Chiene + Tait announces private client team promotions

Accountancy firm Chiene + Tait (C+T) has announced promotions within its Edinburgh-based private client team. Partner Michelle Fallon has been named as the firm’s new Head of Private Client Tax, leading the 20-strong team, while her colleague Alan Dean has been promoted to the role of Director.

Michelle joined the firm in 2013 as Personal Tax Manager before being promoted to director level in 2017 and was then made a Partner in 2019.

Alan joined C+T in 2018 after working with accountants French Duncan and legal firm Turcan Connell.  He specialises in advising high-net worth individuals, trusts and businesses on a range of tax planning issues, including succession planning, business structure, residency and employer taxes.

C+T Managing Partner Carol Flockhart said: “Michelle’s move to become Head of Private Client Tax and Alan’s promotion to Director marks another important stride forward for our renowned private client team. They are both well-regarded and highly respected personal tax experts who have contributed towards the growth of the firm.”

The Budget: key points from today’s Budget speech

Much of the content of today’s Budget was trailed in advance, so there were few surprises. Indeed, the shift in news consumption (not to mention the demands of the pandemic) may mean that we say goodbye to the traditional big announcements on one day in favour of smaller piecemeal policies.

We also need to consider the impact of the ‘Tax Day’ due on 23 March. This is expected to see the publication of tax consultations which would traditionally have been published alongside the Budget. It remains to be seen how much of government tax strategy and policy will be laid down then, and how the Tax Day and Budget Day interplay.

We’ve summarised key points from today’s Budget speech below – but, as ever, the devil is in the detail so do contact us for clarification, or if you have any questions.

Corporation tax rates

  • Corporation tax to rise from 19% to 25% in April 2023
  • Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
  • Companies with profits between £50,000 and £250,000 will be subject to tapered rates

Personal tax rates

  • Personal income tax allowance frozen at £12,570 from April 2021 until 2026
  • Higher rate income tax threshold frozen from 2021 until 2026
  • No changes to inheritance tax nil rate band, lifetime pension allowance or capital gains tax annual exemptions until 2026
  • No mention of any increases to capital gains tax rates or inheritance tax reliefs despite much discussion on these prior to the Budget

VAT and duty

  • No changes to the main VAT rate
  • The VAT rate reduction to 5% for the hospitality industry has been extended until 30 September; thereafter, an interim rate of 12.5% will apply until April 2022
  • No change to the VAT registration threshold of £85,000 until April 2024
  • Planned increased to alcohol and fuel duties cancelled

EIS and R&D tax

  • The EIS system will be reviewed this year to enhance the benefit it brings
  • A consultation on R&D tax relief to ensure its is up-to-date and competitive

Tax reliefs in investment

  • A new ‘super-deduction’ form of capital allowances which will allow incorporated businesses to deduct 130% of expenditure that would normally qualify for main writing down allowances

Loss relief

  • Enhanced loss reliefs for businesses, both incorporated and unincorporated, to allow carry back of losses against earlier years’ profits

Brexit

  • Eight freeports to be established in England

COVID funding

  • Multiple initiatives relating to COVID in the Budget, from an extension of the furlough scheme to new grants for non-essential businesses
  • Sector-specific funding packages announced for the arts and sports
  • Business rates in England will continue their holiday until June, with a 75% discount thereafter
  • Access to grants for self-employed people is to be widened

Self-Assessment Taxpayers get additional help through HMRC Time To Pay

UK taxpayers can now apply online for additional support from HMRC to help spread the cost of their self-assessment tax bill from an annual payment to smaller monthly payments.

In his Winter Economy Plan, Chancellor Rishi Sunak announced that taxpayers could pay amounts due on 31 January 2021 (including any deferred payment on account from July 2020, their balancing payment owed for 2019/20 and the first payment on account for the current tax year) in monthly instalments online through HMRC’s online Time To Pay system.

Interest will still be charged on the tax owed from 1 February 2021.

