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Pre trading expenses

How to claim a deduction for pre-trading expenses As a general rule, a deduction is allowed for expenses that are incurred wholly and exclusively for the purpose of the trade. Thus, for the deduction to be available, the business must have started trading.  However, most businesses will incur expenses in setting up the business. These may include rents and other premises costs, marketing and advertising costs, the purchase of office supplies and stationery, and other similar items. These co...

January 21, 2019

Keeping things private

Any taxpayer submitting a tax return can be selected for an HMRC enquiry completely at random, and if you're unfortunate enough to be selected you could find their enquiries quite obtrusive. HMRC will sometimes request a taxpayer's private records and it's still a grey area as to whether or not they are actually entitled to access those records.  Self-employed taxpayers, or those with rental property businesses, are particularly at risk of being asked by HMRC to provide copies of private ba...

December 3, 2018

tax free christmas parties

Although tax rules include an exemption to prevent employees from suffering a benefit-in-kind tax charge on the staff Christmas party, the exemption is limited in scope and application. Don't simply assume that there will be no tax to pay because without proper planning, an unwanted tax charge could accompany any post-party hangover....

December 3, 2018

Are you a chocolate lover?

There's been a recent dispute settled about the VAT treatment of what was being described as 'allergen free' chocolate. The case was fought between Kinnerton Confectionery Limited and HMRC  and the Tax Tribunal  decided that an allergen-free chocolate bar was standard rated as confectionery and was not food for VAT. The case history: HMRC decided that Kinnerton's allergen-free chocolate bar was standard rated and raised a VAT assessment for £260,000.Kinnerton then appealed on the basi...

November 22, 2018

Commercial vehicle purchases and VAT

When you buy a new commercial vehicle, you will pay 20% VAT on the purchase price and in most cases this VAT can be reclaimed. This assumes of course, that the motor trader selling you the vehicle is VAT registered. But if you buy a second-hand commercial vehicle there are three potential VAT options: The second-hand dealer is not registered for VAT and therefore, you will not be charged VAT.The second-hand dealer is registered for VAT and only charges you VAT on the profit he is making on the s...

November 22, 2018

IR35 and off-payroll working

The government confirms that it is extending Off-payroll working in the public sector to private sector engagements from 6 April 2020. The change will only apply to engagements by medium or large end clients. A consultation on these new rules will be published in Summer 2019. PSCs working for small engagers will be unaffected and will continue to self assess under the existing IR35 rules and the government currently claims there are no plans to revisit the difference in ...

November 21, 2018

Annual investment allowance

The Chancellor picked out investment as his preferred give-away to the business sector in his Autumn Budget 2018. The Annual Investment Allowance is being increased from 1 January 2019, to £1m from the present base level set some years ago of £200,000.  The increase is due to be available for two years, until 31 December 2020.  At this later date the AIA will presumably return to the £200,000 limit. The AIA allows for the 100% write down of qualifying asset purchases against busines...

November 12, 2018

Disabled employees

Let's suppose a wheelchair user is working for a company and the company buys a wheelchair for him or her. Will there be a benefit in kind on which tax has to be paid? The good news is that no there isn't. HMRC already accept that the providing of equipment solely to carry out the duties of the employment, where private use is not significant, is exempt from a tax charge under Section 316 ITEPA 2003. But in this case the wheelchair's private use could be quite significant.   For employ...

November 12, 2018

Let property campaign

HMRC’s Let Property Campaign is aimed at property landlords who have previously failed to disclose rental income.  It opened in Autumn 2013 and was originally intended to last for 18 months. But in November 2018 there are still no signs of it being closed in the near future. The campaign is open to all residential property landlords from those that have multiple properties, to single rentals, and from specialist landlords such as student or workforce rentals, to holiday lettings. Marian W...

November 9, 2018

Dividends

To reduce National Insurance costs, shareholders of small privately owned companies, who are also working directors of the company, can structure their remuneration package to reduce their salary and make up the difference as dividend payments. This remains one of the most useful ways for owner directors of small companies to reduce their overall tax and NIC costs. Dividends are not considered to be a business cost. They don’t reduce the amount of profit assessable to corporation tax. Rat...

November 8, 2018

Choosing a business name

Ever thought of using a different name for your existing business? Here is how you can do this. ...

November 7, 2018

High Street Revival?

In his Autumn Budget delivered 29 October 2018, Philip Hammond made any number of promises.  One of these promises is intended to improve the lack-lustre retail sector in our town centres. There is no doubt that the major online retailers, Amazon and the like, have caused a major shift in the way many of us shop. As faster broadband becomes more commonplace, and the use of computers a regular home fixture, then the drift away from viewing and buying goods on a shelf to viewing pictures and ...

November 1, 2018

MTD for VAT - update

HMRC has announced that a small number of VAT registered entities are to be allowed to defer complying with the requirements of Making VAT Digital (MVD) by six months. Those being permitted to postpone entry into Making VAT Digital until 1 October 2019 are: Trusts'Not for profit’ organisations that are not set up as a company,VAT divisions and VAT groupsPublic sector entities required to provide additional information on their VAT return - Government departments, NHS Trusts, local authoritiesP...

