As always, the new year will find numerous shifts within the financial planning landscape for us all. Changes happen largely due to new regulation or policy introductions and, while there isn’t anything nearly as dramatic as 2015’s launch of pension freedoms around the corner, there’s still lots to look for in 2016. Here’s 3 of the largest changes you might want to familiarise oneself with.
Digital tax accounts are on their way… although over a fairly slow rollout currently! The aim from HMRC is to get everyone who completes a self-assessment tax form to do so electronically by 2020. At the moment, HMRC only asks wealthy taxpayers with numerous income sources to utilise this system, however early 2016 will bring a following batch of trialists being provided with accounts and keying returns. Look out for an envelope via the post (or even an email!) from HMRC, informing you that you’re among the lucky new recruits.
Second home stamp duty will be here shortly
Reported in the Autumn Statement, the additional stamp duty on a second home purchase will be introduced quickly and is going to be ready and ‘live’ by April 1st 2016. Those buying a second home, or rental property will have to pay 3% on top of their standard rate of stamp duty would be, had the new property purchase been their main residence. Whilst it may appear like a somewhat small increase, a real difference between buying pre-April 1st and post-April 1st could be substantial. Landlords that are planning additional property purchase in 2016 may want to check or consult us regarding how their taxation is going to be affected.
Dividend taxation alterations
These new rates of dividend tax will enter into force at the beginning of this financial year (6th 2016). Company owners, that pay themselves in part through dividends, could be especially affected given that the change raises a new £5,000 tax-free rate with all new bands of 7.5%, 32.5% and 38.1% above this for standard rate, higher rate and extra rate taxpayers. Should you currently obtain substantial degree of earnings from dividends then now’s an important time to look at your income plans for the following tax year.