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Taxation

Subcategories from this category: VAT, Corporation Tax, Newsletters (UK)

Prior to the release of the 2016 Autumn budget let's remind the new Chancellor of the Exchequer, Philip Hammond of what he said as an MP

“A taxpayer is entitled to know with certainty – be it an individual or a multinational corporation – what he may or may not do in planning his tax affairs. He is entitled to expect that his treatment be laid down in statute, not determined by administrative fiat; he is entitled to expect that another taxpayer in similar circumstances will receive treatment similar to his; and he is entitled to be protected from retrospective or retroactive legislation.”

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Some of the key changes that will impact small businesses in particular are set out below:

Taxation of dividend income from April 2016. The present 10% dividend tax credit is being abolished from April 2016. In its place an annual dividend tax allowance of £5,000 is being introduced. Dividends received will be free of further charge to Income Tax up to this limit. Above the £5,000 limit dividend income will be taxed as follows:

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©UkTaxworld
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Posted by on in Taxation

The Chancellor will have upset many buy-to-let landlords with his announcement that from April 2017 tax relief on mortgage costs is to be restricted to the basic rate of tax. Landlords of residential properties have benefited from tax relief on finance charges, such as mortgage interest for many years. The mortgage tax relief for homeowners was withdrawn 15 years ago.

In a recent report, the Bank of England was clear that the huge growth of buy to let mortgages could adversely affect the UK economy. The drive for these mortgages is being partly driven by the new pension freedoms and the current low interest rate environment.

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©Informanagement
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As announced in the 2013 Autumn Statement, capital gains tax (CGT) is to apply to non-residents disposing of UK residential property, on gains arising on disposals after 5 April 2015.

Before then CGT was not applied to non residents (other than those carrying on a trade in the UK and, since April 2013, on companies subject to the 'annual tax on enveloped dwellings' (ATED)
charge.

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©Gerhard Visagie
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Posted by on in Taxation
Young men likeliest to miss tax return

The deadline for completing tax returns is 31 January

Young men working in the communications industry are the most likely to miss the looming tax return deadline, HM Revenue and Customs figures suggest.

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©BBC News
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If you are required to file a Self Assessment tax return there are compelling arguments to support the notion that you should calculate your tax position as soon as you can after the 5 April. Don’t forget, it is possible to work out your tax position for 2014-15 and consider your planning options before you file the return. Certainly, we can undertake this for you.

By the end of May or early June 2015 you should be able to draw together most of the information.

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©UKTaxworld / Infomanagement
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Posted by on in Taxation

A new measure was announced as part of the Autumn Statement. Entrepreneurs' Relief (ER) will no longer be available to reduce Capital Gains Tax (CGT) on disposals of the reputation and customer relationships associated with a business (the 'goodwill') to a close company to which the seller is related. This will prevent an unfair advantage to owners of businesses who sell their business to a close company and benefit from a lower CGT rate. This scheme has been used by some individuals to extract funds from a business at the reduced 10% CGT rate rather than the normal rates of Income Tax and National Insurance Contributions.

The measure will apply to disposals of goodwill to a related close company on or after 3 December 2014. The change has been made alongside another measure to restrict Corporation Tax deductions when goodwill is acquired from a related party on incorporation. As stated in the explanatory note to the new draft legislation, 'together these measures remove two incentives which encourage incorporations of businesses for tax reasons rather than for the genuine commercial benefits which may follow from a business being carried on by a company rather than by an individual. HMRC has observed an increasing trend amongst professionals and specialist traders to incorporate their businesses in order to gain these tax advantages.'

©Informanagement
Tagged in: Entrepreneurs Relief Tax
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Posted by on in Taxation

Our Fee Protection Insurance provider, Taxwise reported a clear trend in the activity of HMRC, not only over the last few years but also a seasonal trend within each tax year.

The continued increase of activity from HMRC has been unrelenting, one of the key focus points for HMRC has been the SME and the Sole Trader. Many enquiries are relatively brief and produce little return for HMRC however they are clearly continuing to cast their net as widely as possible regardless of the implications on the SME economy which is continually quoted as the back bone of Britain in the economic recovery.

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©Taxwise - specialist providers of TAX FEE Protection Insurance
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Posted by on in Taxation

MPs have joined the debate over the controversial new powers granted to HMRC by George Osborne in this year's Budget    

In a report this morning, the Treasury Select Committee (TSC) criticised plans to grant HMRC new powers to recover funds directly from taxpayers’ bank accounts and said they were “of great concern”.

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©ICAEW economia - Ellie Clayton
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Posted by on in Taxation

Having spent many years building a business, entrepreneurs can still look forward to a maximum tax hit of just 10% when they sell their business, as long as they have organised their business affairs so that they qualify for the CGT Entrepreneurs’ Relief.

Basically, you will need to demonstrate that you meet certain criteria for the year ending on the date you dispose of your business. For example, if you run your business through a company:

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©Informanagement Tax newsletters
Tagged in: Accounting Start-ups Tax
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