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21/03/2024

How to Reduce the Child Benefit Charge?
The answer is simple: make pension contributions! This is the easiest way for almost everyone to reduce the child benefit charge. For example, if you have an income of £60,000 in 2023/24 and your spouse earns £30,000 and receives child benefit for two children, you can invest £4,000 in your pension.
The taxman will add an extra £1,000 to your pension pot, resulting in a gross pension contribution of £5,000.
By submitting your tax return, you will receive an extra £1,000 of higher-rate tax relief. The £5,000 gross pension contribution will also result in your adjusted net income falling from £60,000 to £55,000. This means your family will now hold onto £1,038 of child benefit instead of nothing. For a more detailed discussion of the pension contribution rules, please contact us.

21/03/2024

Here's the information about the annual pension allowance and its impact on tax for higher earners:

- Annual Pension Allowance (2023/24): £60,000
- Tapering for Higher Earners: For every £2 earned over £260,000 (including pension contributions), the allowance is reduced by £1.

- Tax Benefits for Higher Rate Tax Payers (40%): Pension contributions can reduce tax for higher rate taxpayers.
- Tax Benefits for Earners between £100,000 and £125,140 (60%): For earners in this range, pension contributions can reduce tax at a rate of 60%.
- Tax Rate after £125,140: The tax rate is reduced to 45% for earners beyond this threshold.

- Unused Pension Relief: Unused pension relief can be carried forward for up to 3 years, providing an opportunity to maximize tax benefits from pension contributions.

It's important for individuals to stay informed about these allowances and tax benefits to make the most of their pension contributions and reduce their tax liabilities effectively.

14/03/2024

Navigating Child Benefit and Taxation: A Comprehensive Guide

Eligibility:
- You are eligible for Child Benefit if you are responsible for a child under 16, or under 20 if they are in approved education or training.
- Only one person can claim Child Benefit for a child, with no limit on the number of children you can claim for.

Benefits of Claiming:
- Receive an allowance for each child every 4 weeks.
- Gain National Insurance credits towards your State Pension.
- Obtain a National Insurance number for your child before they turn 16.

High Income Child Benefit Charge:
- You may have to pay this if your individual income or your partner's income exceeds £60,000 and either of you receive Child Benefit or contribute an equal amount towards a child's upkeep.
- Adjusted net income is used to determine if you are over the threshold.

Options for Dealing with the Tax Charge:
- Choose to receive Child Benefit payments and pay any tax charge at the end of each tax year.
- Opt out of receiving payments and not pay the tax charge.

Procedure for Opting Out:
- Fill in the Child Benefit claim form and state that you do not want to receive payments.
- Still fill in the form to receive National Insurance credits and a National Insurance number for your child.

Current Child Benefit Rates:
- As of 6 April 2024, Child Benefit rates are £25.60 for the eldest or only child and £16.95 for younger children.

Increased Threshold:
- The High Income Child Benefit Charge threshold increases to £60,000 from 6 April 2024.

14/03/2024

Annual Tax on Enveloped Dwellings (ATED) Notification

Are you a Non-Natural Person (NNP) owning a UK dwelling?

If so, you may be subject to the Annual Tax on Enveloped Dwellings (ATED). The ATED is an annual charge on UK dwellings held by NNPs such as companies, partnerships with a corporate partner, and collective investment schemes.

ATED Threshold and Filing Requirements:
- The ATED applies to properties over a specific value, unless a relief is claimed.
- It does not apply to individuals.
- File a return in advance on or after 1 April for the chargeable period.
- For example, returns for the period 1 April 2024 - 31 March 2025 must be filed on or after 1 April 2024.

**Payment Deadline and Property Valuation:**
- The ATED is payable annually in advance by 30 April for the chargeable period covered by the return.
- It is based on the taxable value of the property, revalued every five years.
- Different types of transactions may trigger a new valuation date.

**Need Assistance?**
If you need any help in complying with the ATED rules or claiming relief, contact Harish at 44 7448 471 341.

09/03/2024

Interest costs and Covid debt repayments are significantly affecting the profitability and cashflow of businesses across various industries, particularly the hospitality sector. With 10 major challenges, the fight for survival is real. These obstacles include Brexit causing labor shortages, Covid collapsing sales and profits, and interest rate increases leading to profitability issues.

Customers are also suffering from inflation and making fewer visits to pubs, resulting in lower footfall and average spend. Higher energy costs and an increase in labor costs by 10%, coupled with a shortage of skilled chefs, are hurting profits. Food costs have gone up by 20%, and drink prices have also increased by the same percentage.

Reducing opening hours leads to less sales and severe competition on food sales, while the unstable economy stops plans and growth. The sale value of businesses is falling, leading to a loss of goodwill. With interest rates much higher, the cost of capital is stopping investment.

It's crucial for businesses to take these challenges seriously and develop effective strategies to overcome them. If you're facing similar issues, our team is happy to help. We can assist in reducing your overheads, providing better systems, and greater care by replying to your calls and emails within 1 hour. Contact us at 07448471341 for a free consultation to solve your problems.

