Category Archive: May 2016

  1. May 2016 Tax Tips & News

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    Welcome to May’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

    If you need further assistance just let us know.

    Annual tax enveloped dwellings

    New credit card payment fees take effect

    HMRC consultation on fulfilment house due diligence

    New student loan plans take effect

    Companies to be liable for employees who facilitate tax cheating

    May Questions and Answers
    Q. How do I work out my share of a capital gain?
    Q. Are my savings covered by the personal savings allowance?
    Q. Will I be entitled to tax-free childcare?

    May Key Tax Dates

     

  2. ‘One Rule’ for Furnished and Unfurnished Residential Property Lets

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    From April 2016 new rules are in place which align tax reliefs on the replacement of furniture available to landlords of residential property, be it furnished or unfurnished.  This takes us back to the rules in place in 2013 before HMRC made changes which confused everyone.

    The past and the future

    Until 2013 landlords could claim the cost of ‘renewing’ furniture, carpets, curtains, white goods etc. as an expense against rent. Incidental costs of acquiring the new asset or replacing the old were also allowed.  Any proceeds from sale of the old item were deducted from the replacement claim. In other words it was the net cost of replacement which was allowable against tax.

    The original cost of the furnishings bought when the property was first fitted out were not allowable, only the replacement.

    Replacement assets had to be substantially the same as the old item, there was no tax relief for an improvement.  An example being replacing a washing machine with a washer dryer, only the cost of replacing with another washer would be allowable.  It is often the case that HMRC allow the “nearest modern equivalent”, (similar to the concept of replacing single glazing with double glazing). Evidence may have been needed for your accountant to argue this point with HMRC.

    In 2013, HMRC announced that landlords could no longer claim the above ‘renewals’ relief, and tax relief on these costs effectively fell into a black hole.  This was viewed by many as unfair as for those landlords who let their properties fully furnished, they could claim the 10% ‘wear and tear’ allowance every year regardless of any expense actually being incurred. This gave furnished property landlords a tax allowance for replacement of furnishings whilst landlords of unfurnished or partly furnished lets could claim nothing at all.

    Furnished and unfurnished aligned under one rule

    From April 2016 the ‘wear and tear’ allowance rules are abolished and all landlords of residential property lets, be they furnished or unfurnished, will use the ‘renewals’ basis rules as above – the same as we had before 2013.  Although commercial property and furnished holiday lets continue to have their own rules.

    As you can see, the tax rules around residential property lets can prove a minefield for any individual with either 1 or a large portfolio of property.

    At Wright Vigar we have a team of technically qualified experts who are able to advise you on the best solution for you.

    Simply call Neil Roberts or one of the Property Team at Wright Vigar on 01522 531341 or email neil.roberts@wrightvigar.co.uk – we would be delighted to have the opportunity to help you!

  3. Business bitesize – May 2016

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    Welcome to Business Bitesize, Wright Vigar’s bi-monthly newsletter providing food for thought on general business matters.

    To download Business Bitesize ‘Successful Change review’ click herewvigar-bbs-logo_1795564

    Stand still and you lose, embrace change and your business wins… to find out more click here

    We hope you enjoy Business Bitesize. Please feel free to pass on this edition and the supporting tools to your colleagues or contacts. And if you would like printed copies just give the marketing team a call on 01522 531341 or email action@wrightvigar.co.uk