In the Budget the Chancellor extended the period for Zero stamp duty on property purchases up to £500,000 until the 30^th June 2021. After this date the zero threshold will reduce to £250,000 up to the 30^th September 2021 and then drop down to £125,000.

This is great news for buyers and a further boost to the housing market.

Please remember that if you are buying a second property then the additional stamp duty still applies at a 3% surcharge.

Property bought in a company however will benefit from the new rates up to the 30^th June 2021 provided the property is under the £500,000 limit.

Ask us for advice on this aspect if you are looking to buy a residential property.

What if you are a seller?

As a seller this should increase your chances of selling your property but beware if the property is not your main residence and you have potential capital gains tax to pay you must report the sale within 30 days to HMRC.

This new legislation came in for disposals after 6^th April 2020.

When do I have Capital Gains Tax To Pay?

If the property is your main home, then you will not have to pay capital gains tax as it qualifies for Principle Property Relief.

If however you own another residential property perhaps you have bought a holiday home that just the family uses, you have bought a property for your children to live in whilst at university or you have residential property that you let out, then the new legislation may apply to you.

Capital Gains Tax is calculated based on the price you sell the property for after allowing for the price you paid for the property less other deductible costs.

Will It Apply to Me?

The flow chart below is a simple guide as to whether you will have to report the sale to HMRC.

What to Do to report the Gain

Step One

Work out if you have any capital gains tax to pay on the property. To do this you will need the following information:

• calculations for each capital gain or loss you report
• details of how much you bought and sold the asset for
• the dates when you took ownership and disposed of the asset
• any other relevant details, such as the costs of disposing of the asset and any tax reliefs you’re entitled to

If you have a gain then move on to :

Step Two

Create a Capital gains Tax Gateway account with HMRC if you do not already have one

https://www.tax.service.gov.uk/capital-gains-tax-uk-property/start/report-pay-capital-gains-tax-uk-property

Step Three

Log into the gateway and report your gain

This must be done within 30 days of the property disposal date.

Step Four

HMRC will send you a letter advising you what you owe and giving you a reference number and details of how to pay

Do I have to do anything else?

Yes, if you complete a self-assessment tax return the gain details should also be recorded on to this return as part of your normal self-assessment completion.

Don’t wait until the deadlines for your self-assessment return as you may then face interest on the capital gains tax due.

This is a complicated area of tax law and if you need any advice on this we can assist and complete the calculations and the returns on your behalf.

We can provide a quote for this work to be done for you – Obtain Quote Now

For further information contact info@mcgintydemack.co.uk or call 0800 1223 633

We are here to help you.

VAT Soft Landing Period Ends 1^st April 2021

Making Tax Digital and the requirement to keep digital records commenced on 1^st April 2019. From this date until 31^st March 2021 the VAT office allowed a period for businesses to have in place digital links between all parts of their functional compatible software.

Have you now got this in place? If not, you do need to take action before the 31^st March to have a suitable system that the VAT office will accept.

The new rule has the force of law:

A digital link is an electronic or digital transfer, or exchange of data, between software programs, products, or applications.

The use of ‘cut and paste’ or ‘copy and paste’ does not constitute a digital link – except during the soft-landing period as set out in paragraph 3 of the next ‘force of law’.

For VAT periods starting on or after 1 April 2021 your systems must use digital links for any transfer or exchange of data between software programs, products or applications used as functional compatible software, as stipulated in legislation.

This means that any VAT quarters from 30^th June onwards must have a digital means of transfer.

What does this mean for me.

If you currently use an excel spreadsheet for submission this is still an acceptable method of submission. But if you give your accountant figures only to be filed then this is no longer acceptable.

You will need to either start using an excel spreadsheet to record the data or better still implement a full digital bookkeeping system that records all your transactions.

This latter option will give your business more flexibility and will also mean that when the next stage of MTD is implemented which will be accounts data submission you are ready to go.

How we can help

We can offer clients reduced price licences on digital software like QuickBooks, Xero and Sage online and help you set up the system and if required provide training or even complete the book-keeping for us. Let us know what you prefer, and we will provide a quote.

If you are not ready yet to go to full digital records, then you will need to look at maintaining an excel spreadsheet which we can supply to you. This spreadsheet will link to our online system for submission of the return data. If you would like a copy of the spreadsheet please drop us an email.

