What’s worrying you in the Tax world?
In April, Rothmans Tax Partner joined host Sasha Twining on BBC Radio Solent’s ‘Ask the Expert’ slot to help listeners with their tax and accounting questions.
The questions raised covered a wide range of concerns from individuals and business owners, including:
Q. I have US royalties from a pop song, I was involved in; can I reclaim the withholding tax deducted in the US?
A. You need to deal with the proper paperwork in the country the payment originates and may need to get a Certificate of Residence from UK HM Revenue & Customs; this ensures you have the right rate of tax deducted according to the Treaty arrangements with the UK. Any tax properly deducted can then be deducted from the UK tax you have to pay on the income.
Q. I heard about needing to do quarterly Tax Returns as a self-employed person instead of annual Tax Returns; is this still the case and when?
A. This is the Making Tax Digital project. This is still happening and from April 2019 will affect how VAT Registered traders with turnover above the VAT Registration threshold of £85,000 have to submit their VAT Returns. The dates for it to be extended to other taxpayers are not yet confirmed, but over the next couple of years it is likely to affect all businesses who have income (not profits) over £85,000. How quickly it is extended beyond this we wait to see.
Q. I have heard about the new Inheritance Tax exemption for my own house and wonder if I will benefit from this fully as my husband died a few years ago before this was available.
A. Both the Nil Rate IHT band (£325,000) and the Residence Nil Rate Band (rising to £175,000) are transferrable. If not fully used on one death, the spouse can use the balance when they die. If the amount of the band changes, then you look at the percentage of the allowance unused at the time of the first death (based on the amount available then) and apply this percentage to the amount of the band applying at the second death. The same rules apply to both the Nil Rate Band and the Residence Nil Rate Band.
Other questions included the benefits (or costs) of Voluntary VAT Registration and the tax treatment of eBay and similar trading.
Julian has often been a guest on the radio station to comment live on the budget and other tax news. He also writes for technical publications and tweets on tax matters as @jlsTax.
If the questions above raise concerns about your own circumstances, or you have any other tax issues you would like to discuss, please call your usual Rothmans contact or one of our Tax Team.