If you are a landlord, then you're probably aware of the forthcoming changes to allowable expenses. 

Now is the time to be considering your options. 

In our latest blog, we outline these changes and offer some food for thought. 

Say farewell to your generous Loan Interest deduction.... 

Large property portfolio with high levels of interest on borrowings? This will affect you. 

You can still have 100% deduction of loan interest on a mortgage for 2016/17, however from 2017 it will be phased out as follows....

2016/17      100% deduction

2017/18       80% deduction

2018/19       60% deduction

2019/20     40% deduction

2020/21     20% deduction

2021/22       0% deduction

You could consider....

1.   Full incorporation - by moving properties and loans into a company.

2.  Pay down your borrowings.

3.  Sell up!

 

Is there any good news...?

Wear & Tear Allowance...  

The 10% deduction which was allowed against total rent income is being abolished.

Landlords will now be able to claim a deduction as and when they spend money on the property. 

Tax Point....!

Why not consider delaying any property expense until April 2016 to get the full deduction! 

Rent-a-room relief

Thinking about de-cluttering that spare room? Why not let it out and take on a lodger....or even start a small B&B in your own home? You can have tax free rent of £7,500 per year from April 2016.....! 

Do you have a large property portfolio and unsure what to make of these changes?

We can advise you on the best course of action to take. 

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester. 

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Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

 

HMRC have confirmed that all dispensations agreed until 5 April 2016 will not apply after this date and there will be no requirement to report business expenses on a form P11D.

In the current year, employers can request a dispensation from HMRC to cover all genuine business expenses such as travel, business entertainment, and company car fuel avoiding the requirement to declare these on a P11D.

These changes will ease the burden of employers from the strict July deadline and hefty penalties issued for non-compliance.

We would recommend that you continue to have a system in place for checking that all claims made as a deduction are valid business expenses. 

All other non-allowable expenses and benefits in kind will be subject to tax and National Insurance as normal and continue to be reported on a form P11D. Any expenses or benefits provided under salary sacrifice arrangement will need to be paid after deducting tax and National Insurance. 

For more information on the above or advice on getting better controls in place for your business please call Cooper Curtis Accountants on 0845 303 1144.

Cooper Curtis is different in that they specialise in growing successful recruitment businesses through their Accounting Advisory service.

Contact Brian or Caroline on 0845 303 1144 for a chat to see how we can help you raise your game. 

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Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

From 1 April 2016 employees that are 25 years old and over are legally entitled to receive a'National Living wage' of £7.20 per hour, seeing a 50p increase. 

This new minimum pay rate is set to support the government’s vision of a 'higher wage, lower welfare, lower tax society.'

Those employers that don't comply will risk being named and shamed and tough penalties of up to 200% of arrears and a maximum of £20,000 per worker. 

We would recommend you take action before this date and review whether or not you should be making any changes to your payroll. Make sure you also inform your employees of any changes in pay. 

Other changes from April 2016

The personal allowance is set to increase to £11,000 from April removing more lower paid workers out of the tax bracket. 

For employees under 25, the 'National Minimum Wage' will still apply, the rates will be rising to; 

• £6.70 for 21s and over
• £5.30 for 18 to 20-year-olds
• £3.87 for under 18s
• £3.30 for apprentices (the rate applies to all apprentices in year 1 of an apprenticeship, and 16-18 year old apprentices in any year of an apprenticeship)

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester. 

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

If your spouse has some unused personal allowance, if you haven't done so already, you may be able to elect to transfer these and add them to your own personal allowance through an adjustment to your tax code. 

So long as;

- Both spouses are born after 6 April 1935

- One spouse has an annual income between £10,601 and £42,385

- The other spouse has income below £10,600 for the year to 5 April 2016. Or £11,000 from 6 April 2016.

If all the above apply, you should be eligible for this tax break. 

Speak to us for further information on applying for the marriage allowance. 

For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk. 

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester. 

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

From April 2016, the way dividends are taxed is changing. 

The 10% notional tax credit is being scrapped and there is now a £5,000 dividend tax free allowance per tax year.

After that, the tax rates are 7.5% up to the basic rate band (£5K tax free allowance forms part of this), then 32% for higher rate and 38.1% for additional higher rate.

Note, the new 'savings allowance' from April is in addition to the dividend allowance but is not available to use against dividend income, only interest.

Putting this into context, if you take an employment income of £8,000 and take out company dividends of £40,000, this will mean you will pay around £1,390 more in tax than before.

Should you be taking any action? 

If you have enough reserves held in the company, consider whether it would be beneficial paying a large dividend before April 2016.

Consider changing your year end to March if you haven't already, this way you can keep track of the dividends you are taking and this will make it easier to tie in to the year end. 

You should speak with your advisor on possible ways to mitigate this tax before April. 

To discuss how the new dividend regime will affect your business or to find out more about our pro-active services, contact Brian or Caroline on 0845 303 1144 for a chat or email info@coopercurtis.co.uk

Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester

Knowledge - Support - Succeed

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

We would like to wish everyone a very Happy Christmas and a prosperous New Year.

Our offices will be closed from 12pm Christmas Eve and we will re-open at 9am on Monday 4th January 2016.

Wishing everyone a Merry Christmas and Happy New Year!