Author Archives: Richard Verge - Tax Director

About Richard Verge - Tax Director

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Richard is a personal tax expert and is able to advise high net worth individuals on either immediate tax concerns or a long term plan to ensure that their affairs are structured to take advantage of the tax reliefs available.

His experience from working with HMRC ensures that he is more than adept at understanding the view from the other side, to the benefit of his clients. Richard advises entrepreneurs, owners of family businesses and partners in professional practices and provides advice on planning from both a personal and worklife perspective.

Catriona:     Hello, today Richard Verge, head of Goodman Jones private tax team is talking to David James, director of financial planning at Charles Stanley. We’ve been getting a lot of questions from people over the last few months and today’s session is going to be looking at some of the questions, put to us by employers who are keen to see what they can do to protect the business as well as their employees, as well as those questions that we’ve had from individuals and their families who similarly want to make sure they’re in the best place possible to face the future.

Richard:       Hello David.

David:          Hi Richard.

Employers’ questions about pension contributions

Richard:       We’ve been talking through some of the questions which clients have been grappling with in recent weeks, particularly now that the lockdown is beginning to ease and people are looking ahead towards the next few months. One of the questions I’ve been asked a number of times are from employers concerned about their employees being able to continue to afford contributions into their auto-enrolled pensions. What options do they have at the moment?

David:          I mean, the first thing to say is that auto-enrolment is still fully alive during the current pandemic or Coronavirus situation we’ve found ourselves in. So the auto-enrolment duties still apply to the employer and it’s their duty to continue to make those payments in line with the auto-enrolment guide or the actual current contribution rates. So they have to fulfill those. And it’s probably worth mentioning that under the job retention scheme that employers can claim up to 80% of the employee’s salary up to a maximum of two and a half thousand, but they’re also able to claim the 3% pension contribution that they pay on behalf of the employee.

Richard:       Okay.

David:          So where possible you would expect that most employers would aim to maintain the auto-enrolment contribution levels as they did prior to the COVID pandemic, but on a reduced salary based upon the job retention scheme. So up to 80% of their salary. If employers decide to pay a little bit more and top that up by a little bit, then that is part of the overall salary position. So they need to maintain that auto-enrolment requirement during this period.

Richard:       Okay, so if someone is actually looking to suspend say their pension contributions as their cash is tight, they want to reduce income. What can they do then?

David:          It’s obviously very important that people try where possible to continue to maintain their pension contributions, because it’s a long term investment for them, for their retirement. But the rules are quite clear when it comes to auto-enrolment, that if a member decides to stop paying in because they can’t afford to at the moment; and I fully understand why that would be the case. They have to leave the scheme. So by leaving the scheme, then the employer will then stop making their contributions at the same time.

Richard:       And what about then, can they pick that up again at a later time? Can they sort of dip in and out of the scheme as they need to?

David:          Under the normal rules, they’d be invited back in, in 12 months’ time because that’s normally what the auto-enrolment rules would suggest that they do. However, you would expect that the employers would be a little bit more flexible during this period. And if someone looked to walk, back in six months’ time, I’m fairly sure that most employers would consider that and allow them to do so.

Richard:       What about other benefits that are linked to salary? If peoples’ income has gone down during this period; are there any other things that they should be thinking about which may be affected by that change in, income level?

David:          A couple of things to bear in mind here would be if they have some sort of group income protection arrangement whereby the company has taken out an insurance policy to cover people’s salaries, should they be off work after a deferred period of time. Most of those policies would still pay should a member of staff be taken ill or long term sick during the COVID situation. However, that would also then be linked to the current salary of the employee up to the maximum. Now the maximum you can claim under income protection is 75% of your salary. So if an employee was receiving, let’s say 80% of their salary under the job retention scheme, as long as that 80% of the salary didn’t mean they were getting more than 75, the statutory requirement underneath the income protection plan, that plan will be fully able to pay.

Protection for employers

Richard:       You’ve mentioned about income protection, that sort of leads me into other areas. Are there any other ways that employers can sort of protect themselves or safeguard themselves from the impact of the pandemic at the moment?

