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 Advice for small businesses AMS Accountancy Ltd. 01793 818400 HMRC’s Let Property Campaign LOVE OFFICE SPACE Flexible space with great terms MEETING ROOMS VIRTUAL OFFICE TELECOMS BUSINESS SUPPORT As a business owner, it’s your passion and commitment that drives your business. Basepoint Business Centres share this enthusiasm and are committed to helping businesses by offering first-class workspaces alongside services that support you in making your business a success. Offices | Flexi-Space | Virtual Office | Meeting Rooms Unique workspaces for your business Contact us today 70+ videos on YouTube. Search ‘AMS Accountancy’ 01793 602555 [email protected] @basepoint_swnd 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