The Business Exchange Swindon & Wiltshire Edition 40: Dec/Jan 2018/19 | Page 10
FINANCE
UNDERSTANDING
CAPITAL GAINS
Local reaction to the
Chancellor’s Autumn Budget
Business leaders in the South West responded to the
Chancellor’s Autumn Budget, with some calling it the
most positive budget in years – however, others felt it
didn’t go far enough in terms of supporting business.
Philip Hammond declared that “the era of
austerity is finally coming to an end” and highlighted
better than expected GDP growth for the UK.
But local accountancy firm Milsted Langdon said
small businesses had expected more.
Rob Chedzoy, Tax Partner at Milsted Langdon,
said: “What with the difficulties and uncertainties of
Brexit and the importance that small to medium-
sized businesses (SMEs) play within the wider
economic picture for the UK, we would have hoped to
see more measures to support their growth, but the
Budget was certainly lacking in this area.”
Rob said business owners would, for instance,
see the qualifying period for Entrepreneurs’ Relief
extended from one to two years, which will generate
an additional £90m by 2023/24 for the treasury and
affect businesses’ tax planning opportunities.
“The National Living Wage, in particular, will rise
to £8.21 from April 2019 – an increase of 4.9 per
cent. Whilst positive for employees, this will have an
immediate impact on many employers’ wage and
workplace pension bills.”
Rob said that smaller giveaways, such as placing
a freeze on the VAT threshold and fuel duty and the
increase in the Annual Investment Allowance, from
£200,000 to £1m over the next two years, would help
businesses, but the measures didn’t go far enough.
Adam Rainey, regional director for the South West
at Lloyds Bank Commercial Banking, said the plan
to cut business rates by a third for retailers with a
rateable value of £51,000 or less would be a huge
help.
He said:“This could prove to be a lifeline for many
stores in the region’s high streets.”
Richard Mathews, chief executive of Optimum
Professional Services in Swindon, said it was good
to hear that the increases in personal allowance and
higher rate tax were being introduced a year early.
He said:“We’re also pleased that stamp duty
relief for first-time buyers is being extended, and
backdated, to those in shared ownership. Help with
business rates, freezing the VAT threshold, raising
the annual investment allowance and freezing duties
are all good news.
“But the Chancellor said nothing about pensions
or about National Insurance, and I find that silence a
bit worrying. As ever, the devil will be in the detail.”
Breakdown of annual exempt amounts
for capital gains
There is an order for deciding how to
set off the Annual Exempt Amount
(for Capital Gains) and Capital
Losses against Capital Gains.
1. The Annual Exempt Amount
(2018/19 £11,700) is set against any
Capital Gains in the year BEFORE
any Capital Losses are brought
forward. It is set against Capital
Gains at the highest tax rate;
2. Then any Capital Losses in the
year of the Gain are set against any
remaining capital Gain. Again, these
are set against Capital Gains at the
highest tax rate;
3. Then any unused Capital Losses
from earlier years MUST be used
and set against any remaining
capital Gain. Again, these are set
against Capital Gains at the highest
tax rate.
These rules ensure that the Annual
Exempt Allowance is not wasted by
claiming Losses.
They also ensure that Losses are set
against those Gains taxed at 28%
first, then 20%, then 18%, then 10%.
And finally, they ensure that Losses
are used as soon as possible.
Peter Bromiley ACA
Partner, AMS Accountancy
www.ask-ams.co.uk
01793 818400
Ask AMS
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AMS Accountancy Ltd. 01793 818400
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10
THE BUSINESS EXCHANGE 2018
If you rent out a residential property, HMRC need to know the total
amount received and the expenses you’ve paid for. It applies even if
there were periods when the property was empty. So what to do if
you’ve missed the submission date for a tax year or even more?
There is a process that you can sign up to called The Let Property
Campaign to cover situations like this. After signing up, HMRC give
you 90 days to send them the figures for the missing years and your
tax liability will be calculated.
This means that penalties will be reduced because you made the
initial step to admit you are late to HMRC. Also, if you can’t afford to
pay the tax in a lump sum, HMRC will agree monthly payments with
you.
The DDS form can be found on HMRC’s website; filling this in online
will inform HMRC of your decision to sign up for the Let Property
Campaign, and HMRC will send you a Disclosure Reference Number
to use for the process of disclosing the information.
basepoint.co.uk
@AMSAccountancy
www.ams-accountancy.co.uk