Outstanding Tax, Pension Tax Relief, Donations, Business Record Checks, VAT on Green Fees and Building Work

Dec 21, 2015   //   by Ralph   //   Latest News

Welcome to the festive edition of Accountants Corner. This has been written prior to the Chancellor’s Autumn Statement on the 25th November and I will highlight any important changes and what can be done about them in next month’s article. I doubt it will be as the mild as the weather we have been experiencing recently.

Paying outstanding tax through your tax code.  If you want to pay any outstanding self-assessment liability for 2014/15 through your 2016/17 tax code you need to submit your return by the 30th December, (yes that’s right the 30th not the 31st), otherwise HMRC may not be able to include it.

Delayed decision on pension tax relief. The Chancellor has confirmed that the response to the pension tax consultation will take place fully in the 2016 budget. There may be some tax planning opportunities prior to the 2016 budget where it may be that the tax relief for higher earners will be reduced more than it has been already.

Donors to pay for gift aid errors. From April 2016 charities and community amateur sports clubs (cascs) will need to use a new type of declaration for one-off donations to be gift-aided. If the taxpayer does not pay sufficient tax for the amount gift-aided to be claimed then they will need to pay the difference. This could mean that donors that don’t pay much tax could end up donating more than they intended. If you do make donations and gift aid them you need to be careful otherwise you could end up paying more than you thought.

Business record checks scrapped. Thankfully the taxman has decided not to continue with the trial of the Business record checks due to the fact that most of the business visited had sufficiently good records. Although technically these were only checks no doubt to the taxpayers they felt more like an enquiry.

VAT on green fees to be refunded. HMRC will repay either 50% or 33% of the VAT charged on the clubs green fees. This is due to a case in the EU Court of Justice relating to the Bridport and West Dorset Golf Club that decided that green fees aren’t subject to VAT. The taxman does not intend to repay all of the VAT as it says that the clubs would be “unjustly enriched”.  It may be that if you have paid green fees and can prove it you should ask the club for the VAT back. Although it may be some time before the clubs get the refund to pass on to you.

Charging the correct VAT rate on building work. VAT on building work can be charged at the standard rate 20% or at the lower rate, 5%. There is much confusion as to when the lower rate can be charged. The 5% rate is available for the conversion of a non-residential building to residential, a house conversion where additional dwellings are created, converting multiple dwellings back to one dwelling, or if the residential property has been unoccupied in excess of two years. To go into the full detail would require more room than I have here as there are several exceptions etc., so it pays to ask your accountant with regard to your individual circumstances.

It merely remains to wish you all a merry Christmas and a happy, prosperous, and tax efficient new year.

The author Ralph Robson FCCA is based at TA Gittins & Company’s Wrexham office and can be contacted on 01978 264846 or via email on ralph.robson@tagittins.co.uk

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