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Tip of the day

Budget 2013 – the path to 20% corporation tax

One of the budget announcements cheered by the Smiths was that the ‘main’ rate of corporation tax is being reduced to 20% from April 2015. Not only is this great news for all of us as it will encourage multinationals to make the UK their home, it is great news for SMEs who want a structure […]

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Budget 2013

I couln’t post, yestaerday.  If I had, I was going to predict that we would hear much rhetoric and little substance in budget 2013.  To be honest, that is usually a safe prediction for any budget, and indeed any time a politician opens that mendacious hole between the chin and the nose. Much of the […]

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Capital Gains Tax Year-end Planning 2

The previous post looked at how to avoid capital gains tax.  If you are stuck with your gain, the next thing to consider is the rate at which you will pay CGT. Basic rate taxpayers pay 18%. All others pay 28%. CGT adds on top of your other income and could be chargeable at both […]

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Capital Gains Tax Year-end Planning 1

With 5th April on the horizon, now is the time to assess your capital gains tax situation. If you have 2012-13 gains in excess of the £10,600 annual tax-free allowance and you have no losses brought forward, you need to look at your likely CGT bill and what can be done to get rid or get […]

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Tax Credits Planning

In advance of the tax year-end, everyone in the tax credits system should now be looking at their household income for 2012-13 and what sort of award they are going to get. The self-employed can be clever with their accounts to boost an award, but that cleverness will need to be within their accounting year, […]

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Reason to Hire a Qualified Accountant

A recent tax tribunal case has endorsed the use of a qualified accountant as a sign that a taxpayer is making reasonable attempts to be compliant. In the Testa case, HMRC were ordered by the tribunal to suspend penalties as the taxpayer had sorted himself out with a qualified accountant to submit future tax returns […]

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Tax Year-end Pension Planning

There is a bit of a lead-time involved with getting a contribution recognised by your pension company. If you want to use pensions to reduce your 2012-13 taxable income, you will need to act soon. Everyone is entitled to 20% tax relief. You will only be interested in a pension now if there is a […]

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Owner Managed Companies PAYE Month 12

Now that we are into the final month of the tax year, attention turns to tidying up PAYE records. Company directors can have the luxury of leaving everything till the last minute. Not too sure how much to put through as a wage? Not sure how much the company can afford? Not sure how other […]

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CO2 Emissions – A Cost to the Planet and to Your Pocket

If the CO2 emissions are between 95 and 110 g/km or 130 and 160 g/km on a new car that you are after, you need to be doing the deal before 1st April if you are a company and 6th April if a sole trader or partnership. Beneath the lower threshold, there is a 100% […]

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HMRC Ruled Wrong to Ignore Effect on Business or Removal of Gross Payment CIS Status

A Tribunal has just reprimanded HMRC for not considering the effect that a withdrawal of CIS gross payment status would have on the ability of a business to continue to trade. I fear that HMRC may take this one further, but if the decision is allowed to stand, it is potentially great news for all those who have their […]

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Isle of Man Opens Its Books To HMRC

Following on from similar agreements with Switzerland and Liechtenstein, the UK Treasury has brokered a deal with the Manx state to share data on the financial affairs of UK taxapayers. HMRC have announced an amnesty of sorts to those of you who have previously undeclared income arising in the Isle of Man, offering to restrict […]

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4 New HMRC Task Forces Added

Now numbering 35, HMRC have just announced the creation of the latest 4 task forces to focus on investigating the tax affairs of fast food outlets in East Anglia, jewellers in the Midlands, anyone claiming a tax repayment in the South-East and absolutely everyone from Northern Ireland! A big sigh of relief for my clients, […]

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New Case on Home to Work Travel Goes in HMRC’s Favour

HMRC case wins are always bad for a couple of reasons. Not only does this show us a scenario in which we are unlikely to get tax relief, it also means we have another area that HMRC will be attacking with gusto as they like nothing better than a fight in which they can point to case […]

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Get VAT Up to Date by End February

HMRC have announced a clampdown on businesses who have outstanding VAT returns, saying they are going to start taking action after 28th February 2013. It is always a mistake to avoid sending in returns, but if this applies to you, make sure you get yourselves up to date before this month is out.

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Don’t Waste Your Annual Investment Allowance

The allowance for a full tax deduction on capital expenditure has risen to £250,000 with effect from 1st January 2013. You need to be very aware, though that this allowance is pro rata’d for any financial period that ends before 31st December 2013. If you have already got your cheque book out and spent big, […]

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Don’t Panic Over Unpaid Self Assessment Tax … Yet

3% is the rate of interest on unpaid tax. So, if you’ve been unable or unmotivated to meet the recent 31st January payment deadline, no need to panic. 3% a year will cost you around £1 a day for every £10,000 tax owed. Not a big cost and a lot less of a cost than […]

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Autumn Statement – Increase in Personal Allowance

This one is for those earning at or around the personal allowance. You have the Lib Dems to thank for a generous increase in the personal allowance (the threshold only above which you pay income tax) from £8,105 in 2012-13 to £9,440 in 2013-14. If you have the luxury of being able to shift profits […]

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The Autumn Statement – Big News on Income Drawdown

This one only put back what had previously been removed, but for me this is big news. Income drawdown refers to a facility to extract amounts from your pension before you have to formally ‘retire’ and entrust 75% of your pot to an insurance company by way of an annuity. How attractive you find income […]

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The New Cash Basis – Tax Credits

Yesterday, I introduced why you should be excited by the new cash basis if you are just inside or just outside of tax credits.  111% tax relief is why. Problem with tax credits is that by the time you realise you can use them, it may be too late to claim. If you are currently […]

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The New Cash Basis – Why Use It?

