There is an online service available on HMRC to check your National Insurance Contributions (NIC) record online. The service is available at https://www.gov.uk/check-national-insurance-record

In order to use this service, you will need to have a Government Gateway account. If you do not have an account, you can apply to set one up online.

By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you have not already done so. HMRC’s personal tax account can also be used to complete a variety of tasks in real time such as claiming a tax refund, updating your address and completing your self-assessment return.

Your National Insurance record online will let you see:

• What you have paid, up to the start of the current tax year (6 April 2023).
• Any National Insurance credits you have received.
• If gaps in contributions or credits mean some years do not count towards your State Pension (they are not 'qualifying years')
• If you can pay voluntary contributions to fill any gaps and how much this will cost

In some circumstances it may be beneficial, after reviewing your records, to make voluntary NIC contributions to fill gaps in your contributions record to increase your entitlement to benefits, including the State or New State Pension. If you would like to discuss this further, please do not hesitate to be in touch.

There is still time to register for the marriage allowance before the current tax year ends on 5 April 2024. The marriage allowance applies to married couples and those in a civil partnership where a spouse or civil partner does not pay tax or does not pay tax above the basic rate threshold for Income Tax (i.e., one of the couples must currently earn less than the £12,570 personal allowance for 2023-24). HMRC has revealed that March is the most popular month for marriage allowance applications, with almost 70,000 couples applying in March last year.

The allowance works by permitting the lower earning partner to transfer up to £1,260 of their personal tax-free allowance to their spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer (the higher earning partner) does not pay more than the basic 20% rate of income tax. This would usually mean that their income is between £12,571 and £50,270 during 2023-24.

For those living in Scotland this would usually mean income currently between £12,571 and £43,662.

Using the allowance, the lower earning partner can transfer up to £1,260 of their unused personal tax-free allowance to a spouse or civil partner. This could result in a saving of up to £252 for the recipient (20% of £1,260), or £21 a month for the current tax year.

If you meet the eligibility requirements and have not yet claimed the allowance, then you can backdate your claim as far back as 6 April 2019. This could result in a total tax break of up to £1,256 if you can claim for 2019-20, 2020-21, 2021-22, 2022-23 as well as the current 2023-24 tax year. If you claim now, you can backdate your claim for four years (if eligible) as well as for the current tax year.

HMRC’s online Marriage Allowance calculator can be used by couples to find out if they are eligible for the relief. An application can then be made online at GOV.UK.

1 April 2024 – Due date for corporation tax due for the year ended 30 June 2023.

19 April 2024 – PAYE and NIC deductions due for month ended 5 April 2024. (If you pay your tax electronically the due date is 22 April 2024).

19 April 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2024.

19 April 2024 – CIS tax deducted for the month ended 5 April 2024 is payable by today.

30 April 2024 – 2022-23 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.

1 May 2024 – Due date for corporation tax due for the year ended 30 July 2023.

19 May 2024 – PAYE and NIC deductions due for month ended 5 May 2024. (If you pay your tax electronically the due date is 22 May 2024).

19 May 2024 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2024.

19 May 2024 – CIS tax deducted for the month ended 5 May 2024 is payable by today.

31 May 2024 – Ensure all employees have been given their P60s for the 2023/24 tax year.

If you read our post of last week, Property Tax Changes, you will be aware that the Chancellor recently confirmed – as part of his Spring Budget – that the present tax advantages that owners of Furnished Holiday Let (FHL) property enjoy will be abolished from April 2025.

While a deadline in a year’s time may seem a long time away, taking action to mitigate future taxes or undertaking changes during the 2024-25 tax year will require “what-if” analysis.

Start considering your options now

The following planning ideas may or may not benefit you personally and do not action any of these suggestions without first contacting us to undertake the necessary research for you.

Possible options for FHL owners before 6 April 2025:

• As past profits from FHL activities count towards earnings for pension purposes, could you pay a sizeable top-up to your pension pot during 2024-25?
• Is there a way to facilitate, and fund, a disposal of FHL property that triggers the Capital Gains Business Assets Disposal Relief, so that you effectively pay 10% tax on any chargeable gain, and re-establish a base cost for CGT at current market value?
• Are there options of involving your spouse, civil partner or adult children in a CGT planning exercise?
• What are the advantages and disadvantages of incorporating your FHL business?

Change is always a challenge

It is possible that when HMRC publish the fine print of their changes to the tax treatment of FHL businesses, some or all of the above ideas may prove to be dead ducks. However, it pays to stay ahead of the planning curve.

Initially, we suggest that FHL owners that want to explore their options get in touch to start the planning process, and then as more detailed information becomes available you will be best placed to shift from planning into action.

Hopefully, this post will be of help to individuals that find themselves in debt and are struggling to keep up with repayments.

It’s interesting to consider how easy it is to get into debt and how difficult to get out of debt.

In times of rising prices and high interest rates the temptation to use credit cards or other high interest charging loans to manage expenditure seems like a short-term solution that provides a simple way to balance the books.

Unfortunately, when you take out a loan or use a credit card rather more than you generally do, then you are effectively mortgaging your future income to cover the repayment of the loans and the interest charges.

