Please click on the link below for advice on saving tax in 2015/16
Our guidance note explains the changes to taxation of dividends and how they will affect limited company owners
I have uploaded our client guide to the Marriage Allowance.
Our client guides cover many of the tax and accounting issues faced by owner-managed businesses and tax-payers. Please contact us for further details.
Please be aware HMRC have not got the online registration process completely sorted for the Marriage Allowance. As explained by http://www.thisismoney.co.uk
“There is then an application process to go through and claimants are invited to complete their application online.
It has recruited three private operators to conduct ID checks for the system – Experian, Post Office and Digidentity.
This is being introduced gradually and HMRC admits there are restrictions at the moment that mean it may not work for everyone.
The restrictions you encountered are part of that. In order to transfer personal allowance, HMRC needs to verify who you are.
This requires evidence of the documents you were asked for. If you have them, HMRC says you can complete the process online in about 20 minutes.
If you don’t have these you’ll have to wait longer, although HMRC says it is taking phone applications for those who have tried the online application but hit a snag.”
Please click on the link below to see a summary of yesterday’s budget.
Please do not hesitate to contact us if you have any questions.
Here is a really useful guide to reducing your tax bill.
Please contact us if you need any further infomation
We have been having a lot of discussions internally about HMRC’s withdrawal of concession ESC B47. This means that (in an unfurnished rented property), there is no tax deduction available for the replacement of carpets and free standing white goods.
It makes sense, therefore, to take out an accidental damage insurance policy for these sort of items. The cost of the insurance policy will be tax-deductible.
Other alternatives include – making the tenant responsible for replacements and considering furnishing (to HMRC’s definition) an existing unfurnished property thereby getting the wear and tear allowance.
Please feel free to contact us for further advice.
The introduction of the £2,000 employment allowance for the 2014/15 tax year, brings some added complications and opportunities regarding the amount that the Boards of Limited Companies approve as Directors’ salaries.
To re-cap – for the year from 6th April, 2014, most employers will be able to reduce their Employers National Insurance Contributions (NIC) (levied at 13.8% on monthly pay over £663) by a maximum of £2,000 for the year.
There are 2 options.
1/ If the company has other employees and is able to use all the £2,000 Employment Allowance in the year against employer NICs for them , then the best route is for the Company to pay the Director £663 per month. The Company votes dividends to the shareholder/directors to top up their earnings from the company. Care should be taken to avoid any higher-rate tax on the dividend. We can advise you based on your individual circumstances.
2/ If the company has NO other employees, then we suggest that the company pays a one-off bonus to each Director of £2,044 in the last quarter of the 2015 tax year (between 6th January and 31st March 2015). This uses all of the Director’s 2014/15 personal allowance to reduce company profits (saving a further £408 Corporation Tax). The Director pays £245 Employee’s NIC so there is a net benefit of £163. The Company votes dividends to the shareholder/directors to top up their earnings from the company. Care should be taken to avoid any higher-rate tax on the dividend. We can advise you based on your individual circumstances.
If you are interested in option 2, we strongly suggest you contact us as there are some pitfalls that need to be avoided.
In both the above cases, please consider the flexibility offered by a rent agreement between the company and Director for use of home for business purposes (please see my earlier article).
Please note that Directors under IR35 will not be able to claim the Employment Allowance against their deemed salary, but if they actually pay themselves through the payroll under RTI they can.
Where a Director takes a monthly salary of £663 and has no other income, dividends of up to £30,500 can be received without additional income tax being charged.