Whilst forming a partnership can be an extremely flexible way for two or more people to own and run a business together, it is important to appreciate that under this type of trading vehicle, the partners themselves do not have individual protection. If one of the partners resigns, dies, or goes bankrupt, the partnership has to be dissolved, even though the business itself may not need to cease. Although there is no legal requirement to do so, it is highly recommended that, on forming a partnership, a formal partnership deed is drawn up. Many partnerships ask a solicitor to help with [...]

Q. I have recently bought a residential property to rent out. To enable me to purchase this property I took out a mortgage on my own home and I used the money to buy the rental property. Can I claim tax relief for mortgage interest against my rental income? A. You should be aware that the rules for residential landlords claiming tax relief on interest paid changed from April 2017. The answer to your question is, yes, you can offset the interest you are paying on this mortgage against the rental income you are receiving from the purchased property. The HMRC [...]

Employment status tax cases often make the headlines in the professional press and the recent case involving Deliveroo riders was no exception. The meal delivery firm won the case in the Central Arbitration Committee (CAC), confirming that its riders are not 'workers'. This is the latest challenge to the employment status of 'gig economy' workers. In this case, the Independent Workers Union of Great Britain (IWGB) sought to argue that riders were workers, so that they could claim union recognition, thus affording them certain collective rights regarding the minimum wage entitlement, holiday and sick pay, and pension contributions. The CAC rejected [...]

On 2 November 2017, the Government announced a one year delay to the abolition of Class 2 National Insurance Contributions (NICs). Class 2 NICs will now be abolished from 6 April 2019 rather than 6 April 2018. The delay will allow time for the government to engage with interested parties and Parliamentarians with concerns relating to the impact of the abolition of Class 2 NICs on self-employed individuals with low profits. The relevant legislation will be contained in the National Insurance Contributions (NICs) Bill, which will now be introduced in 2018 with the measures it will implement taking effect one year later, [...]

As Benjamin Franklin observed in 1789 'In this world nothing can be said to be certain, except death and taxes.' More than two centuries on, this statement still rings true! These days however, inheritance tax is often referred to as a voluntary tax, because there are various ways to minimise liability to it, or even avoid it all together. PETS Any assets (cash or otherwise) that a person gives away during their lifetime, that do not fall under the exempt transfer rules, such as transfers between spouses and civil partners and gifts to charities, may escape inheritance tax as a [...]

Q. My wife and I jointly owned a property that we originally lived in for many years, although it has been rented out for the last 10 years. My wife has recently died and I am now the sole owner of that property. I intend to sell it and give the proceeds to my two children (both aged in their 40's). Will there be capital gains tax on the sale proceeds? A. If a residence is transferred between a husband and wife who are living together (or between civil partners), of each other who are living together, whether by sale or by [...]

The Office of Tax Simplification (OTS) has published a paper outlining its future works programme, identifying areas of interest that the office will be looking at in the next twelve months and beyond. The OTS is currently working on a review of VAT, and expects to publish its report in October or November 2017. Work has also commenced on a high-level paper on the business lifecycle which looks at key events and the various taxes which apply at these points. The Government has requested a review of capital allowances and the possibility of using instead the depreciation charged in the [...]

As confirmed in the 2017 Spring Budget, the tax rules governing termination payments will change from 6 April 2018. The term 'termination payment' is typically used as a generic summary for a lump sum payment, which is normally (but not always) made to an employee at the time the employment comes to an end. The current rules governing the taxation of termination payments are complex and over recent years, have been subject to manipulation by some employers seeking to minimise income tax and NIC liabilities. The forthcoming changes seek to clarify the rules, particularly in relation to the existing £30,000 tax-free exemption [...]

HMRC have launched a new service designed to directly help mid-sized businesses as they expand and grow. The new Growth Support Service (GSS) will be open to some 170,000 mid-sized businesses registered in the UK who are undergoing significant growth, and who either have a turnover of more than £10 million, or more than 20 employees. Broadly, a business will be eligible under the 'significant growth' criteria if its turnover increased by 20% or more in the last twelve months, where this increase is at least £1 million. HMRC's GSS tax experts will offer dedicated support, tailored to the customer's needs. It [...]

Q. My wife and I are directors of a small company. Our two children also work for the company. Is there any advantage to the company paying for all our mobile phones? A. The tax legislation provides exemptions from tax, and often National Insurance Contributions, for certain benefits-in-kind - mobile phones being one of them. Making use of the exemptions generally offers an opportunity to extract funds from a family company without triggering a tax or NIC charge. Providing the benefit rather than the funds with which to buy the benefit saves tax. The costs are also deductible in computing the company's [...]