Now that the dust has settled from the recent budget, Andrew Hannay has dug a little deeper and beyond the headlines and discovered some issues that need consideration.
As well as freezing thresholds on income tax, inheritance tax and the annual CGT exemption for capital gains tax the government made some less well noted changes.
Firstly, in an attempt to keep tax fairer HMRC have introduced a new penalty system for filing returns or settling tax bills late. This will be phased in and by April 2024 and by then all self-assessment taxpayers will come under this regime. Many of the new reporting requirements will be quarterly and returns are expected to be made digitally. This will affect many people including the self-employed and those with property income over £ 10,000.
Preparation is key as the Government looks to speeding up its tax take. The new regime looks much tougher.
There will be separate fines for late returns and settling tax late.
The second change is to bring Family Investment Companies into line with the changes to corporate tax rates. They will no longer benefit from the 19% tax charge and will now pay tax at 25% regardless of profits.
Many wealthy shelter their wealth in these vehicles and they may be wondering what this means for them. This starts in 2023, so sit tight for the moment but get talking to your advisers now.
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