Monthly Archives: November 2024

Making Tax Digital (MTD) is set to expand to cover income tax starting from April 6, 2026. If you’re self-employed with annual earnings exceeding £50,000, you must be prepared for this transition. For some already registered for VAT, the MTD rules for VAT might be familiar territory. Still, it’s prudent to consult a self-assessment accountant to stay comply with the new requirements for MTD for ITSA.

How does MTD affect the self-employed?

Instead of submitting returns via HMRC’s website, you will need to keep digital records and use compatible software that connects to HMRC to submit information. Starting on April 6, 2026, you’ll also need to send quarterly updates to HMRC and submit a Final Declaration for all your taxable income by January 31 each year.

The VAT registration threshold was raised to £90,000 from April of 2024. If your earnings meet or exceed this threshold, you’ll have to register for VAT. Once registered, HMRC will automatically enrol you in the MTD system, ensuring you’re aligned with digital tax reporting standards.

Benefits of MTD for the self-employed

• Automating data entry means bookkeeping records automatically fill your quarterly updates, reducing the risk of human error.
• Submitting quarterly updates gives you a clearer picture of your total tax liability, aiding in tax planning.
• The updates submitted to HMRC are more frequent but contain less information. This allows you to break down bookkeeping into manageable monthly or quarterly tasks. 

Do you have to go digital?

If you are eligible, transitioning to digital processes is mandatory. Some exceptions include foster carers and individuals unable to acquire a National Insurance number.

Have a self-assessment accountant assess your eligibility. Our self-assessment accountants at Allenby Accountants are well-versed in MTD legislation and will help you determine whether or not it applies to your business.

Call us at 0208 914 8887 today.

The Oct 30 Budget highlighted a commitment to boosting public service spending and investment, with an anticipated rise of approximately £70 billion annually, equaling 2% of GDP. The tax changes unveiled by the Chancellor are projected to cover more than half of this surge in public expenses, with the remainder being addressed through government borrowing.
It’s a good idea to consult tax advisors in London to understand how these updates may affect you and your business:

• The rates and thresholds for employer’s National Insurance contributions are being adjusted. This change alone is anticipated to generate £25 billion more in taxes each year.
• The rates of capital gains taxes are going up and these changes are effective immediately.
• From 6 April 2025, adjustments to the rates for Business Asset Disposal Relief will come into play.
• Inheritance tax relief updates have been targeted, affecting businesses, unquoted shares, agricultural property, unused pension funds, and death benefits, while the current thresholds for inheritance tax will stay the same until April 2028.

The Chancellor confirmed that VAT rates, income tax rates, and employee National Insurance contributions will stay the same.

However, the government will implement several measures previously suggested by Labour before the election. These include eliminating the remittance basis of taxation for individuals not domiciled in the UK, revising how carried interest is taxed, imposing VAT on private school fees, and raising the Energy Profits Levy.

For a more comprehensive understanding of the budget changes, consult with our reliable tax advisors in London at Allenby Accountants. We can assist you in navigating the complexities of taxation and help you minimize your tax liabilities while staying compliant with the latest regulations.

Email our tax advisors in London at info@allenbyaccountants.co.uk to schedule a consultation.

Following Trump’s victory in the US presidential election, there is a lot of curiosity about its implications for the worldwide economy. According to a real estate expert, the fear that capital gains tax might rise in the United States under Kamala Harris has been alleviated with Trump’s win.

UK investors have long favoured the US as a destination for seeking advantageous tax conditions, and there’s been a notable surge in interest among UK residents in purchasing holiday homes there — a trend that’s increasingly viewed as a strategy to safeguard retirement savings.

This trend may very well continue following President Trump’s election. His incoming administration promises to focus on lowering taxes and reducing regulatory burdens aims to create a more stable investment environment and make the US even more appealing to foreign investors. According to UK real estate analysts, these policies should also prompt the UK government to reconsider any further tax increases.

Chancellor Rachel Reeves introduced a 5% increase in Stamp Duty for second home purchases in a recent budget announcement. Capital gains tax rates have also been revised upwards, with the lower rate now ranging from 10-18% and the higher rate from 20-24%. These fiscal adjustments, according to UK property analysts, may lead investors to reassess the attractiveness of UK properties and consider alternatives abroad, particularly the US.

If you are among the investors thinking about investing in US properties, consult with competent property accountants first to fully grasp the implications of your purchase on your tax liabilities as a UK taxpayer. It’s also crucial to understand how American property taxes, zoning laws, and exchange rate fluctuations can significantly affect the final cost of property deals. It’s also important to stay vigilant about changes in US immigration and tax regulations given the potential shifts under President Trump’s administration.

Schedule a consultation with our property accountants at Allenby Accountants today. We can help you start your journey towards successful US property investments.

If you’re a landlord, you might have heard of HMRC’s recent announcement about the Let Property Campaign. This initiative encourages landlords to come forward and address any unpaid taxes on rental income, regardless of whether they own a single property, multiple properties, a vacation home, or rent out a room above the Rent-a-Room Scheme threshold.

HMRC has made it clear that landlords who haven’t disclosed their rental income need to take action immediately. After disclosing, they have a 90-day window to figure out and pay any tax that’s due. Not doing so could result in hefty fines or even legal proceedings if HMRC discovers the unpaid taxes at a later stage.

Landlords will owe tax on their rental income, minus any allowable expenses and deductions. The amount of tax owed depends on their individual tax bracket (basic or higher rate). It’s best to seek the help of accountants for landlords if you need assistance.

Several common pitfalls can lead to tax troubles for landlords. These include renting out a property after moving in with a partner and failing to report the income, continuing to rent out a marital home post-divorce without disclosure, and overlooking the requirement to declare rental income from inherited properties.

Other scenarios that might initially seem innocuous, like leasing a property to help cover care home expenses or renting out a flat to college students, can also lead to errors in reporting rental income.

Note that claiming ignorance about the taxability of rental income in these situations will not absolve you of responsibility, so consult with your accountant to make sure that you’re staying compliant.

How our accountants for landlords can help

At Allenby Accountants, we have a team of experienced accountants who specialise in landlord taxes and can guide you through the process of disclosing and paying rental income taxes. Our expert knowledge of the tax system ensures that all your rental income is declared correctly, minimising the risk of penalties or legal action from HMRC.

Call us today at 0208 914 8887 to schedule a consultation.