By Katie Tax Advice • Tax News 0 Comments

Inheritance tax in the spotlight

We are expecting major changes to inheritance tax (IHT) in the March Budget following two reviews by the Office of Tax Simplification (OTS) and also a report by an All Party Parliamentary Committee.

IHT is perceived as a complicated tax with numerous fairly trivial reliefs and exemptions. Currently the tax only generally applies to transfers on death and gifts within 7 years of death. The All Party Parliamentary Committee suggested that there should be a 10% charge on gifts during someone’s lifetime after an annual exemption (suggested £30,000) has been exceeded.

A more radical suggestion was the abolition of Business Property Relief (BPR) and Agricultural Property Relief which currently allow a family business or farm to be passed on without paying IHT. The OTS also recommended a review of BPR so it may be worth considering bringing forward the transfer of all, or part of, the family businesses.

More routine IHT planning would be to make use of the current £3,000 annual allowance. Gifts up to £3,000 each year are exempt from IHT. If you haven’t used your £3,000 allowance from 2018/19 you can make gifts of up to £6,000 before 6 April 2020 without the gift being liable to IHT. Also consider making regular gifts out of your income to minimise the growth of your estate that will be liable to IHT. Gifts out of your surplus income are not subject to IHT if properly structured and we can assist you in keeping the necessary documentation.

Need more information?

If you need any guidance following the major changes to inheritance tax (IHT) in the March Budget, please do not hesitate to get in touch with our team.

We offer a wide range of services which are unique to your business. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.

Contact us below

Fields marked with an * are required





    By Katie Business News • Tax News 0 Comments

    Another chancellor – big changes in the budget?

    What does a new chancellor mean? It will be nearly 18 months since the last Budget and in the meantime we will have had three different chancellors following the unexpected resignation of Sajid Javid. The early years of a new Parliament are a good time to make radical changes and many are predicting significant tax announcements on March 11.

    Rather than increasing headline tax rates it is understood that the Government are considering the abolition or restriction of many tax reliefs that we have got used to relying on. This would also have the effect of increasing tax revenue, but it is likely that the changes will impact on those who are better off.

    Need more information?

    If you are concerned about the changes in chancellor, please do not hesitate to get in touch with our team. We will do our best to help and we offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

    Our fantastic team at A&C Chartered Accountants are here to help.

    Contact us below

    Fields marked with an * are required





      By Katie Business Advice • Startups 0 Comments

      How to manage salary expectations and bonus conversations

      It is important to manage your staff’s salary expectations. Talking about money with your employees can be uncomfortable.

      Even when you have good news for an employee, discussing pay can be difficult.

      An employee’s performance is inextricably linked to their salary and bonus. However, discussing the two together can lead to the employee

      focusing only on the conversation about pay. As such, managers should discuss performance in a separate meeting prior to any discussion about pay or bonuses. This ensures that both conversations are heard clearly by the employee, and expectations can be managed, prior to any conversation about compensation.

      When a salary and bonus conversation gets tough, it is often because an employee is not getting the information they need or the manager feels that they can’t answer certain questions. Managers need to have key information to hand such as pay scales for the various roles across the business, details regarding potential for pay increases or promotions and any other key information such as company performance and how this has affected the salary and bonus figures this year etc.

       

      If a salary and bonus conversation is not going well, managers should spend more time listening to the employee in order to understand where they are coming from, what their concerns are etc.

      There is often a lot to be gained by managers who are curious when it comes to having tough pay-related conversations. For example, they might learn that an employee feels that their job has not been correctly benchmarked against competitors or the wider market.

      More often than not, a challenging conversation around salary and bonus will require a follow up meeting, giving managers an opportunity to come back with more facts and secure a positive outcome with the employee.

      Need more information?

      If you need assistance on salary expectations within your business, please do not hesitate to get in touch.  Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

      Our fantastic team at A&C Chartered Accountants are here to help.

      Contact us below

      Fields marked with an * are required





        By Katie Business Advice • Tax Advice 0 Comments

        Married couples and civil partners are encouraged to claim the Marriage Allowance before end of tax year

        HM Revenue and Customs (HMRC) is proposing to married couples and those in civil partnerships to sign up to a £250

        Marriage Allowance lets you transfer £1,250 of your Personal Allowance to your husband, wife or civil partner.

