Gifts and Tax

Around this time of year, I start to get questions as to what gifts can be bought for clients and staff.  Fortunately, the rules are fairly straight forward.

Director Remuneration in 2020/21

Much has changed and how Directors remunerate themselves during 2020/21 tax year is no longer a simple question of tax efficiency.  

Right now most business owners will want to hold on to any spare cash in their business or ensure its spent on investment activities rather than luxuries but if you really need a new car then its time to seriously consider a BEV.

The first budget of our new government was always going to be a big event but following the outbreak of the Coronavirus it took on much greater importance than any previous budget since the financial crisis.

With the end of the 2019/20 tax year fast approaching we’ve updated our Year end Checklist for Companies and Company Directors. 10 Quick Tips to ensure you’ve maximised your allowances and reduced your potential liabilities ahead of April 5th !

To support the science and technology industry in the UK the Government introduced what’s known as Research and Development relief. The aim of the relief is to provide companies with tax benefits for investing in research projects that may lead to significant advances in their field.

Interestingly the relief can be claimed even if the project proves unsuccessful providing certain criteria are met.

Claiming tax deductible expenses for working from home or running a home office is a legitimate way to be reimbursed for the costs incurred by you personally for things such as electricity, council tax and rent.

There are however a few things we need to be very, very careful of so we'll start with these.

Inheritance tax is set to be a very big earner for the UK government in the next couple of decades as the baby boomer generation pass down homes and other assets with significant market value.

Inheritance tax is payable at 40% of the taxable gain so your liability could easily be several hundred thousand pounds especially in the south east where property values are so high.

Let’s take a look at some of the basics relating to Inheritance Tax and how we can reduce our liability.

I get asked this question a lot because the rules and taxes relating to company cars are quite complex. If you’re considering getting a new car and wondering whether to put it through the company or not hopefully this article will help you decide.

As I continue this short series on how to reduce next year’s tax liability I’m looking this week at tax efficient investments.

Many of you will have heard terms such as VCT, EIS or SEIS but not really been aware of the considerable tax benefits on offer.

As you’re probably aware Dividend Tax rules have changed in recent years. Gone is the 10% tax credit to be replaced by a £5,000 tax free allowance and two new tax rates 7.5% for basic rate and 32.5% for the higher rate.

Basically, your dividend tax went up but the change also gave us the potential to save £1625 per year. Here’s how it can be done.

A big part of my job is advising small business owners how to extract profits from their companies in the most tax efficient way. We’ve looked at Dividends, Salary and Pensions all of which work well but you may or may not have heard of “entrepreneurs relief”.

Entrepreneurs Relief can be hugely beneficial in reducing your tax liability should you sell part or all of your business or even just close it. Let’s take a look at what it is and how it works.

Retirement planning for small business owners like you and I can take many forms. We can build truly entrepreneurial ventures that pay us a salary long after we stop working in the business itself. We can build up a cash pile in our companies and draw it down over a number of years during our retirement or we can hope to sell our businesses and retire on the proceeds.

There are many ways to plan for your future and in today’s article we’re going to look at the pro’s and con’s regarding pension contributions and how it works for both the self-employed and company directors.

By now I’m sure you’ll have come across the term “Making Tax Digital” or “MTD” as its commonly known but is it really a big deal?

The short answer is yes and it’s heading our way soon so I thought we should have a quick run through of what it means to you and how you can prepare.

As small business owners we have a number of key dates that can prove very expensive to forget.

In the first post of the new year I’ve listed just 6 dates (plus 1 I made up) that if missed have combined penalties of over £5,000 and can lead to your business being closed.

I know what you’re thinking... that’s my accountants job and you’re right, but I think you’ll agree with me that these dates should be in your diary too.

The article should take no longer than 15mins to work through and once done you’ll have the dates in your diary for the whole year ahead.

Many small business owners in the UK remunerate themselves using a blend of salary and dividends for the sizable tax savings available. The problem is most don’t complete the required paperwork to make the dividend legal and therefore leave themselves open to challenge from HMRC.