10 Years of On The Spot Accountants
Top 10 Tax Trends!
- Digitalisation. HMRC and Companies House through .gov.uk are embracing this. Through the speed of setting up a company and filing forms, to checking your state pension online, now moving to filing VAT returns direct from a spreadsheet. At the same time, ‘Making Tax Digital’ is expected to increase taxes raised, but we’re not sure that will prove true.
- Apps. Allied to the above, there are many user-friendly apps to help record your receipts, business mileage, or review your profit or cash balance, integrating with your accounting records, making life a bit easier.
- Self employment crackdown. The large growth in self employment with lower national insurance has warranted several government responses, such as pushing one-person limited companies into being taxed as employees without any employment rights. But true self employment in fairly large numbers is probably here to stay.
- Simplification and complication! Large tax free personal allowances, tax free interest and dividends at low levels helps focus HMRC’s attention on bigger figures and is often sold as a simplification. On the other hand, there has never been so much tax law with many trip-ups for the unwary because politicians like to fiddle to meet their agendas. You can bet that as long as there’s an Office of Tax Simplification, tax will continue to get more complicated!
- Buy To Let properties are bad. The adverse tax rules that have continued to be introduced over the last few years, with a further blow in the last Budget, shows that Governments see this as an area for some pickings. Buy to let owners will sell up, many by April 2020, adversely affecting the housing market, but perhaps that was the plan?
- Tax avoidance crackdown. Another thing that’s expected to improve the public finances. This has continued for many years and has raised some money, but we must remember that evasion is illegal and this needs more attention. Tax avoiders using the law to its extreme, but often losing in the courts, tend to be known to HMRC. What about all the unknowns, unregistered people who should pay tax?
- Accountants aren’t needed. Simpler ‘micro’ accounts are allowed for small companies, cash accounting for sole traders and ‘Tax doesn’t have to be taxing’ campaigns all have their place, but the actual experience of the uninitiated is very different and HMRC will admit they couldn’t run the tax system without accountants.
- Reference to family income. For child benefit, HMRC need to know both parent’s income (married or not) and you need to know each other’s income. For some, this is an unusual and not always easy conversation to have, and there have been many mistakes by HMRC in this area.
- Encouraging Research & Development – A bit! Seen as a good thing for the overall economy, there are good tax reliefs available to help reduce large and small companies’ tax bill and cashflow. So the last Budget was a blow to small businesses where new restrictions were brought in, because a few people were making fake claims.
- Encouraging Entrepreneurship and Investment. With income tax and capital gains tax incentives to invest in young businesses, a low 10% capital gains tax rate when business owners sell their businesses, and no Inheritance Tax on many businesses, these reliefs are very welcome and do encourage growth.