        This reduces their tax by up to £250 in the tax year (6 April to 5 April the next year).

        To benefit as a couple, you (as the lower earner) must normally have an income below your Personal Allowance – this is usually £12,500.

        You can calculate how much tax you could save as a couple. You should call the Income Tax helpline instead if you receive other income such as dividends, savings or benefits from your job. You can also call if you don’t know what your taxable income is.

        When you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple.

        Please see below and example from Gov.uk

        Your income is £11,500 and your Personal Allowance is £12,500, so you don’t pay tax.

        Your partner’s income is £20,000 and their Personal Allowance is £12,500, so they pay tax on £7,500 (their ‘taxable income’). This means as a couple you are paying Income Tax on £7,500.

        When you claim Marriage Allowance you transfer £1,250 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,250 and your partner gets a ‘tax credit’ on £1,250 of their taxable income.

        This means you will now pay tax on £250, but your partner will only pay tax on £6,250. As a couple you benefit, as you are only paying Income Tax on £6,500 rather than £7,500, which saves you £200 in tax.

        So who is eligible to apply?

        You can benefit from Marriage Allowance if all the following apply:

        • you’re married or in a civil partnership
        • you do not pay Income Tax or your income is below your Personal Allowance (usually £12,500)
        • your partner pays Income Tax at the basic rate, which usually means their income is between £12,501 and £50,000 before they receive Marriage Allowance

        You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.

        If you’re in Scotland, your partner must pay the starter, basic or intermediate rate, which usually means their income is between £12,501 and £43,430.

        It will not affect your application for Marriage Allowance if you or your partner:

        • are currently receiving a pension
        • live abroad – as long as you get a Personal Allowance.

        Can I backdate my claim?

        You can backdate your claim to include any tax year since 5 April 2015 that you were eligible for Marriage Allowance.

        Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.

        If your partner has died since 5 April 2015 you can still claim – phone the Income Tax helpline. If your partner was the lower earner, the person responsible for managing their tax affairs needs to phone.

        Need more information?

        We offer a wide range of services which are unique to your businesses who are just getting going! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

        Our fantastic team at A&C Chartered Accountants are here to help.

        Contact us below

        Fields marked with an * are required





          By Katie Business Advice • Startups 0 Comments

          Innovation Champion

          The word innovation can conjure up images of disruptive developments such as online streaming services or companies such as Uber, but you can still be an innovation champion. Fortunately, innovation doesn’t have to happen on a grand scale to make an impact in your business.

          Driving innovation in any business begins with creating and encouraging an innovative and forward-thinking culture to allow your employees to bring new and interesting ideas to the table, and put them into effect. Your employees need to feel free to contribute, to feel their contribution is acknowledged, appreciated and taken into consideration.

          You need to break down barriers between management and employees and ensure that there is regular two-way communication. Creating a team of innovation champions can help. Instead of putting innovation on the backburner until an opportunity presents itself (which it might not), task the right people in your business with driving innovation in a proactive manner. If your innovation champions have a particularly heavy workload, perhaps re-allocate some of their roles to allow them time to devote to driving innovation.

          When things go well, it is good to celebrate success. However, your innovation champions shouldn’t be afraid to make mistakes. Managers need to help employees to feel comfortable and ready to share.

          Good ideas should be recognised but equally, ones that don’t get off the ground should be applauded as something to learn from for the future.

          Driving innovation involves focusing on what you do and what products or services you sell to your customers. Customer feedback can be used to drive innovation. Your customers are generally happy to tell you what it is they want from your firm. Perhaps they want flexibility or they really value quick turnaround times. Spend time gathering feedback from your customers and share this with your innovation champions.

          From your perspective you don’t ever want to give your customers a reason to go elsewhere. Make this the central focus of your innovation strategy and task your innovation champions with finding new and better ways to keep your customers coming back again and again. Perhaps the solution to the problem lies in doing simple things a little bit better or perhaps you can utilise technology to make your product / service delivery more efficient. Focus on your customers, listen to their feedback and let that feedback drive your innovation strategy and the activity of your innovation champions.

          Need more information?

          Our team of chartered accountants have a wealth of experience in a broad range of sectors and love nothing more than helping you and your business. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. We offer a wide range of services which are unique to your businesses who are just getting going!