David:          I think the big question that I would have for businesses at the moment and probably more so looking at the directors, the key personnel is that

COVID has had a massive impact on businesses. And we would hope that in the next few months, please, God things may start to get back to normal, but a concern that I would have for businesses, if they suddenly lost a key person or a director due to an illness or death, then that would have a massive financial implication on the business at a time when their finances are probably stretched to the maximum. So I would be stressing to companies at the moment that they should review their existing directorship protection arrangements and all their business will, whichever you may wish to call it. And their key personal arrangements to ensure that they are fully protected, should something tragic happened to the business while they’re trying to get back onto their feet.

Safety of money for private individuals

Richard:       That’s dealing with things from the employer side, I’m also getting a lot of questions coming indirectly from individuals and private clients. And a lot of them are worried. Well, there seems to be a divergence between those who are thinking well, yes, we’re in for a short recovery. Is it going to be a nice V-shaped recovery and others are saying, well, what about a second spike? What about the safety of money? Should people be looking to put their money into safe products?

David:          I think at the moment, we have to bear in mind that if people are invested, they probably would continue to stay invested in the markets because the markets have sort of rebounded somewhat in the last couple of weeks since the pandemic first hit the country and the world for that matter. So I’m not saying to any of my clients to disinvest during the current climate, because they would then crystallize any losses that they’ve already incurred. But I think the safety of cash at the moment is something for clients to bear in mind.

And the FSCS protection scheme allows bank accounts, the protection of 85,000 pounds per account per institution. And I think it’s always worth double-checking whether or not your bank is part of a wider organization. And you may think you’ve got money in more than one bank, but if they’re a part of the same group, you could only be able to protect one account up to the maximum 85,000 and 170,000 for a joint account.

There is some sort of slight caveats in the FSCS protection scheme that say that they will protect balances up to a million pound against a bank failing. And that has certain caveats to it such as the sale of a property, for example, where someone could suddenly have a large amount of cash in their bank account that they wouldn’t normally have because they’re waiting to buy another property or they’ve received benefits under death in service arrangement. That scheme extends that to a million pounds, but for a short period only.

Richard:       Okay.

David:          While we’re talking about cash on deposit. I think another thing the client should bear in mind is that the national savings and investment, and, you know, I’m a fan of that institution. They offer protection on most of their accounts up to a million pounds, which is far in excess of the FSCS protection scheme. Obviously, you’d have to have the right amount of money and you couldn’t have 500,000 and claim for a million. You’d need a million pounds in there, in order to have that fully protected, but it is a very, very safe haven for cash in the short term.

Richard:       Okay. So it sounds like national savings is perhaps a good idea if you’re worried.

David:          Definitely. And I also think some of the contracts, they have are quite competitive in particular, the premium bonds. I think they’re a very good investment for clients that look to have money in a near-cash position. They do pay out, provide you have a maximum of 50,000, quite regularly. And as it’s deemed to be winnings, any returns on that premium bond are tax-free in the individual’s hands.

Richard:       If we’re looking at things other than cash, obviously the markets are a bit difficult to pick at the moment. Clearly, some investments have done well because of the changes in the environment we’ve found ourselves in. Whereas many have done badly, given that overall, the markets are fairly low at the moment. Do you think this a good time to be investing in the markets?

David:          Well, it definitely depends on people’s timescale and their risk appetite. So, you know, how risk-averse they may be because it has settled down in the markets. But I have to say in my view, going forward, I think we’re in for a bit of a rough ride. So in terms of investing large lump sums of money into the market at the moment, I don’t think you’d ever pick it at the right time because on a daily basis, we’re seeing markets fall by a percent or up by a percent.

So it’s quite volatile and volatility is the thing that makes markets concerned in the first place. So I think if someone was looking to take advantage of the market at the moment being in a lower position, I would probably suggest that they look to drip-feed money rather than placing it in one large lump sum. So typically for a client recently, we agreed that we drip feed a capital sum in over a period of 12 months, rather than going into the market in one go. And I think that’s probably a sensible thing to consider.

Inheritance Tax planning

Richard:       The last topic I wanted to ask you about David, is the question of inheritance tax planning. This whole pandemic as brought to people’s minds the question of, should they start looking at their inheritance tax position? And if so, what could they do? I think my first question to you is when is a good time to sort of start thinking about inheritance tax planning.

