Business Breakfast Autumn 2018

Axminster · Barnstaple · Bideford · Bridgwater · Burnham on Sea · Crediton · Exeter · Holsworthy · Honiton · Ilfracombe
· Okehampton · Plymouth · Seaton · Somerton · Tiverton · Torquay · Weston super Mare

By Your Side. On Your Sidewww.thomaswestcott.co.uk
Making Tax Digital for VAT

What is MTD for VAT all about?
 Accounting and VAT records will need to be kept on HMRC approved
software.
 This will need to be API enabled so that the trader can communicate
digitally with HMRC and they will be able to communicate digitally
with the trader.

Will it apply to me?
 Only if you’re VAT registered and have a turnover of £85k or more.
 Traders with voluntary registration for VAT with a turnover of less
than £85k will not be mandated.
 Reduction in turnover.

When does this start from?
 Your first accounting period beginning after 01/04/2019
 There are deferrals for some complex cases

What records will I need to keep?
 No manual records - these will not be MTD compliant
 Spreadsheets and MTD
 Detailed record keeping is required for MTD
 There are exceptions

Exemptions
 Practicing members of a religious society or those whose beliefs are
incompatible with the use of electronic means for communication.
 Persons for whom MTD is not practical for reasons of disability, age
or remoteness of location.

Cloud accounting packages
 Automatic updates are carried out online
 Your records are stored on the Cloud
 Ease of access
 User friendly software
 Apps to help you make the software suit your business requirements
 The packages are cost effective
 HM Revenue and Customs list of packages

Desktop packages
 Familiarity
 Suits your business
 Poor or unreliable internet signals
 HMRC list of packages

Deferment for complex cases
 Six month deferment to 01/10/2019
 VAT divisions/groups
 Public sector and local authorities
 Overseas based traders
 Annual accounting schemes

Digital links
 Use of more than one software package to complete their MTD VAT
accounting
 Digital links between software packages
 Soft-landing period

How can Thomas Westcott help their clients with MTD?
At Thomas Westcott we recognise that clients’ requirements for help will be
different from business to business. For this reason we are able to offer a mix
and match series of services.
• Assist businesses choose the best software to suit their business.
• Supply and implement the software package.
• Set up nominal ledger codings and mapping for accounts production.
• Train clients how to use the software.
• Provide after training support.
• Carry out a check prior to submission of return to HMRC.
• Provide a full bookkeeping and accounts facility.

Business Tax
 Capital allowances
 Off-payroll working
 Capital losses
 Business rates
Personal tax
 Entrepreneurs’ relief
 CGT on main residence
 NICs
 SDLT
 Non-residents

Budget 2018
Business tax

Budget 2018
Capital allowances
AIA
 Increase to £1M
 1 January 2019 to 31 December 2020
 Currently £200,000

Budget 2018
Capital allowances
Special rate reduction
 Applies to integral features and higher emissions cars
 Currently 8% on reducing balance basis
 Reducing to 6% in April 2019
 Currently 53% of cost tax relieved in first ten years
 Will reduce to 43%
 Effect offset by AIA increase

Budget 2018
Capital allowances
Structures and buildings allowances
 No tax relief for building structures since abolition of ABA and IBA in
2011
 Non-residential structures and buildings eligible for 2% allowance
 Contracts for physical construction entered into after 29 October
2018

Budget 2018
Off-payroll working
 Historically responsibility for compliance rested with contractor (IR35)
 Public sector reform – passed responsibility for operation of rules
from contractor to public sector “employer”
 April 2020 – principle expanded to private sector
 “Employer” will therefore take risk
 Exemption for small businesses

Budget 2018
Capital losses
 Treatment brought into line with income losses
 Applies from April 2020
 Restricts proportion of gain relievable by capital losses to 50%
 £5M de minimis!

Budget 2018
Business rates
 1/3rd reduction for retail properties with rateable value below £51,000
 Will apply to 90% of retail properties
 Effective from April 2019 to 2021
 Review of avoidance of council tax by holiday lets

Budget 2018
Personal tax

Budget 2018
Entrepreneurs’ Relief
 Minimum holding period currently 12 months
 Extended to 24 months from 6 April 2019
 Amendments to 5% test from Budget day
 Currently:
• Share capital
• Voting rights
 Will now include:
• Distributable profits – alphabet shares?
• Net assets

Budget 2018
CGT on main residence
 Final period exemption reduces from 18 months to 9 months
 April 2020
 36 months continues for disabled and care home residents
 Lettings relief to be restricted to shared occupation
 Retroactive?

Budget 2018
NICs
 Employment allowance restricted to businesses paying less than
£100,000 of employer NICs
 Value maintained at £3,000
 Class 2 NICs to be maintained
 Termination payment alignment deferred to 2020

Budget 2018
SDLT
 £300,000 threshold for first-time buyers
 5% on remainder
 No relief where purchase price exceeds £500,000

Budget 2018
Non-residents
 Consultation on 1% SDLT surcharge
 Extension of CGT to non-residential property – 6 April 2019

Any questions?

THANK
YOU
“The content of this presentation has been prepared as a guide to topics of current financial business interest. We strongly recommend you take
professional advice before making decisions on matters discussed within. We can accept no responsibility for any loss to any person acting, or
refraining from acting, as a result of this material.”

Business Breakfast Autumn 2018

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Business Breakfast Autumn 2018