09/03/2024

10 Ways to Improve Your Food Profit Margins in a Restaurant Business.

If you're in the restaurant business, you know that profit margins are everything. Here are ten tips to help you improve yours:

1. Review your menu weekly to ensure it's attractively priced and customer-proof your margins. Surprise your customers with daily special offers to add value.
2. Use seasonal ingredients at a lower cost of purchase to increase profit margins.
3. Consider removing some items from the menu to save on rising ingredient prices.
4. Use less meat and focus on profit.
5. Speak to your suppliers regularly and replace them if they're not listening to cost concerns.
6. Offer set menus under £20 to attract price-sensitive customers.
7. Measure wastage and reduce it to minimize unnecessary expenses.
8. Consider hiring younger staff as wage costs increase on April 1, 2024.
9. Stay on top of your costs and adapt to changes in your sales mix.
10. Track customer visits and average spend through a loyalty card to identify opportunities to increase revenue.

At Abel Accountants we provide a free service to review your margins and systems of control. Are you on top of your numbers? Remember, what you measure is what gets controlled.

09/03/2024

2024 Budget Changes and Non-Dom Rules

The 2024 budget introduces significant changes to the non-dom rules, impacting over 5,500 individuals. They will now face taxation on income and gains outside the UK if not remitted into the country.

Impact and Reactions

Newcomers will retain benefits for four years, but 10% to 20% of non-doms might leave the UK in protest or to seek better tax arrangements elsewhere.

Political Context

This policy shift, driven by the Labour Party, reflects a competitive stance against countries like Spain and Italy to attract wealthy investors. The change is inevitable, with an estimated £2.7bn in additional tax revenue expected by 2025.

Concerns and Considerations

The City of London, where 1 in 5 non-doms reside, is wary. However, the concept of domicile, rooted in the British Empire, is losing its special tax reliefs.

Future Outlook

While the UK may become less appealing to the non-dom community, the £2.7bn increase in tax revenue stands as a significant gain for the Treasury from 2025 onwards.

Conclusion

The 2024 budget's alteration of non-dom rules signifies a strategic move in the global competition for wealthy investors, despite potential repercussions on the UK's attractiveness.

07/03/2024

📢 **BIG NEWS for UK businesses!**

From April 1, 2024, the annual VAT registration threshold will increase from £85,000 to £90,000. While this is a modest increase, it's a long-awaited change for businesses trading just below the current threshold. However, with inflation on the rise, small non-VAT registered businesses may see this as a meagre bone.

But that's not all - the VAT deregistration threshold will also rise from £83,000 to £88,000. Unfortunately, this change won't enable many businesses currently exceeding the existing threshold to deregister for VAT.

What are your thoughts on these changes? Let us know in the comments below.

07/03/2024

Title: Key Property Announcements from the Spring Budget 2024

Slug: spring-budget-2024-property-announcements

# Capital Gains Tax Rate Cut

From 6 April, the higher rate of capital gains tax (CGT) on residential property sales will be cut from 28% to 24%. CGT is payable on profits made when selling a buy-to-let or second home. The sale of a primary residence isn't subject to this tax.

Basic-rate taxpayers currently pay 18% on their gains, while higher and additional-rate taxpayers pay 28% (soon to be reduced to 24%). Everyone has an annual CGT-free allowance of £6,000 (£3,000 from April 2024), and can offset costs incurred in selling the property, such as estate agent fees.

The government states this change will "encourage landlords and second home-owners to sell properties, making more available for buyers."

[Find out more about capital gains tax on property](link-to-more-information)

# Stamp Duty Changes

Despite rumors, no significant changes were made to stamp duty land tax for first-time buyers or downsizers. However, the government has moved to abolish multiple-dwellings relief from June 2024. This relief applies when someone buys more than one property in the same transaction, for example several flats in a block.

Currently, buyers can pay stamp duty based on the average price of the individual properties they purchase, rather than the total cost of the transaction – thereby reducing their tax bill.

For example, if you buy five flats in one transaction for £1m, your stamp duty bill would currently be based on five £200,000 transactions. But from June, it will be based on the total cost of £1m – resulting in a much higher bill.

# Conclusion

While rumors of changes for prospective first-time buyers and downsizers failed to materialize, the Spring Budget 2024 did bring significant adjustments to property taxation. The cut to the capital gains tax rates and the abolition of multiple-dwellings relief are poised to impact the property market landscape.

07/03/2024

Child Benefit is a government payment available to those responsible for a child under the age of 16, or under 20 if they are in full-time education. The current rates stand at £24 per week for the first child and £15.90 for any additional children, effective until April 2024. However, if adjusted net income surpasses £50,000, the High Income Child Benefit Charge (HICBC) will reclaim the Child Benefit. The HICBC is reported on the self-assessment tax return for eligible individuals.

The £50,000 threshold has remained unchanged since January 2013, leading to a doubling in the number of individuals brought into the charge from initial predictions. The current system is perceived as unfair, as a household with two parents each earning £50,000 a year will receive Child Benefit in full. Conversely, a single parent earning over £60,000 or a household with one parent earning £60,000 and the other with no income will have their Child Benefit fully clawed back.

To support recipients of Child Benefit, the government will increase the threshold for HICBC to £60,000 from April 2024 and halve the charge rate to 1% of the Child Benefit for every £200 of adjusted net income exceeding £60,000. The government estimates that nearly half a million families will gain, with an average benefit of £1,260 in 2024/25. From April 2026, the government will transition to a system based on household income rather than individual incomes.

If you have any questions regarding the impact of your Child Benefit claims on your tax position, please feel free to reach out to us for assistance.

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London
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