Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

 

May questions and answers


Newsletter issue - May 2020.

Q. I am thinking of buying a new house that I will use as my main residence. I won't sell my current home until I move into the new property. Will I have to pay the additional 3% stamp duty land tax (SDLT) change when I buy the new property?

A. The short answer is yes.

However, in the situation where the purchase of a new residence precedes sale of the old, tax initially paid on the purchase of the new residence will be refundable if the old residence is disposed of within the three-year window.

The original land transaction return may be amended within the later of:

Q. I started trading on 1 September 2019 and am now thinking about completing my 2019/20 tax return. I have not incurred any capital expenditure and my turnover is less than the current VAT threshold. Should I use 31 March (or 5 April) as my accounting year-end?

A. If you make your business accounts up to 31 March, HMRC will treat this as being made up to 5 April. One advantage of a 31 March/ 5 April year-end is that no 'overlap' profits will be created. Broadly, overlap profits are bought about by being taxed twice in the first two years of trading. You would get relief for this overlap, but potentially this won't be until a much later stage (for example if you change your accounting date, or if you cease to trade). Quite often, profits in a new business are smaller at the start and gradually increase. An advantage of a 30 April year-end is that tax is paid later. So, for a 30 April 2020 year-end, tax will become due for payment on 31 January 2022, and the tax on profits earned between 1 May 2020 and 30 April 2021 will be payable by 31 January 2023. If the business had a 31 March 2021 year-end, the tax on profits earned between 1 April 2020 and 31 March 2021 would not become payable until 31 January 2022. Of course, if you chose a later year-end, you should make sure that you keep enough money aside to pay your tax bill when it becomes due.

Q. How do I register as a self-employed subcontractor in the construction industry?

A. You need to register with HMRC for both self-assessment as self-employed, and under the construction industry scheme (CIS). This does mean that there are two separate registrations, but these can both can be done at the same time.

In most cases you can register as self-employed by calling the HMRC Newly Self-employed Helpline on 0300 200 3504. If you are already registered as self-employed, but need to register under the CIS scheme, you should contact the CIS Helpline on 0300 200 3210.

The contractor for whom you are working will ask you for your unique tax reference (UTR) and you need to provide this before you are first paid, in order to determine which tax deduction rate to use.

The UTR is issued when you are first set up under self-assessment to complete a tax return. If you have not previously been required to prepare a tax return, you will be given a UTR when you register as self-employed.

For further guidance on registration and other obligations for subcontractors, see the Gov.uk website at https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor.

 

 

Request a callback from Mapperson Price

Our philosophy is to provide a professional friendly service to local people, including employed, self-employed and small to medium sized businesses. Fill in our callback form and we'll contact at a suitable time for you.

The partners are supported by staff with a range of experience in accounts, taxation, payroll, and company secretarial work to support the various services the firm offers.

REQUEST CALLBACK

We always aim to get it right first time, every time, we'll respond to you as soon as possible after your form has been received by us.

 


Newsletter Icon

Newsletter Sign up

Handy tax tips delivered directly to your email inbox