Tax / 90 posts found
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. [...]
HMRC’s tougher approach to offshore tax evasion
HMRC have implemented various measures over recent years designed to encourage those not paying the right amount of tax across their offshore tax affairs to make full disclosures. Whilst there has been a positive approach to the facilities provided, HMRC have recently reminded taxpayers that things are about to get even tougher for those who try to hide investments offshore. To date, over 100 countries have committed to exchange information on a multilateral basis under the Organisation for Economic Co-operation and Development Common Reporting Standard (CRS) ,which means that HMRC will be receiving new financial information about their customers from [...]
February 2017 Q&A
Q. Due to unforeseen circumstances I have recently had to sell my house and down-size to a smaller property. I sold the house for £20,000 less than I paid for it. Can I offset this loss against income from my business and reduce my income tax liability for this year? A. Unfortunately the tax law does not permit you to do this. I am assuming that you are not trading in properties and the house was either your main residence or an investment asset. Losses on the sale of a principal private residence are generally not allowable losses for tax [...]
HMRC clarify pre-registration of VAT policy
HMRC have recently published Brief 16 (2016), entitled Treatment of VAT incurred on assets that are used by the business prior to VAT registration. Broadly, the brief aims to clarify when, and to what extent, VAT is deductible and what to do if the correct treatment has not been applied. A business registering for VAT may recover tax incurred on goods and services before their effective date of registration(EDR). This allows the recovery of VAT against goods and services as long as they are used by the taxable person to make taxable supplies once registered. Services must have been received [...]
Caps on income tax relief
In general terms, providing a business is undertaken on a commercial basis with a view to making a profit, tax relief should be available for trading losses incurred. It is usually possible to offset the loss against other taxable income from the same year, or the previous year. Other taxable income may include for example, a former employment (where tax was deducted under PAYE) or a pension. This relief may be particularly beneficial for someone who is self-employed on a part-time basis. For example, where an individual earns £30,000 a year from employment, and makes a £2,000 loss from his [...]