September 2023 Newsletter | Cylchlythyr Misol Medi 2023
- Following the expansion of London's ULEZ (Ultra Low Emission Zone) last month, HMRC have confirmed that self-employed individuals who incur ULEZ charges on journeys "exclusively for the purposes of the trade" will be able to set-off these charges against their income in their annual tax return.
Self-employed individuals who frequently drive via London should ensure detailed records are kept to allow them to claim such costs.
- Many clients have received letters from their bank, warning them that they will close their business accounts unless they act upon the letter. The letters are often genuine and usually request that personal information is updated either over the phone or in branch. Those affected include the self-employed and voluntary organisations (e.g. choirs, sports clubs) who need a bank account to collect their membership fees.
Banks are being put under pressure by regulators to ensure they know the identity of their customers, and this has led to several high street banks sending blanket letters to their customers asking them to provide information to prove their identity.
If you are unsure whether such a letter is legitimate, check with your accountant and/or check with your bank.
- Royal Mail have announced a second price increase in postage this year. From 2 October 2023, the cost of first-class stamps will increase from £1.10 to £1.25 (second class stamps will remain at £0.75). For those who continue to post Christmas cards, you may want to stock up on stamps before the end of the month.
- If you have earned untaxed income between 6 April 2022 and 5 April 2023 and need to complete a self-assessment tax return for the first time, the deadline for registering with HMRC is 5 October 2023. Full details are available on the Gov.uk website.
Ask Huw & Aled: I have three young grandchildren (aged 5-10) and I am keen to gift them money, however at the same time, I want to encourage them to learn about money and to instil financial discipline. Can I open a pension account for each grandchild?
Yes, the grandchild's legal guardian would need to open a Junior SIPP, however once it has been opened, you can pay up to £2,880 into each grandchild's SIPP in each tax year. Tax relief via the government of £720 will be added to the SIPP, giving a total of £3,600 invested each tax year. The threshold may increase in future when the grandchild starts working and remember that the tax relief is based on the grandchild's status, not your own. Therefore, if you are still saving into your own pension, your annual pensions allowance remains unaffected.
Please remember that under current guidelines, your grandchild will not be able to access the money until at least age 55 (57+ from 2028).
If you believe that this is too long a time horizon for them to access the money, you may want to consider other investment alternatives. We recommend you seek financial advice from a qualified financial advisor before making any investment decisions.
