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Twelve top tax tips for your clients

Twelve top tax tips for your clients

It's almost 31 January - and time to get those tax returns in. But there is so much more to tax than just a self-assessment form. Here are 12 points to remember.

1) Excluded cases

As HM Revenue & Customs has had software difficulties in 2017, if clients are an “excluded case” unable to file online, make sure they have left enough time for postal submission to avoid a £100 late filing penalty. 

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2) Due date

Tax payments are due by Wednesday 31 January 2018 in respect of any balance due for 2016/17 and to make your first payment on account for 2017/18.

Changes to payment processes mean that personal credit card payments will not be accepted after Saturday 13 January 2018, and payments at a Post Office are no longer possible.

3) Pensions

Pensions are getting mixed press but if you are investing for the next generation or grandchildren, don’t forget that you can start a pension pot for youngsters and non-earners and make contributions of up to £3,600 a year.

This will receive automatic basic rate tax relief meaning that you would only have to find cash of £2,880. By the time any children start to earn a salary themselves there is a good sized pot already set up in their name, which they cannot immediately access.

This is also a good strategy for non-earning spouses.

4) Isas

Isa millionaires are not unusual and it is easy to overlook the annual investment allowances.

These have now increased to £20,000 for UK resident individuals and junior Isa limits are £4,128. Isas are now transferable between spouses on death without losing their Isa tax free status, so use the allowance or lose it! The tax year end of 5 April is not too far away.

5) Are you a trustee or executor?

Make sure that you or your agent are meeting the obligations of the new Trust Registration Service (TRS) which has a deadline of Friday 5 January 2018 for registering new cases, or potentially as late as 5 March 2018 for re-registering those already notified to HMRC.

6) UK resident but non-UK domiciled?

The introduction of the changes to domicile from April 2017 has introduced the concept of long-term UK residence with associated tax implications.

If you are not yet deemed domiciled under the new rules (ie have been in the UK for less than 15 tax years) review offshore assets, especially trusts, as measures can be taken to protect them from UK taxation.

Rebasing may also be available in some circumstances to reduce the burden of capital gains on offshore assets.

7) Buy-to-let

Buy-to-let landlords have been hit hard by changes that restrict mortgage interest relief and replace wear and tear allowances with tax relief on the cost of replacement furnishings, appliances and kitchenware.

The recent budget did confirm that if you are a landlord travelling to check up on your property, you can claim business mileage rates of 45p a mile for the first 10,000 miles and 25p a mile thereafter.  As usual, mileage logs need to be kept to back up any claims.