Taxpayers who wish to set up an arrangement must:

·         Have no outstanding tax returns, other tax debts or existing HMRC payment plans;

·         Have tax due of between £32 and £30,000;

·         Put the payment plan in place no later than 60 days after the due date of 31 January 2021.

Anyone who has larger amounts due or needs more than 12 months to settle their tax affairs will need to contact HMRC separately.

HMRC has also asked taxpayers to be aware of scammers claiming to be from HMRC who offer to help set up Time To Pay.

A blog from the dog at the Scottish Game Fair

Here Alison Lawton in our Personal Tax team gives a pup’s point of view of this year’s Scottish Game Fair, Scone.

What does a gundog do on his/her day off? A visit to the Scottish Game Fair at Scone would fit the bill as a guest of pawfessional advisers “Chien + Tait”.  As the rest of the United Kingdom basked in sizzling temperatures, we (my owner and I) arrived at Scone in Perthshire under a veil of cloud.  Rather than worry about the weather and replacing my hound-dog expression with a gleeful tail wag, I trotted eagerly to the entrance.

The first highlight of the day was the Chiene + Tait debate “The Ethical Commercial Shoot” with panellists from the RSPB, the British Game Alliance and the British Association for Shooting and Conservation, but not a game bird in sight. The topic could have turned out to be juicy bone of contention but the contributors were obviously well trained, informative, good natured and expertly controlled by their handler, our own Rory Kennedy. The debate was well attended but in the heat of the marquee, I did take the opportunity of a quick forty winks. Luckily, I would not miss any juicy morsel as I would be able to listen to the discussion by downloading the podcast from “Into the Wilderness”, at my leisure.

Chiene + Tait’s residence for the weekend was situated at the corner of the main arena which had marvellous views of the main events for the humans. Unfortunately, the advertising hoardings blocked the four-legged visitors view so I consoled myself with the sound of ducks being herded, fox hounds baying and chain-saws growling in anger (not at the same time, I hasten to add). The youngsters of the pipe band played tunefully and, although tempted, I did not howl along.

The clouds cleared by mid-day, the temperature soared and the crowds gathered. Dogs of all shapes and sizes, from wolf hounds to jack russells, sauntered obediently around the show ground, whilst their owners engaged in some re-tail therapy.  Rather than getting hot under the collar, I retreated to the Chiene + Tait stand where afternoon tea was served in the early afternoon.  A gentle stream of visitors gathered to chat to the staff in attendance and, as it should be on a gloriously sunny afternoon, the chat was not all about accountancy, business and tax – that would be too much for a hot dog to stand.

It was certainly a doggy day out with a difference. So next year drag your owners out to the Scottish Game Fair and visit Chiene + Tait for a warm welcome, refreshments and a bowl of water.

Now, where was that nice gentleman in tweed with the biscuits in his pocket………

Non-Resident CGT regime continues to cause a headache for taxpayers (and HMRC!)

Stephen Baker in our Personal Tax team outlines that the lack of publicity for the Non-Resident Capital Gains Tax return has seen a huge rise in individuals falling foul of the filing requirement.

Since 6 April 2015, non-resident individuals are liable to UK Capital Gains Tax on the disposal of UK residential property. Such disposals must be reported to HM Revenue & Customs (HMRC) within 30 days by way of a Non-Resident Capital Gains Tax (NRCGT) return. Penalties arise if the return is submitted late.

Despite rules being in existence for over 3 years, there continues to be a large number of individuals falling foul of this filing requirement. Recent published tribunal cases on the issue suggest that the reason for late filing is largely due to the short 30-day timescale for reporting and a general lack of awareness of this deadline.

In most cases where penalties have been levied, by the time the taxpayer realises that a return is required, it is likely that multiple late filing penalties are already accrued (even in cases where the CGT due is zero). For example, if a return is filed 12 months late on a disposal on which no tax is due, a total potential penalty of £700 may arise, comprising of a £100 late filing penalty and two £300 tax geared penalties.

