Author Archive: Muhammad Zia

Rotherham Taylor keeps up donation’s tradition to Foxton Centre

Staff from Preston accountancy firm, Rotherham Taylor Limited have marked the festive season by doing their bit for a local homelessness centre.

As in previous years, staff from the firm have collected food and toiletries to donate to The Foxton Centre, which they presented to the charity this week.

The donations will help to support its crucial work over Christmas and New Year. Founded in Avenham in 1969, the centre offers a number of services for rough sleepers, vulnerable women, and young people – acting as a strong anchor within the community. The food and toiletries will help The Foxton Centre spread a little joy to homeless people across Preston over the festive season.

“Our collection and donations to The Foxton Centre has become somewhat of a tradition each Christmas,” said Chloe Greenbank, a Director at Rotherham Taylor Limited.

“We are so glad we are able to continue this tradition going and give some help to people locally here in Preston. I would like to thank everyone on the team for their continued help and support.”

Rotherham Taylor has a long history of supporting vital local causes and regularly undertakes charity work and activities for a range of organisations, including through the Rotherham Taylor Community Fund.

To find out more about Rotherham Taylor and its support of communities in and around Preston, please visit www.rtaccountants.co.uk/why-us/rotherham-taylor-community-fund/    

Implementation of MTD for ITSA delayed for two years

The Government has announced a two-year delay and further changes to the rollout of its Making Tax Digital for Income Tax initiative.

The delayed implementation of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) means it will now be phased in from April 2026 for a smaller number of businesses, rather than the original launch date of April 2024.

The move will give self-employed workers, sole traders and landlords more time to prepare for the upcoming changes.

What is changing?

From the new start date, instead of MTD for ITSA applying to all self-employed workers and landlords with property and/or business income of more than £10,000, it will now only apply to those with income exceeding £50,000.

As per the original plan, they will have to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.

Those with an income of between £30,000 and £50,000 will also need to comply with this from April 2027. However, all taxpayers will be able to join voluntarily beforehand if they wish to eliminate common errors and save time managing their tax affairs.

What about smaller businesses?

The Government has also announced a review into the needs of smaller businesses originally due to use the system in 2024, particularly those under the £30,000 income threshold.

The review will consider how MTD for ITSA can be shaped to meet their requirements and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further rollout of MTD for ITSA after April 2027.

MTD for ITSA will not be extended to general partnerships in 2025, as previously announced. However, the Government says it “remains committed to introducing MTD for ITSA to partnerships in line with its vision set out in the Tax Administration Strategy”.

Under the original plans, MTD would also be extended to Corporation Tax, but the Government is yet to confirm when this final phase will begin.

Why has the implementation of MTD for ITSA been delayed?

The announcement comes days after a recent survey found a huge majority of Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) members said it cannot be successfully introduced in its current form on 6 April 2024.

The joint CIOT and ATT survey found 97 per cent of the 322 professionals questioned said the top three reasons for concern about the digital project are:

  • Taxpayer awareness: 94 per cent believe this is a problem
  • Taxpayers’ ability to comply: 94 per cent are concerned
  • Cost burden on clients: 92 per cent are worried about this and 83 per cent are concerned they won’t be able to charge for all their professional time in dealing with MTD ITSA

You must use software that works with Making Tax Digital for Income Tax, which will allow you to:

  • Create and store digital records of each of your business transactions
  • Send updates of the totals of your business income and expenses every quarter
  • Confirm end-of-period statements

Now the Government says that it understands that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to MTD for ITSA represents a significant change to taxpayers and HMRC on how self-employment and property income is reported.

Need help with preparing for MTD for ITSA? Contact us today.

A Quick Guide to Making Tax Digital for Income Tax Self-Assessment

So far thousands of businesses across the UK have been getting to grips with Making Tax Digital (MTD).

This requires organisations to record and report tax information digitally each quarter using HM Revenues & Customs (HMRC) compliant software.

This is the first stage in HMRC’s strategy to digitise the UK tax system and has so far only applied to VAT.

