HLAS

The Scottish Parliament has the power to set income tax rates on non-savings and non-dividend income for Scottish taxpayers. In the Scottish Budget of 15 December 2022, it has been confirmed that the 5-band structure will remain for 2023/24 and most of the thresholds are unchanged. Like the rest of the UK the top rate threshold has been reduced to £125,140. However, unlike the rest of the UK, the Scottish higher rate and top rates have been increased by 1%. The 19% Scottish starter rate will continue to apply to income between £12,571 and £14,732 (as in 2022/23). The Scottish [...]

The table below sets out the HMRC advisory reimbursement rates for employees' private mileage using their company car from 1 December 2022. Where full reimbursement is made there is no taxable fuel benefit. The rates for the previous quarter, if different, are in brackets. Note that for hybrid cars you must use the petrol or diesel rate and for fully electric cars the rate is now 8p per mile (previously 5p per mile) You can continue to use the previous rates for up to 1 month from the date the new rates apply.

A new points-based system for late VAT returns starts for return periods commencing on or after 1 January 2023. A financial penalty will apply when a number of points have been accumulated, which will depend on how frequently the returns should be submitted. For a trader preparing quarterly returns a penalty will be charged when four points have been accumulated.

The 130% super-deduction for the investment in plant and machinery was introduced in the March 2021 Budget. The enhanced tax deduction is available to limited companies that acquire new plant and machinery between 1 April 2021 and 31 March 2023. Companies should consider bringing forward plans to acquire new plant to benefit from this generous tax allowance. Note that the expenditure must be incurred before the 31 March 2023 deadline.

The CGT annual exempt amount reduces from £12,300 to just £6,000 for gains made in 2023/24. Remember that the 2022/23 allowance is lost if not used by 5 April 2023 and you might want to consider bringing forward disposals of chargeable assets where possible. Where a married couple who are higher rate taxpayers own a buy to let property, bringing forward the disposal from 2023/24 could potentially save £3,528 CGT (£24,600 - £12,000 @ 28%). It would be important to exchange contracts before 6 April 2023 as that is the critical date for CGT.

When considering the wording of your Will you should note that the inheritance tax (IHT) nil rate band continues to be frozen at £325,000 until 2028. There is an additional nil rate band of up to £175,000 for passing on the family home to direct descendants on death. We can work with your solicitor to make sure your Will is tax efficient. Where the nil bands are unused on the death of the first spouse the balance is available on the death of the surviving spouse, potentially allowing a married couple (or civil partners) to pass on assets of up to [...]

Top of the New Year to do list for many individuals is to make or update their Will. Many think this is something to leave until later in life but it is important to get things in place once property is acquired or when children come along. In the absence of a will there are statutory rules which dictate how your assets are distributed on death. Those statutory intestacy rules may not be tax efficient and you might to want to make specific provision in your Will for your unmarried partner or for the guardianship of your children.

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and by their employer. Under the current rules, the government adds to your pension contributions at the 20% basic rate. For instance, if you save £4,000 in a personal pension the government tops this up to £5,000. If you are a higher rate taxpayer there is a further £1,000 tax relief when your tax liability is calculated, reducing the net cost to £3,000. This can be even more effective if your income is between £100,000 [...]

Employees in Britain will be able to request flexible working from day one of their employment, under new government plans to make flexible working the default. Flexible working doesn’t just mean a combination of working from home and in the office – it can mean employees making use of job-sharing, flexitime, and working compressed, annualised, or staggered hours. Workers on contracts with a guaranteed weekly income on or below the Lower Earnings Limit will also be protected from enforced exclusivity clauses, which restrict workers from having multiple employers. The new legislation, backed in the government’s response to the Making flexible working [...]

Following consultation with the border industry, exporters will now have until 30 November 2023 to move across to the Customs Declaration Service (CDS), 8 months later than previously announced. After 30 November 2023, businesses will need to use CDS to make export declarations for goods they send out of the UK, as they already do for import declarations. CDS has been running since 2018 and is already being used for making import declarations when moving goods into the UK. The service will replace the Customs Handling of Import and Export Freight (CHIEF) service, representing a significant upgrade by providing businesses [...]