Restriction on interest relief for Buy to Let Investors

RESTRICTION ON INTEREST RELIEF for Buy to Let Investors is something we are taking very seriously at Brothertons. Even though the changes are being introduced over a 4 year period (2017-18 to 2020-21) so effectively over the next 5 years we are advising clients to consider this straight away and look at their situation in detail to ensure they are set up in the most appropriate way. Read more

Dividend Tax Allowance

From 16-17 new rules have been introduced which will affect the way dividends are taxed on individuals.

The tax credit which is currently associated with a net dividend is being abolished so there will be no more grossing up of a net dividend. A dividend tax allowance is being introduced which will make the first £5000.00 of dividend income tax free, no matter what level of income a person has. Any further dividend received in the tax year will be taxed at 7.5% 32.5% or 38.1% depending on if the income is in the basic, higher or additional rate band.Dividends within your allowance will still count towards your basic or higher rate bands and may therefore affect the rate of tax you pay on dividends you receive in excess of the £5000.00 allowance.

This will impact on many people and we are happy to discuss you situation on a one to one basis to ensure you remain as tax efficient as possible within the new rules.

Updates to Computer Systems

This week we have made some major updates to our computer systems. Lucid Computer Solutions Ltd, our computer and IT support guys, based in Redditch, have again done a great job and everything has been implemented smoothly and efficiently as we have always come to expect, over the 9 years they have provided us with IT support.

Saturday session on Auto-enrolment for Pensions

Our Saturday ‘Auto-Enrolment meetings’ have proved very popular and we have managed to talk to a great number of business owners and address their concerns and answer their questions on AUTO-ENROLMENT.

Moving forward we are extending the Saturday opening times of 11am-4pm throughout the whole of August, so please call the office if you would like to call in and have your Auto-Enrolment questions answered.

Tax on jointly owned property income

We had discussions this week relating to property held jointly between spouses and there are specific rules that should be considered if the asset is income bearing. If spouses or civil partners own property jointly, are married and live together, care should be taken. From an income tax perspective the individuals are treated as beneficially entitled to the income in equal shares. This means for example, if a property is owned jointly, even in differing ownership splits, not 50%-50% the income arising from this property would be deemed to be split 50%-50%. Read more

New Dividend Tax Credit

This week we have been talking to clients about the impact the budget may have on them moving forward. Key areas of discussion have been the the New DIVIDEND TAX CREDIT and the way dividends will be taxed moving forward after 1st April 2016.

This new policy for taxing dividends will mean the current tax credit on a dividend is abolished with the first £5000.00 worth of dividends in a year not incurring any tax. After this level the rates will depend on your level of income in the year and any dividends dropping into the basic rate band will be taxed at 7.5%, dividends dropping into the higher rate band will be taxed at 32.50% and for dividends dropping into the additional rate band the rate will be 38.1%.

Annual Investment Allowance (AIA)

We have been eagerly awaiting the announcement of the ANNUAL INVESTMENT ALLOWANCE (AIA) and the new level has now been set at £200,000.00 from 1st January 2016.

The current level is £500,000.00. There are transitional rules for anyone claiming AIA in a year that straddles these rates and anyone looking at investing in capital assets should take some advice to ensure the timing of the purchase is advantageous with regards the AIA claimable.

Tax relief on mortgage interest

Previous weeks we have talked about the increase in interest of BUY to LET investments. The new budget has potentially impacted on BUY to LET investors. Currently the amount of tax relief on mortgage interest an investor can claim is based on their marginal rate of tax, so if they are a higher rate tax payer, paying tax at 40% with some property profits, the reduction in taxable property income due to the ‘buy to let’ mortgage interest would have effectively given them tax relief at the 40%. Read more

Budget – Key Announcements

This week we saw the first conservative led budget for almost 20 years. There are plenty of changes which we will be looking at over the forthcoming weeks and advising our clients accordingly. I have listed below some of the key announcements by George Osborne and will be looking at the detail, moving forward. Read more

Mortgage Brokers for Buy to Let

A couple of weeks ago we talked about the up-surge in individuals considering ‘BUY to LET’ Investments.

