Autumn Budget 2017: What you need to know

Autumn Budget Summary - Green & Co

Yesterday, the Chancellor announced his second Budget of 2017. Among the key changes to note for this year are:

  • The personal allowance will rise to £11,850 and the higher rate tax threshold for the UK will rise to £46,350 for 2018/19.
  • Automatic enrolment pension minimum contributions increase significantly from 6 April 2018. Employer’s minimum contribution will increase from 1% to 2% with the total minimum contribution increasing to 5% (including 3% staff contribution).
  • The inheritance tax residence nil rate band rises to £125,000 from 6 April 2018.
  • Half of any interest tax relief for personal buy-to-let borrowing will be limited to a 20% tax credit from 2018/19.
  • The VAT threshold will be frozen at £85,000 until March 2020.
  • The diesel supplement for company cars will be increased from 3% to 4% from April 2018.
  • The First time buyers of residential property outside Scotland will pay no stamp duty land tax on the first £300,000 of the purchase price for a home, provided its value does not exceed £500,000.

Download our budget summary to see the rest of the changes announced by Mr Hammond.

If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please contact us to discuss them.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Landlord forum to discuss legislative changes and holiday lets

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This weeks edition of the South Wales Argus features an article on our Gwent Landlord Forum.

Cwmbran-based Green & Co Accountants and Tax Advisors, QualitySolicitors Rubin Lewis O’Brien and lettings agency SerenLiving are set to hold the latest Landlord Forum on Wednesday 28th September; hosting key speakers who will give informative talks to current and potential landlords in South Wales.

The evening, which starts from 6pm, will be held at the Parkway Hotel in Cwmbran and will feature two expert guest speakers who will present on current developments within the private lettings sector. Topics will include the legislative changes that landlords in Wales will soon be facing and holiday lets.

Due to both speakers having a lot to cover organisers have decided to keep the number of speakers at two for this event.

The first speaker will be Douglas Haig, Residential Landlord Association (RLA) Vice Chairman and Director for Wales, a private sector association who offer tailored support for landlords. Mr Haig will be discussing the upcoming legislative changes and the impact these will have on landlords.

The second speaker will be Phil Hathway of Hathway Estate Agents who will be discussing holiday lets.

Katie Williams of Green & Co Accountants said “We hope the event will be another success and that all landlords will be correctly informed on the changing legislation and the opportunities surrounding holiday lets. The forums are a great way to communicate with private landlords.

“We hope to help spread the word of bodies such as the RLA and the important service that they can offer landlords.”

Penny Jarman of QualitySolicitors Rubin Lewis O’Brien said the forum aims to build an ethos of support: “We want landlords to be as informed as possible when it comes to the continual changes in legislation and the different opportunities that are available within the rental market. We hope that through the forum all landlords are continually updated on the ever changing legal and administrative aspects of the buy-to-let market.”

Green & Co Accountants and Tax Advisors specialise in business growth and tax minimisation for businesses across Wales and the South West of England.

For proactive advice, contact Green & Co Accountants and Tax Advisors on 01633 871 122, follow @Green_and_Co on Twitter or email ed@greenandco.com.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Gwent Landlord Forum – 28 September 2016

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The summer holidays are over and the new season of Landlord Forums are back with our first event taking place on Wednesday 28th September at The Parkway Hotel and Spa between 6pm and 8pm.

If you are a landlord and currently letting properties or thinking about buying to let in South Wales and you have not previously attended, pop this in the diary. If you know someone who is a landlord and might be interested, please do pass this invitation on to them – we are always happy to welcome new guests. 

Speakers include:

Douglas Haig – Vice Chair and Director for Wales of the Residential Landlords Association (RLA)

Douglas will be discussing the new legislative changes facing landlords in Wales. This includes an update on Rent Smart Wales, the Renting Homes Act, Stamp Duty, the Wales Bill and what we can expect form the new programme for Government in the coming years.

Phil Hathway – Hathways Estate Agents

Phil will be discussing holiday lets so if you use one of your properties in this way don’t miss this update.

Eventbrite - Gwent Landlord Forum

For any enquiries about this event, please contact Katie Williams at Green & Co on 01633 871122, Email: katie@greenandco.com.

New Tax Year – New Rules!

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So, the 6th of April brings in the new tax year with new rules, but what are the changes?

  • Personal Allowance – increases to £11,000.
  • Personal Savings Allowance – if you are in the 20% band for income tax, you will pay no tax on the first £1,000 of interest you get from savings. If you are a 40% taxpayer, you are allowed to earn £500 of interest tax-free ,rather than £1,000.
  • ISA limits
    • ISA – £15,240
    • Junior Isa limit- £4,080
    • Child trust fund limit- £4,080
  • National living wage – 25 and overs are now entitled to a minimum pay of £7.20 per hour.
  • Dividend Allowance – The first £5,000 you receive in dividends is tax free. Above £5,000, basic-rate taxpayers will pay 7.5% tax, higher-rate taxpayers 32.5%, and additional rate taxpayers 38.1%.
  • Employment Allowance – The new amount of £3,000 can be reclaimed against employers NI.
  • Tax on Loans to Directors -The 25% tax charge on loans to directors, etc. increases to 32.5%.
  • Capital Gains Tax – The higher rate of capital gains tax is reducing from 28% to 20% and the basic rate from 18% to 10%. However, the new rates will not apply to residential property that does not qualify for private residence relief.
  • Vat Registration – The thresholds increase to £83,000 for registration and £81,000 for deregistration.
  • Landlords and Second-home Owners – Will have to pay an extra 3% in stamp duty for second properties bought after 1 April 2016. This is on top of the normal rates (0% on the first £125,000; 2% for £125,001 to 250,000; 5% for £250,001 to £925,000; 10% for £925,001 to £1.5m, and 12% above £1.5m).

