Armagh accountancy firm, Wylie Ruddell, has welcomed the government’s extension to the timeframe in which Capital Gains Tax on Residential Properties has to be disclosed and paid.
Following extensive lobbying from the accounting and taxation fraternity, the chancellor Rishi Sunak made the announcement as part of his Budget speech this week. The new rules will mean that the deadline has been extended from 30 days to 60 days and is effective immediately.
Andrew Cornett, Senior Tax Adviser at Wylie Ruddell said: “This is a very welcome move by HMRC to extend what was a very tight deadline to compute the tax payable and make the necessary submissions online. An additional 30 days allows for some much-needed breathing space to help clients and advisers alike.”
The new reporting regime was introduced in April 2020 and specifically relates to the sale/gift of residential properties. Historically such gains were included on an individual annual tax return. This meant that any disclosure and tax liability may not have been payable for up to 21 months after the sale. The new rules mean that this window has been drastically reduced.
“There has definitely been a widespread lack of awareness of the new rules which has been highlighted by the £1.3m of penalties that were issued by HMRC in its first year of operation. Despite this extended filing period it’s still really important that individuals are proactive in their approach to this compliance,” Andrew continued.
Another positive announcement in the Budget was the extension of the £1m Annual Investment Allowance threshold.
Businesses can get 100% tax relief on qualifying capital expenditure with the limit being £1m per year. This was due to fall to £200k per annum again from 1st January 2022 onwards but the £1m limit will now run until 31st March 2023.
David Ruddell, Partner at Wylie Ruddell said: “The Annual Investment Allowance has been crucial for our clients who have looked to invest in the infrastructure of their businesses. Coupled with the associated tax relief, this really helped businesses to flourish and grow. The extension of the £1m limit for a further 15 months will be well received across the spectrum.”
If you need to discuss your accounting or taxation needs, Wylie Ruddell Chartered Accountants can be contacted on 028 3752 3227 or email - firstname.lastname@example.org