Member Since: 30th Oct 2001
15th Mar 2017
"U-Turn if you want to... this chancellor's not for .... oh wait... yes I am"
8th Mar 2017
So how does any transition from an accruals basis to a cash basis apply in 2017/18 (or each year, if gross rental income fluctuates around the cut-off point)?
I'd imagine for landlords of commercial property with rents falling due in advance on the quarter dates, then the previous accounting treatment would have been to treat a large proportion of the rent due on 25th March as being in advance relating to next year. Under the cash basis, there would be no adjustment at the end of 2017/18 so those rents would be treated as income in 2017/18, but how do we deal with the amount in advance brought forward? It's not a cash receipt in 2017/18 so does it just fall out of account entirely?
On a similar issue, has anyone determined the best way to deal with mixed use property under the new rules for restricting loan interest relief. For example, a building is purchased for £250k with a loan of say £200k. The ground floor of the building is used as a shop (ie a commercial let) but the two floors above are split into flats which are let as residential lets. Rental income is say £20k p.a. from the shop and £5k for the flats. Interest of £5k is paid on the loan. Should there be a restriction in respect of the loan interest under the new rules, and if so, how would you calculate it?
2nd Jun 2016
Does this imply that if the "info to help you complete your return" screen shows a Class 2 NIC liability of £145.60 then a return filed with that amount on it won't be "corrected"? If so, is the problem limited to those cases where this screen does not show that figure? ie is this error going to affect every SA case with a Class 2 NIC liability, or only some cases where the return shows a liability, and HMRC (incorrectly) doesn't think there should be one?