From April 2018, small businesses, including everyone who is self-employed and those letting out property, will have to complete quarterly digital tax returns. This new rule applies where it is your main source of income, or a secondary source of income above £10,000 and your main income is from employment or a pension.
The rationale behind the new quarterly digital returns is that businesses should not have to wait until the end of the tax year or perhaps even longer before knowing how much tax they will have to pay. In addition, the plans will bring small businesses into line with larger corporations.
However, will switching to quarterly tax returns simply increase the already large amounts of red tape that exist for small businesses and create a burden for landlords, many of whom will have become landlords as a result of circumstance rather than design?
As well as adding to the ever-growing admin burden, there are also concerns that many landlords and small business owners could be fined for missing the submission deadlines.
So, is residential property still a favourable investment option?
With these new tax return burdens coming into force together with the recent tax increases and reduced reliefs in relation to property, perhaps residential property investment isn’t quite as favourable as it once was?
With the removal of the Wear and Tear Allowance for fully furnished properties, the phasing out of tax relief on mortgage interest, an additional Stamp Duty levy on second and subsequent properties, and no reduction in Capital Gains Tax rates, it may be time to consider some alternatives to residential property investment.
At Springfield, we can advise on a range of different investment options and with our expertise and careful tax planning, we can ensure that you fully utilise and maximise the tax reliefs, allowances and exemptions that are available to you, thus ensuring that your money is working as tax efficiently and effectively as possible.
Get in touch to find out more about our tax planning services
Springfield Financial Services Ltd offers tax planning services to individuals across Preston and the Fylde Coast, throughout Lancashire, as well as further afield.
For further information or to arrange an initial no-obligation consultation, please telephone us on 01772 729742 or alternatively, simply fill out our online enquiry form and we will give you a call to discuss your requirements.