Owner-managed businesses / 76 posts found
Reform of landlords’ taxation?
The government's plans to allow landlords to use the cash basis for tax purposes were confirmed in the 2017 Spring Budget, but although the proposed legislation was included in Finance Bill 2017, it did not appear in the much reduced Finance Act 2017, which received Royal Assent on 27 April 2017. It is likely that the proposals have been temporarily shelved, pending the outcome of the General Election, and are expected to reappear in a second Finance Bill later this year. If the provisions are subsequently enacted, they are expected to apply retrospectively from 6 April 2017, i.e. for the [...]
CGT annual exemption: use it or lose it!
Capital gains tax (CGT) is normally paid when an item is either sold or given away. It is usually paid on profits made by selling various types of assets including properties (but generally not a main residence), stocks and shares, paintings, and other works of art, but it may also be payable in certain circumstances when a gift is made. The most common method for minimising a liability to capital gains tax is to ensure that the annual exemption is fully utilised wherever possible. Whilst this is relatively straight-forward where only capital gains are in question, the computation can be [...]
HMRC launch consultation on employee expenses
As confirmed the Spring Budget 2017, HMRC have launched a consultation on the use of the income tax relief for employees' business expenses, including those that are not reimbursed by their employer. The main objectives of the consultation, which will run until 12 June 2017, are to understand: if the current rules or their administration can be clearer and simpler; whether the tax rules for expenses are fit for purpose in the modern economy; and why the cost to the exchequer of the tax relief for expenses which are not reimbursed has increased. Expenses form an integral part of the [...]
VAT Flat rate scheme: changes take effect
The VAT flat rate scheme (FRS) is used by many small businesses to help simplify their VAT reporting obligations. Businesses could often gain a cash advantage from using the scheme, but this advantage has been significantly curtailed from 1 April 2017, particularly in relation to service-related businesses. Whilst the FRS continues to operate, many businesses will no longer find it economical to use. Broadly, the FRS is a simplified VAT accounting scheme for small businesses, which allows users to calculate VAT using a flat rate percentage by reference to their particular trade sector. When using the FRS, the business ignores [...]
Tax-free savings update
Although interest rates for savings generally remain low, there are still a few tax-efficient savings opportunities on offer, with increased savings thresholds taking effect from 6 April 2018. Individual Savings Accounts Broadly, cash ISAs are available to investors aged 16 and over, who are resident in the UK, and stocks and shares ISAs are available to UK-resident individuals aged 18 and over. The maximum annual investment limit has been raised to £20,000 from April 2017, which means that a couple can now invest up to a sizeable £40,000 for 2017/18. Interest paid on the investment will be tax-free for both [...]
Salary v dividend
The questions surrounding the issue of how best to extract profits from a company in a tax-efficient manner remain as popular as ever. Despite the introduction of the dividend allowance, and the personal savings allowance, extraction by remuneration and by way of dividend remain the two most widely used methods. The tax effects of these methods may be broadly contrasted as follows: Provided the amount is justifiable, remuneration is generally allowed as a deduction in arriving at the taxable profits of the company. The recipient is taxed on the remuneration through the PAYE system at the date of payment including [...]
Changes to IR35 rules confirmed
HMRC have recently announced changes to the way the intermediaries legislation (known as the 'IR35 rules') will be applied to off-payroll working in the public sector. In particular, contractors who provide their services to a public authority through an intermediary will need to be aware for the changes, which take effect from 6 April 2017. Broadly, from 6 April 2017, responsibility for deciding whether the legislation should be applied will move from the worker's intermediary to the public authority the worker is supplying their services to. Where the rules apply, the fee-payer (the public authority, agency, or other third party [...]
Changes to company carry-forward of losses confirmed
Initially announced at the time of the 2016 Budget and following a period of consultation, Finance Bill 2017 contains provisions to reform the tax treatment of certain types of carried-forward loss for corporation tax purposes with effect from 1 April 2017. Losses arising from 1 April 2017, when carried forward, will have increased flexibility and can be set against the total taxable profits of a company and its group members (referred to as the 'loss relaxation'). For all carried-forward losses, whenever they arose, companies will be able only to use the losses against up to 50% of profits (known as [...]
March 2017 Q&A
Q. Will I have to pay stamp duty land tax on a property I am about to inherit? A. Stamp duty land tax (SDLT) is generally payable on land transactions. There is a land transaction when land passes to a beneficiary under a will, or by virtue of the law on intestacy. However, the legislation governing SDLT (Finance Act 2003, Schedule 3, para. 3A) provides that the acquisition of property by a person: in or towards satisfaction of his entitlement under or in relation to the will of a deceased person, on the intestacy of a deceased person is exempt [...]
Coming soon: tax-free childcare
Plans for the introduction of a new scheme called 'tax-free childcare' were initially announced way back in the 2013 Budget. The original proposals have since been amended and the scheme is now set to be implemented during 2017. Broadly, the new scheme, which aims to help working parents with the cost of childcare, will replace the current system of employer-supported childcare (ESC) which is offered by less than 5% of employers and used by around 450,000 families. Parents will be able to open an online voucher account with a voucher provider and have their payments topped up by the government. [...]