David:          My answer would be today. Because we all know how the inheritance tax works and the fact that we have a period of time more often when we can make a gift to people that peel away over a seven-year period.

But the other thing to look at here Richard is that some people have gone through difficult financial times and they’re probably still living in difficult financial times. So where families are considering making gifts to loved ones. Now is a pretty good time to do that because not only will they be reducing their inheritance tax, but they could be helping their family members out by helping them through this troubled time, by giving them some capital they weren’t expecting.

So I think now is the time to reconsider inheritance tax because we both know how much money the Exchequer raised last year from inheritance tax some five and a half billion pounds. And I don’t see that figure going down. I see that figure going up. So the longer you leave and the longer you delay with inheritance tax, more often than not, the situation will get worse and the opportunities to reduce that position diminished too. So people need to start considering their inheritance tax planning right away.

Richard:       On that very point about inheritance tax, not going away. Obviously, there are concerns being expressed about where the government’s going to get the money to pay for all the assistance they’ve been giving to businesses and individuals during the coronavirus crisis. On the inheritance tax side of things, there’s been a lot of talks even before this about whether business, property relief and AIM-listed stock were going to be an issue. And whether that relief was going to be withdrawn. Do you have any thoughts on that?

David:          I hope that doesn’t change because I think AIM gives a lot of people the opportunity to invest in it in a diversified market. It also gives businesses the opportunity to start up and grow because they’re attracting investors, but it is a more high-risk area than our financial planning because these are startups. So more often than not, there is a greater level of risk attached to these companies. So you are investing for the long term and you have the incentive to do so because they become taxing center after two years.

So I think our government has been pretty strong over the years in trying to encourage new business and new companies, startups. I would expect that to continue. I wouldn’t see any reduction in that if anything, they probably want to see more of that to help the economy get back to normal.

Richard:       So I’m getting from you that you still think AIM-listed products are possibly a good part of your overall IHT planning strategy?

David:          I definitely think so, but for the right people, because some of these areas of investments are much higher risks than the normal sort of run of the mill investments that you and I would know, like an ordinary equity share or something along with that, but even though you’re buying shares in a company, you are taking a lot more risk than you would normally, given this status of the AIM market. But if you speak to clients who’ve invested in AIM over the years. I’m pretty sure most of them are very happy with the returns because there have been some absolute standout returns from those over the last few years.

Richard:       One other minor point that we did discuss previously was about writing policies into a trust. Is that something that you’d like to just mention?

David:          Yes, I think on two fronts, really, I think it’s very important that if people take out life insurance policies to protect their families, they should really consider making sure that those policy proceeds are paid into a trust. And the main reason is that once again, we’re in very difficult financial times and money is tight. If somebody had a payment from a life insurance contract that was caught up in probate, there could be waiting a lot longer than normal to receive those funds at a time when they really need them.

So just by simply writing that policy into trust for their beneficiaries means that they can usually get that money paid to them within about four weeks. So it’s very good financial planning. And I think I’ve moved that over towards pensions as well because under pension’s rules, it’s very important that nomination of beneficiaries is kept up to date so that if somebody passed away during the current situation, their nomination of beneficiaries needs to be accurate so that the pension provider or the trustees can get that pension passed across to the beneficiaries as soon as possible.

Once again, because money may be tight and people might want to get their hands on that money so they can deal with their affairs, promptly and probate can probably take up to a six month period before anything happens there. So the benefit of writing life insurance interest and nomination of beneficiaries being up to date, I think it’s a really important area for clients to do. And more often than not they can do that without an advisor because they can either check their existing arrangement to see what it says, speak to their existing advisor, and if they have life coverage and there’s no trust involved, their insurance company can send them a trust form. And with their advisor, they could probably quite easily put that together. So there is a belt and braces so to speak.

Richard:       I think you anticipated what I was going to say next there David.

David:          Sorry.

Richard:       Not at all, because if my clients are anything like I am you know, these policies have been started some time ago and I was going to ask you, what’s the best way of checking one, whether life policies are written in trust and two whether pension arrangements have been correctly nominated who the potential beneficiaries are.

