Sandison Lang Newsletter - Winter 2022

Sandison Lang news Issue 27

Winter 2022

ALL CHANGE AT THE TOP: NEW TAX MEASURES ANNOUNCED In our Autumn newsletter we reported on the fiscal plans of Truss and Kwarteng. Just two months later, we are now discussing the economic aims of Sunak and Hunt. The two budgetary announcements could not have been more different. The recent Autumn Statement presented strategies to tackle the much debated £55bn ‘black hole’ and unlike the previous monetary wishlist, had been fully considered by the Office for Budget Responsibility (OBR).

rate band for inheritance tax which has stood at £325,000 since 2009 and will now remain in place until 2028 – nearly two decades without keeping pace with house prices.

Data released by HMRC following the Autumn Statement showed the Treasury received £4.1bn in inheritance tax between April and October this year. This is a £500m increase on the same period last year. The OBR predicts that IHT receipts could reach £7.8bn by 2027/28 when the freeze is due to end.

Rather than bold and obvious tax hikes, the new chancellor presented a series of ‘freezes’ which should have the same effect with inflation running high enough to trigger fiscal drag. By freezing or reducing tax allowances or the bands at which tax is paid, the aim is to increase the volume of wealth captured by the Treasury.

The chancellor’s headline move was to reduce the threshold at which the 45 per cent additional rate of income tax applies from £150,000 to £125,140. This was quite an abrupt about turn from the previous chancellor who wanted to remove this band altogether.

For example, Mr Hunt did not increase the nil

As we already know, there is an effective 60 per

cent tax on earnings between £100,000 and £125,140 as this is the point where the personal allowance tapers down.

Those remunerated by dividend from limited private practice companies will be impacted by the reduction to the tax-free dividend allowance which will be halved from £2,000 to £1,000 in April 2023 and then halved to £500 from April the following year.

In the same month, the annual Capital Gains Tax allowance will be cut from £12,300 to £6,000 before halving again to £3,000 from April 2024.

We expect further tax announcements in the Spring Budget in March – although four months is a very long time in politics. As ever, if any of the current round of changes affects you or your business, your accountant will be pleased to discuss your position with you.

Season’s greetings from the full team at Sandison Lang Sandison Lang News Issue 27 Winter 2022

Accountants to the medical profession

Dr Mark Martin: NHS round up In the months before Jeremy Hunt became chancellor, he sympathised with senior doctors caught by punitive pensions tax issues and called it a ‘national scandal’. He tweeted that the government should ‘Grant an immediate exemption for doctors to public sector pension rules which are currently forcing them to retire in their fifties in alarming numbers.’

Sadly, he did not use the Autumn Statement to propose such measures but did announce a workforce plan.

We still await the finer detail on the previous NHS plan – that announced by the new (but now former) health and social care secretary Thérèse Coffey the day before the infamous ‘mini Budget’ in September. This was called

“Our Plan for Patients” and included a package of measures designed to strengthen the crisisstricken health service.

Ms Coffey’s proposals addressed ‘fixing’ the rules which link the NHS pension to inflation by changing the pension revaluation date in the NHS Scheme. She also announced that NHS trusts would be mandated to offer pension recycling by 2023. This allows employees who have opted out of the NHS Pension Scheme to be able to take any unused employer contributions as extra salary. There would also be a series of measures to increase retirement flexibilities for NHS staff.

We expect formal consultations to be launched on these issues and will monitor the outcomes.

Q&A Q: If I organise a small Christmas party for my private practice staff, is it still tax deductible?

William Myatt writes: Employers can spend up to £150 per head (including VAT) every year on ‘annual functions to entertain employees’. You can have more than one event, provided you do not go over the £150 – so could add in a summer BBQ too!

In addition, employers can provide certain benefits of £50 or less to their employees as ‘trivial benefits’.

These are capped at £300 per year for company directors but there is no cap for other employees.

Company update: New team members We are delighted to welcome two new accounts assistants Lara Collins and Suzie Kilcullen, and tax assistant Gemma Campbell.

To calculate the cost, you should add all elements of the party including food, entertainment, room hire, transport and then divide by the number of staff who will attend. NB the limit is not an allowance – if the cost per head is £170 then the entire amount is taxable, not just the £20 excess.

We have relocated our London office to New Cavendish Street, just a few minutes’ away from our former premises on Great Portland Street.

Sandison Lang The Harley Building, 77 New Cavendish Street, London, W1W 6XB

Should you prefer to meet with your accountant in town or have documents to deliver to the London office, please note our new address with immediate effect is:

Our main office is still Tonbridge and our group telephone number remains 01732 365351.

SANDISON LANG Specialist accountants to the medical profession 2 St Mary's Rd Tonbridge TN9 2LB Sandison Lang News Issue 27 Winter 2022

01732 365351 office@sandisonlang.com

www.sandisonlang.com Accountants to the medical profession