Tax / 90 posts found
January 2016 Q&A
Q. What is our IHT position following a change of ownership? In 2014, my partner and I changed the ownership status of our house from joint tenants to tenants-in-common. At that time, my share of the equity was reduced from 50% to 25% and my partner's was, in turn, increased to 75%. Does this count as a lifetime gift for inheritance tax purposes (IHT)? A If you are married to you partner (spouse or civil partners), then the change will not count as a lifetime gift (a potentially exempt transfer (PET)) as it will be treated as an inter-spouse/civil partner [...]
Company cars : April 2016 increases
The financial benefits of driving a company car have continued to erode over recent years, but this benefit remains one of the most popular and potent perks of a job. In general terms, less tax will be payable on 'greener' cars, but the tax charges on lower emissions vehicles are set to rise significantly in real terms over the next few years. Two new appropriate percentage bands apply from 2015-16 for cars emitting between zero and 50gkm CO2, and between 51and 75gkm CO2, with the appropriate percentages set at 5% and 9% respectively. For cars emitting 76-94gkm CO2 the appropriate [...]
HMRC continue with so-called modernisation strategy
The recent formal announcement that HMRC will be replacing local offices with thirteen large regional centres has served to alert the general public to what tax professionals and accountants have known for some time - that to meet government cost and performance targets, HMRC must cut back on frontline staff and take forward digital interactions with taxpayers and their advisers. The announcement comes at a time when HMRC are also facing criticism over customer service issues. In its report on HMRC's performance in 2014-15, the House of Commons Public Accounts Committee (PAC) recently found that 'HMRC is still failing to [...]
Dividend allowance
The government announced at the summer 2015 Budget, that a new dividend allowance of £5,000 will be introduced from 6 April 2016. Broadly, from that date, it is expected that the existing dividend tax credit will be abolished, a new annual dividend tax allowance of £5,000 will be introduced, and the rates of tax on dividend income will change. The legislation introducing the dividend tax changes has not yet been published and the rules outlined below are therefore still subject to possible change. From April 2016, the 10% non-refundable dividend tax credit that currently attaches to dividends will be abolished, [...]
December 2015 Q&A
Q. Can I claim for the time I spend repairing my rental property? I own three rental properties and spend a considerable amount of time each year undertaking various necessary repairs. Can I pay myself say, an hourly rate, for the time I spend on the properties and claim a corresponding deduction in my accounts? A Any amounts taken from the property rental business will simply be viewed as a withdrawal of profits from the business and taxed accordingly. The HMRC Property Income Manual states 'A landlord can't deduct anything for the time they spend themselves working in their own [...]
How to Borrow From your Own Company without Falling Foul of the Law
A number of company directors receive loans from their companies, either to reinvest in the business or for personal use. Until recently the laws surrounding such a transaction have been stringent. However, from the 6th of April 2014 things have changed, albeit for the better, making it easier to take loans from your own company. This article will briefly cover the rules pre-April 2014 and then the new changes. The Rules Pre-April 2014 Previously when an employee of a company received an interest free or a very "cheap" loan it could be treated as a taxable benefit. The interest rate [...]
Looking forward to Rio
The extraordinary performance of the Brownlee brothers in the Olympic triathlon got me thinking. It wasn't their seemingly endless stamina or the fact that Alistair, after swimming 1500 meters and cycling 43 km, ran the 10km phase faster than the last man across the line in the 10k track final. It wasn't their total commitment to the sport either, their youth or their infectious good humour. It was the fact that they were already looking forward four years to the next Olympics in Rio and talking about their preparations. As businessmen, we can learn so many lessons from our great [...]
Tax Planning
I don't expect Jimmy Carr saw the funny side when Prime Minister David Cameron denounced as immoral his use of a tax avoidance scheme that reportedly cut his tax bill to just 1%. He wasn't breaking the law and his use of the "K2" scheme had been fully disclosed to HMRC. But the tide of moral indignation swamped the cheeky chappy and forced him to admit a "terrible error of judgement." The scheme had been recommended by his financial advisor and that got me thinking about our role in advising clients on the best ways to manage their tax affairs. [...]
The rebranding blues
The rebranding blues It seems I have started something big. At the end of April I wrote to my clients with exciting news about our practice. I was giving up the old blue livery for the brand new claret and grey of TLA Business Services. I wasn't doing it to start a trend. I just wanted to expand the services we provide and make better use of our skills in business planning and metrics. And I wanted my new business to reflect that change. I really didn't have anything in particular against the colour blue. And I certainly didn't expect [...]
Business Structures – which to use?
Having made the decision to be your own boss, it is important to decide the best legal and taxation structure for your enterprise. The most suitable structure for you will depend on your personal situation and your future plans. The decision you make will have repercussions on the way you are taxed, your exposure to creditors and other matters. The possible options you have are as follows. Sole trader This is the simplest way of trading. There are only a few formalities to trading this way, the most important of which is informing HMRC. You are required to keep business [...]