David:          Yes. I mean the financial adviser, if they recommended their life insurance in the first place probably would have ensured that the client wrote the policy and trust. But if they haven’t by just contacting the adviser, they can get the necessary forms and that can be dealt with. And also with the nomination beneficiaries at Charles Stanley, it’s something we are very keen on ensuring, and this is something we would conduct our annual review just to make sure that the client’s circumstances haven’t changed since their last meeting. And if there have been changes, those changes are actioned after that meeting. So the client fully understands what would happen to their life insurance or their pensions in the event of their untimely death.

Richard:       Okay. Well, thanks very much, David, for your insight, hopefully, that’s been of help to some of our listeners and I look forward to having another conversation with you very soon.

David:          Face to face, hopefully, Richard.

Richard:       Face to face, that would be good.

David:          Face to face would be lovely.

Richard:       With a pint of beer.

David:          Absolutely.

Catriona:     Thank you for listening. If you’d like to speak to Richard or David, they’d love to talk to you. You can find their details at or

David James leads Fitzrovia Financial Planning, a joint venture between Goodman Jones and Charles Stanley which came about because of the very close working relationship we have with their independent and impartial advisers.

He can be contacted at

Richard Verge leads a team of tax advisers specialising in advising people on a personal level whether that be in connection with their individual tax affairs or the tax affairs of their families or businesses.  As such he gives advice and guidance on personal tax and succession planning as well as overseeing the tax return process.

Email Richard on


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Not many people knew very much about Rishi Sunak at the beginning of this year, but 6 months later and he has become one of the most well known faces in British politics. Eventually he will need to turn his attention to how we will all pay for the measures introduced to protect the economy through the Coronavirus crisis, but for the moment the emphasis remains on spending money to protect jobs.

Given that the wealth of any nation and its people can be measured in terms of the productivity of its workforce, I don’t think many people will disagree with the importance of trying to protect the jobs market, and as every employer knows, it is far more difficult to recruit new workers than retain existing ones, so the measures to keep staff in place shows a welcome understanding of the real problems businesses are facing.

The measures introduced in the Chancellor’s summer statement were categorised into three areas:

  • Supporting jobs – aimed at the whole business workforce with a job retention bonus for furloughed employees, the Kickstart program to provide work placement for 16-24 year olds, traineeships and payments to employers hiring new apprentices.
  • Protecting jobs – aimed mainly at the hospitality and leisure sector including a temporary VAT cut on meals, non-alcoholic beverages, accommodation and attractions and the “Eat out to help out” scheme providing discounts on eating out.
  • Creating jobs – aimed mainly at the housing and construction sector with a temporary increase in the Stamp Duty Land Tax threshold to £500,000 (although no reduction in the second home higher rate charge) and the “Green Homes Grant” of up to £5,000 for making homes more energy efficient.

For more details of the measures introduced, see  our summary of the Chancellor’s Summer_Statement_July_2020

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Rishi Sunak gave an assured performance in his first budget speech which was understandably dominated by the potential threat of the coronavirus on the economy. Amongst the large package of spending measures the tax announcements were surprisingly few and far between given that many were expecting a new government with a large majority to take the opportunity to introduce changes and get some of the more difficult news out of the way early on in its cycle.

Goodman Jones Budget Summary 2020

Many of the tax announcements were already widely anticipated but here are a few of the highlights:

  • Entrepreneurs relief – Despite calls from many sides of the political spectrum to completely abolish entrepreneurs relief, the government instead reduce the lifetime limit from £10m to £1m which takes us back to the level at which it was first introduced in 2008.
  • Stamp Duty Land Tax (SDLT) – Many were hoping for an easing of the currently high SDLT burden, but the only announcement was a new surcharge of 2% on non-residents purchasing UK residential property will apply from April 2021. This is currently planned to apply to partnerships and trusts where at least one member is non-resident so may catch some people by surprise.
  • Pension – There was no raid on pensions this year as some had been speculating. However, the tapering of pension relief for higher earners was significantly eased at least partly in response to NHS doctors and consultants complaining that it was making taking on extra work uneconomical.
  • Corporation tax – Corporation tax which had previously been due to fall to 17% this April has been kept at 19%.
  • Personal tax allowances – The personal tax allowance has remained unchanged at £12,500 but as already announced the lower national insurance threshold has been increased to £9,500.

