Tax Changes Affecting Buy to Let Investors

Back in August we reported on how the landlord fair wear andtear allowance was to be scrapped as of April this year, and how tax relief on buy to let mortgages was also set to be decreased down to the basic rate by 2019.

Then there was the news that landlords would face a change to the way tax is paid when a buy-to-let property is sold. From April 2019 capital gains tax will be due within 30 days of selling a property, rather than at the end of the tax year.

Stamp Duty Changes 2016

Now we hear that stamp duty changes will also be introduced in April this year, applying to anyone purchasing additional residential property.

Buy a second home or investment property after 1 April and you will be paying an extra 3 per cent on properties over £40,000. So on a currently zero-rated property costing from £40,000.01 to £125,000 you will pay 3 per cent on the full purchase price; on a property from £125,000.01 to £250,000 it will be 5 per cent rather than the current 2 per cent; from £250,000.01 to £925,000 the rate will be 8 per cent and up to £1.5 million 13 per cent. Over this amount, stamp duty will be charged at 15 per cent.

Investors with 15 or more properties, however, will not have to pay the additional percentage, and there may be further potential exemptions for larger and corporate investors.

However, there could be a glimmer of light in the shape of offsetting purchase costs against any eventual capital gains tax – including stamp duty. So whilst there will be a large bill to pay on purchase, if the property is eventually sold at profit, the stamp duty can be claimed back later against CGT.

With the many changes on the horizon, it makes sense for buy to let investors to take advice as soon as possible. If you are an investor looking to add to your portfolio then you may be wise to do so sooner rather than later, but speaking to your bookkeepers for cash flow planning guidance is a good first move.

What you Need to Know About Gender Pay Gap Reporting

Early this year, draft Regulations will be published by the Government that will call for larger employers to publish information detailing any differences in gender pay. Information about variations in pay between men and women will have to be provided and this will need to include a single annual figure setting out the gender pay gap and the method by which the calculations have been made.

There is also likely to be a second reporting tier which will outline the gender bonus gap. Employers will have the opportunity to include commentary on the factors that contribute to their gender pay gap, and any measures being taken to close the gap.

Who Will Gender Pay Gap Reporting Affect?

All private, public and voluntary sector employers in England, Wales and Scotland that employ 250 or more personnel will be affected by the Regulations. Businesses on the borderline with employee numbers will need to take note of the Regulations so that they are ready to comply when the time comes. Smaller businesses may also wish to take note of the information being published, as it could well affect them at a point in the future, and may influence their pay structures.

When Will Gender Pay Gap Reporting Start?

Watch this space. There is no precise date as yet and it is likely the reporting requirement will be phased in, starting with larger employers.

What Does ‘Gender Pay Gap’ Mean?

According to the Equal Pay Portal, the gender pay gap is ‘a calculation of the difference in the average earnings of the women and men in any given population’. Basically it is the difference in average hourly earnings of male and female full time employees.

The Office for National Statistics has published figures stating that women in the UK earn on average 19 per cent less than men. The new Regulations aim to eliminate gender inequality and take down the barriers that are in the way of women’s success.

It has been illegal for more than four decades to pay women and men varying rates of pay for equal or similar work. The Government says the pay gap exists mainly amongst older workings and reflects ‘the types of jobs that women tend to enter, and the levels of seniority they progress to’.

How Should I Prepare for Gender Pay Gap Reporting?

Ahead of the Regulations being introduced, it is a good idea to conduct an equal pay audit on an informal basis. This will help you identify potential issues in advance, and will give you time to take steps to address the issues.

As soon as the Regulations are introduced and there is clearer information about employers’ requirements, we’ll let you know. In the meantime, talking to your bookkeepers will help you with your equal pay audit.

Data Protection Law to see Biggest Change in 20 Years

An agreement was reached on the draft EU General Data Protection Regulation (GDPR) at the end of 2015, and it signifies the dawn of momentous changes to privacy law: the biggest changes in two decades.

Data protection seems never to be out of the news, and it is certainly an area where new legislation is being introduced on a regular basis. It is important however to take good note of this latest Regulation, because it is set to have a huge impact for any business that operates in the financial services, transport, energy and water or health sectors. Search engines, cloud computing providers and internet payment operators will also be affected.

Now is the time to start preparing if your business falls under any of these categories, because there is much to do. Risk assessments will need to be adjusted to accommodate the new rules and, as head of data privacy at PricewaterhouseCoopers Stewart Room says, “Most companies will be shocked at the scale of the new rules and the work that needs to be done before the laws take effect in two years – it is not much time for the magnitude of the internal changes that will be required.”

There are still fine details to be confirmed, but in the meantime, you should make yourself aware of the following key points of the GDPR:

• If your company breaches data rules in a serious way then you will need to report the incident to regulators within 72 hours.
• If your business if found to be in breach of the GDPR then it will be fined up to 4 per cent of its global turnover.
• If you handle significant amounts of data then you will be required to appoint a data protection officer within your business.
• Consumers will have the right to request that their data is transferred from one company to another, so that their preferences and order history are made available to them through their new supplier.
• A consumer’s right to be forgotten will no longer be limited to search engines. It will now extend into their entire web history, allowing permission to request total removal from any online platform and its history trail.

The GDPR is likely to become EU law in the early part of 2016. A two year grace period will precede enforcement. Even if your business does not fall into one of the GDPR governed categories, it is still vitally important that you are fully aware of all the legislation that applies to your business, especially considering the new powers held by the InformationCommissioner’s Office (ICO) concerning the use of data in telemarketingcampaigns.