with certain taxpayers (usually the largest UK businesses and multinationals). HMRC refutes these claims saying they seek to collect the right amount of tax due under UK law and that they make sure every taxpayer, no matter what their size, pays everything they owe.

The press release also states that at any given time HMRC has around half of the UK’s 2,000 largest businesses under investigation. This compares with around one in ten small businesses. This rate of investigation is because the largest companies often pose the biggest tax risks. 

HMRC has also said that robust measures were put in place to control error and fraud in the key coronavirus support schemes and that HMRC's customer service has not been impacted by staff working from home during the pandemic.

Source: HM Revenue & Customs Tue, 18 Jan 2022 00:00:00 +0100
b78ff857 eb9b 4f34 bedf 2a5293d79c58 800x380 - HMRC fraud squad net £1bn from criminals

HMRC fraud squad net £1bn from criminals

HMRC’s Fraud Investigation Service (FIS) was launched in April 2016. The FIS is responsible for HMRC’s civil and criminal investigations into the most serious fraud and wrongdoing. It has been estimated that tax evasion and fraud cost the exchequer up to £10bn per annum.

The formation of the FIS brought together HMRC’s criminal and civil investigators. This partnership allows HMRC’s investigators to unlock the most complex financial crimes. Since the service was established more than £1 billion has been recovered from the proceeds of crime and tax offenders. 

The FIS has been proactively pursuing the suspected proceeds of crime using enforcement powers, both criminal and civil, to disrupt the movement of cash and assets.

HMRC has reported that since 2016, more than 1,200 seizures of cash and assets have been made while on operational duty, including gold bars worth £750,000 from a passenger at Manchester Airport and £48,000 found in a freezer drawer, hidden among chicken nuggets at a house in Blackpool.

HMRC’s Director of Fraud Investigation Service, said:

‘To reach this £1 billion milestone in 5 years speaks volumes to the dedication, hard work and skill of FIS to recover the proceeds of crime from those who try to cheat the system.’

Criminal cash can be seized by HMRC officers under the Proceeds of Crime Act 2002. In addition, Account Freezing Orders can be used to freeze balances in bank accounts where it is suspected they contain criminal money.

Source: HM Revenue & Customs Tue, 11 Jan 2022 00:00:00 +0100
bcbf93d7 df0f 49e1 859d 2e42aa800f5a 800x380 - Beware online sales scams

Beware online sales scams

A new government press release has been issued reminding the public that online sales scams continue to be a major issue. In fact, 2021 saw a record number of cyber-attacks and online scams. 

Action Fraud, the national reporting centre for fraud and cyber-crime, has revealed that almost 100,000 people in the UK have fallen victim to online shopping fraud in the past 13 months. This has seen over £60 million being reported lost.

The National Cyber Security Centre (NCSC) is encouraging people to shop online securely by following five actionable steps:

  1. Keeping accounts secure – strong and separate passwords should be used for the most important online accounts, including email, banking or payment accounts (such as PayPal). The NCSC recommends using three random words to create a password. Turning on two-step verification can add an extra layer of protection.
  2. Be aware of emails, text messages or websites that look too good to be true or suspicious – many scammers set up fake messages designed to steal financial and personal information. Members of the public can report suspicious messages to the NCSC via text to 7726 and email to report@phishing.gov.uk.
  3. Choose online retailers carefully – research stores before buying to confirm they are legitimate – check via trustworthy consumer websites. Certain emails or texts regarding "too good to be true" offers may contain links to fake websites. If unsure, don’t use the link.
  4. Use a credit card for online payments if possible – most major credit card providers protect online purchases and are obliged to refund individuals in certain circumstances.
  5. Only provide enough details to complete a purchase – only fill in the mandatory details on a website when shopping online (often marked with an asterisk).
Source: Cabinet Office Tue, 04 Jan 2022 00:00:00 +0100
dd36075a 0443 4c65 a59e 74c4eb8df637 800x380 - Plug-in grants for electric vehicles

Plug-in grants for electric vehicles

The government has announced significant changes to the low-emission vehicles plug-in grant scheme. The changes became effective on 15 December 2021. The changes have been introduced in response to soaring demand for electric vehicles and to help target those buying the most affordable zero emission cars. More than 10% of cars sold in 2021 were electric.

Under the previous rules a grant of up to £2,500 was available for qualifying cars with an 'on the road' price cap of up to £35,000. From 15 December 2021, the government will provide grants of up to £1,500 for electric cars priced under £32,000. There are currently estimated to be 20 models on the market that would qualify. The support for wheelchair accessible vehicles is being prioritised, these will retain the £2,500 grant and a higher £35,000 price cap although there are a limited number of grants available.

There are also grants available for specified motorcycles, mopeds, small vans, large vans, taxis and trucks. Grant rates for the plug-in van grant are now £5,000 for large vans and £2,500 for small vans, with a limit of 1,000 per customer per year. Motorcycle and moped grants have also changed, with the government now providing £500 off the cost of a motorcycle, and £150 for mopeds, with a price cap on vehicles of £10,000.

The plug-in grant scheme was first launched in 2011 and is available across the UK with dealers using the grant towards the price of eligible new cars. The paperwork for the grant application is handled by the dealer selling the vehicle.

The scheme is open to qualifying purchases by private individuals and businesses.

Source: HM Revenue & Customs Tue, 21 Dec 2021 00:00:00 +0100