Questions about Finances Answered

by Pete Bird, Bird & Co, Certified Public Accountants Taxation

Here are a couple of questions we have been asked recently. Question: I’ve been going over some old tax returns to try to track down some capital losses. However, whilst doing this, I’ve noticed that I missed some figures, including my considerable pension contributions, off the 2018/19 return. From what I can see online, I’ve just missed the deadline to amend it. Is there any way to claim the extra relief? It’s worth around £2,000 which would be very helpful at the moment?

Answer: You should make a claim under the provisions for Overpayment Relief. This permits a claim to be made up to four years after the end of the tax year in question where there are no other means to recover the overpaid tax. You need to be very careful when drafting the claim, as it must contain specified information. It must also be signed by you personally, an accountant can’t sign it on your behalf (though they could help you draft the letter). Question: Following the Covid-19 pandemic, I’ve decided to change my year end to 31 March (from 31 December) in order to utilise overlap relief that I’ve been carrying forward. However, I’m not sure exactly what profits to include on my return? Answer: This will depend on exactly how you enact the change. If you prepare accounts for the 15 months to 31 March 2021, your return for 2020/21 will include the results for the full 15 months, less the overlap relief. If you prepare accounts for the three months to 31 March 2021, you will have two accounting periods (one 12 months and one three months) in the basis period for 2020/21 and you will include the results from both, again deducting the overlap relief. Of course, it’s possible that you are referring to your current year, i.e. you will prepare accounts to 31 March 2022. In that case, the change won’t take place until the 2021/22 year and you should just report your results to 31 December 2020 on the 2020/21 return in the usual way. Do you have any tax or business questions, if so email Pete Bird of Bird & Co (info@birdandco.ltd) and if of general interest we will publish them here?

No Fault Divorce, At Last

The very long-awaited Divorce, Dissolution and Separation Act 2020 is to come into force on 6 April next year.

This is a lot later than originally hoped and it would seem that the delay has been due to the IT changes necessary on the Government online divorce platform. But the 6th April 2022 is now fixed on the parliamentary record. So those of you who have been holding off starting divorce proceedings on the traditional grounds, can now work towards this new timetable. The new law will allow married couples to divorce without attributing blame as a reason to end the marriage. The current law only provides for “blameless” divorce if you have been separated for two years, or five years.

Otherwise, the majority of divorces where the spouses agree they can’t wait for two years, require allegations of unreasonable behaviour to be raised by one against the other, or agreeing that adultery has taken place. Neither ground is exactly the best start to ending a marriage in a civil and amicable manner.

The new law will permit spouses to divorce after being apart for a limited period of time. The exact Rules will be finalised over the coming months and your local family law specialist will be able to provide more details closer to the date.

So watch this space…..

Certifi ed Public Accountants supporting local businesses with cost-eff ective accountancy and taxation service for many years.

We specialise in sole traders, partnerships, small limited companies and all types of self-employed businesses, as well as all aspects of accountancy and taxation, concentrating on the personal approach.

Speak to Pete or Bernard, any time, for a free, initial chat.

T: 01733 248 180 E: pnbird@birdandco.ltd or info@birdandco.ltd Text: 07305 355595 www.birdandco.ltd

183 Main Street, Yaxley, Peterborough PE7 3LD

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