December Newsletter 2022

Dec 20, 2022 | Newsletters | 0 comments

CGT ANNUAL EXEMPTION CUT

Many people had predicted an increase in the rate of Capital Gains Tax (CGT) paid by individuals, citing a possible alignment with income tax rates as the main reason for the prediction. Surprisingly however, Chancellor Dominic Raab announced that he would be reducing the £12,300 annual tax-free CGT exemption to just £6,000 in the financial year 2023/24 and only £3,000 in the financial year 2024/25.

This announcement means that those disposing of investments such as shares, second homes and buy-to-let properties will have to pay more tax. If you are thinking about or planning any capital disposals, please contact us to discuss the best strategy for the timing of any sales.

CARS, VANS AND TAXATION!

For those provided with an electronic or ultra-low emission company car (emitting less than 75g of CO2 per kilometre), there will be annual increases in the benefit-in-kind percentages, and therefore the taxes paid by both employees and employers, from the 2025/26 tax year.

For all other company car users, there will be a 1% increase (up to a maximum of 37%) in the calculation of the benefit-in-kind in 2025/26 before being fixed for the following two tax years.

The fixed multipliers used to calculate benefits-in-kind on employer provided vans, van fuel (for private journeys in company vans) and car fuel (for private journeys in company cars) will increase in line with the Consumer Price Index (CPI) from 6 April 2023.

The government have also announced that they will introduce Vehicle Excise Duty on electric cars, vans and motorcycles from April 2025.

A MINI U-TURN ON SDLT

One of the few changes announced by previous Chancellor Kwasi Kwarteng not reversed by current Chancellor, Dominic Rabb, was the change concerning Stamp Duty Land Tax (SDLT) in England and Northern Ireland.

On 23 September 2022, the starting threshold increased from £125,000 to £250,000 and for First Time Buyers the threshold increased from £300,000 to £425,000.

Although Dominic Raab did not reverse the SDLT change, it has been made clear that the new thresholds are only temporary and, from 1 April 2025, they will return to their original rates.

CHRISTMAS POST

Beat the festive rush and get all of your letters and parcels in the post in time for Christmas. The latest cut-off dates for guaranteed Christmas delivery are as follows:

Wednesday 7 December 2022: Royal Mail Bulk Mail Economy

Monday 12 December: 2nd Class, 2nd Class Signed For, Royal Mail 48

Friday 16 December: 1st Class, 1st Class Signed For, Royal Mail 24, Royal Mail Tracked 48

Monday 19 December: Royal Mail Tracked 24

Wednesday 21 December: Special Delivery Guaranteed

Fletcher Thompson Opening Hours

We are closing the office for the Christmas period from 5:30pm on 23 December and we will be reopening at 9:00am on 3 January 2023.

We would like to thank all of our clients for their continued support as we wish them all a very Merry Christmas and a Happy New Year.

THE GIFT OF GIVING

Where possible taxpayers should “Gift Aid” any payments to charity to provide a further benefit of 25p for every £1 given, as long as you have paid the basic rate of tax and make the donation from your own funds. With Gift Aid increasing the value of your donations by 25%, you can give even more to the causes you care about.

Higher rate taxpayers obtain additional tax relief on the grossed-up amount donated. For example, where an individual makes a £20 cash donation to charity the charity can reclaim a further £5 from HMRC making a gross gift of £25.

 THINKING OF GIVING PRESENTS TO STAFF THIS CHRISTMAS?

You can only spend £150 per tax year on staff entertaining. If you spend any more then it’s all taxable on the employee. It’s nice to give gifts but please be aware you can’t reclaim the VAT and they are not allowable for tax purposes unless they have your logo on.

Watch out for food, drink, or vouchers though and they mustn’t be more than £50 per recipient in a tax year.

If you invite a supplier or customer to an event, that’s entertaining and is treated the same as gifts. It is worth mentioning that client entertaining is generally not an allowable expense for corporation tax purposes.

However, the cost of employee entertaining is an allowable expense, and therefore the cost of the staff Christmas party can be deducted. If you are unsure about what is and isn’t considered an allowable expense for corporation tax purposes, you can always get in touch with one of our friendly team members, who will be happy to answer any questions and concerns.

DIARY OF MAIN TAX EVENTS

DECEMBER 2022 / JANUARY 2023

DateWhat’s Due
19/12/2022PAYE & NIC deductions, and CIS return and tax, for month to 05/12/2022 (due 22/12 if you pay electronically).
 30/12/2022Deadline for filing 2021/22 tax return online in order to request that HMRC collect outstanding tax via the 2022/23 PAYE code.
 01/01/2023Corporation tax for year to 31/03/2022 unless quarterly instalments apply.
 19/01/2023PAYE & NIC deductions, and CIS return and tax, for month to 05/01/23 (due 22/1 if you pay electronically).
 31/01/2023Deadline for filing 2021/22 self-assessment tax return online and paying your outstanding tax for 2021/22 and first payment on account of 2022/23 tax.