Review of the 2014 Autumn Statement

04 December 2014 •

In his 2014 Autumn Statement the Chancellor announced a number of significant changes. Here is our initial reaction to these changes, as well as an overview of some of the key points that could affect you and your business.

Stamp Duty Land Tax

This was one of the key changes announced in the Chancellor’s Autumn Statement and the changes are anticipated to deliver savings for up to 98% of the house purchasing public. Rather than a stepped method of calculating Stamp Duty Land Tax on acquisitions of residential property, from 4th December 2014, this will change as follows:

Property Value (£) Tax rate charged on part of property price within each tax band (%)
0 – 125,000 0
125,001 – 250,000 2
250,001 – 925,000 5
925,001 – 1,500,000 10
1,500,001+ 12

Broadly, the new calculation mechanism means a lower SDLT charge on values up to £937,500, but a higher charge for property purchase above this value.

Entrepreneur’s Relief Changes

Changes have been announced to the availability of Entrepreneur’s Relief on the incorporation of sole trader and partnership businesses into Limited companies.  From the 3rd December 2014 Entrepreneur’s Relief will no longer be available on the transfer of good will between these connected parties and no corporation tax deduction is available within the company for the amortisation of this acquired goodwill for the company.

ISA Transfers

The Chancellor announced that he will now allow for ISAs to be transferred to surviving spouses on death of an individual and retain the tax benefits of the ISA “wrapper”.

Pension Transfers

As previously announced the onerous 55% tax charge payable by pension schemes on transfer at death has been abolished. Now surviving family members can receive these pension funds free of tax.

Remittance Basis charge

A new rate for UK resident/non-domiciled individuals utilising the remittance basis has been announced. Individuals who have been a UK resident for more than 17 of the last 20 years will now incur a £90,000 remittance basis charge if they wish to utilise the remittance basis.

In addition, the £50,000 remittance basis charge which is incurred by UK resident/ non-domiciles who have been resident in the UK for more than 12 years has been increased to £60,000.

If you would like to talk to one of our tax team and explore what this Autumn Statement could mean for you and your business, please call 020 7731 6163

No responsibility for loss occasioned to any person acting on or refraining from action as a result of the material in this email can be accepted by us.

Fulham Boys School a new secondary school in Fulham officially opened

02 December 2014 •

Having been assisting the newly established Fulham Boys School as auditors and tax advisors for the last couple of years, Warrener Stewart was delighted to attend its official opening as a new secondary Free School in south west London on 21st November.

Nick Morgan, Ryan Lane and David Bayman joined with local dignitaries including The Rt Hon Greg Hands MP and the Rt Revd Paul Williams, Bishop of Kensington to celebrate the opening of London’s first secondary Free School for boys. In recognition of the school’s hard work and the Government’s commitment to the development of more Free Schools Nick Gibb, Minister of State at the Department for Education also attended the official opening.

Local parents have worked tirelessly with FBS governors and staff over the past five years to access government funding to start a Free School.  Warrener Stewart were delighted to have been appointed as the school’s auditors from the outset and during recent years to have worked alongside the governors to ensure the school could open to their first Year 7 intake in September 2014.

Warrener Stewart’s director, Nick Morgan who is the Firm’s principal contact with FBS commented; “This school is great news for Fulham and the surrounding area and promises to deliver great things in the future. It’s the culmination of 5 years hard and thankless work by the original founders and others who have joined them along the way. We look forward to being a small part of the evolving success.”

A landlords guide to tax liabilities

13 November 2014 •

Navigating the rental market as a landlord can often be confusing. While there are many rewarding aspects to being an investor, there are also tax obligations to bear in mind.

Writing in this month's KFH's London Property Market Blog, our tax expert Ryan Lane outlines some allowable expenses landlords can enter on their annual tax return.

If you are planning on letting a property in the UK, your rental income profits will be subject to income tax. This is fairly standard, however there are still many who don’t fully understand what this entails and what implications you may face should you not adhere to HM Revenue & Customs (HMRC) procedures. In order to avoid any penalties, a self-assessment tax return must be submitted annually to HMRC. Your profits will then be subject to tax at a rate of 20%, 40% or 45%, depending on your total income in that tax year.