The full details on the legislation can be found https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat

For more details please contact us on 01942322767 or email info@mcgintydemack.co.uk

PAY VAT DEFERRED DUE TO COVID 19

A lot of businesses will have taken up the option given by the government to defer VAT that was due between 20^th March 2020 and 30^th June 2020.

The time to pay this deferred amount is almost arrived but you do have options to consider that may help your current cashflow and financial position.

A new VAT deferral payment scheme will open on the 23^rd February offering businesses extra help to meet the liabilities that are coming due.

DATES OPEN

The new scheme is open from 23^rd February to 21^st June and lets you:

• Pay your deferred VAT in equal instalments interest free
• Choose the number of instalments from 2-11.

HOW DO I APPLY

• You must join the scheme yourself we as your agent cannot do this for you
• Obviously you have to have a liability that is due for the above deferred period
• Be up to date with your current VAT returns
• Join the scheme by 21 June 2021
• Pay the first instalment when you join
• Pay your instalments by preferably direct debit

HOW LONG CAN I PAY OVER?

The date you join the scheme dictates how long the payments can be over:

JOIN DATE	NUMBER OF INSTALMENTS
19 March 2021	11
21 April 2021	10
19 May 2021	9
21 June 2021	8

The sooner you join the more flexibility you have.

If you join this scheme it does not stop you having other time to pay arrangements for other HMRC debts

HOW DO I JOIN THE SCHEME?

Ideally you should do this online through your Government Gateway account.

• Create or log into your gateway
• Make sure there are no outstanding returns from the last 4 years
• Ensure any errors if any exist are corrected
• Make an application online

If you want to join the new scheme but cannot use the online service then you can contact the COVID helpline when the scheme opens on 0800 024 1222.

ACT NOW

Your options on the VAT you owe are:

• Pay the deferred VAT in full on or before 31 March 2021
• Join the new VAT deferral scheme

If you do not take up one of the above options, then you may face interest or penalties.

Full details are available https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

If you need clarification on any of the above points either in confirming the new scheme will be applicable to you or help in getting old returns up to date please contact us ; info@mcgintydemack.co.uk or call 01942 322767

NEW RULES VAT REVERSE CHARGE

New VAT rules for sub-contractors and building contractors will soon take effect. From 1st March 2021, the VAT reverse charge will change how you have typically been accounting for VAT. How you layout information on your invoices to clients and prepare your VAT returns may change.

The VAT reverse charge – what is it?

It is where the supplier of construction services does not account for VAT, but the end-client does. The reverse charge means the customer receiving construction services must pay the VAT to HMRC, opposed to the company supplying the service. The end-user will have to recover VAT subject to the standard HMRC procedures.

How will the new rules be applied?

From 1st March 2021, these new rules apply to standard rate VAT or reduced-rate construction services provided by VAT registered companies. If the supplies of service are zero-rated, the reverse charge will not apply. Suppose you or your business don’t make an onward supply of construction services. In that case, you are the end customer, and standard VAT rules are applicable.

If your invoices have CIS and non-CIS registered materials, the new reverse charge will apply to the entire invoice total.

What do you do if you are a sub-contractor?

If you’re invoicing a customer (or contractor) in a supply chain. In that case, you’ll either have to apply the reverse charge or charge VAT as usual. If it’s the reverse charge, the total of your invoice will not include VAT.

The invoice has to state to your contractor or customer that the reverse charge rules have been applied, showing the total amount of output VAT applied (20% if it’s the standard rate of VAT). Your contractor or customer will then need to include that amount on their VAT return. You don’t have to include the reverse charge on your VAT return.

What do you do if you are the main contractor?

If you are the main contractor receiving a VAT reverse charge invoice from a sub-contractor, you should continue to record it as an ordinary expenses invoice and include the input VAT on your next VAT return.

HMRC Guidance https://www.gov.uk/guidance/how-to-use-the-vat-reverse-charge-if-you-supply-building-and-construction-services

You’ll also have to account for the reverse charge VAT that your sub-contractor has informed you about. The overall effect on your VAT liability will be neutral as the input VAT covers the output VAT.

