Tax return completion and submission for people with simple tax affairs, most people would agree is overtly complex, and not something most people would look forward to doing.
Over the next parliament, there should be some big improvements in tax return information submission, with HMRC’s Digital Strategy now taking shape and the pieces beginning to link together.
HMRC are intending to give tax payers digital accounts which are pre-filled with information from employment (via RTI), pensions and banks accounts (which are all now available electronically) which should lead to a much better experience for the tax payer and cut down on errors of missing items or incorrect figures.
There will still be additional information required for tax payers with more complex affairs such as properties and investments, but it should improve the service to taxpayers, and it is expected to dramatically cut costs to HMRC.
The end of the tax return is upon us for people with simple affairs, and tax accounts is expected to start for taxpayers by 2017. For people with more complex affairs, it is probably just a renaming exercise and a simpler, but more real time, process.
The personal tax year for 2014/15 is due to end shortly on the 5th April 15. If you have maxed out on your pension contributions and used your full ISA allowance, what options are available to a higher earner who wants to get some tax relief via an approved Government scheme?
There are two government approved tax breaks, the enterprise investment scheme and venture capital trusts, both aimed at attracting investment into smaller UK companies.
Both schemes are worth considering if you are a higher rate tax payer, and offer significant tax saving for higher rate tax payers. It is not all one way through, as these schemes often have higher investment risks being in smaller companies. Income tax relief is available on the cost of the investment of up to 30% of any investment, and any gains are exempt from CGT.
VCT investments tend to be more liquid as there is a secondary market in these shares, so you do have an exit route. Both investments require minimum holding periods to qualify for the tax relief of between three to five years, also there are annual limits for investments into these schemes of £200,000 for VCT schemes and £1,000,000 in EIS schemes.