The Insolvency Service (TIS) seem to be waking up to their responsibilities and on 21 March 2024, they issued a news story entitled:

“Don’t feel alone: find out the first steps in the journey out of debt”

Neil Sutton, a Senior Leader with TIS said:

“It can be difficult to see your way out of a debt cycle, and it’s absolutely not an easy step to take by yourself.

“So, working with debt advisers is important, to help you understand the implications of any solution you decide to enter.

“The government also offers a scheme called Breathing Space, which is administered by the Insolvency Service. Breathing Space lasts for 60 days, during which the people you owe money to can’t take any action against you, and interest and charges are frozen. It allows you time and headspace so you can work with a debt adviser to plan a suitable financial solution.”

More about Breathing Space

Neil continued:

“Problem debt can impact people’s physical and mental health. Breathing Space allows you to turn off that noise and work with a debt adviser to explore suitable solutions for you.

“Breathing Space itself is not a solution to debt, but a tool to help you deal with it. A debt adviser will make sure that it’s right for you.

“During a Breathing Space, lots of people do budgeting with the help of their debt advisers or see if they can access other benefits. If there’s a way forward that doesn’t involve insolvency solutions, that’s what debt advisers will help you look at.

“As with DROs, the Breathing Space scheme is delivered in partnership with the debt advice sector. ”

Useful links

If you need help, take a look at the following links published by TIS:

• People seeking any of these options should first speak to a debt adviser – which can be accessed free of charge via MoneyHelper.
• For details of options for dealing with debt, see Options for dealing with your debts: Overview – GOV.UK (www.gov.uk)
• Check how you can pay off debt and contact a free, expert debt adviser here: Check how you can deal with your debts – GOV.UK (www.gov.uk)
• For more information about DROs, see Options for dealing with your debts: Debt Relief Orders – GOV.UK (www.gov.uk)
• For more information about IVAs, see What you need to know about Individual Voluntary Arrangements (IVAs) – Insolvency Service (blog.gov.uk)
• For more information about bankruptcy, see: What you need to know about bankruptcy – Insolvency Service (blog.gov.uk)
• If you are in Scotland there are different options available. For details see here: Accountant in Bankruptcy – Scotland’s Insolvency Service – Explore Various Debt Solutions (aib.gov.uk)
• The government announced changes to DROs in the Spring Budget in March 2024, to make sure that those who most need support can access help. Chancellor Jeremy Hunt announced that the £90 fee for DROs would be abolished from 6 April 2024.

The recent Spring Budget did little to make the life of those letting, buying or selling property any easier. For example:

• The reduction in the higher rate of CGT on affected property sales from 28% to 24%.
• The removal of multiple dwellings relief for Stamp Duty Land Tax purposes.

These competing changes must make life tricky for buyers and sellers.

Landlords, repairs or capital purchases

Landlords, who have been completely flummoxed by a recent round-Robin sent out by HMRC, suggesting that the replacement cost of a boiler with a more efficient version was a capital purchase not a repair, are relieved that it is, after all, a repair and not capital expenditure.

Owners of Furnished Holiday Let Properties

Owners of Furnished Holiday Let properties, who have enjoyed several tax breaks for many years – as their FHL business was treated as a trade and not an investment – must be disarmed by the Chancellor’s stated intention to abolish the FHL status from April 2025. Presumably, from that date, FHL property income and gains will be treated the same as a buy to let rental or sale.

It will be interesting to see if any transitional arrangement are put in place to soften the transition from April 2025.

Meanwhile, present owners of FHL properties may be advised to seek advice on any actions to be taken before April 2025. But beware, government has confirmed that anti-forestalling rules will be applied from the date of the Budget (March 2024) to block methods that obtain CGT relief under the current rules by utilising unconditional contracts ahead of the new rules coming in in April 2025. Draft legislation on this will be published later this year so more information will be available at that time.

Is this a good time for property owners?

Probably not if you own FHL property, but homeowners should escape aside from the Stamp Duty changes.

Principle Private Residence Relief – in most cases, no CGT to pay when you sell your own home – is still in place. You can still let out a room in your home and pay no tax if the rents received are less than £7,500 per annum and you abide by the Rent-a-Room Relief rules.

And if you are concerned by any of the issues raised in this post please call

It’s interesting to consider the challenges that are plaguing small businesses at present. For example:

• A frustrating inability to reestablish profit levels to fund investment or to maintain the living standards of employees and shareholders.
• Cash flow constantly hovering at zero or at overdraft limits.
• Having to witness the slow decline in profits retained in previous years to maintain dividend payouts or absorb current losses.
• Making sense of the import and export rules since we left the EU.
• The impact of higher interest rates; particularly, meeting rising repayments and their effect on profits and cash flow.

Not an inspiring background if you are a UK SME.

However, those companies who can make way in the face of these opposing headwinds can leverage their hard won achievements to sing their own praises.

Success breeds success.

Rudyard Kipling had it right in his poem “If you can keep your head when all around you are losing theirs…”

When your results evidence success, and you are in a minority at that time, then you will stand out from the crowd and be an attractive business partner.

In our experience, the one course of action that supports this positive business development outcome, is the willingness to engage in rigorous business planning. We can bear witness to this statement. And even if a business has to accommodate a reduction in profits for a period to meet external difficulties head-on, those affected who have flexible business plans in place will be the ones to weather the storm.

If you presently have no formal business plans, pick up the phone, let’s have a discussion to see how we could help and have your business stand out or the crowd.