If you believe the new reverse charge VAT rules apply to your business, contact us today, we’re here to help you every step of the way. Email us at info@mcgintydemack.co.uk or call 01942322767

Company values are part of your business DNA – they define the business and they support the vision, culture and reflects what is important to the operation of the business.

To establish strong core values gives a business a framework to develop, it is used internally and externally.

Clients can see what the company is about and what is important to the business. New and existing employees can understand what is important to the company and in some ways, what is expected of them.

Core values should be timeless, they are the foundation of your business, they should not change and they should be sustainable. They should apply in good and bad economic situations.

We felt during lockdown that it was important to re-establish our values, look at what we were doing in practice and make them core to our business. Working as a dispersed team some home working some in the office we felt to set and agree these values on paper would help us to continue and build on our company values.

As part of one of our group zoom sessions we asked all staff what they thought was important to our business, to them and to our clients

We received a variety of suggestions

Reliable	USP	Better Clients	Efficiency	Efficiency	Integrity	Commitment to customers
Teamwork	Professional	Better Fees	Commitment	Integrity	Responsibility to	Accountability
Ethical	Accurate	Digital Working	Accomodating/Adapting	Open & Honest	Respect	Leadership
Helpful		Paperless Office		Lead By Example	Sportsmanship
Specialised				One Team	Servant Leadership

This was important because for core values to work everyone in the Team must buy into them.

Some of the above represented the same value but by a different word. After a review and a vote we ended up with the following core values which as a team we are all proud to work with and encompass into the business. The helps us all work to the same goals and helps us shape the business with these values central to any decision that we make.

1. Efficient
2. Collaboration
3. Integrity
4. Accountability
5. Commitment

Efficient – Obtaining the best possible outcome in the least wasteful manner by maintaining dynamic, relevant policies and procedures while consistently supporting a quality workforce.

Collaboration – recognising one another’s strengths, listening and evolving together, helping and supporting each other for the sake of our collective goal

Integrity – acting with honesty and honour without compromising the truth

Accountability – acknowledge and assume responsibility for actions, decisions and policies. This applies both as individuals and as the company.

Commitment –  committing to great service to all our clients

Do you know the core values of your business ?

Are you and your team in sync?

Now is a good time to look at how your business needs to develop to ensure you continue to thrive in these challenging economic times. Core values are the foundation they help to differentiate your business from the competition but for them to work you yourself must believe in them and integrate them into your daily work so your team can follow.

On the 23^rd March 2020 we all had to embrace digital to survive and prosper. Whether it was for business or for personal reasons to keep in touch with loved one’s online platforms like zoom became household names.

We all use digital methods to stay in touch, run and develop our business and in our leisure time.

As a business during lockdown we were lucky in that as we were already cloud based moving to home working was relatively easy , a new phone system, COVID office procedures and home working kits and we were up and running within days with no disruption to service to clients

Since March we have continued with three staff in the office, who are those who preferred to be there with the rest working successfully from home. The Digital Age was here or so I thought.

At our weekly team zoom meetings we have covered all aspects of training and business development. Looking at new software we have brought in to help run the business and training skills to help us manage our time and the pressures of home working and an online structure. We have also had quizzes and social events online

These meetings have helped us all to remain connected, one team working together.

With our new way of working I was therefore extremely surprised that at one of our sessions where we looked at promotional items we should have for the practice, top of the voting was The Humble Post IT.

We said no to USB’s, mouse mats and anything digital for the good old post it.

Thinking about it I should have known – when we were in the office all the younger team members always decorated their screens and desk area with an array of colourful notes reminding them what they had to do and when.

We all use them to remind us how to do certain keystrokes – shift command 5. Reminding us to make that important call, or chase up that tax return that’s not come back yet. Yes we can use digital reminder methods, online diaries, data bases but it appears that even when working at home the sight of the colourful stickers remind us not only of what to do and when but maybe also a reminder of how the office was in the good old days pre March 2020. It appears that a paperless office does not mean no Post Its

Throwing that note away when done is cathartic and more so than just ticking a box on an online portal

So we now have our own post it notes – picked by the team and being used by the team and on the way to our clients so that they can remind themselves what to do and more importantly where we are when they need us.

Many thanks to Pac-hs Limited our associated company for designing and producing the Post IT’s for us. If you like the idea of getting your own their details are 01257400451 or www.pac-hs.co.uk

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