These are just some of the announcements made yesterday. To read more please see our budget summary at the top of this page or download the PDF document.

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For overseas owners of UK land and property, the tax rules have become more complicated over recent years – and for the most part, less beneficial.

Many of the changes introduced affect not just non-UK residents, but also foreign-domiciled UK residents (known as ‘resident non-doms’, or RNDs). They apply to residential and commercial

property; and to direct and indirect ownership (i.e. property ownership via a company, partnership, trust or other entity).

The resulting tax landscape is complex, with hidden risks for overseas non-resident property developers.

It’s important to understand the new rules, and their implications for your portfolio strategies. And it’s vital that your ownership structures take account of the risks, while being as tax efficient as possible.

Tightening the net

A slew of measures have all but eliminated the tax benefits of indirect foreign ownership of UK residential property.

This is now subject to:

• the maximum rate of Stamp Duty Land Tax (SDLT) at 15%
• a dedicated tax charge, called the Annual Tax on Enveloped Dwellings (ATED)
• new rules to bring it more fully into the UK inheritance tax (IHT) net

In addition, the Finance Act 2019 has widened the scope for foreign indirect ownership of UK land and property to incur capital gains tax (CGT).

Meanwhile, a new tax-avoidance rule specifically targets disposals of foreign entities with at least 75% of their value in UK land and property. It allows to HMRC to counteract any tax advantages derived from such disposals.

Indirect disposals have also lost their protection from economic double taxation, meaning they could potentially be taxed twice under different sets of rules .

Future changes

On the plus slide, there’s a change in the offing that may be positive for non-resident owners of UK land and property.

From April 2020, income from company-owned property assets will attract corporation tax – which falls to 17% at the same time. This compares favourably to today’s situation: overseas companies currently pay basic-rate income tax on proceeds from UK property, at 20%.

But inevitably, it’s not all good news. The government is consulting on a 1% SDLT surcharge for non-resident property purchases, likely to apply to direct and indirect structures.

And there’s speculation that they’ll go further, closing existing gaps between the tax treatment of foreign-owned residential and commercial property; and between direct and indirect ownership. That could end the eligibility of indirect structures to avoid IHT and SDLT on UK property in certain circumstances.

Key decisions

Faced with an increasingly difficult tax landscape, non-resident property developers must consider two crucial questions – neither of which have simple answers:

1. Should new investments in UK property be made via foreign entities?

Under current rules, there can be tax advantages to purchasing UK commercial property via an overseas company.

But the opposite is the case for residential property, thanks to ATED, the higher SDLT rate, and greater IHT exposure. Unless, that is, the property being purchased is to be redeveloped, or let on commercial terms to a third party with no connection to the owner.

2. Should properties held in foreign corporate entities stay that way?

If acquiring a property for their own use, non-residents should consider collapsing any existing property-owning companies, to avoid ATED and other potential tax liabilities.

Selling a company’s shares (as opposed to the property itself) will attract a much lower SDLT rate than a property sale. But the gains will likely be eroded by the commercial risks and higher transaction costs of selling a company.

The tax rules affecting these decisions are highly complex; and there will be a combination of commercial and personal priorities to weigh up alongside the tax implications. Expert technical advice will be essential when structuring your foreign-owned UK property portfolio.

The Goodman Jones property team can help you find the right strategies in light of the recent changes, and keep your portfolio optimised in an evolving tax landscape.


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Non-Residents’ Capital Gains (NRCGT)

With effect from 6 April 2019, the scope of capital gains tax for non-residents has been extended to include UK commercial property as well as residential property. Prior to this date only residential property had been within the charge to NRCGT, but from 6 April 2019 onwards the sale of any UK land and property by a non-resident will be subject to capital gains tax.

How Capital gains tax is calculated

Where commercial property is already owned prior to 6 April 2019, the chargeable gain will be calculated by reference to the increase in value from the rebasing date of 6 April 2019 (for residential property the rebasing date is 6 April 2015). An election is available to ignore revaluing at 6 April 2019 which will be beneficial if the original cost was higher than the April 2019 value (a similar election is available for residential property).

