Tax planning needs a ‘holistic’ approach

Holistic tax planning might sound airy fairy but it makes a big difference to the amount of tax you pay. Company directors take note!

Key Budget 2011 Predictions – What will happen to tax?

We predict business and personal tax announcements in the coming Budget 2011. Overall whatever we get, business owners really need a ‘roadmap’ to understand how the tax system will develop over the coming years. Then they can start making planning decisions for their business. In particular having a long range view will help with longer term workforce planning, deciding whether to hire new staff, where to locate offices and important investment decisions.

Headline tax rates are never what they seem

If you’re a Sunday Times reader, you could not fail to notice the article in January about footballers and their tax affairs. This highlighted how many footballers have been avoiding the 50% tax rate by using image rights companies into which the majority of their earnings are paid and then using their director’s loan account to withdraw income. Apparently, it is possible to pay a rate of just 2% by following this strategy. We wish it were that straightforward!

Tax planning for £100K plus earners and tax efficient gift ideas

With Christmas almost upon us, you may be looking for some alternative gift ideas. Here at RJP, the Surrey based tax specialists, we’ve put together a Christmas wish list which see you through well into January and tax return time!

A home office can be a very tax efficient strategy for business owners

HMRC’s definition of fixed costs makes it more straightforward to claim for expenses when working from home but this applies to sole traders and partnerships only – not limited companies or employees – and qualifying criteria must be met.

Business owners with a limited company can also claim for a home office by ‘renting’ the designated room at market rates. They may also be able offset this profit against any property investment losses and therefore reduce corporation tax.

Read the full article to see how you can save tax

1 in 3 Surrey taxpayers could receive “tax error” letters

1 in 3 Surrey taxpayers could receive “tax error” letters

RJP’s tips for dealing with notifications of incorrect tax paid: Any challenges to tax underpayment will be carefully scrutinised; Reimbursements for tax overpayments are payable as lump sum
Beware of phishing scams; HMRC never use email to notify or refund taxpayers.

Tax free perks could be a summer bonus for staff

Many tax breaks are swiftly disappearing, as the Government’s reforms begin to take shape. What perks can you offer staff that are tax efficient? They can also be beneficial for your business…..

Britain gets its first decent Budget for business in years!

Yesterday’s Budget was the first decent budget for entrepreneurs and business owners for some time and it’s exactly what the country needs to help rebuild economic activity.

Coalition tax policies unveiled mark the end of ‘E’ Relief

Last week, the new Conservative LibDem coalition government was announced amid a flurry of guarded excitement and scepticism. The coalition has been quick to stamp out suggestions that their political differences will be too marked to produce effective financial policy and so far, the speed with which agreements have been reached is impressive and very positive in terms of their quality.

Act quickly to take advantage of double “E” Relief

I wrote this article for the EBA blog and thought I would post it now because it’s attracted some comments….a great tax planning opportunity for some….so read on if you are a business owner…..

There weren’t many announcements in last month’s Budget that we didn’t already know about, especially if you are one of those affected by the 50% tax rates. But there was one rather nice surprise in the form of doubled entrepreneurs’ relief.

Aside from the previously announced NI increase or so called “jobs tax”, one of the other controversial changes made by this Government was, in 2008, to abolish the taper relief previously introduced as an incentive for entrepreneurs. When entrepreneur’s relief was announced as a replacement, the £1m was considered rather a paltry amount. So, when in last month’s Budget, the lifetime limit on gains qualifying for entrepreneurs’ relief was increased from £1 million to £2 million for disposals made on or after 6 April 2010, it was welcomed as a positive measure.

This is especially true because it has been largely considered to be a vulnerable relief, and, in fact, most advisers anticipated wider changes to capital gains tax to better reflect income tax rates in the Budget. But this didn’t happen.

In view of this, many business owners will be seeking to trigger capital gains in order to utilise this relief sooner rather than later. And those who have already utilised the relief to its previous limit of £1m may have an opportunity to take a second bite of the cherry.

Whilst the outright sale of a business or company shares is the obvious way in which to trigger a qualifying capital gain, other things to consider are as follows:

• Incorporation of non-incorporated businesses – this may trigger a capital gain following the valuation of the goodwill of the business and subsequently, depending on taxation rates involved, could also provide a more flexible and beneficial means of managing personal income levels in the future;
• Sale of a number of shares or the granting of EMI options over personally held shares;
• Inheritance tax planning by considering gifting shares.

However it is important that steps are taken quickly to secure any tax planning opportunities that have arisen following this legislation. Should there be a change of Government after May 6th,, any capital gains tax related tax relief may be subject to change.”