Welcome to the March 2019 Newsletter from Walsh & Co
HMRC has urged 700,000 couples currently 'missing out' on the Marriage Allowance to claim it. The Allowance could save couples up to £238 in tax during the 2018/19 tax year.
Meanwhile, the government is set to proceed with its plans to increase probate fees, despite strong opposition. Estates which are valued between £50,000 and £300,000 will be subject to a fee of £250. The fee rises thereafter to reach £6,000 for estates with a value above £2 million.
And with the Chancellor's 2019 Spring Statement set to take place on Wednesday 13 March, many are speculating as to what the event will entail. Our website will contain a summary of the key announcements, so please visit regularly.
HMRC reveals 700,000 couples are 'missing out' on Marriage Allowance
HMRC has estimated that around 700,000 couples are 'missing out' on the Marriage Allowance, which could save them up to £238 in tax during the 2018/19 tax year.
Introduced in April 2015, the Marriage Allowance enables spouses to transfer a fixed amount of their personal allowance (PA) to their partner. The option is available to couples where neither pays tax at the higher or additional rate. If eligible, one partner will be able to transfer 10% of their PA to the other partner (£1,190 for the 2018/19 tax year).
For those couples where one person does not use all of their PA, the benefit will be up to £238 (20% of £1,190). From April 2019, the PA will rise to £12,500. As a result, £1,250 can be transferred from one partner to the other during the 2019/20 tax year, giving rise to a £250 tax break.
Couples are able to register for the Marriage Allowance at https://www.gov.uk/apply-marriage-allowance. Claims can be backdated to include any tax year since 5 April 2015 that couples were eligible for the allowance.
Commenting on the allowance, Mel Stride, Financial Secretary to the Treasury, said: 'For more than 3.5 million married couples and those in a civil partnership, we are putting up to £238 this year back into their wallets, and it is encouraging to see so many people taking advantage of the tax relief.'
'Married couples who are yet to sign up for this great scheme – you too can benefit – it is quick to register, and any backdated allowances will be paid as a lump sum.'
The Marriage Allowance is available in Scotland: to qualify, the higher earning partner must pay tax at the starter, basic or intermediate rate.
Rise in probate fees to take effect despite opposition
Government plans to increase probate fees are set to go ahead despite considerable opposition.
Currently, for estates valued at over £5,000, a grant application made by a solicitor is subject to a flat fee of £155. A grant application made by an individual is subject to a fee of £215.
During the consultation period, the government's new plans were met with strong opposition. Experts stated that the rise in fees will make it 'impossible' for many families to access assets without falling into debt. Meanwhile, MPs voiced concerns that the increase could disadvantage charities.
As a result, the original proposals have been adjusted. From 1 April 2019, the increase in fees is set to take effect. Estates which are valued between £50,000 and £300,000 will be subject to a fee of £250. The fee rises thereafter to reach £6,000 for estates with a value above £2 million.
Lucy Frazer QC, Parliamentary Under Secretary of State, said: 'The top band has now been reduced from £20,000 under the previous proposal to £6,000 under this order. The new banded fees structure does not amend the underlying policy rationale, and will retain the same progressive banded structure as the earlier proposal, in which the fee payable relates to the value of the estate.'
Commenting on the plans, John O'Connell, Chief Executive of the Taxpayers' Alliance, said: 'It's hard enough to deal with the loss of a loved one without the government stepping in and taking away so much through inheritance tax, and now this proposed increase to probate charges.
'While probate can be bureaucratically burdensome, these death tax hikes are totally unreasonable and will hit taxpayers even harder.'
The rise in probate fees will apply to estates in England and Wales – estates in Scotland and Northern Ireland are subject to different fees.
ESSENTIAL TAX DATES FOR MARCH
New Advisory Fuel Rates (AFR) for company car users apply from today.
5% late payment penalty on any 2017/18 outstanding tax which was due on 31 January 2019 and still remains unpaid.
PAYE, Student loan and CIS deductions are due for the month to 5 March 2019.
End of corporation tax financial year.
End of CT61 quarterly period.
Filing date for Company Tax Return Form CT600 for period ended 31 March 2018.
Last minute planning for tax year 2018/19 – please contact us for advice.
QUOTE OF THE MONTH
'In less than 50 days, UK firms could face the biggest change to their terms of trade in over a generation, without the information and clarity they need to navigate their forward course.'
Dr Adam Marshall, Director General of the British Chambers of Commerce, commenting on the business group's publication of a list of 20 'critical' 'no deal' Brexit questions.
WEBSITE OF THE MONTH
Considers issues affecting small firms.
ON OUR WEBSITE
A wealth of resources for businesses
With topics ranging from group VAT registration to corporation tax self assessment, the Your Business section of our site is a hub of essential information.
Useful information for individuals
For a comprehensive bank of guides covering furnished holiday lettings, Tax-Free Childcare and much more, please visit the Your Money area of our website.