Tax preparation expert David Redfern, founder of DSR Tax Refunds, today highlighted several changes to taxation legislation which will come into force from next month and warned taxpayers to be aware of them. He noted that with less than 2 weeks to the start of the new tax year, taxpayers should be aware of these changes and consider how they might affect their finances.
Redfern highlighted the reduction to the dividend allowance as having particular potential to impact on taxpayer’s finances. Noting the drop in the allowance from £5,000 to £2,000 in tax year 2018/19, he stated that “the reduction in dividend allowance on share investments could lead to a basic rate taxpayer being expected to shell out an extra £225 in tax a year, rising to £975 for higher rate taxpayers, which is a significant increase in taxation and could wipe out some of the gains from the increase in the personal allowance”. He also highlighted changes to income tax relief for interest against rental income, restricted to the basic rate of tax, with only 50% of the interest now fully deductible from rental income (down from 75%), noting that this could impact on higher-rate taxpayers who claim child benefit and are subject to the High Income Child Benefit Charge. Redfern noted “these changes are being phased in over four years but due to their complex nature, they have the potential to make the rules around tax relief on rental income very complicated”.
As well as highlighting the increase to the personal allowance, up to £11,850 from £11,500, Redfern also noted that the rules had been changed around Marriage Allowance to make it easier to claim on behalf of a deceased spouse of civil partner to allow claims to be backdated. He stated that “whilst most of the changes might be seen as unwelcome on behalf of taxpayers, it is good to see that there are some changes which will benefit the taxpayer rather than government coffers”. He added the increase in the Capital Gains Tax annual exempt amount to £11,700 as another welcome change for taxpayers. He finished by noting that one of the more significant changes, allowing HMRC to recover Self Assessment debts through PAYE income in real time, was not due to take effect until April 2019, allowing those affected a further 12 months to avoid being targeted by the change.
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About DSR Tax Refunds
DSR Tax Refunds are a firm of tax rebate specialists serving clients nationwide. DSR Tax Refunds are tax preparation experts who specialise in identifying potential allowable expenses for tax rebates for clients. Their specialist team can help employed and self-employed subcontractors with all relevant paperwork to ensure their claim is handled in an accurate and efficient manner.
For more about DSR Tax Refunds, visit https://tax-refunds.co.uk/
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