Yesterday was all about how.  Today is asking why. The ability to load up on payments made just before your year-end will create a one-off cash flow advantage on your tax payments.  You will get a lower tax bill, but you are only advancing a payment that you would have made at a later point […]

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The New Cash Basis

The cash basis afforded to unincorporated businesses operating under the VAT threshold will from the 2013-14 tax year be able to do something that every other business has always wanted to be able to do: to load up with stock before the year-end and get tax relief on it. Go on, you have to do it.  […]

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The New Cash Basis – Stock and Debtors

Look out for this one when it comes in in 2013-14 (it is already with you if your year-end is between April and November) if you carry stock and you often end a year with customers owing you money. Rather than calculating profits on invoices, unincorporated businesses with turnover under the £77k VAT threshold will […]

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The Autumn Statement – New Cash Basis

Apologies to those who can’t make use of the cash basis, but I am just going to love playing with this one. In the spirit of simplification, one of the new initiatives that slipped through the Chancellor’s Autumn Statement almost unnoticed was the concession, coming in from the 2013-14 tax year, that sole traders and […]

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Autumn Statement – Multiple Companies Just Got a Little More Attractive

The further cut in the ‘main’ rate of corporation tax to 21% from April 2014 would at first seem to mean little to SME’s as that rate only applies to profits above £1.5m. Where it would impact most businesses is the accompanying marginal rate of tax for profits between £300,000 and £1.5m.  HMRC have yet […]

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Autumn Statement – Pension Allowances Take A Hit

George Osborne has tightened the restrictions on the amount that we can put into pensions in any one year and in a lifetime. Before today, the limit was £50k in a year and £1.5m in a lifetime. From 6th April 2014, those limits are coming down to £40k a year and £1.25m a lifetime. Planning […]

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Autumn Statement – Capital Allowances

A bit early to give you much detail on this, only a couple of hours after George Osborne announced that the Annual Investment Allowance is to be increased from £25k to £250k. This kicks in from 1st January and will be around for 2 years. We will have to wait for detail on how the £250k […]

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One For Foreign Landlords of Holiday Lets

As of tomorrow, the 1st December, all foreign landlords will have to register holiday lets for VAT since the £77,000 VAT registration threshold for the rest of us is reduced to £0 for you. The only way to avoid VAT, is for the let to be managed by a UK-based agent.

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The Joy of a Fixed Asset

Well, sometimes you just have to sex-up a title. The title is the only bit that needs it, though.  This whole topic is pretty damn sexy with nothing on. Once upon a time, we used to try and sneak fixed assets past the taxman, asking him to believe us that new machinery was a repair […]

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Annual VAT Scheme

Open to businesses with turnover no more than £1.35m , the annual accounting scheme is one of a number that the VATman has introduced over the last few years in pursuit of simplification. They all have merit in keeping things simple, and keeping things simple is always a noble pursuit in business. There are other […]

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Knowing Which Tax to Pay Late

There has been no letup to the shortage of cash in circulation since the credit crunch first came to stay in 2008. Very few businesses can pay what they want, when they want to. If something has to give, can you delay paying the taxman? Would it help with that decision if I tell you […]

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“Unfair” Grounds for Appeal Against VAT Default Surcharge

A number of tribunal appeals brought by the oppressed taxpayer have been successful where the VAT payment was just one day late and the disproportionality of the one-day-late offence measured against the level of penalty was such that the tribunal had no option but to agree that the penalty was “plainly unfair”. This does not […]

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40% off Quickbooks 2013

I have just had an offer from Quickbooks that all I need to do is buy multiple copies and I get 40% off. If 2 or more of you want to invest or upgrade, I will get you that 40% discount.

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Should You Take Advantage of Lack of Resource at HMRC?

Today has seen a report by the National Audit Office highlighting how HMRC is unable to cope with the demands of tackling marketed tax avoidance schemes. I’m not advocating filling your boots, because it may be a signal that HMRC are going to enter a recruitment drive and thereby shut more schemes down, but it […]

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Flat Conversion Allowance

Handy one, this.  Or, at least it is up until April 2013. Now in its last few months of life, you will need to hurry but it is still possible to convert empty space above shops into a flat and have the building work qualify for full tax relief when ordinarily relief would have to […]

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Doing Up Business Premises?

Work done to the fabric of a building is devilishly difficult to get tax relief on. HMRC have a tendency to spoil our sport by denying tax relief where expenditure is on the setting where a trade takes place. There is a specific tax allowance available that affords tax relief on premises spend irrespective of what […]

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New Car? <160g/km, please

Not interested in its brake horse-power, don’t care what sort of satnav it’s got and don’t even bother telling me what colour it is. If you’re getting a new car, the only thing I want to know is the CO2 emissions. If you’re buying outright, then capital allowances are 18% < 160g/km, but just 8% >. If […]

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Long-funding Leases

Tax relief comes in the form of capital allowances if you buy something on HP. Operating leases give you tax relief on the rentals paid and finance leases provide for tax relief on depreciation and lease interest. If your asset would qualify for 100% first year allowances whether through the annual investment allowance or by […]

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Post-cessation Expenditure

Remember that if costs won’t leave you alone even after you have closed the doors on your business, it is not too late to get tax relief even if you think you have sent your final return in. HMRC will allow claims for expenses incurred post-cessation if that expenditure would have been allowed had the […]

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Pre-trading expenditure

Tax relief is available on expenditure in the 7 (seven) years prior to the commencement of a trade. It pays to have a long memeory and to be very organised at keeping thngs and remembering where you put them.

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Inheritance Tax for Charity Donors

Recent changes to inheritance tax rules mean that if you give at least 10% of your estate to charity, the rate payable on the taxable part of your estate will fall by 10%. This is not greatly attractive unless you are already set to give 9%. A £1m estate with £100k given to charity would […]

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