HMRC COMPUTER ISN’T ALWAYS CORRECT

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,...

SNAP ELECTION MEANS SHORTER FINANCE ACT PASSED

The original Finance Bill published after the Spring Budget ran to nearly 700 pages. As a result of the announcement of the General Election on 8th June a significantly shorter Finance Bill was passed with many of the more detailed and more controversial measures being deferred to a later Bill. Whether those measures will reappear...

Better to Pay Interest on Your Loan Account Than Dividends if Higher Rate Tax Payer

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...

Additional IHT Relief 2017

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...

New Tax Free Allowances Started on 6th of April

  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...

Tax Investigation Protection

Any UK taxpayer or business can be selected for an enquiry and it can cost thousands of pounds in professional fees to successfully defend your case. With HMRC committed to reaching its target of recovering £27 billion, and with 46% of its staff dedicated to enforcement and compliance, we believe that compliance activity is a...

Corporate Tax Measures

The Chancellor announced that the Government is committed to continue to have the lowest corporate tax rate of the G20 major trading nations. As already announced the corporation tax rate reduces to 19% from1 April 2017 and then to 17% from 1 April 2020. The corporation tax rate for small and medium sized companies trading...

Business Rates Relief for Small Businesses

There has been much lobbying from the small business sector to reduce business rates. The Chancellor stated that 600,000 small businesses currently benefit from small business rates relief. He also announced that no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year...

Reduction in the Dividend Allowance

  The Dividend Allowance will be reduced from £5,000 to £2,000 from April 2018. The government expect that even with the reduction in the Dividend Allowance to £2,000, 80% of ‘general investors’ will pay no tax on their dividend income. However, the reduction in the allowance will affect family company shareholders who take dividends in...

Class 4 National Insurance contributions (NICs)

It had already been announced in the 2016 Budget that Class 2 NICs will be abolished from April 2018. The government will now also legislate to increase the main rate of Class 4 NICs from 9% to 10% with effect from 6 April 2018 and from 10% to 11% with effect from 6 April 2019....