When a taxpayer purchases a newly constructed property, he may put down a deposit to reserve the property before it is finished, or even started. This is referred to as buying “off-plan”.
The contract to purchase the property is normally not completed until the property is finished, and at that time the balance of the purchase price must be paid. If the taxpayer can’t pay the balance when requested, he loses the right to complete the contract and acquire the property.
News & Updates
Tax avoidance schemes
HMRC regularly publicise failed tax avoidance schemes on their spotlight page. The latest schemes all relate to disguised remuneration, i.e. paying individuals in a way which would normally not be subject to PAYE.
Tax returns for 2016/17
The personal tax computations for 2016/17 are particularly complex due to the introduction of the variable savings allowance (at £500 or £1,000), and the £5,000 dividend allowance.
It has always been possible to off-set the personal allowance against any slice of income, but in earlier years the best result was generally achieved if the personal allowance was first set against earned income. That is no longer the case for taxpayers with significant amounts of savings or dividend income.
IR35 for public sector contracts
Schedule 1 to the Finance Bill 2017, confirms the new provisions for off-payroll working in the public sector (applying IR35), will take effect from 6 April 2017. This will affect a huge number of workers, particularly doctors working as locums, nurses, teachers and other consultants.
Penalty notices
HMRC has a number of legacy computer systems, which don’t always talk to each other effectively. This has caused problems with class 2 NIC liabilities disappearing from taxpayers’ records, as we reported in our newsletter on 8 December 2016.
Deregister for VAT
Since we last wrote about the VAT flat rate scheme (FRS), the rules have been amended to make it even more difficult for traders to avoid the 16.5% flat rate. To fall outside that category the trader must spend 2% or more of his gross turnover and at least £250 per quarter on “relevant goods”.