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Tax Reduction Posts

Tuesday February 18, 2014 at 10:35am
It sounds odd doesn’t it, pay less tax and yet increase the overall amount of tax collected. Well this concept is well known in economics and is known as the “trickle-down effect”. The idea is that economic policies that help the wealthy then trickle down to everyone else. As business is the only real driver of the economy, because this actually creates employment that generates growth, helps business and you help everyone.By reducing taxes for business and the people who run t....
Thursday October 24, 2013 at 4:34pm
Trading through a Limited Liability Partnership (LLP) can bring significant advantages, especially where one of the partners is a limited company. Indeed we set up our own Financial Planning business this way. Advantages include reduced rates of National Insurance and greater tax relief on cars. However, some accountants have obviously gone too far for HMRC. Allocating all profit to corporate partners One piece of planning was to have a corporate partner of an LLP. All of the LLP’s profits....
Friday August 30, 2013 at 10:00am
The electric vehicle has been in the news a great deal over the summer, perhaps in place of some of the traditional political news stories. There have been complaints about the £7.2 million spent on unused charging points, announcements of new VW electric cars coming onto the market and the promise of new technology that could increase the range of such vehicles.Electric and hybrid vehicles are just one of the initiatives aimed at reducing emissions and meeting government environmental tar....
Thursday February 21, 2013 at 9:00am
I attended the Peak Tax conference recently and one of the highlights was hearing Robert Venables QC speak on the well-publicised GAAR or General Anti Abuse Regime, about to be introduced in the March budget. This new regime is intended to stop abusive tax planning. Some useful comments were made. This was the second eminent QC I have listened to that advised that the GAAR would actually be greatly weakened to the point of being ineffective by being cast too wide. The more abusive tax planning i....
Thursday October 4, 2012 at 9:00am
In demanding economic times, cost management is never far from the minds of many small business owners and just a few simple steps can help avoid wasting valuable profit. Here are six tips to both reduce costs and bring in additional income. Energy efficiency - according to a recent E.on survey, few SMEs take energy efficiency seriously. Have you reviewed your energy consumption lately? Turning off lights in unoccupied spaces, switching off unused office equipment and only using the heating whe....
Thursday August 9, 2012 at 9:00am
Over the years contractors have often set up limited companies to reduce the amount of tax they pay. Recent publicity about civil servants and BBC personnel has brought the focus back on to the rules which determine whether personal service companies, limited companies or partnerships provide protection from the IR35 rules intended to prevent the avoidance of tax and National Insurance Contributions (NICs). HMRC recently published new guidance designed to help contractors self-assess their possi....
Thursday June 21, 2012 at 1:32pm
The reality of tax avoidance for many small business owners is very different to the headline hitting experience of Jimmy Carr.Owning and running a business is tough. I say this from a lifetime of working with business owners. Even the good times are not immediately obvious, it is only by comparing them to the really hard times you realise things are not so bad. Small business faces huge competition, that’s the way a capitalist society works. We do not have professions sheltered from compe....
Thursday June 7, 2012 at 10:00am
£12.6 billion – that’s apparently the amount wasted by UK tax payers who fail to take advantage of tax reliefs and benefits. What a staggering figure, and maybe because it’s such a large number it’s just too easy to fail to see how it relates to your personal tax position. Well, just by taking a few examples you’ll start to see how tax savings can really add up. Personal allowances – if you are a married couple with one earning significantly more than t....
Thursday April 19, 2012 at 1:37pm
The recent Budget saw a concerted attack on tax avoidance, especially the practices used by the super-wealthy. And when you look at some of the headline figures, it’s hardly surprising the Government saw this as a ripe target. Many were dismayed when Gordon Brown abolished the 10% tax band for the lowest earners. However, with a little creativity, 10% tax still exists – only this time for the UK’s highest earners. HMRC found that 10% is the average rate of income tax paid by th....
Thursday April 5, 2012 at 10:58am
The Budget brought excellent news for businesses involved in product innovation: an improved tax credit system will be applied to research and development. For many companies, growth in years ahead is dependent on research and development now. Tomorrow’s cutting edge products have to be devised today, but in the current economic climate investing the considerable sums of money needed for R&D is a hard and even risky decision. It can be many years before a return is made on such investm....
Wednesday March 21, 2012 at 9:31am
The news today is all about the budget. As promised in previous statements the BBC is reporting that the Chancellor will increase the personal allowance to £9,205, which might sound like good news but, read on. The personal allowance trap is the little-known area of income tax quicksand, which progressively drags you under once your income exceeds £100,000. It creates a situation where individuals pay 60% income tax on some of their income. How can this happen? It’s all down to....