However, from April 2024, HMRC will roll out MTD for Income Tax Self-Assessment (ITSA). This will affect more than 4.2 million taxpayers with business and/or property income of £10,000 or more.

The clock is ticking on this landmark change and now is the time to act.

Who is affected?

Perhaps one of the most significant changes for sole traders, partnerships, landlords and property investors is the introduction of MTD for ITSA.

This will require the self-employed and landlords with combined annual gross business and/or property income above £10,000 to comply with MTD from April 2024 by recording and reporting their income using HMRC-compliant software every quarter.

Crucially, this applies to gross income or turnover, rather than profits.

However, the £10,000 threshold only applies to income declared on a 2022/23 Self-Assessment Tax Return. Trading income or property income below £1,000 would not be taken into account for the threshold if it was not included on the Self-Assessment Tax Return. Likewise, Rent-a-Room income below £7,500 that was not included on the Self-Assessment Tax Return would not be taken into account.

Someone mandated into MTD for ITSA as a result of their 2022/23 Self-Assessment Tax Return will not be exempt from MTD for ITSA in future years until their income falls below £10,000 for three consecutive years.

This will come into force in the tax year beginning April 2024 for the self-employed and landlords, and April 2025 for all other ITSA taxpayers, such as general partnerships.

What do you need to submit?

If this change affects you, you will need to complete four quarterly submissions, plus an annual return digitally.

According to the latest information from HMRC, taxpayers within the scope of MTD for ITSA must keep digital records of each transaction, including details of which category each of their transactions falls within and the total amount of income in each category.

Speak to our team today to find out how software can help you prepare for MTD for ITSA.

Stamp duty thresholds boost for homebuyers

For homebuyers, from 23 September the level at which people start paying stamp duty land tax was raised from £125,000 to £250,000.

For first-time buyers in England and Northern Ireland, they will not pay any stamp duty on properties up to £425,000 – the previous threshold was £300,000.

The maximum value of a property on which first-time buyers can claim relief also increased from £500,000 to £625,000.

The new SDLT rates when purchasing residential property are now:

Property value SDLT rate
Up to £250,000 0 per cent
£250,000 – £925,000 5 per cent
£925,000 – £1,500,000 10 per cent
Above £1,500,000 12 per cent

Where surcharges apply

For those who are purchasing a second property or further properties, an extra three per cent surcharge applies.

Anyone buying an additional residential property for £40,000 or more has to pay the surcharge, whether it’s a holiday home or a buy-to-let.

The surcharge is added to each rate of SDLT and, therefore, increases for more expensive properties.

For example:

Property value SDLT rate
Up to £250,000 3 per cent
The next £675,000 (difference between £250,001 to £925,000) 8 per cent
The next £575,000 (difference between £925,001 to £1.5 million) 13 per cent
The remaining amount (difference between £1.5 million) 15 per cent

For landlords considering multi-property purchases, they can make SDLT savings by buying more lower priced properties with a lower stamp duty rate, rather than say a property above £1.5 million, where higher charges apply. However, they should be aware of the ‘linked transaction rules which may treat the purchases as one transaction.

The new rules on Stamp Duty apply until April 2025.

SDLT is a devolved issue for Scotland and Wales where separate rules apply.

House prices continue to rise but the growth rate slows

House prices continue to grow, despite rising inflation and the cost-of-living crisis, according to new data from the Office for National Statistics (ONS).

The average house price for June stood at £280,000, but some estate agents are warning that buyer demand is starting to wane, and home sellers will eventually have to adjust their price expectations.

£20,000 year-on-year increase

The latest house price data for June 2022 published by HM Land Registry (HMLR) shows average prices across the UK increased by 7.8 per cent in the year to June 2022, down from 12.8 per cent in the year to May 2022.

The rise is still a £20,000 increase over the same period last year, says the survey.

In London, house prices have grown by 6.3 per cent in the last 12 months – 1.5 per cent lower than the national average of 7.8 per cent.

Average house prices increased over the year in England to £305,000 (7.3 per cent), in Wales to £213,000 (8.6 per cent), in Scotland to £192,000 (11.6 per cent) and in Northern Ireland to £169,000 (9.6 per cent).