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ELECTION ON 8TH JUNE – WHAT’S IN THE MANIFESTOS?

Blog, Budget 2017, Tax

The decision to call a snap General election on 8th June caught many of us by surprise. The various political parties have been rushing out their manifestos making all sorts of promises if elected. These documents are becoming increasingly important. Bringing in measures contrary to a manifesto, like the increase in Class 4 National Insurance […]

HMRC COMPUTER ISN’T ALWAYS CORRECT

Blog, HMRC, Tax

HM Revenue and Customs have acknowledged that their software and some commercial software used by accountants doesn’t always come up with the right amount of tax payable! You may have seen this reported in some newspapers such as the Daily Telegraph. This arises because the tax system of different income tax personal allowances, dividend allowances, […]

STAMP DUTY ON SECOND HOMES

Blog, Money Matters, Tax

Since 1 April 2016 there has been a 3% supplementary Stamp Duty Land Tax (SDLT) charge payable on the purchase of second and subsequent residential properties costing more than £40,000. This was clearly aimed at buy-to-let investors as well as those buying second homes. Note that this additional 3% charge does not apply where the […]

BETTER TO PAY INTEREST ON YOUR LOAN ACCOUNT THAN DIVIDENDS IF HIGHER RATE TAXPAYER

Blog, Budget 2017, HMRC, Tax

Ever since the introduction of the 7.5% increase in the rate of tax on dividends in April 2016, it has been more tax efficient for owner managed business shareholders to pay interest on their loans to the company rather than pay themselves dividends. The interest would be deductible against the company’s profits saving corporation tax […]

SHOULD WE GIVE SHARES TO CHILDREN AND PAY £5,000 DIVIDENDS TAX FREE?

Blog, Budget 2017, HMRC, Tax

The introduction of the £5,000 tax free dividend allowance has tempted many family company shareholders to give shares to other family members so that they can be paid £5,000 a year tax free. (Note that this allowance reduces to £2,000 from 6 April 2018). Such a strategy needs to be carefully structured as there can […]

NEW TAX FREE ALLOWANCES STARTED ON 6 APRIL

Blog, Budget 2017, HMRC, Tax

The £5,000 dividend and savings allowance of up to £1,000 have been with us since 6 April 2016. There are now two further allowances available since 6 April 2017. There are concerns that these have not been widely publicised and not properly understood. The first £1,000 allowance is against self-employed income. This is a deduction […]

ADDITIONAL IHT RELIEF FOR PASSING ON FAMILY HOME STARTED 6 APRIL

Blog, Budget 2017, Estate Planning, Tax

For deaths on or after 6 April 2017 there is now an additional £100,000 inheritance tax (IHT) allowance where the family home is passed on to direct descendants. This was originally announced on 8 July 2015 and that date is relevant where the deceased has downsized to a lower value property. This additional relief increases […]

DOES THE NEW 16.5% VAT FLAT RATE PERCENTAGE APPLY TO YOUR BUSINESS?

Blog, Budget 2017, HMRC, Tax

The new VAT flat rate of 16.5% started to apply from 1 April 2017 for “limited cost traders”. A “limited cost trader” is one using the VAT flat rate scheme but where the VAT inclusive cost of goods for a year is less than 2% of VAT inclusive turnover, excluding certain specified items. Those specified […]

U-TURN ON SELF-EMPLOYED NICs – FOR NOW

Blog, Budget 2017, HMRC, Tax

In his first Budget on 8th March, the new Chancellor Phillip Hammond announced that he would  level the playing field between employees and the self-employed by increasing Class 4 National Insurance Contributions (NICs) from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019. His justification is that the self-employed […]

YEAR END CAPITAL TAX PLANNING

Blog, Business Tips, Estate Planning, HMRC, Investments, Tax

Have you used your 2016/17 £11,100 annual capital gains exemption?  Consider selling shares where the gain is less than £11,100 before 6 April 2017. Also, if you have any worthless shares, consider a negligible value claim to establish a capital loss. You may even be able to set off that capital loss against your income […]