Latest tax news

Latest tax news

Latest tax news – summer 2021

Electric cars – the Benefit in Kind (BIK) on electric cars has been frozen at 2% from 2022/23 until 2024/25. Whilst this is an increase from the zero, then 1% rates in the previous tax years, it still represents a tax-efficient and green perk for employees. The employer’s Class 1A NI is reduced and there are first year allowances (tax reliefs) for employers installing charging points, plus 100% FYAs on fully electric cars.

Inheritance Tax – the residential nil rate band is reduced for estates which are over £2m and this is before reliefs like business property reliefs are applied, so the value of the business is included with personal assets.

SEISS grants – these are taxable amounts and if we prepare your personal (self-assessment) tax return, you will need to tell us about any SEISS grants you have received as part of the government’s Covid financial support scheme. HMRC does not provide tax agents with this information so please ensure we know about any grants awarded during the pandemic.

Capital Gains Tax – Since 6 April 2020, any gains arising on sale of residential property must be reported to HMRC and paid within 30 days of sale completion. So far, HMRC has issue penalties of £1.3m for late filing. Please inform us once a sale has been agreed so we can help gather all relevant information and ensure you meet all HMRC deadlines.

PPR claims and nudge letters – HMRC has been using nudge theory in recent years, encouraging taxpayers to ‘do the right thing’ when it comes to claiming PPR by making sure they fully qualify for the relief. HMRC has issued nudge letters to taxpayers where it has received information (through the automatic exchange of information with other jurisdictions) that the taxpayer has income or gains, such as on sale of a second property. We can help you understand and comply with the rules around PPR.

Business Asset Disposal Relief – HMRC is using Targeted Anti-Avoidance Rule legislation where the relief has been claimed on disposal but the same business has started up within a two-year window. Relief claimed wrongfully in this manner will be clawed back by HMRC.

Read more about the services we offer and how our tax specialists can help you business or contact us if there’s anything you’d like to discuss with the above Latest tax news.