|
News Article - Budget Small Print
The Chancellor’s Budget speech contained some surprises,
but there were some interesting points hidden away in the
small print. If you are in the building industry, a farmer or
your business has made losses, read on...
The Budget “Red Book” (which is actually white and not red
these days) contained the announcement of a crackdown on
“false self employment” in the construction industry. The tax
profession and the Revenue regularly disagree about whether
people are employed or self employed and anyone in the
construction industry who engages workers should consider a
“health check” now, before the inspector calls.
Farmers with land outside the UK should note that the
government now accepts that agricultural property and
woodlands anywhere in the European Economic Area qualifies for
inheritance tax reliefs and for capital gains tax hold over
relief. It may now be possible to make claims for relief back
as far as the 2003/4 tax year as well as going forward. A less
welcome announcement was the withdrawal of the special tax
reliefs for Furnished Holiday Lettings which many farmers have
benefited from - and which have been used widely in the South
West - from next April.
Companies showing losses in accounts years ending between
24th November 2008 and 23rd November 2010 will be able to set
those losses back up to three years against their total
profits in the earlier years to generate tax refunds. The self
employed – including partnerships – will also be able to set
back losses from the 2008/9 and 2009/10 tax years up to three
years, but only against profits from the same trade. The
amount to be set back one year is unlimited but there is a
£50,000 cap for each year on the amount set back further.
Two cases I have seen recently have made me realise that
some businesses are missing out on existing loss reliefs. Sole
traders and partners can already set business losses against
other income of the tax year in which the loss is made and of
the previous tax year. This can generate repayments where
there is other taxed income such as employment income or a
pension. In the case of a new non-company business, losses of
the first four years trading can be set back against
employment or other income arising in the three years
preceding the year of loss, but there are strict time limits.
Many new businesses miss out because they simply do not know
that these reliefs exist.
As ever in tax, it is easy to lose out if you don’t take
advice from a qualified professional.
|
