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New year – new challenges ahead

Taxpayers who have not yet filed last year’s returns have been urged to use the national lockdown to bring their tax affairs up to date.

Francesca Hutcheson called on taxpayers to seek out specialist advice to ensure they were taking advantage of all the reliefs available.

“It’s vital to speak to a professional adviser who will help calculate your tax liabilities and make sure you’re paying the right amount.

“We’ve all had to deal with huge challenges over the last 12 months and, as we enter a new year – and a new lockdown – it’s clear those challenges are set to continue for some time. But the latest lockdown is the perfect opportunity to take the time to assess the state of your finances and work with professionals who, despite working from home, are all still fully operational offering online support and phone advice.”

Francesca says, Chancellor Rishi Sunak had already made it clear there would be “hard choices” ahead in order to make inroads into the high levels of national debt that had been created.

“The debt is a direct cost of the Government support for the NHS, businesses and individuals during the pandemic and, while it is inevitable that taxes will need to rise, whether it will happen in 2021 and how the UK tax policy may change in response remains to be seen.”

Francesca says there has been a lot of speculation about increasing Capital Gains Tax rates with the Office for Tax Simplification recommending some of the valuable reliefs be abolished.

“We already know that the current CGT regime is hugely complex – there is no single rate of tax that applies to gains on disposal of capital assets and it could be anything from 0% to 28%, with multiple rates in between.

“But with the Government under pressure to find ways to fund the cost of the Coronavirus crisis, aligning Capital Gains Tax rates more closely with Income Tax rates – currently up to 45% - would be a sensible starting point.”

Francesca also warned that despite many business filing deadlines and tax payment dates being deferred since the start of the pandemic, there has been no extension to the normal filing date for 2019/20 self-assessment returns.

“These returns are still due on January 31, and HMRC have confirmed that in most cases, late filing penalties will still apply if you fail to meet the deadline, unless the delay is directly due to the impact of the Covid-19 pandemic on you or your advisers. It may still be possible to agree a payment plan to spread the cost of any tax liabilities arising from the return, but take professional advice to consider all the options available.”

 

Francesca Hutcheson, Tax Director

 

The Author

Mel Edwards

Mel Edwards

Marketing Assistant

Mel joined Dyke Yaxley in May 2017 as a Marketing Assistant after spending 2 years as an Administrations and Marketing Manager for a local Shrewsbury healthcare agency...