Under the government’s original plans, anyone required to submit Income Tax Self-Assessment returns to HMRC would have been obligated to sign up for the Making Tax Digital (MTD) service by April 2024 – but the implementation of MTD for ITSA has since been delayed until April 2026.

Switching to the online tax service will initially be mandatory for landlords and self-employed earners with income over £50,000
a year, while those with annual income below this but above £30,000 will be required to join from April 2027.

Before setting a deadline for extending MTD to smaller businesses earning less than £30,000 a year, the government conducted a review to consider how this might affect the needs of small businesses.

The outcome of the MTD small business review is the announcement that there are no plans to extend MTD for ITSA to landlords and the self-employed earning below £30,000 a year for the foreseeable future – though this may be reviewed again.

Here’s a short guide explaining what self-employed workers and landlords should know about current changes to MTD for ITSA.

How MTD for ITSA works

Making Tax Digital is the official campaign moving small businesses and self-employed individuals over to the government’s new online tax system, scrapping paper tax returns to improve efficiency and reduce tax fraud.

This involves registering for the MTD service when requested, depending on the type of earnings, economic activity, and specific taxes that apply. HMRC has been rolling out its implementation gradually to give people to adjust to these changes.

Once registered and mandated to use the service, businesses and individuals must submit the requested financial information and updates using MTD-compatible software instead of submitting an annual tax return online or by post.

Quarterly updates with accurate income reports will allow taxpayers to estimate the tax bill they’ll have to pay at the end of the year, so they can budget in advance.

A date has still not been set for general partnerships (with individuals), non-general partnerships (with corporate partners), or limited liability partnerships (LLPs) to join.

Changes to reporting income

Some changes to the obligations for reporting income under MTD for ITSA were also announced in the executive summary of the Autumn Statement 2023.

Instead of requiring an end-of-period declaration and a separate final declaration for year-end reporting, there will now be one final declaration. Removing the end-of-period statement should reduce confusion and administrative burdens.

Quarterly reports will also now be cumulative, so each update will include information from previous quarters to build a full summary of the year’s income and expenditure to date. Businesses can correct previous details with each report instead of resubmitting.

Additionally, landlords who jointly own property can maintain less detailed records for these properties to simplify transferring digital records between owners, and are free to not submit quarterly expense updates for jointly owned properties if they choose.

However, records for jointly owned properties must still be submitted before landlords can finalise their reports and tax positions at the end of the year.

Concerns about MTD for ITSA

Despite the government’s efforts to make the MTD process simpler for everyone who will have to use it, many people are still concerned that HMRC has lost sight of taxpayer needs – as shown by its design flaws, missed deadlines, and spiralling costs.

HMRC has shared an online guide to MTD for ITSA explaining when to sign up and how to use it. Even if you don’t qualify for mandated registration, you may still be able to register voluntarily to help HMRC with testing and developing it.

It’s important to note that the threshold limits of £50,000
and £30,000 apply to total income from self-employment and property, not profit.

If you are a landlord or self-employed and affected by the MTD for ITSA requirements, or other regulatory changes such as basis period reforms, you may want to get assistance from professional accountants to update your accounting processes.

At gbac, we have a team of trained accountants in Barnsley who can help with setting up cloud accounting software and making tax management more efficient.

To discuss how we could help you or your business, get in touch with our team by calling 01226 298 298 or emailing info@gbac.co.uk.

From Property Alerts for fraud prevention, to energy efficiency requirements for rented properties, to Making Tax Digital for Income Tax delays – it’s essential for landlords to keep up with the latest regulatory changes.

For example, the Leasehold and Freehold Reform Bill
was introduced in Parliament last November and is likely to be passed into law in mid-2024.

Also in November, the National Trading Standards Estate and Lettings Agency Team (NTSELAT) published two more sections of guidance for sales agents and letting agents regarding ‘material information’ in property listings.

Here’s what these changes could mean for landlords when it comes to advertising a property or extending a lease in 2024.

Extending a lease

Presently, if you have a leasehold property, then you own the property itself, but not the land it’s sitting on – so you have to pay ground rent to the freeholder.

The Reform Bill will do away with this type of homeownership by making every home freehold from the outset. Anyone buying a property will own both the land and the building, and leaseholders will no longer need to own their property for at least 2 years to be able to buy their freehold.

