Newsletter 11th March 2024
There is certainly plenty to talk about in this week’s newsletter as you might have heard there was a Budget last Wednesday, which I am now referring to as” The Budget of no Surprises”.
You probably heard the headlines, National Insurance cuts and an uplift in the VAT registration threshold, that’s only part of the story.
Question of the week, are there enough Tax Advisors, and why do you and I need to know?
Capital Gains Tax it might be time to put your finger on the pause button.
Grab that coffee and take a few minutes out to read this week’s edition of “Tax Matters to you”.
The magic number
Whilst reading this month's edition of Tax Advisor magazine I was very surprised to read that the Association of Taxation Technicians (ATT) the regulatory body that I am a member of was expecting to reach there 20,000 members later this year. The actual membership stands at 19,924 leaving a further 76 exam passes required to reach the magic number.
In contrast, the Association of Accounting Technicians boasts of a membership of shy of 124,000 and the ICAEW of which many accountants are members, is in the region of 166,000 (following a quick Google search).
So as you can see there is a significant disparity in those who specialise in issues around tax to those who are experts in preparing company accounts (I’m sure they do more). Even though I have been aware for a long time tax advisors have been thin on the ground as many accountants from other firms call me at Tax Matters for assistance with Capital Gains Tax, Inheritance Tax and those more complex Tax Returns, or simply put all the stuff they do not specialise in.
In the recent Budget, the Chancellor announced that there was to be a 6-week consultation from the 6th of March to discuss the Government’s intention to raise standards in the Tax Advisory sector through a strengthened regulatory framework. Although this had previously been suggested it now appears the consultation will focus on mandatory membership of a recognised professional body of which the ATT is one. The hope is that this will remove bad actors from the tax stage and subsequently both protect and enhance the public purse. This is something I strongly agree with as we all pay the same tax or at least we should.
The shortage of ATT-qualified persons is of real importance for Tax Matters, as I am currently on the lookout for a part-time person who is a member with at least one year’s experience in practice, and possibly is looking for a return to work role or wants to cut their current working week. If you know or hear of anyone then please ask them to drop me an email at jreeves@taxmatters.tax
A Budget of no surprises
Prior to the Chancellor standing up in the House of Commons which was certainly a rowdy affair this year with the deputy chair attempting to calm the house whilst uttering “Shout more quietly,” the press had well and truly let the cat out of the bag beforehand.
Where was the BIG surprise the one we were all waiting for the one that was going to change the fortunes of the Tory party? As you will see from my evaluation of the BUDGET ANNOUNCEMENTS there were some helpful and welcome adjustments. The proposed changes to The High-Income Child Benefit Charge as previously mentioned by me are to change in April with further amendments set for the future following a consultation, and if you are an employee or self-employed there will be a further 2% cut in national Insurance from April to match the cut announced in the Autumn Statement (4% in total).
Budget Surprise
For those of you with a second property (buy to let) who are in the process of selling or were considering there is some good news. Even though the annual exemption allowance will drop from £6,000 to £3,000 in the 2024/25 tax year the higher rate tax rate for the sale of residential property will also fall from 28% to 24% which will provide many with a favourable saving. If you run the numbers on a sale with a gain of £100,000 it looks something like this –
2023/2024
Gain £100,000
AEA -£6,000
Taxable Gain £94,000
Tax 28% = £26,320
2024/2025
Gain £100,000
AEA -£3,000
Taxable Gain £97,000
Tax 28% = £23,280
This is a Tax Saving of £3,040.00
It is worth remembering the tax rate is set at the date of exchange and not completion, so you may wish to delay your sale until after the 5th of April 2024 to take advantage of the tax saving.
However, make sure you file the 60-day report to HMRC within time as you don’t want to lose the savings in late filing penalties and interest.
I hope you have enjoyed this edition of my newsletter, and found it both enjoyable and informative. If you have any suggestions or comments then please let me know it is always good to hear from you. In addition to the newsletter, I am also updating the website, so please take a look from time to time to see what is happening.
If I or the Tax Matters team can be of any assistance to you, your family or your friends then please do not hesitate to contact me at 01442 828006 or jreeves@taxmatters.tax