Category: Tax Advice

The Annual Tax on Enveloped Dwellings (ATED) was introduced in April 2012 and is charged where certain residential properties are owned within a corporate structure. This tax not only catches UK properties owned by wealthy oligarchs via offshore companies but also applies to UK resident companies. Originally the charge only applied where the value of the property exceeded £2 million but that threshold has been subsequently reduced to £500,000.

The charge for 2022/23 starts at £3,800 and rises to £244,750 where the property value is more than £20 million.

Properties need to be revalued every five years and the latest valuation date is 1 April 2022. With significant increases in property values in recent years this may mean that more companies may be required to complete an ATED return.

There are numerous exemptions and reliefs from ATED but companies still need to submit an ATED Relief Declaration Return.

MAIN ATED RELIEFS

The main situations where there is a relief from ATED are where the property is:-

• let to a third party on a commercial basis
• being developed for resale by a property developer
• owned by a property trader as the stock of the business for the sole purpose of resale
• a farmhouse occupied by a farm worker or a former long-serving farm worker

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.

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Reimburse private fuel for your company car?

Unless there is full reimbursement of fuel provided for the private use of a company car there is a benefit in kind charge based on a fixed figure of £24,600 which is multiplied by the CO2 emissions percentage that is used to calculate the company car benefit for that vehicle.

For a high emission car that percentage can be as high as 37%, resulting in a benefit in kind charge of £9,102 and an income tax bill of £3,640.80 for a higher rate taxpayer. Even with current fuel prices, that would be an awful lot of private mileage, so the employee should consider reimbursing the employer using the HMRC approved mileage rates by 5 July 2022 for 2021/22.

Do you need further guidance on private fuel and own a company car? 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.

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The 130% super-deduction for companies that invest in new plant and machinery applies where the expenditure is incurred between 1 April 2021 and 31 March 2023. Many companies recovering from the coronavirus pandemic have not had the resources to commit thus far and the war in Ukraine may have made them reluctant to invest until the political and economic situation stabilises. Thankfully the special tax relief announced in the Spring 2021 Budget will be available for expenditure up until 31 March 2023 potentially saving £247 for every £1,000 invested in new equipment.

It is hoped that the current £1 million Annual Investment Allowance (AIA) will continue to be held at that level once the super-deduction ends. Note that the AIA is available to unincorporated businesses as well as limited companies and for second hand as well as new equipment.

Do you need further support with the super-deduction tax relief? We offer a wide range of services which are unique to your business and 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.

Trading losses – carry back or forward?

In the March 2021 Budget, it was announced that the normal one year carry back for trading losses would be extended to three years. That means that many businesses that have made losses during the COVID-19 pandemic may be able to obtain a repayment of tax paid in that earlier three-year period. This enhanced carry back applies to unincorporated businesses as well as limited companies and will provide a much-needed tax refund.

However, with the corporation tax rate increasing to 25% from 1 April 2023 for profits over £250,000 it may be more beneficial to carry the loss forward. Note that the marginal rate is 26.5% where profits are between £50,000 and £250,000 a year. So, there is a trade-off between a tax refund now and a possible bigger tax saving in the future.

For the enhanced carry back the company’s the loss-making accounting period must end between 1 April 2020 and 31 March 2022. For unincorporated businesses the trading loss must be incurred in 2020/21 or 2021/22.

For corporation tax purposes, it is no longer necessary to finalise the company accounts and file the CT600 corporation tax return to claim loss relief where the loss is no more than £200,000. HMRC will however require evidence of the loss to process the claim such as management accounts for the period.

Do you need further guidance on Trading losses? 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.

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With the increases in National Insurance Contributions (NIC) from 6 April 2022 many employees and their employees are considering changing their entitlement to their contractual salary for either tax free benefits in kind such as additional contributions into their pension, or benefits in kind that have a low tax and NIC charge such as an electric company car. This needs to be done with care and requires a change to the Contract of Employment.

From 6 April 2017 where a benefit is given as part of optional remuneration arrangement (salary sacrifice), the rules for valuing the amount of the benefit treated as earnings from the employee’s employment has changed.

Where a benefit is given under optional remuneration arrangements, the general rule is value of the benefit treated as earnings from the employment is the greater of the amount of:

• salary or cash pay given up by the employee in return for the benefit
• the benefit treated as earnings from the employment under the normal rules, ignoring any amount made good, as outlined in HMRC booklet 480

The 5 exceptions to this rule are:-

• employer pension contributions;
• employer-provided pension advice;
• employer-supported childcare and provision of workplace nurseries; and
• cycles and cyclist’s safety equipment
• Ultra – Low (< 75g) CO2 emission cars

Many employers have started offering zero or low emission cars as an alternative to additional or reduced salary entitlement. The normal optional remuneration arrangement rules do not apply to cars with CO2 emissions of 75 grams per kilometre (km) or less. Cars with CO2 emissions of 75 grams/km or less continue to be taxed on the cash equivalent of the benefit worked out under the normal rules without having to make a comparison with the salary foregone.

Example

An employee is given an electric car which is available for their private use under an optional remuneration arrangement in which the employee gives up salary of £150 per month, or £1,800 per year. The car has zero CO2 emissions and has a list price of £40,000 and a cash equivalent value of £800 (£40,000 x 2%). The relevant amount to be treated as earnings from the employment is the £800 cash benefit because its CO2 emissions are no more than 75 grams.

We offer a wide range of services which are unique to your business and work with you to offer tax efficient solutions. We understand that the rise in National Insurance Contributions in 2022 is a huge concern for businesses and we are here to help. Our team of chartered accountants have a wealth of experience in a broad range of sectors 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.

Please find below our list of main tax events March/April 2022. If you have any questions, we are here to help you meet these deadlines.

Do you need further support with the tax events March/April 2022? We offer a wide range of services which are unique to your business and work with you to make sure you meet these deadlines. 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.

Company cars – Advisory reimbursement rates

These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 March 2022. Where there has been a change the previous rate is shown in brackets.

Note that for hybrid cars you must use the petrol or diesel rate. You can continue to use the previous rates for up to 1 month from the date the new rates apply.

Do you have a company car? We offer a wide range of services which are unique to your business and have assisted many of our clients with guidance on company cars and the reimbursement rates.  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.