Business News

Couples may be missing out on tax breaks without realising it, according to HM Revenue & Customs (HMRC).

Savings can be made both with Income Tax and Capital Gains Tax (CGT) by using their personal tax allowance.

For CGT, a couple’s two allowances (each equal to £12,300) can be combined to reduce the final tax bill on a transaction like selling a second home.

But for nearly two million couples who are married or in a civil relationship, the ‘Marriage Allowance’ can also be used and save up to £252 per annum in Income Tax.

This can be backdated to include any tax year since 5 April 2017. If your spouse or civil partner has since died, you can still claim.

If one partner earns below the Personal Allowance threshold of £12,570 and the other is a basic rate payer, then 10 per cent of the lower earner’s allowance can be transferred to the higher earner.

For the current tax year, that figure is £1,260, which means an annual tax saving of £252. Multiply this by the backdated four years and you could have a saving of £1,220.

For couples who have been together for many years, a change in circumstances like the effects of the COVID pandemic, where they may have lost a job but have found lower paid employment, could also mean they are now eligible.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “Marriage Allowance lets eligible couples share their Personal Allowances and reduce their tax by up to £252 a year. Nearly 1.8 million couples are already using the service – it is free, quick and easy to apply, just search ‘marriage allowance’ on GOV.UK.”

Claims are automatically renewed yearly but couples should notify HMRC if their circumstances change.

Visit GOV.UK to find out more about Marriage Allowance.

If you think you could benefit from the Marriage Allowance or would like advice on other personal tax matters our team at Clemence Hoar Cummings is ready to help. Please contact us to find out more about our tax planning services.

Link: 1.8 million couples benefitting from extra tax relief

It is a nightmare that plagues both business and private users alike, but cyber security experts are continuing to fight back against the online crooks using email scams targeting their organisations.

The UK’S cyber police force, the National Cyber Security Centre (NCSC), has published guidance for businesses on a new reporting tool that can be added to their organisation’s Microsoft Office 365 accounts where potential scams can be reported directly to the NCSC’s Suspicious Email Reporting Service (SERS).

It is just one weapon in the long battle against online criminals and comes as the cost to the UK from cybercrime incidents amounts to £5.7 million this year.

More than ever the internet is vitally important to the UK economy but is also exploited by those wishing to cause harm – with cybercrime being largely invisible but having devastating effects on companies and their employees.

A generation of tech-savvy younger people has also become a prime target for scammers and phishers.

Phishing is when attackers attempt to trick users into disclosing personal information by clicking a malicious link that will download malware, or directing them to an insecure website.

There have been 14,883 cybercrime incidents involving scammers and phishers since the start of the year, with one-third of the total losses, £1.9 million, coming from businesses, according to fraud prevention experts PPC Shield.

Since 1 January this year, their survey shows that 43 per cent of reported incidents involve hacking, fake social media posting and email scams.

Since its launch in April 2020, the Suspicious Email Reporting Service has received over 6,500,000 reports from the public – resulting in the removal of more than 97,000 scam URLs.

A cyber attack can have a devastating financial impact on a business and so it is important that owners and their team remain ever vigilant. If you would like advice on protecting your finances speak to us today.

Link: UK reports £5.7 million of losses due to cybercrime

While rising property values may seem like good news, as prices go through the roof it could land you with a hefty Inheritance Tax (IHT) bill.

The latest data from HM Revenue & Customs (HMRC) show that the average IHT tax bill stood at nearly £210,000.

IHT is a charge on the value of the estate of someone who has died and includes all their assets, from property to investments and vehicles.

The current threshold stands at £325,000, below which you do not pay anything except in certain circumstances.

A 40 per cent tax charge then applies to anything over that value if no planning is undertaken, such as gifting to charity.

The £325,000 threshold might be even higher if you gift your home to a direct descendant such as your children or grandchildren, where a further residence nil-rate allowance of £175,000 takes the figures to £500,000 before tax, or up to £1 million if you are a surviving spouse or civil partner.

As property values increase, people who are leaving a home in an estate could find they are moving into the IHT bracket unexpectedly.

The new figures from HMRC, which are taken from the 2018/2019 tax year, show that the average IHT bill rose by six per cent compared to the previous year.

The figures indicate that the average IHT bill for that year was £209,502, a significant rise from the previous year, which averaged out at £197,521.

The sudden rise in house prices may mean that more individuals face an IHT bill if they leave property or other assets to beneficiaries – despite the increase to the residence nil-rate threshold.

Government data shows that revenue from IHT receipts from April to May 2021 were £966 million – £340 million higher than the same period last year, partly due to the sharp increase in property prices.

No one wants to pay more tax than they need to, especially when they are passing wealth to the next generation. To find out how we can help you with IHT and estate planning, please speak to our team.

Link: Average IHT bill now above £200k

As the UK emerges from the economic crisis caused by the pandemic there are many positive indicators of financial recovery, such as a fall in COVID-induced public spending, a rise in job vacancies and a decline in unemployment, all of which are encouraging businesses to grow.

The economic indicators are good news for SMEs with people spending on home improvements and leisure, as cash saved during the lockdown flows back into the economy.

The SME market makes up over 95 per cent of UK businesses and they are vitally important to the UK economy.

Despite earlier optimism about growing their businesses, many have felt frustration in their ability to obtain business loans from traditional banks and finance firms.

Now a new report suggests that many who are struggling with day-to-day cash flow and the ability to make quick decisions on finances are turning to unsecured loans to take their business forward.

No security is needed for an unsecured business loan, which means the borrower does not have to put assets at risk to secure the funding and allowing for quicker decisions to be made.

Unsecured business loans allow for greater flexibility and give business owners the opportunity to quickly fund their company with the minimum of fuss.

The list of businesses who can apply includes self-employed individuals, sole traders, partnership firms and private limited companies engaged in the business of trading, manufacturing and services.

The report by finance firm iwoca suggested they are now turning to credit brokers, with more than a third applying for loans over a four-week period in May.

Over half of respondents reported that the most commonly requested unsecured loan amount they’d applied for on behalf of their clients was under £50,000, with around 17 per cent requesting £25,000 or less.

If you require help financing your growth or need funding for a project then our experienced team can help. To find out more about our services, please contact us.

Link: iwoca SME Expert Index find 1 in 3 brokers see rising demand for unsecured finance