To the latest edition of Tax Tips & News, our monthly newsletter designed to bring you tax tips and news to keep you one step ahead.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.
Please contact us for advice in your own specific circumstances. We’re here to help!
Using the SEIS
The seed enterprise investment scheme (SEIS) is designed to help small companies raise modest amounts of funding (up to £150,000). The investor must subscribe for new shares issued by the company (not buy them from another shareholder), and in return he can claim income tax relief equal to 50% of the cost of those shares. – click here to read more >>
Earn-out Payments on Business Sales
When you sell a business, you may receive some of the consideration up front and another payment later if the business meets certain targets, that later payment is called an ‘earn-out’.
How this earn-out is taxed can be tricky to work out, as it depends on a number of factors. For example: is the earn-out to be paid in cash or as shares or bonds, or is there a cash alternative to the offer of shares/bonds? Can the value of the earn-out be determined at the time the business was sold, or not until some later event has occurred? – click here to read more >>
VAT and Indirect Exports Change
When you export goods to a country outside the EU the goods are ‘zero-rated’ for VAT purposes, which means you do not apply VAT to the value of the goods. However, you need to have the paperwork to prove that the goods left the UK. – click here to read more >>
New RTI Messages
Real time information (RTI) is all about one-way communications with HMRC. Your payroll software sends reports (called FPS or EPS) to HMRC about the deductions made from your employees’ pay, and normally you hear nothing back. – click here to read more >>
Experts warn that small business VAT reporting liabilities could escalate if proposed EU changes are introduced
Do you think your small business can get along fine without the help of your local accountant? Are you reasonably confident preparing and filing your quarterly VAT returns? Well, things may be about to change if the European Union gets its way, and unless you’re supremely confident in your administrative and accounting capabilities, things could be about to get extremely complicated. Proposed EU laws could mean that filing VAT returns for small businesses could become extremely complex and time-consuming. – click here to read more >>
Small business tax advice: SMEs could benefit to the tune of £2,000 per year with the help of a new government Employment Allowance
Britain is a nation of shop keepers and small businesses, so we’re constantly told. It’s these small businesses that are the lifeblood of our economy. They drive growth and bring prosperity to the nation even in times of recession. But how do you encourage more entrepreneurs to take the plunge and start up new businesses? Well, as accountants we know that the best way of doing this is by offering incentives and making the prospect of running a small Start-Up more appealing. So Steven Glicher accountant are encouraged by news that the government is set to launch a scheme that will provide such an incentive. From April, 2014, the coalition government is introducing a new Employment Allowance scheme that will cut National Insurance contributions and could benefit as many as 1.25 million SMEs. – Click here to read more >>
November Question and Answer Section
Q. After purchasing a residential property to let, I spent a considerable amount on kitchen refurbishments and a new central-heating boiler, before letting it for the first time. Can I claim those costs against the rents for tax purposes?
A. It depends on whether the property was capable of being let before you carried out those refurbishments. If it was legally safe to let it – then the expenditure was probably ‘repairs’ and is allowable. If the property was in such a bad state that it could not be let to anyone, even on a tiny rent, the costs are likely to count as improvements and will not be allowable. We need to look at the detail of what work was done, and the context of your entire lettings business before we give you a final answer.
Q. The Taxman has written to me saying I missed a small pension worth about £800 a year from my last tax return. He hasn’t noticed that I also missed it off the last four. What should I do?
A. Best advice is to come clean immediately and tell the Taxman about all the missing amounts of pension income for all tax years. There may not be more tax to pay if the pension provider has already deducted tax at your marginal tax rate. However, if there is higher rate tax to pay there will also be interest due at 3% and possibly a penalty. By confessing all without delay you can qualify for a reduced penalty, down to say 15% of the tax due. We can help you with those penalty negotiations and may be able to get it suspended for up to two years.
Q. I’ve just won a sports car! The snag is the prize is only available from the company’s headquarters in Seattle, USA, although there is a cash alternative. Are there any tax implications of accepting the prize in the form of the car or as cash?
A. Most states in the USA impose a tax on competition prizes, but the awarding company may allow for that. There is no similar tax in the UK. If you take the car and ship it back to the UK there will be import duties and VAT to pay, so the cash alternative may be more tax efficient.
November Key Tax Dates
2 – Last day for car change notifications in the quarter to 5 October – Use P46 Car
19/22 – PAYE/NIC, and CIS deductions due for month to 5/11/2013