In addition to the standard nil rate band (£325,000), since 6 April 2017 each person is entitled to a residence nil rate band (RNRB) to use against the value of their home if it is left to direct descendants on death. For 2018/19, the rate is £125,000. This will increase to £150,000 in 2019/20 and to £175,000 in 2020/21. It will then increase in line with the Consumer Price Index .

As above, the RNRB enables a 'couple' to pass on a total of £1m to children/grandchildren free of inheritance tax. The relief is tapered away if the estate is worth more than £2m. The RNRB may be lost where, for example, the property is placed into a discretionary will trust for the benefit of the children/grandchildren.

If you would like to discuss the RNRB in more detail, please feel free to contact us.

You will need to enrol your employees into a workplace pension scheme if:

They are aged between 22 and Up to State Pension age

If they earn more than £10,000 a year or £833 per month or, £192 per week

They usually work in the UK

The auto enrolment minimum contribution is currently 5% of qualifying earnings of which at least 2% must be paid by the employer. In April 2019 this rises to of 8% qualifying earnings of which at least 3% must be paid by the employer.

You must monitor the ages and the amount you pay to your staff (including new starters) to see if you need to put any of them into a pension scheme. You must put them into a pension scheme and write to them within six weeks from the day they meet the age and earnings criteria.

Please contact us if you would like help with your payroll or pensions auto enrolment compliance.

Jointly Let Property
Where two or more individuals jointly own a property any profit or loss is normally divided between them according to their share of the property being let unless a different division is agreed. The share for tax purposes must be the same as the share actually agreed.

Where the joint owners are married or in civil partnership, the profits or losses should be split 50/50 unless they own the property in unequal shares and they make an election to have their share match the share they each hold.

HMRC reminder to employees to claim their tax deductible expenses

HMRC is reminding employees that they may be able to claim a tax rebate on their work related expenses. HMRC estimate that millions of employees, particularly those working in the service industry, could be entitled to a tax refund. Workers, including nurses, hairdressers, construction workers and those working in retail and food sectors, may be able to claim tax rebates.

Individuals in these types of roles sometimes have to pay for work-related expenses including car mileage, replacing or repairing small tools, or maintaining branded uniforms.

Where these types of expenses are incurred, employees may be entitled to claim a tax refund. HMRC is advising individuals to go directly to GOV.UK to check if they can claim extra cash back. HMRC advise taxpayers to log in to their Personal Tax Account to claim their tax relief online and that approved claims should be refunded within three weeks.

Financial Secretary to the Treasury, Mel Stride MP, said:

‘We know what a difference tax relief can make to hard-working customers, especially at this time of year. HMRC is keen to make sure customers get all the relief they’re entitled to, by using the online service.

Tax relief isn’t available for all employment expenses, so the online Check If You Can Claim tool is very helpful – then if your claim is approved, your full tax relief will be paid directly into your bank account.

The majority of claims are for repairing or replacing tools and branded uniforms, professional subscriptions and mileage. Healthcare workers, people working in food and retail, and those in the construction industry are among the top professions to claim from HMRC.

HMRC is advising that taxpayers may be able to claim tax relief on the cost of:

repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
business mileage (not commuting)
travel and overnight expenses
professional fees and subscriptions.

Contact us if you would like help claiming tax relief on your expenses.

Self assessment deadline approaching

The deadline for submitting your 2017/18 self assessment return is 31 January 2019. The deadline applies to taxpayers who need to complete a tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 National Insurance Contributions (NIC), capital gains tax and High Income Child Benefit Charge liabilities.

There is a penalty of £100 if a taxpayer’s return is not submitted on time, even if there is no tax due or the return shows that they are due a tax refund.

The balance of any outstanding income tax, Classes 2 and 4 NIC, capital gains tax and High Income Child Benefit Charge for the year ended 5th April 2018 is also due for payment by 31 January 2019. Where the payment is made late interest will be charged.

The first payment on account for 2018/19 in respect of income tax and any Class 4 NIC or High Income Child Benefit Charge is also due for payment by 31st January 2019.

HMRC revealed that more than 2,600 taxpayers filed their return on Christmas Day. If you would like help with your return or agreeing your tax liability please contact us.