This month’s newsletter includes: a reminder of costs that are covered by the landlord’s wear and tear allowance; a note that HMRC are delaying the implementation of penalties for smaller business employers; a reminder of the various small business rates reliefs available; and finally, the announced date for the Autumn Statement 2014.
Our next newsletter will be published Thursday, 6 November 2014.
Wear & Tear Allowance (WTA)
If a property is let furnished – with sufficient furniture, furnishings and equipment for normal residential use ? landlords can only claim tax relief for the furniture and equipment by way of the WTA. Prior to April 2013, landlords had the option of claiming the cost of replacement furniture instead.
The WTA is calculated as 10% of the gross rents less any tenant’s costs (e.g. water rates and council tax) met by the landlord.
WTA does not cover repairs, which continue to be tax deductible. The question is then raised can replacement of an item be counted as a repair? In this respect, landlords that let furnished property need to distinguish between:
Needless to say there are grey areas!
Replacement of items that are integral to the building
Fixtures integral to the building are those that are not normally removed by either tenant or owner if the property is vacated or sold. Examples include:
This list is not intended to be complete but gives an idea of the assets that are integral to the building and fall outside the wear and tear allowance. As these items are integral to the building, the cost of replacing these items is normally an allowable expense as a repair to the building.
Replacement of items that are not integral to the building.
Expenditure of this type will be covered by the WTA. Examples given on HMRC’s website in this category include:
HMRC delays RTI penalties
From 6 October 2014, HMRC was due to include smaller employers in the penalty regime for late filing of Real Time Information (RTI) payroll returns for 2014-15.
HMRC have announced that this penalty process will be delayed for a number of smaller employers.
They will now start from:
The size of the late filing penalties depends on the number of employees within the PAYE scheme.
Number of employees
Penalty per PAYE scheme
1 to 9
10 to 49
50 to 249
250 or more
Business rates relief
There are a number of reliefs available to owners or tenants of smaller business premises. This article lists a number that can be claimed.
Small business rate relief:
You’ll get 100% relief (doubled from the usual rate of 50%) until 31 March 2015 for properties with a rateable value of £6,000 or less. This means you won’t pay business rates on properties with a rateable value of £6,000 or less.
The rate of relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.
Some local councils will give you up to £1,000 off your business rates if you occupy a retail property with a rateable value of £50,000 or less. To be eligible the property must mainly be used as a shop, restaurant, cafe or drinking establishment.
You’re usually not eligible if your business provides financial services, medical services or professional services like legal advice or accounting.
Empty properties re-occupation relief
You may get 50% off your business rates if you start occupying a retail premises that’s been empty for one year or more.
Rural rate relief:
You may qualify for the rural rate relief if your business is in a rural area with a population below 3,000. The relief is between 50% and 100% off your business rates.
You can get rural rate relief if your business is:
Local councils can also:
Autumn statement 2014
HM Treasury has announced that this year’s Autumn Statement will be made on 3 December 2014. Historically, this has been used to showcase the Government’s expected tax changes in the following year’s finance act.
If you have any suggestions the Government is seeking your views on what you would like to see in the Statement. According to the GOV.UK website:
“In the interest of open and transparent policy-making, the Government welcomes original and innovative ideas, which will be considered by HM Treasury as part of the policy-making process.
Business, charities and members of the public can submit these views via email to email@example.com
For information on the correct procedure for submitting your representation, please view the guidance.
To allow for full consideration in advance of the Autumn Statement, any submission should be sent to HM Treasury by 17 October.”
Tax Diary October/November 2014
1 October 2014 – Due date for Corporation Tax due for the year ended 31 December 2013.
19 October 2014 – PAYE and NIC deductions due for month ended 5 October 2014. (If you pay your tax electronically the due date is 22 October 2014.)
19 October 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 October 2014.
19 October 2014 – CIS tax deducted for the month ended 5 October 2014 is payable by today.
31 October 2014 ? Latest date you can file a paper version of your 2014 Self Assessment tax return.
1 November 2014 – Due date for Corporation Tax due for the year ended 31 January 2014.
19 November 2014 – PAYE and NIC deductions due for month ended 5 November 2014. (If you pay your tax electronically the due date is 22 November 2014.)
19 November 2014 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2014.
19 November 2014 – CIS tax deducted for the month ended 5 November 2014 is payable by today.