Start of new tax year ushers in raft of fiscal changes
The 6 April start of the new tax year saw important fiscal changes come into effect, including the changes to the deadline for sellers of residential property who are liable for capital gains tax (CGT).
Other fiscal changes for the 2020/21 tax year include greener benefit rates for employer-provided cars and an increase in the flat rate income tax deduction for homeworkers.
From 6 April 2020, if a UK resident sells a residential property in the UK, they will have 30 days to tell HMRC and pay any money owed. The seller must submit a standalone tax return covering the CGT, which can no longer be included as part of a self assessment return.
Failure to tell HMRC about any CGT within 30 days of completion may incur a penalty, as well as interest on the sum owed.
Also, as the government continues to promote greener business motoring, it has introduced new emissions tests and reduced benefit rates for cleaner vehicles.
The new Worldwide harmonised Light vehicle Test Procedure (WLTP) is more accurate than the New European Driving Cycle (NEDC) test it is replacing. The WLTP is expected to show higher vehicle carbon dioxide (CO2) emissions; however, for cars registered before 6 April 2020, the NEDC test will still be used.
For most company cars registered from 6 April 2020 car benefit rates will be reduced by two percentage points for 2020/21 from the rates previously announced. Additionally, all zero-emission models, regardless of when they were registered, will be subject to a 0% rate.
Finally, the flat rate income tax deduction, which is available to employees to cover additional household expenses where employees work at home, has risen. This was set at a rate of £4 per week but rose to £6 per week from 6 April.
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