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▌ Henton & Co Tax Blog Archive
Paying for school fees
If your company is likely to generate enough profits, get the grandparent to subscribe for shares in your company, which they then gift into a trust. The dividends paid on these shares can be used to fund the school fees. Posted by Simon Gray on 25/04/2008 13:50:13
Benefits In Kind
Provide medical check-ups for key employees, e.g. directors only. For 2008/09 these are a tax & NI free benefit in kind. Posted by Simon Gray on 24/04/2008 18:23:22
How to keep your tax rate down to 10%
Restrict your total salary and benefits to £5,435 in 2008/09 so the rest of your savings and dividend income is taxed at only 10%. You can even recover the tax you've paid at source on your bank interest. Posted by Simon Gray on 14/04/2008 17:17:20
Business Records for sole traders
There are a number of good reasons why setting up a separate business bank account is a good idea. Not least of which are that it will save you accountancy fees now and hassle with the taxman in the long-term. Posted by Simon Gray on 04/04/2008 11:54:19
Interest on Company Money
With the increase in CT rates and decrease in income tax rates from 5th April, 2008 there is in effect a 1% 'penalty' (rising to 2% in 2009/10)where surplus funds are held by the company rather than in your own name. To save this 1% tax, extract as much cash as possible from your company and invest it in your own name. The most straightforward and tax efficient way to do this is via a dividend. Posted by Simon Gray on 03/04/2008 18:08:21
off-setting the increase in corporation tax
Your company can still offset the upward move in CT rates by buying low emission cars. You can have another £1,400 in income from your company before paying higher rate tax, as the basic rate threshold increases from £34,600 to £36,000. Posted by Simon Gray on 02/04/2008 13:47:01
Capital Gains Tax on Property Sales
Remember to deduct all the costs of sale and purchase, including the estate agent's and solicitor's fees. The stamp duty you paid when you bought the property is also deductible from the sale proceeds. Posted by Simon Gray on 31/03/2008 18:29:20
interest on over paid national insurance
If you received an NI repayment between 1993 and 2005 you may be entitled to some well overdue interest. Posted by Simon Gray on 20/03/2008 17:30:40
Capital Allowances
when construction is involved, minimise debate with HMRC by getting architects, quantity surveyors, builders and others to agree to what was achieved by the spend on each item. Posted by Simon Gray on 19/03/2008 15:04:05
Pensions - Cash back on property deals
Transfer an asset into your pension scheme to get a tax rebate for you and your fund. Depending on movement in market prices, you could even buy it back later and then transfer it in again when the price is right. Posted by Simon Gray on 18/03/2008 12:36:50
New CGT rules
Sell your minority investment holding before April 6 and then buy it (or similar)back. This will bank your taper relief tax saving before it disappears. Posted by Simon Gray on 17/03/2008 11:40:34
Capital Gains Tax
A property letting business is specifically excluded from the new CGT entrepreneurs' relief. However, you are still better off than before with the new flat rate of 18% for disposals after April 6, 2008 Posted by Simon Gray on 16/03/2008 16:26:31
VAT
When dealing with a new supplier check that their VAT number is genuine by calling the VAT helpline on 0845 010 9000. They will tell you if the VAT number and address details you read out match their dastabase. You can't reclaim VAT on purchases if the supplier's VAT number is invalid. Posted by Simon Gray on 15/03/2008 16:44:22
VAT registration / deregistration
Deregistration is at, or below £62,000 and for registration, the figure is £64,000. These are totals for your latest 12 month period. If you are marginally over, check to see that you haven't missed any credit notes. Posted by Simon Gray on 13/03/2008 19:20:26
Effects of new tax rates
The tax rebate into your pension fund is reducing if you are a basic-rate taxpayer. To counteract this reduction, increase your contribution by 2.6% from April 6, 2008. Posted by Simon Gray on 07/03/2008 10:12:40
HMRC penalties
Check the date you actually received notice to file the tax return, and how much tax was outstanding on 31st January, 2008. These are both good reasons for appealing against a late filing penalty. Posted by Simon Gray on 18/02/2008 14:55:53
Inheritance Tax
Make small gifts of up to £3,000 out of your estate. If you are writing a cheque, this needs to be cashed by April 5, 2008 to fully utilise your 2007/08 exemptions from inheritance tax. Establish a regular gift pattern if you can. Posted by Simon Gray on 17/02/2008 13:49:17
Capital Gains Tax
You don't have to rush to sell your business before April 6, 2008. If the new entrepreneurs' relief applies, your 10% tax rate will be preserved. Posted by Simon Gray on 15/02/2008 17:15:07
ISAs
Don't wind up a TESSA only ISA, let it be automatically transferred to a new cash ISA. Starting in 2008/09, withdraw amounts from your stocks and shares ISAs to fund new cash ISAs each tax year. There's no tax and the interest rates are far better. Posted by Simon Gray on 14/02/2008 10:44:45
Highly Taxed Fuel
If the tax you would pay on free fuel from the company is less than teh cost of the fuel used for your private journeys, take the free fuel. But you need to recalculate this break-even point for the new tax cost from April 6, 2008. Posted by Simon Gray on 11/02/2008 10:48:23
New Rates of Interest
If you are charged interest by HMRC, always ask for a breakdown of the calculation. It has been known for their computer system to use the wrong rates. But only complain if the error is against you! Posted by Simon Gray on 10/02/2008 15:01:16
Preserving Indexation
Before April 6, 2008 transfer the asset to your spouse on a so-called no gain / no loss basis. When they sell the asset at a later date the indexation allowance you have accumulated is then available to reduce their tax bill Posted by Simon Gray on 04/02/2008 10:10:30
Holiday Homes
You have a holiday home that you wish to keep in the family rather than sell. However it will take 7 years before this gift is ignored for inheritance tax purposes. There is a way around this.....reduce the 7 year wait to 2 years by renting the property out as a holiday home. Capital gains tax won't be an issue as this disappears on death with a tax-free uplift to market value for property passed on. Posted by Simon Gray on 02/01/2008 12:06:35 |
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