There are ways in which you can mitigate some of your tax liabilities. One way is to ensure that you have deducted all the allowable expenses from your total rental income as you would only be taxed on your net rent. The list of allowable expenses is comprehensive and includes contents insurance, lettings agent’s fees, maintenance and repairs to the property and the cost of services. According to the Landlord’s Energy Saving Allowance, you could also reduce your tax bill by up to £1,500 by installing energy saving products. If you’re a landlord with multiple properties, employing an accountant may be beneficial to ensure you are making the most effective use of your tax allowances.

HMRC has strict procedures in place. These include timelines on notifying HMRC of new sources of income and deadlines on filing tax returns. Failure to comply could lead to tough financial penalties for you. For example, failing to notify HMRC of taxable rental income could result in a fine of up to £3,000. HMRC is aware of a large tax shortfall from landlords failing to register their property business. To address this problem, it has introduced the Let Property Campaign. For landlords who have failed to declare their correct rental income, the Let Property Campaign provides the opportunity to get their tax affairs in order. Reporting undisclosed income now, will mean exposure to penalties will be limited from 100% of the tax due, to a maximum of 20%.

If you have any questions about tax requirements for landlords please contact one of the Warrener Stewart tax team at our Fulham offices.

Double entry at Warrener Stewart

31 October 2014 •

Two new recruits join the Fulham chartered accountants

To meet the growing accountancy and tax needs of our clients, Warrener Stewart has recruited two new trainees to join their Fulham offices.

Suzie Chadwick, who has a degree in Economics and Accounting from the University of Southampton, joins as a trainee accountant. Whilst Ryan O’Connor is the latest trainee tax technician to be recruited to the expanding tax department.

Both new recruits have chosen to continue their training whilst they work, combining a heavy schedule of exams alongside working for many of the owner managed businesses that Warrener Stewart handles.

For Suzie, joining a medium sized firm of chartered accountants like Warrener Stewart gives her the opportunity to gain experience across a wide range of businesses. Commenting upon her appointment she said; “Following my degree I started work within the financial sector before deciding to train as a maths teacher. Whilst teaching was rewarding, I wanted to learn and gain more skills; this is the perfect way to develop my accountancy career whilst gaining experience in all aspects of client handling from VAT returns to preparing accounts for audit.”

The opportunity to study and work alongside the experienced tax professionals at Warrener Stewart was the driving force for Ryan O’Connor to become part of the tax team as a trainee tax technician. After graduating in Sports Rehabilitation, Ryan decided upon a change of direction into tax. “I wanted to make the move to London and work in taxation, when an opening came up within the tax department at Warrener Stewart.” 

HMRC spam email

11 September 2014 •

Based on our experience, it is at this time of the year that spam email traffic, purportedly from HMRC, starts to increase.

These emails advise the recipients that they are due a tax refund and requests details of bank accounts in order that the refund can be sent to them.

It is HMRC policy that they will NOT send direct emails to taxpayers detailing tax refunds or requesting personal information and if you do receive an email of this kind, we recommend that you delete it. 

Simply get in touch with us if you have any questions regarding your tax position.

Warrener Stewart joins the ICAEW Business Advice Service

28 August 2014 •

Why it is some businesses thrive and other’s barely survive?

Professional business advice for SME’s and startups can frequently be the difference between their survival and their failure. The professional membership organisation for chartered accountants, the ICAEW, recognises that as qualified business advisors chartered accountants are perfectly placed to help fledging business so has introduced the Business Advisory Service (BAS).

Fulham based chartered accountants Warrener Stewart has been helping owner managed business of all sizes make sense of their numbers for the last 30 years. Joining the ICAEW’s BAS scheme seemed a natural progression to helping business owners, many of whom are based near Warrener Stewarts’ offices in SW6.

Under the ICAEW’s scheme, businesses who are not currently using Warrener Stewart are offered a free, one hour consultation to discuss a business related matter with one of their expert principals.  Commenting on the scheme, company director Gary Chapman, who signed Warrener Stewart up to BAS, said:

“So many businesses face the same concerns throughout their lifecycle, such as developing and implementing a business plan, through to understanding their tax liabilities and how to access finance, plus knowing how to restructure their company.  Since we work with such a wide variety of owner managed businesses we felt that we had a wealth of experience that new clients could benefit from so happily signed up to BAS.”

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