This ebullient is about

  1. New changes to Flat rate vat
  2. IR35 is changing (Locum doctors effected most)
  3. Check your State Pension
  4. Landlords tax relief changes
  5. Lifetime ISA
  6. Domain name scam
     

1

New Flat rate vat : At Autumn Statement on 23 November 2016, the Chancellor of the Exchequer announced the introduction of a new 16.5% VAT flat rate for businesses with limited costs. This will take effect from 1 April 2017.


What is a limited cost trader?
A limited cost trader will be defined as one whose VAT inclusive expenditure on goods is either:

  1.     less than 2% of their VAT inclusive turnover in a prescribed accounting period
  2.     greater than 2% of their VAT inclusive turnover but less than £1000 per annum if the prescribed accounting period is one year (if it is not one year, the figure is the relevant proportion of £1000)

Goods, for the purposes of this measure, must be used exclusively for the purpose of the business but exclude the following items:

  •     capital expenditure
  •     food or drink for consumption by the flat rate business or its employees
  •     vehicles, vehicle parts and fuel (except where the business is one that carries out transport services - for example a taxi business - and uses its own or a leased vehicle to carry out those services)


These exclusions are part of the test to prevent traders buying either low value everyday items or one off purchases in order to inflate their costs beyond 2%
Here is link to new FRV calculator. https://www.tax.service.gov.uk/check-your-vat-flat-rate/vat-return-period


2

IR35 and public sector changes
IIR35 (intermediaries legislation) if you work for a client through an intermediary you need to check if it applies to you.
IR35 calculator https://www.gov.uk/guidance/ir35-find-out-if-it-applies


The decision of whether IR35 applies to the working arrangement now rests with the public body (i.e. NHS Trust or Health Board) where the work is actually being conducted. It is therefore not up to the intermediary worker to provide evidence of whether IR35 applies, but rather a decision made by the ultimate employer.


3

Check your State Pension
You can check and read more about state pension on link below

4

Landlords tax relief changes


From 6 April 2017 relief for finance costs on residential properties will be restricted to the basic rate of income tax.
Landlords will only be able to deduct a portion of finance costs from their property when calculating rental profits.
Finance costs include mortgage interest, interest on loans when buying furnishings and fees when taking out and repaying mortgages.
The changes will be phased in over 4 years.
Tax year    Percentage of costs deducted from profits    Percentage of costs available as basic rate deduction
2017/18    75%    25%
2018/19    50%    50%
2019/20    25%    75%
2020/21    0%    100%
 


5

Individual Savings Accounts: Lifetime ISA
This can be good alternative to pension contribution or combination of both

6

Domain name scam
What out for this scam and don’t be victim of it

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