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Salary or bonus?

2019-11-01T21:15:38+00:00November 9th, 2019|Categories: Blog, PAYE|Tags: , , , |

As 31 December approaches, many companies will be getting ready to tie up tax matters for their financial year-end and giving consideration to salaries, bonuses and dividends. Given current tax rates, paying a dividend rather than a salary will often be a more cost-effective way of withdrawing profits from a company. However, if the company is loss-making and has no retained profits, it will not be possible to declare a dividend, and an alternative will need to be considered. This often involves an increased salary or a one-off bonus payment. From a tax perspective, the position will be the same [...]

Losses in the first years of trade

2019-11-01T21:10:34+00:00November 6th, 2019|Categories: Business|Tags: , , |

If a new business makes losses in its first few years of trading, there may be scope to carry back those losses and set them off against other income received in the years prior to commencement of the trade. This is commonly referred to as 'early trade losses relief' and it applies to losses sustained in the tax year in which a trade is first carried on, or in any of the next three years. The provisions may be particularly useful to new businesses as they may be used to generate a cash boost in the form of a [...]

Recognising genuine HMRC contact

2019-11-01T21:08:16+00:00November 3rd, 2019|Categories: HMRC|Tags: , |

Broadly, phishing is the fraudulent attempt to obtain sensitive information such as usernames, passwords and credit card details by disguising oneself as a trustworthy source in an electronic communication. This is generally carried out by email spoofing or instant messaging, and it often directs users to enter personal information at a fake website which matches the look and feel of the legitimate site. Most people are aware of the increase in volume and sophistication of phishing campaigns in recent years, but worryingly, there has also been a notable rise in reported incidents of phone calls and/or electronic communications from [...]

Private residence relief and the final period exemption

2019-10-28T23:04:14+00:00October 31st, 2019|Categories: Blog, Property, Taxation|Tags: , , , |

Private residence relief (also called main residence relief) is well known. It prevents a liability from capital gains tax arising on any gain on the disposal of a property which has been the taxpayer’s only or main residence throughout the period of ownership. Where a property has not been the only or main residence throughout, the amount of private residence relief is reduced. It is available both for the period during which the property was the taxpayer’s only or main residence and, currently, the final 18 months of ownership (the ‘final period exemption’). Where the property has been let, [...]

Tax-free expenses for home-workers

2019-10-03T00:15:53+01:00October 4th, 2019|Categories: Blog, Taxation|Tags: , , , |

Providing certain conditions are met, no tax liability will arise if an employer makes payments to employees for reasonable additional household expenses, which the employee incurs in carrying out duties of their employment at home under 'homeworking arrangements'. 'Homeworking arrangements' are arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home. There is no requirement for any part of the employee's home to be used exclusively for the purposes of the employment. HMRC will accept that homeworking arrangements exist where: - there are arrangements between the [...]

Overdrawn director’s loan accounts

2019-08-23T16:24:33+01:00September 20th, 2019|Categories: Blog, Taxation|Tags: , , |

In a personal or family company, the lines between the directors as individuals and the company are often blurred – the director may lend money to the company when cashflow is tight and the company may lend money to the director or pay personal bills on the director’s behalf. Transactions between the director and the company are tracked via the director’s account. If the director’s account is overdrawn at the end of the accounting period (such that the director owes the company money) and the company is close, there are tax consequences to consider. Broadly, a close company is [...]

Changes to main residence relief

2019-09-02T11:42:40+01:00September 13th, 2019|Categories: Blog, Property|Tags: , , , , , |

In his Budget on 29 October 2018, the Chancellor outlined a number of changes to main residence relief. The changes affect the final period exemption and the availability of lettings relief, which applies where a property which has at some time been an only or main residence, is let out. Main residence exemption No capital gains tax is payable on a gain arising on a property which throughout the period of the taxpayer’s ownership has been his or her only or main residence. If the property has been an only or main residence at some point, the taxable gain [...]

VAT ALERT: DOMESTIC REVERSE CHARGE IMPLEMENTATION DELAYED

2019-09-10T12:41:54+01:00September 7th, 2019|Categories: Blog, VAT|Tags: , , , |

There has been a last-minute change to the start date for the VAT domestic reverse charge (DRC) for building and construction services. This was scheduled to begin on 1 October 2019. It is now delayed until 1 October 2020. The government cites concern that some businesses are not yet ready to implement the change – and possible coincidence with Brexit – as the reasons for the delay. Despite the delay, the government is still committed to the DRC and there has been no change to the detail of the legislation. The DRC changes the way that VAT is accounted [...]

Expenses that landlords can deduct

2019-08-23T16:24:28+01:00September 2nd, 2019|Categories: Blog, Property|Tags: , , |

Landlords must pay tax on any profit from their property rental business (although income from property of less than £1,000 a year can be ignored). In working out the profits, expenses are deducted from rental income. To ensure that the landlord does not pay more tax than is necessary, it is important to deduct all allowable expenses. Remember, the profit calculation is undertaken for the property income business as a whole, not on a property by property basis. Consequently, it does not matter whether the expenses incurred in relation to an individual property exceed the rental income from that [...]

The CGT annual exemption – use it or lose it!

2019-08-23T16:24:19+01:00August 30th, 2019|Categories: Blog, Taxation|Tags: , , |

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. Some assets are exempt from CGT, including assets held in an Individual Savings Account (ISA), betting, lottery, or pools winnings, cash held in sterling, jewellery, antiques, and other personal effects that are individually worth £6,000 or less. The most [...]

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