The government has announced that HMRC collected a record sum of £5.4 billion in inheritance tax (IHT) during the 2018/19 tax year.
The increase comes on the back of a 15% rise in the number of estates liable for IHT. Between 2015/16 and 2016/17, the number of estates paying IHT rose by 3,600 to 28,100.
Rising asset values, particularly in regard to properties in London and the South East of England, have been a key factor behind the increased number of estates falling into the IHT net. The freezing of the tax-free nil-rate band threshold also played a key role.
The residence nil-rate band (RNRB) gives an additional allowance to people leaving their family home to direct descendants, such as children or grandchildren. The amount of relief is £150,000 for 2019/20, rising to £175,000 for 2020/21.
Despite the increase in estates paying IHT, the tax only applies to 4.6% of deaths in the UK. The average amount of tax paid was £179,000.
Please contact us for advice on estate and IHT planning.
Internet link: GOV.UK IHT statistics
According to the British Chambers of Commerce (BCC) there are ‘major gaps’ in the government’s no-deal Brexit guidance for UK businesses.
The BCC carried out a review of official government no-deal Brexit guidance for businesses, and found that 31 of 36 critical areas are still marked amber or red, suggesting that businesses have ‘incomplete or insufficient information available to plan thoroughly for a no-deal outcome’.
Dr Adam Marshall, Director General of the BCC, said:
‘While the government has ramped up communication to businesses in recent weeks, there are still big gaps in the guidance available to help businesses to prepare for Brexit, with just weeks to go until 31 October.
Our business communities don’t want to see a disorderly no-deal exit on 31 October, which would lead to an overnight change in trading conditions.
Averting a messy and disorderly exit is still critical. Businesses across the UK want politicians on all sides to come together and find a way forward – fast.’
Internet link: BCC news
The Department for Business has launched a nationwide programme of events to help businesses prepare for Brexit.
The free events are designed to provide free advice on a range of Brexit-related topics, including exporting, importing and employing EU citizens. Attendees will also have the opportunity to hear from senior government officials and access support tailored to their location and business.
More than 30 Brexit-readiness events have been scheduled to take place across the UK.
Internet link: GOV.UK news
The government has initiated a review of the Loan Charge and whether the policy is an appropriate way of dealing with disguised remuneration loan schemes used by individuals who entered directly into these schemes to avoid paying tax.
Sir Amyas Morse, the former Comptroller and Auditor General and Chief Executive of the National Audit Office (NAO), will lead an independent review of the Loan Charge.
The government has asked Sir Amyas Morse to report back by mid-November, giving taxpayers certainty ahead of the January Self Assessment deadline.
Internet link: GOV.UK news
HMRC has announced a one-year delay to the introduction of the VAT domestic reverse charge for building and construction services.
The reverse charge represents part of a government clamp-down on VAT fraud. According to the government, large amounts of VAT are lost through ‘missing trader’ fraud. As part of missing trader fraud, VAT is charged by a supplier, who then disappears, along with the output tax. The VAT is thus lost to HMRC. The construction industry is considered a particularly high-risk sector.
The reverse charge when introduced will not change the VAT liability but instead it will change the way that VAT is accounted for. In the future, the recipient of the services, rather than the supplier, will account for VAT on specified building and construction services. This is called a reverse charge. The reverse charge is a business-to-business charge, applying to VAT-registered businesses where payments are required to be reported through the Construction Industry Scheme (CIS).
The charge was due to come into effect on 1 October 2019. It has now been delayed by 12 months until 1 October 2020 due to fears that businesses in the construction sector were not ready.
HMRC says it remains ‘committed to the introduction of the reverse charge’, and has put a robust compliance strategy into place in order to tackle fraud in the construction sector.
Internet link: GOV.UK revenue and customs brief