When it comes to extending leases, the current term is 90 years for apartments and flats, but the government intends to increase the standard extension term to 990 years for both flats and houses, with zero ground rent.

Other changes include reducing ground rent to virtually free (peppercorn) upon a premium payment, and removing ‘marriage value’ (which reflects the increased market value of an extended lease).

A leasehold property could have an initial lease term of just 99 years, which may seem fine to a new landlord, but letting a lease run down to less than 80 years could make it costlier to extend and potentially harder to sell or remortgage the property.

Advertising property

After publishing Part A of its guidance on which information to include in property listings in 2022, the NTSELAT published Parts B
and C at the end of 2023.

These extended guidelines set out the ‘material information’ that anyone listing a property for rent, lease, or sale will be obligated to include. Providing accurate details about relevant features will allow potential tenants or buyers to make properly informed transactional decisions.

This includes specifics beyond the asking price or rent, deposits, and council tax rates required in Part A. Most landlords and agents may already include the bulk of this mandatory information, but those letting privately might overlook some items.

Part B states that all property listings should include information about the:

• Property type (e.g. semi-detached house or flat)
• Property construction and building materials
• Number of rooms and type of each room
• Utilities (electricity, water, sewerage, heating, broadband, mobile signal)
• Available parking for the property

Under Part C, the following must be included if it’s relevant to the property:

• Accessible facilities/accessibility adaptations
• Building safety information
• Restrictive covenants, rights, or easements
• Planning permissions or developments
• Flood or coastal erosion risks
• Coalfield or mining issues

If known, these details should be provided through the property advertising portals at the earliest opportunity, whether it’s a private let or through an agent.

This will help both tenants and landlords, who can avoid wasting time and money on fall-throughs, because all the necessary information is available from the start.

Listings should follow this new guidance as early as possible, with property portals expected to enforce these rules by the end of 2024.

Financial management for landlords

If you are a landlord, it’s important to make sure you are complying with current regulations, while streamlining your operating costs wherever possible.

From tax planning for property and income tax to managing Service Charge Accounts for residential or commercial buildings, all kinds of landlords can benefit from professional accounting services to help them do just that.

With the team at gbac, you can enjoy improved financial organisation and peace of mind, thanks to landlord services provided by our accountants in Barnsley.

To discover more about what we can do for landlords, call gbac on 01226 298 298, or email an enquiry to info@gbac.co.uk and we will respond as soon as possible.

Following announcements made in the Autumn Statement 2023, new rules will come into effect for individual savings accounts (ISAs)
from April this year.

Since launching in 1999, ISAs have offered an excellent route for building up tax-free savings, with different options and regulations introduced over the years.

Allowing savers to set aside ad-hoc sums up to an annual allowance, sheltered from income tax and capital gains tax, it’s no wonder that ISAs are so popular.

Now, changes coming into effect on 6th April 2024 to make ISAs more user-friendly will also make them even more attractive to more people hoping to build their savings – but there are some limitations to be aware of.

Multiple ISA subscriptions

Currently, it’s only possible to subscribe to one of each type of ISA per tax year, but subscribing to multiple ISAs of the same type with different providers will now be allowed – offering much greater flexibility than before.

Savers can pick and choose easy-access or fixed-rate Cash ISAs to suit their needs, and investors can spread investments over several providers. However, all ISA
subscriptions are included in the annual allowance of £20,000.

Partial ISA transfers

The current all-or-nothing approach to ISA transfers
is that the entire ISA must be transferred if you want to move it to another provider during the tax year. However, the new rules will allow partial transfers between providers.

Savers will be able to transfer any amount they like from one ISA manager to another without having to transfer the entire subscription. For example, if you paid in £10,000, you could move £5,000
to another provider without an issue.

No need to reapply

At present, an ISA account that’s seen as ‘dormant’ – with nothing paid in during the previous tax year – will require reapplication. Effectively, if you don’t pay into your ISA for a year, you have to apply for it again to restart payments.

As an administrative hassle, the government has decided to scrap this requirement. So, if you made no contributions to your existing ISA
in the previous tax year, you won’t need to reapply to resume contributions, reducing confusion.

