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Questions & Answers

March questions and answers

2019-09-02T11:22:09+01:00March 27th, 2019|Categories: Questions & Answers|Tags: , , , |

Q. My wife and I own various assets – some are held in individual names and others are held jointly. We are wondering whether we should 'equalise' the value of our assets so as reduce potential liability to capital gains tax at a future date. A. As a general rule, so-called 'equalisation of estates' is often desirable for both capital gains and inheritance tax purposes. Broadly, this means that ideally each spouse/civil partner should own assets: - amounting to at least the value of the inheritance tax (IHT) nil rate band (currently £325,000); - which, on sale, enables full use [...]

January 2019 Questions and Answers

2019-09-01T23:09:11+01:00January 24th, 2019|Categories: Questions & Answers|Tags: , , , , |

Q. What should I do about an error I accidently made on my latest VAT return? A. You can adjust your current VAT account to correct errors on past returns if the error: - was below the reporting threshold (in broad terms this is less than £10,000, or up to 1% of your box 6 figure (up to a maximum of £50,000); - was not deliberate; and - relates to an accounting period that ended less than 4 years ago. When you submit your next return, add the net value to box 1 for tax due to HMRC, or to [...]

December Questions and Answers

2019-09-01T23:08:02+01:00December 15th, 2018|Categories: Questions & Answers|Tags: |

Q. I am aware that there is to be a temporary increase in the limit for claiming Annual Investment Allowances. Are all assets eligible for the allowance? A. Unfortunately not all expenditure on plant and machinery will qualify for annual investment allowances (AIA). The most common examples of assets that are not eligible are cars and assets that have been used for some other purpose before being brought into the business, for example a personally owned computer. These assets should still qualify for capital allowances, but allowances will be given gradually over several years, rather than the full cost being [...]

November questions and answers

2019-09-01T23:07:45+01:00November 26th, 2018|Categories: Questions & Answers|Tags: , , , , |

Q. Are there any advantages to registering voluntarily for VAT even if my taxable turnover is less than the registration threshold? A. A business can register for VAT even if its turnover (total sales) is below the threshold and it may actually save tax by doing so, particularly if its main clients or customers are organisations that can reclaim VAT themselves. Say you want to purchase a new office printer for your business which costs £100 plus VAT, i.e. £120. You set the £120 paid out against your profits for income tax purposes. If you are a basic rate taxpayer [...]

October Questions and Answers

2019-09-01T22:08:58+01:00October 31st, 2018|Categories: Questions & Answers|Tags: , , |

Q. I bought my house in 1998 and I lived in it until 2000 when my employer required me to work in Spain. I returned to live in the house in 2005 and have lived there until now. I have never owned any other properties. Will I qualify for full private residence relief for capital gains tax purposes when I sell my home? A. Based on the information provide, you should be entitled to full relief. The qualifying periods of absence are: a) absences for whatever reason, totalling not more than 3 years in all b) absences during which you're [...]

June Questions and Answers

2019-09-01T22:05:01+01:00June 22nd, 2017|Categories: Questions & Answers|Tags: , , , |

Q. Before I became registered for VAT, I bought a capital item from a friend, which cost £1,000. As it was a private purchase, I did not pay any VAT. I have now joined the flat rate scheme (FRS) for VAT and have just sold the same item for £500. Should I have charged VAT on the sale and included the gross total in my calculation for flat-rate VAT? A. HMRCs VAT Notice 733 at paragraph 15.9 confirms that where input tax is reclaimed on capital expenditure goods then, when the goods are eventually sold out of the business, [...]

May Questions and Answers

2019-09-01T22:02:10+01:00May 8th, 2017|Categories: Questions & Answers|Tags: , , |

Q. My company owns a car which is used during the day by various employees for business travel only. However, since there is no overnight parking facility at our business premises, one of my employees takes the car home each night and parks it outside his house. He does not use the car privately. Am I correct in assuming that no taxable benefit arises? A. Unfortunately not. To qualify for exemption under the pool car rules, the vehicle must not normally be kept overnight on or near the residence of any of the employees. In addition, home to work [...]

April Questions & Answers

2019-09-01T12:03:16+01:00April 14th, 2017|Categories: Questions & Answers|Tags: , , , |

Q. I have recently become aware that one of my employees has been selling my stock and pocketing the cash. As the money has never gone in the till, do I have to account for VAT on it? A. The VAT treatment depends on whether or not you've actually supplied the goods, what happened to them, who was responsible for them at the time and if you've issued a VAT invoice. Generally, where goods are stolen, no supply is made by the business, and so no output tax is due. However, where goods have been sold and cash is stolen, [...]

March Questions & Answers

2019-09-01T12:02:28+01:00March 29th, 2017|Categories: Questions & Answers|Tags: , , , , |

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 [...]

February questions and answers

2019-09-01T12:00:08+01:00February 28th, 2017|Categories: Questions & Answers|Tags: , , , |

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 [...]

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