A number of taxpayers have appealed against these penalties by bringing a case to the tax tribunal. From these appeals, a number of interesting outcomes have emerged. As would be expected, ignorance of the rules is not a reasonable excuse and the tribunal has stated this in several cases, although initial tribunal rulings were somewhat critical of HMRC’s lack of sufficient promotion of the new regime and found in favour of taxpayers in a couple of appeals on this basis. More recent tribunal decisions however, have found in favour of HMRC and concluded that lack of awareness of the change in law was not a reasonable excuse.

Despite the trend of cases in favour of HMRC, there were several smaller wins for taxpayers:

  • In cases where there were multiple disposals and subsequent multiple penalties, the tribunal has reduced or eliminated some of these penalties. It was found that there had been no chance for the taxpayer to learn from their first mistake (i.e. filing the return for the first disposal late) and therefore charging penalties for additional disposals would be unfair.
  • The tribunal analysed the penalty legislation in great detail and held that any tax-geared penalties should not exceed 100% of the actual tax due. Therefore, if no NRCGT is actually payable, penalties should be restricted to the initial £100 late filing penalty. It will be interesting to see how this point develops as the legislation applies to other taxes also.

Going forward it appears that there will need to be an increased awareness of the requirement to file a NRCGT return within 30 days. Although this is a requirement that tax advisers should be aware of, clients tend to notify advisers of transactions after the tax yearend (when a NRCGT return is likely to be already long overdue). This problem has the potential to become more prominent; currently there is a proposal to extend the 30-day reporting limit to both Non-resident commercial property disposals and to residential property disposals by UK residents.

It will be interesting to see how HMRC deal with any further appeals on this matter, but in the meantime, if you have any queries regarding NRCGT, please do not hesitate to contact me or one of the Personal Tax Team at Chiene + Tait on 0131 558 5800 or email mail@chiene.co.uk.

My Week of Work Experience at C+T

Even though I have always been good at maths, I had never thought of being an accountant. I was told by my school to get a work experience placement to see what path I wanted to take in life. Last year I chose to work in my old primary school since I wanted to be a teacher, but this year, I decided to take a completely different route, and try something that was completely unknown to me.

Let’s just say that my first day didn’t go that well (in my opinion) as I felt completely out of my depth. After day one, I was worried that I wouldn’t enjoy the rest of the week, but I was wrong. My second day at C+T was more of what I excepted and what I hoped to be doing – Personal Tax. I felt comfortable in that environment as I could use my knowledge of maths and Excel to complete my work, as well as working beside lovely people. I did use my knowledge of maths at C+T, but it isn’t a necessary requirement for being an accountant, as Excel formulas are always used. Yes, having maths is useful but you don’t learn tax at school or university, you learn it when you start working here. Many people who work here have told me that the degrees they did at university (like maths or physics), are not used as much as they expected when doing their job.

Throughout the week I worked with different departments, such as personal tax – that I previously mentioned –  but also the VAT team and the Marketing team. I learned how to do VAT returns (the base knowledge of them) and how to design invitations and work on the Chiene + Tait website from behind-the-scenes with marketing, which was a lot of fun in my opinion (as something is very satisfying about turning an orange dot to a green dot for SEO, just by changing small details).

Compared to working in a primary school, an office environment is the polar opposite. Being a classroom assistant to Primary 1’s is hard work, but a different type of hard work to working in an office. Working in an office is more mentally exhausting, while working in a primary school is definitely more physically exhausting. Going back to my primary school was exciting, and it was comfortable returning to the place I knew extremely well, as I got to reminisce the memories with my friends. Working in an office however was new to me, but I enjoyed it nonetheless. This week has been somewhat challenging, but I have learnt that I can do more than I thought I was capable of doing.

I’d glad I have done work experience here, as it has opened my eyes to office life, and has shown me what I can do if I want to be more than a teacher. Currently, I am still wanting to do a maths degree at university and possibly a post-graduate in teaching, but I will definitely consider applying for a summer job next year, to hopefully learn more about the departments, and working life at Chiene + Tait.