Companies and self-employed businesses with a turnover exceeding £150,000 a year are obliged to prepare their accounts using the ‘accrual’ basis of calculating profits i.e. recognising the income received and expenses paid on an invoice basis, regardless of whether or when the cash is received. Such a method of calculation may result in some customers
Tax Implications of Writing Off a Bad Debt Read More »
With different rates and limits of National Insurance contributions (NIC) for the 2022/23 year, anyone who has more than one paid job or who is both employed and self-employed could easily find themselves paying too much in NIC. Problems can arise because the PAYE system does not easily cater for multiple jobs. HMRC are supposed
NIC Position if you are Employed and Self-Employed, Deferment Read More »
A tax charge may arise under the benefit in kind legislation where a company van is available for an employee’s private use. If fuel is also provided for private journeys, a separate fuel benefit tax charge arises. The van and fuel benefit charges for 2023/24 have now been announced. Van Benefit Charge The van
Taxation of Company Vans in 2023/24 Read More »
As part of the move to Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA), the basis period rules are being reformed. Despite the delay to the MTD for ITSA start date – which will now take effect from April 2026 rather than April 2024 – the reform of the basis period rules is
Basis Period Reform – Preparing For the Transition Read More »
To encourage pension savings, tax relief is available on contributions made to registered pension schemes. However, there are limits on the contributions that can qualify for relief, and punishing tax charges can apply if these limits are exceeded. Limit 1 – 100% of Relevant Earnings Tax relief on private pension contributions is capped at
Pension Payments – What Tax Relief is Available? Read More »
For a brief period it seemed that the days were numbered for the additional rate of tax following the announcement in the ill-fated mini Budget that it was to be scrapped. Like much of the mini Budget, its planned abolition was swiftly reversed. However, this was not the end of the additional rate tax saga;
Beat the Reduction in the Additional Rate Tax Threshold Read More »
Directors’ loans can be tricky from a tax perspective. Specific tax charges apply where loans to director shareholders of close companies (broadly those under the control of five or fewer shareholders) are not repaid by the corporation tax due date. This is nine months and one day from the end of the accounting period. Where
Repaying Directors’ Loans – Does the Order Matter? Read More »
Limited liability partnerships (LLPs) are a relatively new type of business structure that came into being following the financial crisis of the late 1980s, and early 1990s. In the UK, before 2000, generally, each partner was jointly and severally liable for the firm’s liabilities which meant that a partner could become liable for the negligent
LLP VA Company – Which is Best? Read More »
If used correctly, dividend waivers can be an effective planning tool, particularly where one shareholder is a higher-rate or additional rate taxpayer and others are not. However, several points need careful consideration. When a private limited company is incorporated, it is usual for the issued shares to be created as ordinary shares divided into set
Using Dividend Waivers as a Tax Planning Tool Read More »
Business property relief (BPR) is one of the more valuable tax reliefs available to business owners because it reduces the value of an estate for IHT purposes on both life and death transfers. The amount of BPR available is: 100% BPR for: an unincorporated business, such as a sole trader; an interest in an unincorporated
Business Property Relief – Be Aware of the Pitfalls Read More »
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