Fractional shares

Though it isn’t concrete yet, the government intends to make it possible to hold fractional shares within a Stocks & Shares ISA. Currently, investors must hold a full share, even though some shares can cost hundreds of pounds.

This will allow investors who would have been priced out of shares to hold fractional investments in an ISA, making it easier for more people to invest in shares. The government should announce more details after running consultations.

Frozen ISA allowances

The maximum tax-free amount that you can save in ISAs
each year – the annual ISA allowance – unfortunately will not be increased this year. This means it will stay frozen at £20,000 for Adult ISAs and £9,000 for Junior ISAs.

This allowance can be split across multiple types of ISAs, such as a Cash ISA, Lifetime ISA, Innovative Finance ISA, or Stocks & Shares ISA. However, you must make sure the total across all accounts doesn’t exceed the allowance.

Cash ISA age limit

In line with other ISAs for adults, the age limit for opening a Cash ISA will be set at 18 years old from April 2024. After this, 16–17 year olds will only be eligible for Junior ISAs, and limited to a lower allowance of £9,000 a year.

Under-18s (or their parents) may want to open a Cash ISA
before 5th April if they want to benefit from the adult allowance in addition to being eligible for a Junior ISA – a ‘loophole’ that offers a combined allowance of £29,000.

ISAs and tax planning

Though it hasn’t been updated yet, HMRC has an online guide to ISAs
for 2023–2024.

As the current tax year draws to a close and the ISA
reforms approach, there’s no better time to re-assess your financial strategies for the coming tax year – ensuring you make informed decisions for tax-efficient saving.

Of course, ISA regulations can change at any time, and it can be difficult to choose the right savings option for your personal circumstances.

If you need help with financial planning for your future, including tax planning, it’s a good idea to get professional advice from qualified accountants, who can help you to manage your savings portfolio.

The skilled accountants in Barnsley at gbac would be happy to assist you with savings and tax advice – call 01226 298 298 or email info@gbac.co.uk to find out more.

Last November, the measures announced in the Autumn Statement 2023 included some extensions and some cuts to business rates relief for the 2024–2025 tax year.

While the business rates burden may be alleviated for some businesses in England and the Scottish islands, businesses in Wales sadly will not be as fortunate.

Here are the latest figures for business rates relief
and multipliers from 1st April 2024.

Business rates discounts

Business properties in the retail, hospitality, and leisure sectors that are not eligible for small business rates relief may qualify for a 75% discount, which was available in 2023 and will be continuing in 2024.

With a cap of £110,000 per business, this discount is typically available from local councils for business properties that are primarily used as shops, restaurants (including cafés, bars, or pubs), cinemas, music venues, hotels, gyms, or spas.

Welsh retail properties have an equivalent scheme, but the discount will drop to 40% for 2024. There is no equivalent scheme for business properties in Scotland or Northern Ireland, but hospitality businesses on the Scottish Islands will get 100% relief.

Business rates multipliers

To calculate a business rates bill, the property’s rateable value (RV) is multiplied by a multiplier that may reflect the Consumer Price Index (CPI).

The small business multiplier, which applies to properties with an RV below £51,000, will continue to be frozen at 49.9p in 2024, as it was in 2023.

However, the standard multiplier, which applies to properties with RVs over £51,000, is going to increase by 6.7%
– reaching 54.6p for 2024–2025.

These multipliers apply in England. In Wales, the regular multiplier is increasing by 5% to 56.2p, while there have been no announcements yet for Northern Ireland.

In Scotland, properties with RVs up to £50,000 will be subject to a multiplier of 49.8p, RVs between £51,001–£100,000
to 54.5p, and RVs above £100,000 to 55.9p.

Help with business rates relief

With inflation at around 4% and expected to fall throughout 2024, the increased multipliers are unlikely to be welcome news for businesses in England and Wales – though the frozen multiplier for small businesses and continued retail discount is sure to benefit many businesses in England.

Detailed information about business rates in England and the types of business rates relief
is available on the government website.

If you are concerned about the impact of business rates
on your small to medium business, have you considered speaking with tax consultants?

At gbac, our accountants in Barnsley and Leeds can help businesses across the UK to improve their financial management and benefit from efficient tax reliefs. Call 01226 298 298 or email info@gbac.co.uk to discuss our services.