For companies, any gains will be taxed at the corporation tax rate which is currently 19%. For individuals the rate is 20% (28% for residential property).

Indirect Holdings

The sale of shares in a company owning UK property can also be caught by the NRCGT charge. Gains on the disposal of closely held indirect interest in property-rich companies are also now taxable with effect from 6 April 2019. Broadly speaking, a closely held interest is 25% or more in the relevant entity and a property-rich entity is one in which 75% or more of the gross asset value of the company is UK land. The fact that measure is of the gross asset value means that borrowing costs cannot be offset against the property value.

There is an exemption from the charge for disposals of indirect holdings where what is being sold are shares in an ongoing trading company which has UK land amongst its assets. The exemption will apply where all or most of the land is being used in the course of a qualifying trade.

Reporting requirements

Any tax due needs to be paid and a NRCGT return submitted online to HMRC within 30 days of completion of a sale. Failure to submit a return and pay the tax due will be subject to penalties and interest.

Valuing your property

We recommend that non-resident individuals and companies holding UK commercial property consider valuing their property assets now in order to get a contemporaneous value which can be used to calculate and plan for future tax liabilities on disposals of their property or shares in property rich companies. If you would like to consider valuing your property, we can help put you in touch with local surveyors.

Temporary non-residence

Existing rules which catch gains made by individuals who are temporarily non-resident continue to apply. Where an individual makes a disposal during a period of non-residence and returns to the UK within five tax years of their departure, gains made of UK assets during that period of non-residence will be taxable on their return. Relief will be given for any NRCGT paid during that period.



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Goodman Jones Spring Statement 2019

With continuing uncertainty surrounding Brexit and forecasts dependent on whether there is an orderly withdrawal from the EU, Philip Hammond was only prepared to make a modest number of spending commitments in his Spring Statement, but promised us a full spending review in advance of the summer recess to be completed in time for the Autumn Budget.

Announcements made in the Spring Statement included:

  • The promise of further Infrastructure spending on transport, digital networks and science and technology.
  • Publication of two reports setting out achievements on tackling tax avoidance and evasion and setting out HMRC’s updated strategy for offshore compliance.
  • Publication of draft legislation on new capital allowances for non-residential structures and buildings.
  • Improvements to the Apprenticeship Levy.
  • A commitment to the introduction of Making Tax Digital (MTD) for VAT but also a promise of a delay in the introduction of MTD for income tax previously set for April 2020.

We have also been promised further documents for the coming months including:

  • Reports and consultation on housing planning reform.
  • A consultation on the changes to capital gains tax private residence relief announced in the 2018 budget.
  • A consultation on the corporate loss restriction.
  • New guidelines on the conditions for approval of Enterprise Investment Scheme funds.
  • A crack down on late payers for small businesses.

We will have to wait to see what happens to the economy post Brexit before we know how much the Chancellor will have available to him for his spending review, but in the meantime we can share with you our Spring Statement Summary which includes a recap of the key changes for the forthcoming 2019/20 tax year already announced and passed into Law.

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The continuing uncertainty surrounding Brexit presented Philip Hammond with a difficult task when he stood up to deliver his Spring Statement today. With forecasts dependent on whether there is an orderly withdrawal from the EU his response was to announce a full spending review in advance of the summer recess to be concluded before the Autumn budget when hopefully we will have greater clarity on our future relationship with Europe.

With no significant announcements made on taxation we decided to make good use of the experience of our tax team and its diversity in terms of age, gender and political views to come up with our wish list of tax reforms for the Chancellor which in no particular order are as follows:

1. Increase in Research and Development (R&D) tax credits

With Brexit fast approaching there is a concern about a potential brain drain of highly skilled persons who undertake research and development  across many sectors. Enhancing the existing  R&D tax credits regime would help to offset that loss by making the UK a more attractive place to work whilst simultaneously encouraging further research projects.

2. Amendment to the Stamp Duty Land Tax (SDLT) regime

The large increases in SDLT on residential property have been effective at dampening down the property market at the high end and discouraging buy-to-let landlords, but the Stamp Duty legislation was never designed to work for such high levels of tax and with such discrepancies between residential and commercial rates. There is now widespread unfairness in the system which needs a ground roots review.

