HMRC is pretty serious about working closely with accountants.
So serious, in fact, that it regularly issues an ‘Agent Update’ to people like us, which includes lots of important information about the various changes (both immediate and planned) to taxes, employment, and pensions.
There’s just one problem. It’s a bit of a beast. So, we’ve picked out three of the most important things from their March Agent Update and made them readable for normal human beings who aren’t natural bean counters.
Capital Gains Tax on property disposals
From next month, HMRC will be changing its rules for Capital Gains Tax (CGT) that relates to the disposal of UK residential property.
Your principle private residence won’t be affected, but for any other residential property you wish to dispose of, the tax due will need to be reported and paid to HMRC within 30 days of completion.
Clearly, you might need some help to ease that process, which is why we were happy to see that there’ll be a new digital service available at Gov.uk from April. This, we’re told, will make the payment of CGT property disposal liability far easier.
There’s an upside to all of this, too. If you have no other Self-Assessment criteria, you’ll no longer have to register for Self-Assessment to pay the one-off CGT when you dispose of a property.
Those who do have other Self-Assessment criteria will simply need the help of a knowledgable accountant to ensure the gain is included on their tax return (which will be amended by HMRC to allow for this).
Backlog of R&D claims
In April 2015, the relief companies could claim from HMRC for qualifying R&D costs increased to 230%. This was great news, and, to this day, has provided thousands of firms with a much-needed cash injection from the government for their R&D efforts.
The problem? An inevitable backlog of claims. However, we’ve now been informed by HMRC that, “there was a concerted effort from experienced Research & Development (R&D) staff as well as staff seconded from across HMRC who were trained to process R&D claims to deal with the backlog”.
This has apparently resulted in around 98% of the backlog being processed. However, HMRC is currently transitioning the R&D processing work to HMRC Business Tax and Customs (BT&C) – a move it hopes will mitigate any future instances of backlogs.
HMRC has been open about the “huge increase” in R&D claims late last year but goes to great lengths in its latest update to confirm that the teams are “more than capable” of meeting the challenge.
If you’d like to speak to them about your claim, you can call the Growth Helpline on 0300 123 3440 or email email@example.com for technical queries.
Non-residential companies owning property
If you’re a non-residential company landlord, you’re currently liable to income tax on the profits generated by your property business.
This is changing from 6th April and will mean you won’t fill out an SA700 form any more for income tax on non-resident company income. Instead, it’ll be chargeable to corporation tax.
If that’s you, a letter from HMRC might be on its way containing a Corporation Tax Unique Tax Reference (CT UTR).
There’s a few things either you or your accountant (preferably the latter) will need to do on receipt of this letter:
- tell HMRC if you already have a CT UTR or no longer let the property out;
- tell HMRC if you file your accounts to a date that’s different from 5th April; and
- register with HMRC Online Services so the Company Tax Return can be filed each year.
Need help with any of the above?
If you have any questions on the updates we’ve listed above, please do not hesitate to get in touch. We know this stuff like the back of our hands, and our direct communication with HMRC means we’re best placed to give you the advice you need.