Calculated according to employment status and earnings, it’s essential for workers to pay National Insurance Contributions (NICs) to help provide funding for essential public services like the NHS, state pensions, and state benefits.

However, many people believe they are building up a national fund, when it’s more of a ‘pay as you go’ system – each year’s contributions pay for that year’s benefits.

Framing NICs
that way, rather than as just another tax on income, previously allowed politicians to make headlines over basic income tax changes with less attention on revenue from increased NICs – but the Chancellor Jeremy Hunt seemed to give up on this approach last November.

In the Autumn Statement 2023, it was announced that upcoming NIC reductions would be the equivalent of tax cuts for employees and self-employed people.

As of 6th January 2024, the main rate of National Insurance has dropped by 2%, which is effectively a 15% reduction in National Insurance Contributions – resulting in significant savings for millions of workers across a variety of sectors.

Here’s a summary of the changes to NICs in 2024 and what this could mean for you.

How have National Insurance Contributions changed?

Special rules apply to directors, but for regular employees, the NIC cut means that on 6th January this year, the main rate decreased from 12% to 10% on earnings between £12,570–£50,750
a year.

The difference to pay packets is essentially the same as if there had been a 2p cut to basic rate income tax, but it’s the Chancellor’s view that the NIC reduction was the cheaper option, as there’s no tax cut to NIC-free pension or investment income.

The NIC rate for employers didn’t change, staying at 13.8%
on earnings over £9,100.

If you earn less than £50,270 a year, paying pension contributions as a ‘salary sacrifice’ isn’t as advantageous as it used to be, but it’s still an attractive option, as the table shows below (based on a sacrifice of £1,000).

On the other hand, if you’re one of the growing number of higher rate taxpayers, salary sacrifice remains the same unaltered financial advantage.

This is the biggest tax cut in the personal tax system since the allowance for National Insurance increased in 2022, which is believed to now make personal taxes lower for those on average salaries in the UK than in any other G7 country.

Who benefits from National Insurance tax cuts?

The cut to National Insurance Contributions is intended to benefit a wide range of professional workers, from plumbers and police officers to teachers and nurses.

If the average annual pay for a salaried worker is £35,400, reduced NICs will result in them taking home an extra £450 this year. Other examples include annual gains of:

• £520 for a full-time nurse with a £38,900
  average salary
• £750 for a junior doctor with an average £63,000
  salary
• £630 for a police officer or teacher on an average salary of £44,300
• £410 for a self-employed plumber earning £34,400
  a year
• £170 for a night shift cleaner earning £21,000
  a year
• £900 for a family with 2 earners on average £35,404 salaries

Not only will around 27 million people be better off in jobs across hundreds of different industries, but the OBR (Office for Budget Responsibility) says that this tax cut will also boost the number of employed people by 28,000 by 2028–2029.

By the same tax year, the OBR also estimates that those in work will boost the economy by increasing their working hours by 0.3%, with 94,000 more full-time hours – what the government calls ‘making work pay’.

What are the implications for tax planning?

The changes to the National Insurance system affect millions of taxpayers across the UK, so it’s essential for everyone to understand them for tax compliance and financial management purposes.

That’s why the government has shared plenty of guidance online, including the launch of a new online tool from HMRC that helps people to estimate how much they could save in reduced NICs by entering their salary information.

Both working individuals and businesses who employ workers need to adjust their financial and administrative strategies to ensure they are complying with NIC regulations and making the most of reduced tax liabilities.

Self-employed people who need assistance with bookkeeping and employers who need help managing payroll and accounts could benefit from professional financial services, such as those offered by the team here at gbac.

To discuss what gbac can do for you, get in touch with our accountants in Barnsley.

According to the Office for National Statistics, the median age of the UK population increased from 30.96 years old in 2011 to 40.7 years old in 2021.

This gradual ageing of the population, combined with shifting work patterns brought about by COVID-19, has led to a rise in research on attitudes towards retirement.

The latest report to investigate such attitudes is Standard Life’s Retirement Voice 2023.

One of the topics it covers is the benefit of planning ahead for retirement – but what do people in the UK think about retirement planning, and when is the best time to start?

