HMRC’s ‘Basic Period Reform’ made permanent
From the 2024/25 tax year, all self-employed individuals and partnerships will report business tax information to HMRC on a tax-year basis, regardless of their accounting period.
This changes all sole traders and partnerships to a 31st March or 5th April year-end. This follows a transition period (April ’23-’24) during which businesses were required to make all necessary adjustments. The transition period becomes permanent from 6th April 2024. The idea behind the reform is to simplify the rules and create a more transparent tax situation. It should also help avoid the possibility of double counting and therefore double taxation of profits, which can occur when a business basis period overlaps the accounting period.
VAT implications
HMRC calls this ‘Basic Period Reform’ and some clients may wish to change their VAT periods to align.
Staying with VAT, the Chancellor announced an increased threshold at which businesses must compulsorily register for VAT. The turnover threshold will increase from £85,000 to £90,000 from 6th April 2024.
Good news for savers
The budget included announcements about changes to ISA limits. The annual ISA investment limit will increase from £20,000 to £25,000 per year. An additional £5,000 investment within the tax-free investment wrapper has to be held and maintained within UK securities.
That’s as much detail as we have and there’s no start date as yet.
A new ISA
The Government also announced that a new ISA-style savings product is currently in the design and feasibility stages. No details are available as yet but it’s intended to encourage investment in UK companies. Watch this space…
A new National Savings Bond
Similarly, National Savings NS&I is to be enhanced by a new three-year British Savings Bond. This is apparently due to be launched in time for the new tax year, which is only a couple of weeks away, so expect announcements coming thick and fast, including an interest rate!
HMRC live webinars for landlords
If you’re a new landlord, or already receive rental income from a UK property, HMRC has announced two live webinars that could be of interest.
The webinars won’t cover capital gains tax, inheritance tax, or stamp duty, but you can ask tax experts live questions during the event.
Residential property income for individuals – an introduction
- What we mean by income from property
- An overview of furnished holiday lettings
- When to record income and expenditure
- The property income allowance
- The ‘Rent-a-Room’ scheme
You can register for this webinar directly with HMRC via this link: https://register.gotowebinar.com/rt/6945950733301064795?source=Gov
Residential property income for individuals – expenses and deductions
- Revenue and capital expenses
- Expenses before you start letting your property
- Costs for repairs, improvements, mortgage and finance
- Replacement of domestic items relief
You can register for this webinar directly with HMRC via this link: https://register.gotowebinar.com/rt/1296904081369422176?source=Gov
In other news…
HMRC telephone helplines’ future secured
HMRC have announced today (20/03/24) that they will not now be closing their self-assessment telephone helpline. It was confirmed just yesterday that the advice line would be closed from April to October each year. However, following feedback from the public, less than a day later this decision has been reversed.
VAT and PAYE helplines reprieved
Similarly, the VAT and PAYE helplines have also had a reprieve. The VAT hotline was due to become available for five days every month ahead of the deadline for filing VAT returns. And, the PAYE helpline for employers would no longer take calls from customers relating to refunds with all enquiries directed to use online services. Both of these decisions have been reversed.
See the HMRC website for more information: https://www.gov.uk/government/organisations/hm-revenue-customs
We’re here to help…
Please get in touch for more information on any of these matters We’re always happy to answer enquiries and guarantee to return calls and messages within 24 hours. Call 01482 631700 or use our website contact form https://www.rackhamsaccountants.co.uk/contact-the-team/
