Tax Newsletter January 2019

Happy New Year… our newsletter this month includes: a reminder that self-assessment tax returns and liabilities are due by 31 January 2019;  a CGT planning idea for married couples and a brief note about the Loan Charge disclosure requirements.

 

Our next newsletter will be published on Thursday, 7 February 2019.

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Newsletter January 2019


April 2019 Loan Charge Disclosure

The Loan Charge affects anyone who took a loan (after April 1999) from an employment related trust.  In such cases, the individual is required to disclose details of the loan to HMRC. Disclosure must be made before 1 October 2019 however HMRC have stated that it must not be made before 5 April 2019.

 

Significant penalties will arise if the information is not provided within the stated time limits or if the information provided is incorrect.

 

The responsibility to make the disclosure rests with the employee, ie the person who received the loan.


 

Tax payment time again

As you will be aware, 31 January  2019 is the deadline for submission of 2017-18 self-assessment tax returns. It is also the date by which the balance of tax for 2017-18 needs to be paid together with a payment on account for 2018-19, if one is due.

 

We are currently working hard to ensure we help all of our clients to meet that deadline.  If your return has already been signed and submitted to HMRC but you can't remember how much you need to pay - full payment instructions can be found in the letter originally sent to you with your tax return.

 

If you have cash problems and are unable to clear tax due on the 31 January, you can approach HMRC for extended terms. Call:

 

Business Payment Support Service – 0300 200 3835, or
Self Assessment Payment Helpline – 0300 200 3822

 

If you miss the payment deadline and receive a letter or bill threatening legal action, call the HMRC office that sent you the letter.

 

Before you call be sure to estimate how much you can pay on account and you will normally need to clear any balance before any future payments on account become due (ordinarily this would be before 31 July 2019 when the second payment on account for 2018-19 falls due).

And don’t forget, HMRC will charge interest on tax paid late and penalties so make your call before the 31st January 2019 to minimise these costs


 

CGT planning for married couples

This article is also relevant to couples who have entered into a civil partnership.

 

For the tax year 2018-19, taxpayers can make tax-free capital gains of up to £11,700.

 

This allowance is available on a per person basis and so married couples (and those in a civil partnership) have a combined CGT allowance of £23,400.

 

Consider married couple John and Joy. Joy wants to dispose of a block of shares before 6 April 2019, but this will create a taxable gain of £22,000. After her CGT allowance is deducted this will create a CGT bill of £2,060 – Joy is a higher rate taxpayer and so she would pay CGT at 20%.

 

John is retired and has relatively little income for 2018-19 and no capital gains. It is quite legitimate for Joy to gift 50% of her shares to John before they are sold – gifts between spouses and civil partners are free of CGT. Each party would then sell their half-shares and chargeable gains of £11,000 each would be covered by their £11,700 allowance. Hey presto, no CGT to pay.

 

John and Joy decide to use the tax saved to fund a well earned winter break abroad. Not a bad outcome and an entirely acceptable tax planning ploy.


 


 

 

Tax Diary January/February 2019

1 January 2019 - Due date for Corporation Tax due for the year ended 31 March 2018.

19 January 2019 - PAYE and NIC deductions due for month ended 5 January 2019. (If you pay your tax electronically the due date is 22 January 2019)

19 January 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 January 2019.

19 January 2019 - CIS tax deducted for the month ended 5 January 2019 is payable by today.

31 January 2019 – Last day to file 2017-18 self-assessment tax returns online.

31 January 2019 – Balance of self-assessment tax owing for 2017-18 due to be settled on or before today. Also due is any first payment on account for 2018-19.

1 February 2019 - Due date for Corporation Tax payable for the year ended 30 April 2018.

19 February 2019 - PAYE and NIC deductions due for month ended 5 February 2019. (If you pay your tax electronically the due date is 22 February 2019)

19 February 2019 - Filing deadline for the CIS300 monthly return for the month ended 5 February 2019.

19 February 2019 - CIS tax deducted for the month ended 5 February 2019 is payable by today.


DISCLAIMER - PLEASE NOTE: The ideas shared with you in this email are intended to inform rather than advise. Taxpayers circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.