HMRC has estimated that around 700,000 couples are ‘missing out’ on the Marriage Allowance, which could save them up to £238 in tax.
Introduced in April 2015, the Marriage Allowance enables spouses to transfer a fixed amount of their personal allowance (PA) to their partner. The option is available to couples where neither pays tax at the higher or additional rate. If eligible, one partner will be able to transfer 10% of their PA to the other partner (£1,190 for the 2018/19 tax year).
For those couples where one person does not use all of their PA, the benefit will be up to £238 (20% of £1,190).
Commenting on the allowance, Mel Stride, Financial Secretary to the Treasury, said: ‘For more than 3.5 million married couples and those in a civil partnership, we are putting up to £238 this year back into their wallets, and it is encouraging to see so many people taking advantage of the tax relief.
‘Married couples who are yet to sign up for this great scheme – you too can benefit – it is quick to register, and any backdated allowances will be paid as a lump sum.’
The Marriage Allowance is available in Scotland: to qualify, the higher earning partner must pay tax at the starter, basic or intermediate rate.
The British Chambers of Commerce (BCC) has published a list of 20 ‘unanswered, critical questions’ in relation to a ‘no deal’ Brexit scenario.
The BCC’s questions highlight a range of ‘key issues’ that are ‘unclear’ for businesses in regard to a no deal Brexit scenario. The questions cover such topics as trade and borders; people; regulation and contract fulfillment; and digital concerns.
The business group stated that firms are ‘hugely concerned’ that the UK is ‘unprepared for all eventualities’.
‘In less than 50 days, UK firms could face the biggest change to their terms of trade in over a generation, without the information and clarity they need to navigate their forward course,’ said Dr Adam Marshall, Director General of the BCC.
‘Even those companies trying their hardest to get ready are still in the dark on important matters, from contracts through to customs.
‘The imperative remains to avoid a messy and disorderly exit on 29 March, but businesses need answers they can base decisions on, no matter the outcome.’
The BCC’s list of questions can be viewed here.
Last Friday, 8th February, KPMG confirmed withdrawal of their small business accounting (SBA) service in the UK, no longer providing cloud-based bookkeeping to their SME and micro business clients.
KPMG said it is contacting its existing SBA clients to inform them of its decision.
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In a new report, economic think tank the Institute for Fiscal Studies (IFS) has suggested that Chancellor Philip Hammond will be required to spend ‘billions more’ in order to end austerity.
The report suggested that spending increases promised by the Chancellor could be absorbed by a commitment to fund international aid, the UK’s defence sector and the NHS.
According to the IFS, some departments have already experienced ‘especially big cuts’ since 2010, meaning that it may prove to be difficult for the government to make any further savings.
Commenting on the report, Ben Zaranko, Research Economist at the IFS, said: ‘The Chancellor needs to decide what period the next Spending Review should cover, and what funding to make available to it.
‘The government has already committed to increase day-to-day NHS spending by £20 billion over the next five years. Even though the latest plans have overall day-to-day spending increasing over that time, these increases wouldn’t be enough even to cover the NHS commitment in full.
‘This suggests yet more years of austerity for many public services.’
The IFS also suggested that if the UK leaves the EU without a Brexit deal, the UK economy would struggle to grow, potentially leading to lower spending or higher taxes in the medium term.
Government plans to increase probate fees are set to go ahead despite considerable opposition.
Currently, for estates valued at over £5,000, a grant application made by a solicitor is subject to a flat fee of £155. A grant application made by an individual is subject to a fee of £215.
During the consultation period, the government’s new plans were met with strong opposition. As a result, the original proposals have been adjusted. From 1 April 2019, the increase in fees is set to take effect. Estates which are valued between £50,000 and £300,000 will be subject to a fee of £250. The fee rises thereafter to reach £6,000 for estates with a value above £2 million.
Lucy Frazer QC, Parliamentary Under Secretary of State, said: ‘The top band has now been reduced from £20,000 under the previous proposal to £6,000 under this order. The new banded fees structure does not amend the underlying policy rationale, and will retain the same progressive banded structure as the earlier proposal, in which the fee payable relates to the value of the estate.’
Commenting on the plans, John O’Connell, Chief Executive of the Taxpayers’ Alliance, said: ‘It’s hard enough to deal with the loss of a loved one without the government stepping in and taking away so much through inheritance tax, and now this proposed increase to probate charges.
‘While probate can be bureaucratically burdensome, these death tax hikes are totally unreasonable and will hit taxpayers even harder.’
The Chartered Institute of Taxation (CIOT) has urged the government to ‘simplify’ its new Structures and Buildings Allowance (SBA).
The SBA provides relief for expenditure on certain new, non-residential structures and buildings. Eligible construction costs incurred on or after 29 October 2018 will qualify for relief: this will be at an annual rate of 2%, on a straight-line basis. If a contract was entered into before this time, relief will not be available.
In a recent report, the CIOT stated that the current SBA rules are ‘too complex’, and that they ‘over-complicate matters for taxpayers’.
According to the CIOT, the SBA ‘creates new categories of expenditure’, which will have to be identified and tracked for tax purposes. The Institute has urged the government to remove ‘much of the detail and complexity’ from the current proposals in order to help eliminate confusion amongst taxpayers.
Commenting on the matter, John Cullinane, Tax Policy Director at the CIOT, said: ‘We urge the government to consider whether a simpler, more streamlined approach to the SBA is possible. The policy aims could have been achieved by a simpler approach of incorporating the relief for this expenditure into the existing capital allowances available.’
A study carried out by the University of Warwick’s Centre for Competitive Advantage in the Global Economy (CAGE) has revealed that the average UK worker has already lost a week’s wages as a direct result of Brexit.
According to the study, in the first year following the Brexit referendum, the average worker had to spend more than £404 as a result of rising prices.
In order to maintain the same lifestyle, the average UK household was required to spend £7.74 more per week.
Commenting on the findings, Dennis Novy, Economics Professor at the University of Warwick, said: ‘It is clear that the average UK household is already paying the price for voting to leave the EU.
‘The economic effects of leaving the EU will depend crucially on the outcome of the ongoing negotiations between the UK and the EU. But even before Brexit has actually taken place, the referendum shock of June 2016 has already had substantial economic costs for the typical household.’