Tax Insider 3 x Newsletter Bundle 

A common scenario, particularly among smaller businesses, is where there’s a bright individual within the workforce: someone on whom the business has come to rely; someone whose presence really makes a difference. What’s stopping them from leaving? Hopefully, they have such a good boss the thought wouldn’t enter their head; but what if they’re so good there’s a strong chance that a competitor will want to poach them? How can you stop this from happening? 

Chris Thorpe looks at some under-utilised remuneration methods potentially available to companies, in particular the enterprise management incentives scheme.

Wrong VAT shown on invoices: What happens next?

It goes without saying that businesses should always show the correct amount of VAT on their sales invoices; but mistakes sometimes happen. The VAT amount can be wrongly calculated by a mathematical error, or the wrong VAT liability can be applied (e.g. a zero-rated supply is treated as standard-rated, or a standard-rated supply treated as subject to the lower rate).

Andrew Needham looks at the consequences of showing the wrong amount of VAT on an invoice.

Special offer! Temporary extension to the trading loss carry-back rules

The pandemic has affected all walks of life, both with the obvious physical manifestations of the disease but also with the more insidious impact on the UK economy. 

Meg Saksida explains why a valuable measure for business owners was introduced and how it may affect you.

Getting reacquainted with the associated companies rules

The introduction of the 19% flat rate of corporation tax (CT) in 2017 put the topic of ‘associated companies’ on the backburner.  

Kevin Read explains why the ‘associated companies’ rules will soon be important again.

The key to SDLT relief for purchases of multiple dwellings

A very popular property investment strategy is to convert a large property into a house in multiple occupation (HMO). In fact it is fair to say that many landlords have this as their sole investment strategy given the potential financial rewards. 

Reshma Johar delves into the increasingly popular multiple dwellings relief for stamp duty land tax relief purposes.

One nil rate band or two?

The inheritance tax (IHT) allowance (or 'nil rate band') (£325,000 for 2021/22) is generally available to individuals. For married couples (and civil partnerships), the transferable nil rate band (TNRB) rules broadly allow claims for unused nil rate band of a deceased spouse (or civil partner) to be transferred to the survivor. 

Mark McLaughlin warns of a potential IHT problem when dealing with ‘nil rate band’ legacies in wills.

Q&As with Arthur Weller

Company reserves: Storing up trouble?

Many businesses are sitting on a kind of ticking time bomb in relation to tax. This is in the situation where profit and loss reserves build up because they are not being regularly cleared out by way of dividends paid to the shareholders. 

Alan Pink looks at the potential impact of allowing reserves to build up in limited companies.

Ending a company: Dealing with overdrawn shareholder/director’s loan accounts

In the current Covid-19 environment, we are seeing a lot more owner-managers liquidating ‘their’ companies. In many cases, business owners were already approaching or contemplating their intended retirement, and the impact of Covid-19 has simply accelerated these plans. 

Peter Rayney explains how to deal with overdrawn shareholder/director’s loan accounts in a winding-up scenario.

Using the extended carry back loss rules for tax repayments

Many businesses have, unfortunately, incurred losses because of the Covid-19 pandemic. Tax relief is already available for losses, and there are various ways in which losses can be relieved. 

Sarah Bradford explains how the new rules that extend the period for which losses can be carried back might be used to generate a useful tax repayment.

How inheritance tax business property relief may be ‘recycled’ in a family

Business property relief (BPR) is an important inheritance tax (IHT) relief. It shelters the value of eligible business property from IHT at current rates of 100% or 50%. The most common categories are a business (or interest in a business) and unquoted company shares, which potentially attract BPR at 100%. 

Mark McLaughlin looks at how inheritance tax business property relief may be ‘recycled’ in a family.

Q&As with Arthur Weller

Replacement of domestic items relief: Tips and traps

It does not matter whether a landlord is using the cash basis or the accruals basis; the initial purchase of domestic items and furnishings in a residential property is not available to be offset against the landlord’s rental income for tax purposes. This is confusing for many landlords, who can sometimes incorrectly assume that all purchases used ‘wholly and exclusively’ for the property are tax-deductible. 

Meg Saksida goes back to basics and explains this important relief for residential property landlords.

The tax position on the removal of a property from the property business

Over the last few case studies, I have looked at introducing property into the property business and the implications of updating, repairing and adapting property for its intended use. 

Lee Sharpe looks at the tax position on the removal of a property from the property business.

The marital home on separation and divorce: What’s the CGT position?

When a couple separate or divorce, this usually results in a change in the couple’s living arrangements. The marital home may be sold, with both parties buying new homes from their share of the proceeds; or one party may decide to remain in the marital home, buying the other party out. 

Sarah Bradford examines the capital gains tax implications of a sale or transfer of the marital home on separation or divorce.

An important exception from the higher rate of stamp duty land tax

A higher rate of stamp duty land tax (SDLT) applies (in England and Northern Ireland) to acquisitions involving a ‘higher threshold interest’ by a company (among others). This is broadly an interest in a single dwelling costing more than £500,000. The SDLT rate in such circumstances is 15% (FA 2003, Sch 4A, para 3). 

Mark McLaughlin looks at a case on an important exception from the higher rate of stamp duty land tax.

Q&As with Arthur Weller