Which age groups are planning for retirement?

‘Retirement Voice’ is an annual survey carried out by pension provider Standard Life, which is now in its third year of publication. For 2023, the survey questioned 6,000 people between the ages of 18–80 years old about their plans for retirement.

According to the survey results, only 29% of respondents claimed to be doing a ‘great deal of planning’ to prepare for their retirement.

Those who sought professional financial advice and households with annual income over £100,000 were the most likely to say this, but not more than half of these groups.

Considering over half of current retirees reported wishing they had started saving for retirement earlier, it’s surprising that only around 1/5 of Gen X respondents (aged 42–57 years old) said they had undertaken significant retirement planning.

Meanwhile, 27% of millennials (26–41 years old) and 34% of Gen Z (18–25 years old) said they were already doing a great deal of planning for retirement – with Baby Boomers
(58–80 years old) the most confident age group at 36%.

With Gen X next in line to retire after the remaining Boomers, changing attitudes to retirement planning with better education about pensions and savings seems essential to ensure people are able to support themselves in retirement.

What is the best age to start retirement planning?

The survey results indicate that the average age at which people start to show a keen interest in retirement planning is 36 years old
– but is this early enough?

While Baby Boomers and Gen X started to take interest in retirement finance at 49 and 39 respectively, Millennials and Gen Z are starting younger, at 28 and 20.

It certainly seems to be the smart idea to start looking into retirement planning as early as possible, with 61% of keen planners feeling positive about the wellbeing of their retirement finances compared to 21%
of non-planners.

As only 37% of people believe they are saving enough to retire comfortably and 55% are concerned that their retirement funds will run out before they die, it could benefit them to seek financial advice and get their retirement savings on the right track.

We offer several types of financial planning services here at gbac, so if you need professional guidance to maximise your pension pot, why delay it any longer?

Reach out to our qualified Barnsley accountants
to find out how we can help you improve your financial wellbeing and build your retirement funds.

In welcome news for young workers and apprentices, minimum wage rates will increase substantially from 1st April 2024. However, this may put more pressure on employers who are already struggling in a difficult economic climate, as even small employers must pay the appropriate minimum wage.

Almost all workers in the UK are entitled to a minimum hourly pay rate known as the National Minimum Wage. The National Living Wage is a higher minimum pay rate currently available for workers over 23 years old, but this age limit will be reduced to 21 years old
in the coming April.

Here are the changes to minimum wage rates that will take effect in a few months’ time.

New NLW and NMW rates from April 2024

The current and future rates for the National Living Wage (NLW) and the National Minimum Wage (NMW) , and the increases between them, are as follows:

When it comes to apprentices, the minimum wage for workers under 18 years old applies, but only if the apprentice is 19 years old or under, or in the first year of their apprenticeship. Otherwise, employers must pay the appropriate rate for the apprentice’s age.

The only benefit that counts towards the NLW/NMW is provision of accommodation, with the maximum offset being £9.99 a day
(or £69.93 a week) from this April.

What about the Real Living Wage?

The Real Living Wage (RLW) is an hourly rate of pay based on the cost of living, which is calculated independently and paid on a voluntary basis. Around 14,000 employers across the UK voluntarily pay the RLW, benefitting more than 460,000 employees.

The Real Living Wage is currently £12 an hour, close to the National Living Wage, but it applies to more workers from 18 years old. The RLW is also higher in London, where the costs of living and working in the capital city are higher, at £13.15 an hour.

Accounting and payroll services for employers

Employers can use the National Minimum Wage and Living Wage calculator on the government website to make sure they are paying an employee the right minimum wage, and to check whether an employee was underpaid in a previous year.

To ensure that employees are paid appropriately and in a timely manner, and avoid the problem of owing employees who have been underpaid, employers of any size can benefit from professional accounting and payroll services.

Here at gbac, our team offers a variety of financial services that can help businesses of all sizes, including bookkeeping, payroll, and tax management.

To find out what we can do for your business, get in touch with our accountants in Barnsley by phone or email today.

The current default accounting method for businesses in the UK is accruals basis accounting, which involves noting transactions as they happen instead of upon payment of invoices. If a qualifying business wanted to use cash basis accounting to record transactions when payments are completed, they would have to opt in.

