Capital gains tax rules for separating spouses relaxed
Magma Tax Blog
by Karl Greaves
1y ago
From 6 April 2023, some of the capital gains tax (CGT) advantages of being married have been extended to last for longer post-separation.    Separating spouses or civil partners can continue to transfer most assets to each other without paying any CGT on any increase in value for up to three years after the tax year of the separation (or the date of divorce if earlier). Assets which form part of a formal divorce settlement are not subject to a time limit at all. In both cases, CGT on any such asset will effectively only be realised when the receiving spouse or civil partner subsequen ..read more
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Full expensing investment allowance: A new tax incentive for UK businesses?
Magma Tax Blog
by Karl Greaves
1y ago
Jeremy Hunt recently announced a new investment allowance, in an attempt to soften the impact of the much-criticised corporation tax hike.  But will it work?  Revealed in the Spring Budget, this new scheme will replace the super-deduction and allow companies paying Corporation Tax to offset the entire cost of qualifying assets against tax in the year of purchase, resulting in an effective 25% reduction in investment costs. Basically, this new allowance means that any companies spending money on new plant or machinery (broadly defined, from office furniture to wind farms) can be deduc ..read more
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IHT receipts up to £5.9bn with record breaking year expected
Magma Tax Blog
by Karl Greaves
1y ago
The latest data shows that there’s no respite in sight, with Inheritance Tax (IHT) receipts hitting £5.9bn throughout the period of April 2022 to January 2023 – a 15% increase on the previous year. With IHT tax receipts averaging £588mn a month this year, it’s predicted that this years’ takings will blow the old record of £6.1bn out of the water, exceeding the £7bn mark. These figures will be pleasing on the eye for the Treasury, as the combination of frozen thresholds announced in the Autumn Statement (current tax-free allowance of £325,000 is frozen until 2027/28), increased house prices and ..read more
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HMRC interest rates for late and early tax payments rise… yet again
Magma Tax Blog
by Karl Greaves
1y ago
With the Bank of England’s base rate and HMRC’s interest rates being tightly knit, the Monetary Policy Committee’s decision on 2 February 2023 to increase the base rate to 4% has forced HMRC’s hand in increasing the interest rate for late paid tax and the rate paid on repayments of tax. What are the changes? From 13 February 2023, companies in the Corporation Tax quarterly instalment payment regime will see an interest increase from 4.5% to 5% for underpayments For all other late payments of taxes (business or personal), an increase from 6% to 6.5% will take affect from 21 February 2023 I ..read more
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Capital gains tax receipts hit record levels
Magma Tax Blog
by Karl Greaves
1y ago
Official data shows that capital gains tax (CGT) receipts have almost doubled over the last 4 years, representing a record breaking £15.3 billion in the year to 31 October 2022. Part of this meteoric rise in CGT takings can be attributed to a rush in property sales.  The end of the pandemic, stamp duty holiday and linked increases in property prices encouraged volumes of buy-to-let investors to sell their assets and take advantage of market conditions. The cutback in the lifetime allowance of Business Asset Disposal Relief (BADR) in March 2020, from £10 million to £1 million, was a furthe ..read more
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R&D – What do we know?
Magma Tax Blog
by Karl Greaves
1y ago
Research and development relief (R&D) has been the talk of the town, especially since the reform bombshell of the 2022 Autumn Statement.  The current eight-week consultation points towards further reform, considering the case for a single and more manageable R&D scheme. What are the confirmed R&D changes for 1 April 2023 SME rate reduces from 130% to 86% SME tax credit rate reduces from 14.5% to 10% Large company/R&D Expenditure Credit rate (RDEC) increases from 13% to 20% Changes to accounting periods from 1 April 2023 Disallowance of overseas costs such as non-UK agen ..read more
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Calls to modernise the P11D process
Magma Tax Blog
by Karl Greaves
1y ago
The ICAEW have openly called on HMRC to improve form P11D, used to report benefits in kind (BiK), to make it easier for employers to complete. A P11D is a form used to report expenses and benefits paid to directors and employees which have not been subject to PAYE tax. The process of reporting can be complicated, as well as unwieldy, with employers liable to receive a penalty of £100 for every 50 employees for each full month that the return is late. A suggested revamp would simplify the form and ‘surrounding processes’, easing the administration burden for HMRC, employers and employees. One o ..read more
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Electric vehicles – mileage claims and charging
Magma Tax Blog
by Karl Greaves
1y ago
Electric and low emission vehicles (EV) remain highly sought after.   Despite the slight increase to the benefits in kind (BiK) tax rate to 2% this April, EVs remain a widely tax-efficient option for businesses and employees.  We often get asked about the tax position on EV mileage claims and charging costs? Claiming Mileage for employee EVs (including those under salary sacrifice arrangements) For employees claiming mileage on their own EV usage, HMRC’s Mileage Allowance Payment (MAP) sets the rate at 45 per mile for the first 10,000 miles then 25 pence for any additional miles ..read more
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The rising cost of corporation tax
Magma Tax Blog
by Karl Greaves
1y ago
Most business owners are very aware of the upcoming corporation tax hike. From 1 April 2023, corporation tax will increase from 19% to 25%, with the nearly one third cost increase fully affecting businesses with taxable profits over £250,000. Such is the level of increase that accelerating proposed asset disposals, reconsidering the timing of planned capital expenditure and even changing company year ends are all hot topics of conversation. Corresponding, but less highlighted, changes to “super-deduction” rules for capital allowances, research & development tax legislation and ch ..read more
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Personal tax returns – the last-minute rush….. 
Magma Tax Blog
by Karl Greaves
1y ago
As of the turn of the year, according to HMRC, around 47% of people were yet to file their 2021/22 self-assessment tax returns.  That’s around 5.7 million of the 12.1 million anticipated.    To avoid automatic penalties, 2021/22 tax returns must be filed by midnight on 31 January 2023.  Any tax due must also be paid by that point too.     Speak with us If you need assistance, our dedicated Private Client team will handle all your queries surrounding the upcoming tax return deadline……be warned though, they are very popular at the moment! The Team Our experienc ..read more
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