Business news and opinion from Evans Weir > Tag: Tax | Page 2

Following, significant adverse feedback from motor manufacturers, businesses and drivers alike, the government has completed a U-turn on legislation that was set to change the tax classification on double cab pick-ups, treating them as cars rather than goods vehicles. Had they progressed with their plans, the tax on benefits-in-kind for employees, when provided with a double cab pick-up by their employers, would have increased, substantially.

New legislation that came into force from 1st January 2024, has left many individuals wondering whether they will end up paying tax on incomes generated through a range of online portals such as eBay and AirBnB. News of the reporting changes for digital portals spread like wildfire across social media with some suggesting this was a back door in for HMRC to begin charging tax on sales of unwanted goods and second-hand clothes. But clarity has now been provided to help online sellers and those renting properties via portals such as AirBnB understand what the new legislation is and when it might see them paying additional tax.

Recently released data would suggest that things remain tough in the economy as the number of insolvencies in August was the highest in that month in four years and the number of VAT and PAYE registered businesses overall dropped by almost 40,000.

Our latest Autumn Tax briefing is now available to download here.

The Treasury and HMRC are reportedly looking at the removal of a ‘double tax break’ which currently enables families to inherit pension savings and not pay income tax or Inheritance Tax (IHT) on the proceeds. At present, families inheriting pension savings from somebody who dies before the age of 75 can withdraw funds and not pay any tax on the proceeds.

At the same time as a poll for the Sunday Telegraph suggested voters believe Inheritance Tax (IHT) to be the most unfair tax levied on UK residents, revised HMRC forecasts were suggesting that up to 50,000 more families would be faced with an IHT tax bill by 2028.

News that HMRC has pulled in almost £650m due to complex inheritance gifting rules in the past three years, has once again highlighted the need for careful estate planning by families. Whilst the overall tax receipts from Inheritance Tax (IHT) between April 2022 and February 2023 were £6.4 billion, the focus of this latest news is on the proportion collected as a result of gifts made by the deceased in the period leading up to their death.

When you split a business to avoid registering for VAT it is called disaggregation and HMRC can perceive this to be deliberate tax avoidance, which carries penalties and could see them treating all the individual businesses as a single entity and taxing them all equally. However, there are legitimate situations whereby disaggregation is acceptable and appropriate.

Our Spring 2023 tax year end newsletter can now be downloaded here.

Back in 2015, then Chancellor George Osborne, shook up the dividend taxation system, overhauling an area of economic policy that had not been touched for years. But now the present day Chancellor, Jeremy Hunt, has signalled what appears to be the death knell for the allowance as he set out plans in November 2022, to reduce it to just £500 in the 2024/25 tax year.

The Chancellor’s budget announcement that personal allowances and the threshold for the higher rate tax band will be frozen until April 2028, will see thousands more individuals paying higher levels of tax as a result. It is estimated that the move will see more than 200,000 (two-hundred-thousand) individuals moving into the higher rate tax band alone.

It has been calculated that some top earners, with a salary in excess of £100k, could end up paying an effective tax rate of more than 90% as a result of the recent changes to the additional rate threshold announced in the Autumn Statement cum Budget.