We have had detailed meetings this week with a number of mortgage brokers to assess the market place for potential borrowings. There are many things to consider when entering this market or just considering a second property to let out.

We are happy to sit with anyone who would like to explore the potential to getting into this market and answer any questions they have from a business, tax or accounting perspective and we are also happy to provide you with details of trusted mortgage brokers who will be able to assist in any borrowing requirements you may have.

Should I be trading as a Limited Company?

This week we have set up another couple of Limited Companies for our clients using our In-House Incorporation Service.

Trading as a sole-trader can be simple and straightforward. However, it isn’t necessarily the best format for a trading vehicle. It really does depend on many issues whether a company is a better option for trading a business, but sticking with the same format of trading vehicle because that is how it has always been done is not an approach we would recommend.

We help businesses look at their circumstances in a ‘case by case’ basis and ensure there is a bespoke solution to each trading scenario.

Please call with any questions you have if you have ever thought…’Should I be trading as a Limited Company?’

Auto Enrolment Pensions advice

This week we have seen further concern from small employers who are worried about their duties, regarding AUTO-ENROLMENT PENSIONS for their staff. To help counteract this, we are offering Saturday meetings, during July, for anyone (clients or non clients) who needs some help and advice in this or any area.

If you are too busy during the week and would like to come in and have a chat and get some advice, please give the office a call and arrange a 30 min free meeting. We will be available every Saturday during July, 11.00am to 4.00pm.

P11d deadline

We have also been reminding client’s that the P11d deadline for reporting ‘benefits in kind’ for 14-15 is now closed with the deadline for submission of the forms being 6th July 2015.

The payment deadline for any Class 1A NIC due is 19th July 2015 or 22nd July 2015 if paid electronically.

Penalties are levied by HMRC for late or non submission of P11ds and we would advice any business to assess their situation to see if any submissions are required.

Buy to Let

Over the last few months we have seen increased interest from individuals thinking about investing in the ‘BUY to LET’ market. The improvements in the property market and signs of recovery in this area have triggered peoples interest in potentially starting out or developing their property portfolios. A further change in the pension rules allowing individuals to drawdown on their pension funds have also created further interest, with potential funds for investment being more accessible. Read more

VAT Reviews

We have spoken to a new client this week and addressed their VAT situation. After completing one of our ‘free reviews’ we identified there were some substantial savings to be made.

We do carry out a lot of free VAT reviews for non-clients and very often find areas we can make savings.

Please don’t hesitate contacting us if you would like us to have a look at this for you, it really can be beneficial.

New Marriage Allowance

This week we saw commentators talk about the new marriage allowance which has been introduced from 6th April 2015 saying it is potentially not worth the effort that HMRC will have to put in to administer the allowance. We disagree!

The allowance allows an individual with unused personal allowances to transfer £1060.00 of the PA to their spouse, as long as the spouse is a basic rate tax payer. This will bring a saving of up to £212.00 pa and is well worth the claim. We will be ensuring all our clients that are eligible will get this and it is definitely worth the effort.

Auto Enrolment

This week we saw another one of our clients stage for AUTO ENROLMENT. All the training and systems implementation we have been doing here at Brothertons over the last 12 months is now paying off for us. This particular client was very concerned about his obligations as an employer. He was really worried about everything that needed to be done. I initially went to see him and told him we would help make the process as pain free as possible and help him every step of the way, which is what we have done. It really makes it all worth while when the client calls into the office to thank us personally for making the process smooth and problem free. Read more

Coffee and Accountancy

During the week we have taken on a few new clients. I also met up with a potential new client and we arranged to meet in his local coffee shop. What a good excuse to feed my caffeine addiction!

It did make me think what a good idea….if businesses want to talk to us about any business, accounting or tax issues they have, why not meet them at a local Costa or Starbucks!!….. and have a chat about their business and get that mocha at the same time…. so give me an excuse to get out and I will get the coffee.

Feeling bogged down?

One of the clients we took on a few weeks ago was bogged down with using an accounting package which was in their own words ‘over the top and dragging her down’. She seemed to be spending all her time on the data entry rather than on her business! Sound familiar? Read more