Recent years have seen HMRC stepping up its efforts to reduce what is termed the ‘tax gap’ (defined as being the amount of tax that HMRC think should, in theory, be paid in comparison with the amount actually paid) which from statistics published in February for the 2019/20 tax year is believed to be £35 …
Difference between tax planning and tax avoidance Read More »
If you operate your business through a personal or family company and extract profits in the form of dividends, it is prudent to review your dividend policy to determine whether it would be beneficial to pay a further dividend before the end of the 2021/22 tax year on 5 April 2022. It should be remembered, …
Owners of successful businesses frequently use companies as a trading medium not least because of the tax benefits that can be achieved. When the time comes for the owner to retire or reduce their involvement there are two options – sell or pass to the next generation. If the latter, then there are ways to …
Tax issues on transferring shares to family – succession Read More »
A shareholder/ director is permitted to withdraw monies from the company’s bank account as salary, bonus or dividend (or possibly a loan’). However, there are set rules that need followed with regard to dividends and it is easy to fall into a ‘trap’ if those rules are not followed. Trap 1 – Timing The payment …
The taxation of profit from furnished holiday lets (FHL) could be termed a ‘hybrid’ of taxes. The operation of a FHL is deemed to be a business and not a property income investment, and as such the usual business income and expenditure accounts are prepared. Benefits of treatment as a holiday let This treatment creates …
There is a lot of preparation involved in setting up a business, and costs will be incurred, which may be substantial. Before it is able to start trading, a business may incur expenditure on items such as: • acquiring premises; • recruiting staff; • buying stock; • setting up website; • IT costs; • advertising …
Where a landlord runs an unincorporated property business, the profits from that business are charged to income tax. Where the business is carried on through a company, the charge is to corporation tax. There are four different types of property business: • a UK property rental business; • a UK furnished holiday lettings business; • …
The government receives its tax money on different dates depending upon the type of tax charged. Taxpayers taxed under PAYE usually pay their tax bills monthly; the self employed make two Payments on account plus a balancing payment, companies pay nine months and one day after the company year end and ‘Large Companies’ (broadly those …
The self-assessment tax return for 2020/21 must be filed online by midnight on 31 January 2022 if a late filing penalty is to be avoided. The exception to this is where a notice to file a return for 2020/21 was issued after 31 October 2021, in which case the filing deadline is three months from …
Payments on account – Who needs to pay and how are they calculated? Read More »
Making Tax Digital (MTD) is a government programme to move to a digital tax world. HMRC’s stated ambition is to become one of the most digitally advanced tax administrations in the world. MTD involves fundamental changes in the way in which taxpayers keep records and report information to HMRC. MTD launched with MTD for VAT, …
Get ready for the next steps of Making Tax Digital Read More »