Friday February 10, 2012 at 9:00am
Investors and start-ups take note. From 6 April 2012, the Seed Enterprise Investment Scheme (SEIS) offers tax breaks to individuals investing in small companies. In 2012/13, these tax breaks could be worth 78% of the investment.SEIS conditions SEIS builds on the success of the Enterprise Investment Scheme (EIS). The government's idea is to help riskier start-up companies raise the finance they need. In order to qualify: Companies must have 25 employees or fewer Their assets must not exceed &po....
Thursday September 8, 2011 at 6:46pm
It is always frustrating when a client tells me of a financial transaction they have just completed without thinking to consider the tax implications first. In many ways it is not unreasonable for clients to assume that the transaction they are undertaking is straightforward and nothing can be done to improve it. However, there are a surprising number of ways to reduce tax that most people would know nothing about. Here are some examples: Mitigate stamp duty* on property purchases It is legally....
Friday August 19, 2011 at 2:47pm
Since the Finance Act receiving Royal Ascent on 19th July 2011 there’s been something of a rush in some quarters to check the effects on tax planning advice and tax planning schemes. Luckily the two leading UK providers of tax planning services that we work with were well ahead of the game and we’re able to talk with confidence to clients about our current tax planning options. It did set me thinking however about how individuals and business owners can be sure they are getting the b....
Thursday June 2, 2011 at 10:00am
Most business owners are aware of the benefits of paying a dividend rather than salary. With no national insurance being charged on dividends you can save around 20% (net of tax relief), based on employers NI charged at 13.8% plus employees NI charged at 12%. This is a big saving. Another useful thing about dividends is that the tax is paid on 31st January following the year end rather than being deducted at source as it is under PAYE. There is more to this than the cash flow advantage. If you w....
Thursday March 10, 2011 at 10:00am
Directors’ loan accounts are used widely in private companies yet they are subject to a considerable amount of confusion, not least the tax implications arising in certain circumstances. It is very common for a director to lend money to, or borrow funds from, their company. As many directors are also shareholders in the companies they operate it is easy for them to assume that funds can be taken out of “their” company without keeping appropriate records or properly considering ....
Thursday March 3, 2011 at 10:00am
As the tax year end approaches now is an ideal time to review your tax and financial planning requirements. High earners in particular could save a considerable amount of money by implementing some tax planning ideas before 5th April this year. With the Office of Tax Simplification (OTS) carrying out a review into all tax reliefs, allowances and exemptions, and identifying reliefs, you may want to consider making sure any tax planning is executed before the 23rd March 2011 Budget, which will tak....
Monday February 7, 2011 at 10:00am
With the financial year end only a few months away now is the time to start taking last minute action to try and reduce your 2010/11 tax liability and save on tax. Business owners action plan 1. Bring forward capital expenditure. If you are considering significant capital or revenue expenditure this year you may want to see if you can bring the payments forward and claim tax relief in the accounts to March 2011. There are still generous capital allowances for purchases of equipment that qua....
Thursday January 20, 2011 at 10:50am
Interesting to read Fidelity International last week suggesting that high earners could be facing tax bills amounting to 68% of their earnings. Whether you agree with their figure, apparently calculated by taking into account tax and national insurance rate changes as well as the recent hike in VAT, there’s no doubt that under the new tax regime many high earners will face significant increases in their tax liability unless they take specialist advice and take advantage of every tax mitiga....
Monday December 6, 2010 at 9:47am
One of the changes announced in the June budget seems not to have crossed many business owners’ radar and yet I think it potentially has a substantial impact on how they might be able to reduce tax costs now and in the future. You may have spotted the change to the tax relief on contributions into pensions being reduced from £255,000 to £50,000 per annum for pensions with a pension input period ending after 5th April 2011. You might have been excused for thinking that it’....
Thursday September 30, 2010 at 7:05pm
At the Liberal party conference Nick Clegg was the latest Government spokesman to talk about clamping down on tax avoidance. He even went on to talk about avoiding tax as being an ethical question. I’d say a bigger ethical question is how our taxes are spent by government. Indeed if people felt their taxes were being spent wisely and fairly they may have more time for the ethics of high taxation. What’s all the fuss about? It is probably worth looking at the distinction between evasi....
Tuesday July 6, 2010 at 11:23am
Discretionary trusts can be a good way of avoiding inheritance tax on your capital. They can also allow you to exert control over the trust assets by being a trustee. However, there is an entry tax (or chargeable lifetime transfer) of 20% on all transfers that exceed an individual’s inheritance tax nil rate band (£325,000 in 2009/10 tax year). This can be a major obstacle where assets exceed this amount. Normally a gift into trust is still chargeable to inheritance tax in the first s....
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