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Bird & Co Newsletter – July 2017

Bird & Co Newsletter – July 2017

By In Business, News On June 28, 2017


Bird & Co Accountants –  Newsletter July 2017

Taxation

Written by Pete Bird for the Yaxley , Stanground and Hampton Gazette’s July 2017

Question:

I was made redundant from my job on 1 March 2016 and I received a termination package of £25,000. I was then re-employed by the same company on 1 November 2016, but was made redundant from that job too on 1 March 2017. I was paid a further redundancy payment of £10,000 when I left in March 2017. Does the £30,000 redundancy exemption apply to each payment I received?

Answer:

I’m afraid not! Since your employer remained unchanged you are only entitled to one £30,000 exemption. The whole of the first payment of £25,000 is exempt, but only £5,000 of the second payment. You will be taxed on the remaining £5,000 in 2016/17.
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Reform of Landlord’s Taxation

The government’s plans to allow landlords to use the cash basis for tax purposes were confirmed in the 2017 Spring Budget, but although the proposed legislation was included in Finance Bill 2017, it did not appear in the much reduced Finance Act 2017, which received Royal Assent on 27 April 2017. It is likely that the proposals have been temporarily shelved, pending the outcome of the General Election, and are expected to reappear in a second Finance Bill later this year. If the provisions are subsequently enacted, they are expected to apply retrospectively from 6 April 2017, i.e. for the current tax year.

Up to and including 2016-17, profits of a property business must be calculated in accordance with generally accepted accounting practice (GAAP), commonly referred to as the accruals basis. Although this remains the case for certain landlords (including companies, LLPs, corporate firms, and trustees of trusts), if the Finance Bill 2017 provisions are enacted, the position for 2017-18 onwards will be more complicated. The general rule is that the cash basis must be used. However, this is subject to some exceptions and there will be scope for the individual to elect to continue using the accruals basis if they so wish. The new property allowance will remove some landlords from income tax, whilst for others, it will provide a deduction from profits of £1,000.

We will report on this after the election and when further details are known.

 

Dates to Remember:

1 July 2017 – Due date for Corporation tax for companies with an accounting period ended 30 September 2016.

6 July 2017 – Filing deadline for submitting forms 2016-2017 P11D and P11D(b) to HMRC and the employees must receive their copy of the P11D.

7 July 2017 – Due date for for filing and payment of VAT for the period ended 31 May 2017, unless you submit a paper return then the date is 30 June 2017.

31 July 2017 – Due date for the second payment on account for the tax year ended 5 April 2017.

Monthly Dates:

19th of the Month:

Due date for postal payments of PAYE, NIC and CIS deductions and on-line filing deadline for CIS monthly return
to HMRC.

22nd of the Month:

Due date for electronic payments of PAYE, NIC and CIS deductions to HMRC.

 

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