Hello everyone,
Firstly as the end of January is fast approaching just a few reminders below on tax returns and tax payments required by the end of the month.
Following on from the Budget in November, there is much to consider with tax increases and proposed reductions in inheritance tax reliefs.
Finally we give advance notice of forthcoming holiday absence.
Kind regards
Simon
Tax Returns! Tax returns should generally be filed by 31 January in the year to avoid late submission penalties. We would ask any clients with returns currently outstanding to send in any outstanding information and ensure any signed returns are sent back promptly.
31 January tax payments- If you are due to make a tax payment, you should have received a reminder and details of how to pay from HMRC. Clients expecting to make a payment who have not received a reminder yet should contact us to confirm their position. For details of how to pay click Here .
You should be aware that if you pay late then interest will be charged on late payments and if 2023/24 remains outstanding after 28 February there will be a late payment surcharge of 5% of tax outstanding. If you think you will be unable to pay on time, you should consider approaching HMRC to agree a time to pay arrangement. Once a time to pay agreement is in place you will not be charged late payment penalties, just interest. Details of how to set up a time to pay arrangement are here.
Inheritance tax – frozen allowances and proposed changes
IHT is already being paid by larger numbers of people as the continued freezing of the nil rate band results in more people exceeding the threshold. There were proposals in the budget to reduce business and agricultural property relief so that tax would be payable at 20% on the value of business and agricultural property over £1,000,000. For defined contribution pension funds where there are funds left on death it is proposed that the assets remaining should be subject to inheritance tax as well as income tax. These changes mean that people will need to adapt their IHT planning if they wish to minimise the IHT payable on death.
Individuals may wish to consider gifting business assets earlier rather than holding on to them if they will no longer be fully relieved on death.
The value of estates will increase for those with private pensions containing assets at death once pensions are brought within the scope of IHT. Instead of being content with having assets remaining in pension pots at death as they previously passed without IHT charge to beneficiaries, individuals may want to give away more of their wealth whilst alive and our article here provides an outline of reliefs available.
In future newsletters we will cover what planning to consider prior to the end of the tax year.
Advance notice of holiday absence
We shall be out of the office from mid-February to 24 March.
We shall be checking emails periodically and respond as necessary. We shall be travelling in New Zealand so due to time differences and internet availability there may be delays in replying.
We have planned for all regular work (VAT, PAYE etc) to be filed on time over this period. If you have any concerns please get in touch.
Please note, that we will not be checking for phone messages, all contact should be via email.
Kind regards
Simon.
For more information or to discuss any issues raised above please contact Simon Bell by phone on 01376 571358 or email [email protected] .
Please feel free to forward this newsletter to any colleagues or friends who may be interested in it.
This newsletter is written in general terms and therefore cannot be relied on to cover specific situations; applications of the principles set out will depend on the particular circumstances involved and it is recommended that you take professional advice before acting or refraining from acting on any material in the newsletter.