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Here are the 12 strategies our tax experts are sharing with you as part of your free trial:
- Dividend Allowance: More Bad News On The Horizon For Shareholders The Chancellor of the Exchequer, Philip Hammond, announced in the 2017 Spring Budget that the so-called ‘dividend allowance‘, whereby the first £5,000 of dividend income is basically tax-free, would be cut to just £2,000 from April 2018. The tax revenue generated by this measure has been estimated at just shy of £900 million a year, almost immediately.
- Writing Off Directors' Loan Accounts – A Surprising Result? The age-old problem of tax planning for owner-managed businesses (OMBs), of course, is how most tax-efficiently to extract profits personally from the limited company that is carrying on the trade.
Lee Sharpe looks at the government’s plans to restrict the dividend allowance and gives planning points to prepare for this change...
- Alan Pink looks at situations in which the option of writing off an overdrawn director’s loan account could be unexpectedly useful...
- HMRC Enquiries: Should I Stay Or Should I Go? The tax return enquiry by HM Revenue and Customs (HMRC) is a possibility for virtually anyone who files a return...
- Is The VAT Flat Rate Scheme Costing You Money? The VAT flat rate scheme for small businesses is a simplified scheme which allows eligible traders to calculate the VAT that they pay over to HMRC by reference to a fixed percentage applied to gross (i.e. VAT-inclusive) turnover.
Mark McLaughlin looks at some issues to consider regarding potential meetings with HM Revenue and Customs in tax return enquiries...
Sarah Bradford examines whether the new flat rate percentage for limited cost traders means that some small businesses may be better off leaving the scheme...
- Research And Development: £2.5 Billion Claimed, Are You Missing Out? In the 2014/15 fiscal year, government statistics show that a record breaking 20,935 companies made claims for some form of R&D tax relief, with 20,000 claims being made by small and medium-sized enterprises (SMEs). The value of claims in 2014/15 was £2.45 billion.
- Traps With Directors’ Loan Accounts And How To Avoid Them It’s fairly common practice, in owner managed limited companies, for the prime movers who control the business to draw out amounts of money in lump sums or regular monthly payments. These drawings are then formalised after the end of the year, by the company’s accountants, as either remuneration, dividends, or repayment of loans made by those individuals to the company.
Lindsey Wicks provides a reminder about the tax reliefs available for companies involved in research and development (R&D).
- Alan Pink considers some common problems with drawings out of closely controlled companies – and possible solutions.
- Suspended Penalties: You’ve Had Your Chance Mark McLaughlin points out that appealing against HMRC assessments or notices to correct errors in tax returns might have an unfortunate knock-on effect.
- NICs on Directors’ Loan Accounts Some readers may wonder, what is the difference between a dividend and simply drawing down on the loan account? After all, a dividend entitlement can be drawn down from a director/shareholder’s account in pretty much the same way, practically speaking.
- Lee Sharpe looks at a potential NIC tax trap for directors’ loan accounts.
- Spouse’s Wages – Legitimate Expense Or Tax Dodge? A common element in the accounts of many self-employed individuals (and partnerships) is a deduction for the wages of family members, particularly a spouse (or civil partner). For example, in over 30 years as a tax practitioner, I have seen countless claims for ‘wife’s wages’.
- Can A Dividend Be Recategorised As Salary? Many director shareholders will be well aware that dividends tend to be more tax-efficient than salaries; the main reason for this is not strictly tax but National Insurance contributions (NICs).
Mark McLaughlin recommends that business owners think carefully before claiming deductions for salaries paid to their spouses or civil partners...
- Lee Sharpe looks at the worst possible scenario whereby dividends could be classed as salaries and thus the NIC-free status is lost.
- No Sacrifice! The New ‘Optional Remuneration Arrangements’ Rules An increasing number of employers have been offering ‘salary sacrifice’ arrangements as a way of incentivising their workforce in a cost-effective and flexible manner. Many offer a suite of benefits for their employees to pick and choose from, recognising that each employee has different needs and aspirations.
- Lindsey Wicks looks at the changes to the tax treatment of ‘salary sacrifice’ from 6 April 2017.
- Using The Family Company To Support A Student Through University Being a student can be expensive for mum and dad, as well as for the student. Most students need to find a way to supplement their maintenance loan, as this is often not sufficient even to cover their accommodation costs. Often the student will take on a part-time job, but many seek help from the bank of mum and dad! Where there is a family company in the mix, this offers a vehicle for supporting the student through university.
Sarah Bradford explores opportunities for using the family company to support a student through university...
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