October 24, 2018

Powers of attorney

As we may live until a ripe old age, which might involve coping with disability of one form or another, we need to think about the support we could need. Many have heard the term “power of attorney”, but not many, we suspect, will have made the investment and appointed someone trusted to act as their representative if they become physically or mentally unable to look after themselves in old age. If you become infirm and unable to make sensible decisions about your health care or finances, an...

October 22, 2018

Time to invest?

Should your business invest in new equipment or other long-term capital acquisitions at this time? No one really knows what the impact of Brexit will be - Brexiteers believe the floodgates will open  and the rest of the world will rush to buy our goods and services whereas Remainers expect recession to return. The reality could sit somewhere between these two extreme points of view. With these uncertainties present, is this a good time to consider investment in new plant and equipment or th...

October 22, 2018

Exclusivity and tax relief

For an expense to qualify as a deduction for tax purposes we have to be able to demonstrate that the expenditure was incurred “wholly and exclusively” for the purposes of business or employment. We will also need to consider if the expenditure has a 'duality of purpose'. The precedent case used to decide on duality of purpose happened way back in the 1980’s, when a barrister claimed for the cost of business suits which she insisted were only used for business purposes. To her delight, the...

October 8, 2018

What's your excuse?

Companies House have published a list of some of the more bizarre excuses submitted for the late filing of statutory accounts.  The excuses include: 'I found my wife in the bath with my accountant' 'pirates stole my accounts' 'we delivered the accounts to the betting office next door to Companies House''a volcano erupted and prevented me from filing''slugs ate my accounts''it was Valentine’s Day''my company was more successful than I thought it would be, so I was too busy to fil...

October 1, 2018

Cash is king

Most successful business owners agree that in times of trouble cash is king.Cash acts as a backstop to help you out in periods of difficult trading conditions.There are many ways you can improve cash flow, some of which are discussed here. 1. If you are registered for VAT you could use a cash accounting scheme if eligible. This scheme  determines your VAT liability based on monies received and paid rather than sales and purchases invoiced. Why pay VAT if it is tied up in debtors: money owed...

September 24, 2018

Dirty laundry??

In a recent tax case, three taxpayers claimed tax relief for the cleaning costs of work clothes amounting to £2,200 a year. HMRC disagreed. The facts were interesting. Each of the claimants worked in the drainage or sewage industry and in order to maintain personal hygiene they washed work clothing on a daily basis. So why shouldn’t they claim for the costs of keeping their work clothes clean under these circumstances ? Their claims were based on the purchase of sanitising and washing product...

September 17, 2018

Changes to self employed liability on the way?

If you are a sole trader, or in a basic partnership, and your business gets into financial difficulty, any liabilities that can't be covered by the sale of business assets might have to be settled out of personal assets. There is no automatic protection for your personal assets. Recently The Office for Tax Simplification (if only this were true!) put forward a proposal that sole traders should be able to elect for a form of limited liability status to allow them to protect their homes from any c...

September 10, 2018

MTD For VAT - latest news

Making Tax Digital (MTD) is HMRC’s plan to create an electronic link with all the accounting data of UK businesses. The ultimate goal being to draw in any data they need directly from your computer using links provided by your software. Which is fine if you are using accounts software that can cope with this process. The first implementation deadline for MTD is 1 April 2019, when all businesses registered for VAT, and with turnover in excess of £85,000, will need to start to submit returns us...

September 3, 2018

Do you have a will?

According to research around 70% of us have not made a Will. With no direction from you, do you know who will inherit your money and assets if you die without making a Will?  The legal jargon is dying intestate. Consider Frank (a random name chosen for no special reason) , 75 years old and deeply into avoidance when it comes to considering his estate. Lets now speculate that he died recently, and his estate was subject to the rules and regulations that apply in England. He is married, and h...

August 31, 2018

Free Agent Mobile

Free Agent's mobile app lets you check your business finances on your phone!  Interested ?  - see our short introduction here. ...

August 9, 2018

Technology

As if running a small business wasn't hard enough there's also the nagging and constant requirement to keep up to date with new technology. When I first started in business my 'tools' comprised of a pocket calculator (scientific I think it was - not that I ever needed to make a 'scientific' calculation), an A4 analysis pad, a set of 4 pens in different colours, a pencil, an eraser, and a pencil sharpener. Now I have a networked PC, a laptop, a smart phone, a phone system with an automated menu o...

April 30, 2018

GDPR and Companies House don't work....

Within this era of supposedly enhanced data protection and the forthcoming GDPR  why are Companies House sending out reminder letters in the post which include both the company name and the authorisation code on the same document?All it takes is for the wrong person to open this letter and they have the ability to appoint new directors, change the registered office of the company and a host of other options.How can this be right?...

April 23, 2018 Posts 1-25 of 30 | Page next
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