If you have any questions regarding the changes, please do not hesitate to contact us.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of gubgib at FreeDigitalPhotos.net

Tax & The Landlord: Upcoming Changes

 

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It is a time of change for Landlords who are facing not one, but two big changes this April and another fundamental change from 2017/18. Here is a recap of these changes:

Wear and Tear Allowance

From 6 April 2016 Wear and Tear Allowance for furnished lettings will be no more. Instead, Landlords of furnished, part furnished and unfurnished properties can claim for the expenditure they incur when replacing furnishings. For those who let furnished properties and replace very little during the year, this change will no doubt be unwelcome; however for those with unfurnished lettings this is a change for the better as they will now get relief for replacing items such as carpets and white goods.

Stamp Duty Land Tax (SDLT)

From 1 April 2016 a higher stamp duty charge is planned for purchases of additional residential properties, for example, second homes or buy-to-let properties. The higher rate is 3% above the current SDLT rates.

Finance costs

Currently Landlords receive relief for the finance costs incurred in their rental businesses at their marginal tax rate. However, from 2020/21 the relief for such expenditure will be restricted to the basic rate of tax – currently 20%. The restriction will be gradually phased in from 2017/18. This change does not just affect those paying higher rate tax, however.  Some people will find that, even though they are currently basic rate taxpayers, when the finance costs can no longer be deducted in calculating the net rents, they may be pushed into higher rate tax; and yet, tax reduced will only be 20% of the finance costs.

There is certainly a lot to consider and Landlords are advised to use the time until the changes take effect, in 2017-18, to ensure they fully understand how they will be affected.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 

Ed Gooderham’s thoughts on the Budget

Ed Gooderham, partner at Green & Co, tweeted along live with George Osborne’s Budget announcements. Catch up with his thoughts here…

If you have any questions on any of the above or about the Budget in general, please don’t hesitate to contact us on 01633 871122

Own More Than Two Residential Properties? Beware Of The Proposed New Stamp Duty Charges!

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From 1 April 2016 the government will introduce higher rates of stamp duty land tax on purchases of additional residential properties.  This has been the subject of a consultation document which has now been published. The government proposes to introduce higher rates of stamp duty land tax, which will apply to the majority of purchases if, at the end of the day of the transaction, individual buyers own two or more residential properties.

The higher charge will not apply if the purchaser is merely replacing their main residence.

As the proposals stand at present, the current rates of SDLT will increase by 3% if additional properties are purchased with a value in excess of £40,000, and will apply to the whole property, not just the amount that exceeds £40,000.

For example if an additional home is purchased for £250,000, 3% will be due on the first £125,000 (as opposed to 0%) and 5% will be charged on the remaining £125,000 (instead of 2%). Certain transactions will be exempt such as caravans, house boats, time shares and mobile homes. Furnished holiday lets will, however, fall within the charge.

The consultation process closed on 1 February 2016. The final design of the new rules will be revealed in the budget on 16 March 2016. So if you are considering buying a second residential property, you need to keep a close eye on the budget announcements.

For further information please contact Green & Co.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Sujin Jetkasettakorn at FreeDigitalPhotos.net

Autumn Statement – The Big Question

Ed Gooderham and Nick Park look at two key issues raised by the Autumn Statement in answer to the South Wales Argus‘ Big Question this week (see below for their answer in full):

www.greenandco.com

“The Autumn Statement has raised, in particular, two key issues.

The good news is that there are changes to Stamp Duty Land Tax (SDLT). Under the old rules (the slab system), house buyers paid tax at a single rate on the entire property price. The new rules mean that house buyers will only pay the relevant rate of tax on the part of the property price that falls within each tax band. As with the old system, there will be no stamp duty on properties under £125,000. However, at the £250,000 threshold, the duty only increases to 2% and there are increases to 5% and 10% for properties up to £925,000 and £1.5m respectively.  These changes will greatly reduce the burden of stamp duty on those looking to get a foot on the housing ladder.

The bad news relates to businesses changing from sole traders or partnerships to limited companies. Based on the information that we have seen so far, it will no longer be possible to claim Entrepreneurs’ Relief on the sale of goodwill to a related company. Similarly, it will no longer be possible to claim Corporation Tax Relief on goodwill purchased from a related party. These changes are effective immediately, but do not affect purchased goodwill from unrelated parties.”

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.