However, following the Autumn Statement in November 2023, the government will make cash basis accounting the default instead. This means cash basis will be the standard method of calculating trading profit for self-employed traders and partners with trading income, taking effect from the start of the 2024–2025
tax year.

Businesses will now have to use the cash basis scheme and opt out if they want to use the accruals basis scheme instead. This should make it simpler for most businesses to complete tax returns reporting their income to HMRC.

Removal of cash basis restrictions

Previously, small businesses could only use cash basis accounting if their annual turnover was below a certain limit. Now, regardless of size, any business can use the cash basis scheme after the removal of the £150,000
turnover restriction.

Another two restrictions will also be removed, meaning there are no more obstacles to businesses that would otherwise qualify using the cash basis scheme:

• Interest costs will be fully deductible (no £500 maximum deduction).
• Cash basis
  losses can now be relieved like accruals basis losses.

When a business moves from accruals to cash basis, some adjustments will be necessary to make sure no items are omitted or double-counted.

Pros and cons of cash basis accounting

The cash basis scheme simplifies accruals and capital allowances, so calculating trading profit is typically easier. That said, it may not be suitable for larger businesses.

It also offers the opportunity to legally manipulate trading profit for a period, for example, by paying suppliers early closer to the end of the period to reduce profit.

However, banks and financial institutions may insist on using accruals basis accounting, as it will reflect a period’s trading profit more accurately.

Switching between accruals basis and cash basis

Information on moving to cash basis is available in the HMRC guide to calculating trading profits, and more details on the cash basis expansion can be found in the government’s policy paper.

If your business is affected by this change and you need to switch to cash basis accounting in 2024, it can help to get professional assistance from qualified accountants.

At gbac, we have a team of accountants in Barnsley who can assist with a variety of financial services, ensuring your bookkeeping and tax management are in order.

Call us on 01226 298 298 to discuss your accounting needs, or send an email to info@gbac.co.uk and we will get back to you soon.

While Research and Development (R&D) tax relief was introduced to encourage UK companies to make innovative investments that could boost the economy, the government is reforming this system due to concerns over fraudulent tax relief claims.

In addition to switching to online or digital submissions only and requiring more information for R&D tax relief applications from April 2023, the government announced in the November 2023 Autumn Statement that the Research and Development Expenditure Credit (RDEC) scheme and the small or medium enterprise (SME) R&D relief scheme would be merging into one from April 2024.

These two schemes will merge into a new scheme that is similar to the RDEC scheme currently used by large companies, which will eliminate the complexity of moving between schemes. This is designed to simplify the system and make it easier to ensure that companies can claim the right R&D relief they are entitled to more efficiently.

How does R&D expenditure credit (RDEC) work?

Alongside the R&D expenditure
deduction, the RDEC offers a standalone 20% credit. As this is taxable, if the main Corporation Tax rate applies, then the credit is worth £15,000 for every £100,000 spent on research and development.

The expenditure credit could lead to repayments for loss-making companies, which would be calculated using the 19% profit rate of Corporation Tax.

If the credit is not used to reduce Corporation Tax liability for the current tax year, it is capped based on the PAYE and National Insurance contributions paid for research and development workers – but the cap from the SME scheme will be used in future, which is more generous.

What about R&D-intensive SMEs?

Small or medium enterprises can still claim a repayable 14.5% credit under the SME scheme, despite the merging of the two schemes. With an 86% uplift, this can result in a £26,970 cash repayment for every qualifying £100,000 of expenditure.

The intensity is calculated as a proportion of the SME’s qualifying expenditure compared to their total spending, with the R&D intensity threshold reduced to 30%.

There will be a grace period of 1 year for companies that fall below the new threshold.

Need help with R&D tax relief claims?

For more information on the expenditure credit scheme as it currently applies, HMRC’s RDEC guide is available to read on the government website.

The new scheme will apply for accounting periods starting on or after 1st April 2024.

If you want to make sure that your small to medium business, or company of any size, is compliant with the R&D relief rules and benefits from the most effective tax relief, you may want to consult with our accountants in Barnsley.

Call gbac on 01226 298 298 or email us at info@gbac.co.uk to learn more about how we can help your company with R&D tax reliefs.