Extensive changes to how taxpayers record and report income to HMRC are being introduced under a project entitled Making Tax Digital for Business (MTDfB) .
With the end of the tax year looming there is still time to save tax for 2016/17. We have set out some points you may want to consider.
In a change that will impact residential landlords, the amount of income tax relief available on residential property finance costs will be restricted to the basic rate of income tax. This change will mean that landlords will no longer be able to deduct all of their finance costs from their property income. They will instead receive a basic rate reduction from their income tax liability for their finance costs.
The old paper £5 note will no longer be legal tender from 5 May 2017 and may not be accepted in shops and could be refused by banks.
HMRC have released more unusual excuses from taxpayers who failed to complete their self-assessment tax return on time. These include:
Latest HMRC research has found that the tax authority’s 2015/16 self-assessment marketing campaign, urging taxpayers to file their return early, has been successful with overall awareness growing to highest levels, yet communications still lack around Making Tax Digital (MTD) which is scheduled to begin in 2018
On 15 August 2016 HMRC published six consultation documents on Making Tax Digital. The six consultations set out detailed plans on how HMRC propose to fundamentally change the method by which taxpayers, particularly the self-employed and landlords, send information to HMRC. Two key changes proposed are:
Phillip Hammond, The Chancellor of the Exchequer, will deliver the Autumn Statement on 23rd November. Whilst no one can be certain, these are some of the changes we anticipate.
People wishing to file their tax return on paper face a looming deadline, but flexible workers in the self-assessment process need to be aware of the rules.
HMRC have announced further details of the new Tax Free childcare scheme which is to be introduced in 2017.