A new tax year is upon us and, from 1 April and 6 April respectively, companies and individuals must be aware of some key tax changes. However, with all the recent Brexit uncertainty, some may have been missed. Here, we have summarised some of the more important measures which you should be aware of:
Making Tax Digital
From today, 1 April 2019, every business earning above the £85,000 threshold now needs to keep their VAT records digitally and file their returns using Making Tax Digital-compatible software. Read more.
Introduction of payslip changes
From 6 April all ‘workers’, including casual and zero hour workers – so not just those classified as ’employees’ – have the right to receive itemised payslips. Adding to this, payslips will have to include information about the number of paid hours the employee has worked – but only in situations where “the amount of wages or salary varies by reference to time worked”.
In order to facilitate this change, employers need to adjust their payroll setups. Our experts at Beavis Morgan are well versed in all aspects of payroll management. We also offer outsourced payroll services, whereby our specialist team provides a speedy and cost effective payroll solution for your business. Find out more.
Pay Corporation Tax in instalments
For accounting periods beginning on or after 1 April 2019, very large companies will have to make payments 4 months earlier than currently. For example, for a 12 month accounting period to 31 March 2020, payments relating to the liability for the year to 31 March 2020 will be due in months 3, 6, 9 and 12 of the period, so in June, September, and December 2019 and March 2020 for that year’s corporation tax liability.
A large company is one that has taxable profits of over £1.5 million in the accounting period. If the accounting period is less than 12 months, this threshold is reduced proportionately. Technical guidance can be found here.
New fixed rate amortisation relief
A new fixed rate amortisation relief of 6 per cent has been introduced for goodwill and similar intangible assets acquired after 1 April 2019, provided that they are acquired as part of a business with other qualifying intangible assets.
The provisions are complex and expert advice should be sought if you are acquiring intangibles as part of a business. Contact Paul Ashton for further information.
Corporation tax relief back for acquired goodwill
Relief for acquired goodwill on the acquisition of businesses with eligible intellectual property has been introduced from 1 April 2019. The proposed new relief will be given at a fixed rate of 6.5 per cent on up to 6 times the value of any qualifying intellectual property assets in the business being acquired. Read more.
Capital Gains Tax on UK land for non-UK tax residents
From 6 April 2019 non-UK tax residents are liable for UK Capital Gains Tax on the disposal of all UK immoveable property, including commercial property and other UK land. There are various measures which accompany these rules, which can be found here.
Income tax: Offshore receipts in respect of intangible property
This measure will apply a UK income tax charge to amounts received in a low tax jurisdiction in respect of intangible property, where the income arises directly or indirectly from the sale of goods or services in the UK. The measure will apply to income receivable from both related and unrelated parties and will be effective from 6 April 2019.
The tax will apply regardless of whether there is a UK taxable presence, and will be charged at a rate of 20 per cent on the gross income received, to the extent that the amounts are referable to the sale of goods or the provision of services in the UK.
National Minimum Wage increases
From 1 April, the national living wage will increase 4.9 per cent from £7.83 to £8.21.
Entrepreneurs’ Relief extension
The minimum period throughout which the qualifying conditions for Entrepreneurs’ Relief must be met will, from 6 April 2019, been extended from 12 months to 24 months.
Personal tax allowance increases
From 6 April, the personal allowance, the amount you can earn before paying income tax, increases to £12,500 from £11,850. The threshold for paying the higher rate of income tax (40 per cent) will increase to £50,000 from £46,350. This amount includes the increased personal allowance.
While the dividend allowance for 2019/20 remains at £2,000, the increased tax thresholds enable you to take more in dividends before paying the higher dividend rate.
If you have any concerns or queries relating to these changes, our tax experts are available to guide you through the tax maze and help you with bespoke solutions to ensure that you and your business are as tax efficient as possible. We can also look ahead to retirement and inheritance tax planning.
For more information and to discuss your tax affairs in further detail, please contact your usual Beavis Morgan Partner.