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Business Tax Insider
Business Tax Insider
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Brand NEW business tax saving magazine.
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Here is what our tax experts are sharing with you in this month's magazine:
- Company Shareholders - How to Use Rights Issues and Bonus Issues of Shares
Private companies invariably start their lives with a nominal number of shares of a nominal value. This enables the company to start trading, but as the company evolves that number may need to be increased for a variety of reasons... - Could your Company be Claiming Research & Development Tax Relief?
My firm recently took on a new client in the engineering industry, and I was brought in to discuss possible tax planning ideas with them. When I mentioned ‘R&D’ (Research and Development), the engineering director said they didn’t do much R&D – he described his company’s work as ‘solving practical problems’. To cut a long story short, after much discussion we are now working on a claim for R&D tax relief that we expect to reach well over £200,000, giving a tax repayment of at least £50,000 to a company that were convinced they did not do any R&D... - Shareholder Exit Strategies - Company Purchase of Own Shares v MBO
Where a private company shareholder wishes to exit as a shareholder (and usually also as a director/employee) the first notion which usually springs to mind is for the company to purchase the shares, which the Companies Act 2006 permits provided that certain conditions are met and procedures followed... - How to Obtain a VAT Clearance from HMRC
A business can telephone the National Advisory Service on 0845 010 9000 to ask for information and guidance from HM Revenue & Customs (HMRC). That is useful for simple matters such as checking a VAT number quoted (incidentally, always state the name and address of the other business as well as the number because the full details can then be confirmed)...
- Tax Insider: Tax Tips
- Tax Insider: Your Property Tax Questions Answered by Arthur Weller
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I wholeheartedly recommend the ‘Tax Insider’ to anyone who is interested in legitimately minimising their tax bill.
Dr Bennie Mallett, General Practitioner
Business Tax Insider will benefit business owners, company directors and entrepreneurs.
Each month our experts reveal tax saving strategies covering the whole business life cycle including:
Each month our experts reveal tax saving strategies covering the whole business life cycle including:
- Tax saving tips for early years of business
- How to maximise business expenses
- How to maximise capital expenditure
- Extracting profits from a company
- Tax implications of employing people
- Tax efficient business exit strategies
- Plus more…
- Corporate Partners – Current tax Advantages(May 2013)
- Fixtures in commercial property – what has changed?(December 2012)
- Self Employed and Trading Profit Tax and Planning: Part 2(December 2010)
- Self Employed and Trading Profit Taxation: Part 1(November 2010)
- How to Use Dividend Waivers to Save Tax(November 2010)
- How to Save Tax with an ‘EFRBS’(September 2010)
- Tax Savings for Entrepreneurs(September 2010)
- How to Buy the Trade and Assets of a Business Without VAT(August 2010)
- Fighting Property Values with HMRC(August 2010)
- How to Claim Relief for Trading Losses - And Don’t Forget Class 4 NIC!(August 2010)
- Is Stamp Duty Due on Swap?(October 2011)
- Can HMRC Claim Tax on Gifted Properties?(October 2011)
- Can a UK Company Purchase an Italian Property?(September 2011)
- Are Lease Extension Fees Allowable?(September 2011)
- Will I Have to Pay Capital Gains Tax (CGT)?(September 2011)
- Can I Claim for Expenses Incurred Before Starting Up My Company?(September 2011)
- What Costs are Allowable as Pre-Trading Expenditure?(September 2011)
- Do My Partner and I Have to Split Profits 50:50?(September 2011)
- Am I Eligible for a Tax Refund?(September 2011)
- Can I Use My Daughters’ Personal Allowances?(September 2011)
Can I Claim for Expenses Incurred Before Starting Up My Company?
I am in the process of getting things in place to start my own business and have a number of items already that I can use which were bought a few years ago. Can I use these (to save on paying out again for something already in my possession) and claim them back against my income tax in my first year trading? As they were bought about 3 years ago (before I considered turning a hobby into a business) I no longer have receipts for these items. Can I still claim the expense back?
Arthur Weller Replies:
Have a look in the HMRC Business Income Manual at pages BIM46351 and BIM46355:
You can see that if revenue expenditure is incurred within seven years of starting the trade, it can be claimed on the day trading started, if it would have been allowable if incurred after trading had started. However it seems to me that you are asking about capital expenditure, which is specifically excluded from this treatment, if you look there. It appears to me that the correct treatment is to calculate the market value of the assets on the day you started trading and introduced them into your business (which may be somewhat less than three years ago when you originally purchased them), and calculate capital allowances accordingly.
If you are asking about revenue expenditure, I would still use market value of the items on the day you started trading. This situation is not the same, but nevertheless very similar, to that which can be found in the HMRC Employment Income Manual pages EIM21660 and EIM21661:
Here it explains that if the taxpayer charges the business more than the market value for the introduction of an asset then the taxpayer is subject to income tax on the difference.
- Agree The Split Of Partnership Profits And Losses(March 2013)
- Capital Allowances Must Be Claimed(February 2013)
- Claim A Deduction For Training Costs(January 2013)
- Use Actual Costs Rather Than Fixed Rates Where These Are Higher(December 2012)
- Tax-Free Benefits And Expenses(November 2012)
- Pay PAYE Quarterly(October 2012)
- Terminal Loss Relief: Individuals(September 2012)
- Choose The Method Of Relief For Early Year Losses(August 2012)
- Bonus Or Salary?(July 2012)
- Choose The Right Finance Option For Your Business(June 2012)
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