3. Delay making tax digital

With so much focus on Brexit the implementation of Making Tax Digital should be delayed. This is because there is inevitably going to be a change in process and reporting for importers and exporters. Forcing that change on business at the same time as the implementation of Making Tax Digital is inequitable and against the government’s stated policy of reducing red tape.

4. University Tuition Fees

There has been net emigration from the UK in advance of Brexit of individuals from key public sector roles. Scraping tuition fees for key courses such as nursing and midwifery would help to offset the difficulties in recruiting post Brexit.

5. Student loans

Write off student loans after 10 years for all those who have worked in the UK for that period of time to encourage those who have learned in the UK to earn in the UK as well and help to reduce the brain drain.

6. Shared ownership property and SDLT exemption

Help key sector workers to buy properties by allowing first time buyer exemption for those purchasing their first home jointly with others where the joint purchaser does not qualify. Also to exclude previous minority holdings in property for the purpose of defining first time buyer.

7. Reducing the complexity of the tax legislation

General review of the tax legislation to reduce complexity

8. Reduce inequality in the National Insurance system

Currently the burden of National insurance falls disproportionately on those with low to middling income. A review of the National Insurance system to remove inequality, align with income tax and reduce complexity is long overdue.

9. Reduce Inheritance tax

The UK currently appears to be out of step with most other countries in having a high level of inheritance tax with a relatively low entry level. Reducing the rate of tax and abolishing the current complex system of reliefs would be fairer for everyone, encourage money into the country and may even increase the overall tax take to the Treasury.

10. VAT zero rate on sanitary products

The chancellors announcement of the provision of free sanitary products at schools and colleges is welcome, but sanitary products remain subject to VAT. The government has previously stated that it “remains committed to applying a zero rate of VAT to women’s sanitary products” but EU VAT legislation has always stood in the way. Hopefully one benefit of leaving the EU will be that this change can now be implemented.


And finally, once all of the above has been implemented we wish for a long period of calm and stability with minimal tax changes so we can plan for the future with certainty.


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Increases in the rate of Stamp Duty Land Tax over the past few years have created a number of anomalies in the legislation which, if applicable to your circumstances, can substantially reduce the amount of SDLT payable on the purchase of a property. When originally introduced, the rates of SDLT were sufficiently low that these anomalies were of little consequence, but now the rates have been increased to much higher levels, there can be substantial savings to be made.

Multiple Dwellings Relief

One such anomaly is the effect of Multiple Dwellings Relief (MDR). The purpose of this relief is to simplify the calculation of SDLT when a single transaction includes the purchase of more than one dwelling. Rather than separately calculating the SDLT on each unit acquired, a simple averaging is applied and SDLT calculated on the average unit price arrived at by dividing the total transaction price by the number of individual dwelling units.

MDR Claims

When SDLT rates were low, an MDR claim usually made little difference to the overall SDLT payable and was a sensible and pragmatic simplification for purchase of multiple dwellings. This is still the case where dwellings purchased in a single transaction are of similar value. But with the current much higher rates of SDLT for more expensive properties, where a purchase consists of an expensive dwelling and a much cheaper dwelling, then by averaging the unit price, this can create a substantially lower overall SDLT charge.

This effect can be particularly significant when buying a property which may have a separate annexe such as a granny annexe. For example, the standard rate of SDLT due on a property purchased for £1.2million would be £63,750. If the same property has a self-contained annexe which qualifies as a separate dwelling and an MDR claim is made, then the combined SDLT charge falls to £40,000. This is because the SDLT would be calculated based on two properties valued at £600,000 each. Such properties are often under a single title and the fact that there could be more than one dwelling within the property can sometimes be missed. Contrast this with the SDLT on two separate purchases of properties with values at say £900,000 and £300,000 (i.e. the same overall total of £1.2 million) and there is a different combined SDLT charge again of £42,250.

Can I recover overpaid SDLT?

If you have purchased a property within the last twelve months which contained a separate dwelling, but you paid SDLT on the full purchase price, then you may still be able to submit an amended SDLT Return to make an MDR claim and recover the overpaid SDLT.