          If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

          Our fantastic team at A&C Chartered Accountants are here to help.

          Contact us below

          Fields marked with an * are required





            By Katie Business News • Tax News 0 Comments

            Diary of main tax events February / March 2020

            Please find below the main tax events and deadlines for February / March 2020.

            Date What’s Due
             

            1/02

            		  

            Corporation tax payment for year to 30/4/19 (unless quarterly instalments apply)
             

            19/02

            		  

            PAYE & NIC deductions, and CIS return and tax, for month to 5/02/20 (due 22/02 if you pay electronically)
             

            1/03

            		  

            Corporation tax payment for year to 31/5/19 (unless quarterly instalments apply)
            2/03 5% penalty imposed on 2018/19 income tax, CGT, class 2 and 4 NIC still unpaid at this date
             

            19/03

            		  

            PAYE & NIC deductions, and CIS return and tax, for month to 5/03/20 (due 22/03 if you pay electronically)

            Need more information?

            If you need any support with making the February / March 2020 tax events and deadlines, please do not hesitate to get in touch. We offer a wide range of services which are unique to your business and work with you to meet all of your business deadlines. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

            Our fantastic team at A&C Chartered Accountants are here to help.

            Contact us below

            Fields marked with an * are required





              By Katie Business Advice • Tax Advice • Tax News 0 Comments

              Don’t be late in paying your personal tax bill

              Make sure you are not late paying your personal tax bill. Individual’s 2018/19 income tax, CGT, class 2 and 4 NIC liabilities should have been paid by 31 January 2020.

              Note that if the balance is still unpaid at the end of February 2020 a 5% surcharge penalty is added in addition to the normal interest charge unless a time to pay arrangement has been agreed with HMRC.

              Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.

              Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income must report it in a tax return

              Need more information?

              You can get help if you don’t understand something about your tax, for example tax returns, allowances and tax codes.

              You can also get help and support with Self Assessment.

              Our team offer a wide range of services which are unique to your business and help many people with personal tax. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

              Our fantastic team at A&C Chartered Accountants are here to help.

              Contact us below

              Fields marked with an * are required





                By Katie Tax Advice • Tax News 0 Comments

                Will inheritance tax be simplified

                Another announcement to listen out for in the Spring Budget is whether the Chancellor acts on the recommendations of the Office of Tax Simplification (OTS) regarding inheritance tax (IHT). As reported in an earlier newsletter, the OTS suggested simplifying IHT on lifetime gifts including reducing the period of potential exemption from 7 to 5 years. Such a change would mean that the donor would only be required to survive for 5 years following a gift for the transfer to be exempt from IHT.

                The OTS also suggested that the conditions for Business Property Relief might be tightened up by aligning the rules with the definition of a trading company for CGT. This relief currently provides 100% relief on the transfer of shares in an unquoted company.

                The suggested change would mean that more transfers of shares would potentially be liable to IHT and may require a careful review of your plans if you are looking to pass on your business.

                Need more information?

                We offer a wide range of services which are unique to your businesses who are just getting going! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

                Our fantastic team at A&C Chartered Accountants are here to help.

                Contact us below

                Fields marked with an * are required





                  By Katie Insights • Tax Advice • Tax News 0 Comments

                  Another reason to sell property before 6 April 2020

                  Are you thinking of selling your property? If the draft legislation issued for consultation last year is enacted in the next Finance Act there will be important changes to private residence relief for disposals after 5 April 2020.

                  Firstly, the exemption for the final period of ownership will be reduced from 18 months to 9 months. This applies where a former main residence is disposed of and is intended to give relief where the owner has moved to another main residence until the former residence is sold i.e. “bridging”. Note that for many years this additional allowance was 36 months that led to a tax planning strategy referred to as “second home flipping” which HMRC are seeking to counteract.

                  The second change will be the abolition of letting relief except for situations where the taxpayer lives with the tenant. This generous relief currently provides an exemption of up to £40,000 per owner where the former main residence is rented out.

                  As a result of these two proposed changes you might want to consider disposing of a property before 6 April 2020 if you were planning to take advantage of these CGT reliefs.

                  Need more information?

                  Our team of chartered accountants have a wealth of experience in the property sector and we work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

                  Our fantastic team at A&C Chartered Accountants are here to help.

                  Contact us below

                  Fields marked with an * are required