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CGT, MTD and IR35: The upcoming challenges

The new tax year will bring a number of changes that practitioners will need to inform their clients about. Netax’s Tax Tips with Rebecca Benneyworth guide analyses the new capital gains tax, MTD and IR35 rules.

28th Oct 2019
Commercial Production Editor AccountingWEB.co.uk
In association with
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Among other tax measures, April 2020 will bring changes to the off-payroll working rules for private sector businesses, capital gains tax and the Making Tax Digital links for the exchange of data between different software programs.

In a new guide, tax lecturer and regular AccountingWEB contributor Rebecca Benneyworth summarises what practitioners and their clients need to know about these changes due to take effect from the beginning of the new tax year.

Capital gains tax

April 2020 will see the implementation of new capital gains tax (CGT) rules, including the introduction of new stand-alone CGT returns for disposals of UK residential property. From this date, the returns will have to be paid within 30 days of the completion date of the disposal.

There is a risk that the change will take many disposers by surprise, warns Benneyworth, and a number of factors will add to the pressure of the change, including the possibility of it being overlooked by the solicitors handling the sale.

Since the person doing the tax return will need to wait for the client’s authorisation, the whole process might also take longer with the new rules.  

Making Tax Digital

Although there are no major changes expected until 2021, practitioners need to prepare for the new requirement for digital links from April 2020. From this date, all data exchanged between different software programs will need to be via a digital link, and it will no longer be possible to key in or use journal entries.

The guide also covers the case of voluntarily registered businesses, which now need to monitor their value of taxable supplies.

IR35

April 2020 will also usher in the new off-payroll working rules bringing the private and the public sectors in line. The new process will impact most businesses engaging contractors through Personal Service Companies. To illustrate how the new rules work, the guide includes an example of the calculation of the net pay difference for a contractor affected by of payroll working.

Netax’s Tax Tips with Rebecca Benneyworth provides an in-depth analysis of the tax changes in 2020, with a focus on how to communicate them with clients.