We are seeing an increasing number of firms trawling through the Land Registry records for property purchases of the types of property that are frequently converted into multiple dwellings. These might typically be large terraced town houses which are often split into separate flats. Those firms are then mailing the purchasers recommending that they make MDR claims on a no-win-no-fee basis.

If you receive such a letter, I would recommend caution as there are many reasons why an MDR claim may not be applicable and may have costly repercussions for you further down the line.

Distinct Separate Dwelling

For a claim to be successful, the transaction must involve more than one distinct separate dwelling. HMRC accept that a single building can contain more than one dwelling but state their view as follows:

“A self-contained part of a building will be a separate dwelling if the residents of that part can live independently of the residents of the rest of the building including independent access and domestic facilities”.

This will require an annexe say to have its own separate entrance and separate kitchen and bathroom facilities.

Converting the number of dwellings

Another trap for the unwary is that if an MDR claim is made on a transaction and there is subsequently a change in the number of dwellings subject to the claim within a period of three years from the transaction, then there will be a claw-back of MDR claimed. If, say, a property was purchased that was separated into more than one flat with the intention of converting it back to a single property, then any Multiple Dwelling Relief claimed will have to be repaid.

HMRC Enquiries into MDR claims

Finally, it should be noted that a Stamp Duty Land Tax Return is a Self-Assessment Tax Return and as such any claim is likely to be processed without a detailed initial review, but HMRC have the power to enquire into such Returns and accordingly an apparently successful claim may be challenged and fail once it has come under proper scrutiny. This might be an issue if you have already paid out on no win fee basis.

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Goodman Jones Budget Summary 2018

Download the Goodman Jones 2018 Budget Summary

Last year Philip Hammond promised us fewer frequent tax changes and more consultations and this years budget appears to have delivered on that promise.

Many of the announcements were minor changes to existing legislation or confirmation of matters which have already been subject to public consultations.

New measures include the increase of the personal tax higher rate threshold to £50,000, the introduction of a new capital allowance for the construction of commercial property, a temporary increase in the annual investment allowance and help for the high street by way of a business rate reduction and money being made available for infrastructure spending.

Some of the minor amendments to existing legislation which may have a significant impact include changes to capital gains tax relief for the main residence, the restriction of the capital gains tax relief for residential letting which will make this relief unavailable in most cases and changes to the qualifying conditions for Entrepreneurs relief including extending the qualifying period to 2 years.

Matters which had been the subject of previous consultations and were expected include extending capital gains tax for non-residents to include sales of UK commercial property and bringing the private sector into the off payroll working rules to counter avoidance of PAYE tax.

For a full review of the budget download our pdf.

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Download the Goodman Jones Budget summary

We were expecting a budget for housing and Philip Hammond’s announcement of 300,000 new homes a year has been backed up with a package of measures including the promise of billions more on infrastructure spending, planning reforms and help for first time buyers. The increase in the Stamp Duty Land Tax (SDLT) nil rate threshold for first time buyers was a particular highlight and will mean no SDLT on the first £300,000 for properties valued at up to £500,000.

Other tax measures included adjustments to the SDLT higher rates legislation to remove certain anomalies which were unfairly bringing a lot of people within the higher rate; the removal of indexation allowance for capital gains within companies and capital gains tax on non-resident investors will be extended to include commercial property.

The Chancellor restated the government’s commitment to a low-tax economy and unusually for any budget there were no tax increasing measures announced. We were also given a welcome promise of less frequent tax changes and more consultations in advance of any changes.

We generally expect a list of new anti-avoidance measures and this budget didn’t disappoint. Further measures were introduced to tackle perceived abuse of the tax system in connection with the National Insurance employers allowance, disguised remuneration, profit fragmentation and double taxation relief to name a few. Consultations were promised on extending the “off-payroll working rules” introduced for the public sector last year to the private sector; the taxation of trusts and the use of rent-a-room relief.

Overall whilst there were not a lot of headline grabbing measures this time around, there were many less obvious changes announced in the budget publications and I think it will be sometime yet before we understand fully the impact of this budget.

For a full review of the Budget, download our pdf.

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