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

Trust planning opportunity still available

Trust planning opportunity still available:

Another tax planning strategy that is still available despite rumours that it would be closed in the Budget was the CGT hold over relief when assets are transferred into or out of a trust.

This relief currently enables a non-business asset, such as an investment property, to be transferred without paying CGT. The relief applies where the transfer is subject to inheritance tax, but where the value transferred is no more than the £325,000 IHT nil rate band the transfer of the asset can take place without IHT or CGT being payable.

For example, Colin, a higher rate taxpayer, wants to gift his adult daughter Liz an investment property worth £300,000.

The property cost him £100,000 a number of years ago. If he were to transfer the property to Liz directly there could be up to £56,000 CGT payable on the £200,000 gain.

If the property is transferred to a trust for the benefit of Liz then the transaction would be immediately chargeable to IHT but covered by the £325,000 nil rate band. The resulting gain could then be held over so that no CGT is payable.

At a later date the property could be transferred from the trustees to Liz providing another opportunity to hold over the capital gain.

If this strategy may be of interest to you please get in touch. You will also need to instruct a competent trust lawyer to set up the trust.

Need more information?

Do you need more guidance on trust planning opportunities? 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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    By Katie Business Advice • Tax Advice • Tax News • Wealth Planning 0 Comments

    Regular gifts out of your income is tax efficient

    Regular gifts out of your income is tax efficient:

    One tax planning opportunity that many thought the chancellor might restrict was the exemption from inheritance tax for regular gifts out of an individual’s income. Inheritance tax is designed to tax transfers of capital so if the donor can demonstrate that the gifts are made out of surplus income then the transfers are not taken into consideration for IHT. The exemption applies where there is a regularity to the payments, such as a standing order to pay school fees. HMRC will also require proof that the payments are paid out of post-tax income and do not limit the donor’s normal lifestyle. Detailed records are required, and we can help you with a suitable spreadsheet.

    Need more information?

    Do you need more guidance on how your  income can be tax efficient? 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.

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      By Katie Tax Advice • Tax News 0 Comments

      Christmas is the time for giving

      Christmas is the time for giving:

      Many were expecting the chancellor to announce changes to inheritance tax (IHT) in his Autumn Budget, However, like capital gains tax (CGT), the rules have remained broadly the same as last year. That means that each tax year individuals may make gifts of up to £3,000 in total and that amount is not included in their cumulative total of gifts for IHT.

      Even if the £3,000 annual exempt amount is exceeded, provided it is an outright gift to an individual, there would be no inheritance tax payable provided the donor survives for 7 years.

      Note that the gift of an asset other than cash may also give rise to a capital gain and CGT may be payable where the asset has increased in value. However if you give away a business asset such as shares in your trading company it is possible to make a claim to hold over the gain so that no CGT is payable. We can of course advise you on the procedure to follow.

      Need more information?

      Christmas is the time for giving. Do you need more support with this topic? 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 and 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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        By Katie Business Advice • Tax Advice • Tax News 0 Comments

        Gift giving and tax

        This time of year we need to consider gift giving and tax. It is easy during the Christmas period to to be  generous, but most of us feel we are quite generous enough to the taxman during the rest of the year.

        If you run a business, there are different rules depending on the type of gift you give. You can find the regulations here.

        Business giving

        As an employer providing gifts to your employees, you have certain tax, National Insurance and reporting obligations.

        A Christmas bonus will be taxed, but if you give a gift, the rules are not so clear. Depending on the value of the gift, the employee may still get taxed on the value of the gift as a benefit in kind, and you may have to pay Class 1A NI.

        The Taxman does consider some small items to be trivial benefits which can be given as tax-free gifts to staff. These can include seasonal gifts such as a turkey, a bottle of wine, or a box of chocolates.

        If you are feeling extra generous this Christmas and intend to give larger gifts to your staff, then you can pay the tax and NI due on the cost of the gift, on behalf of the employee, through a PSA (PAYE Settlement Agreement) with the tax office.

        Need more information?

        We offer a wide range of services which are unique to your business and can help during the Christmas period. Gift giving and tax is complex and we are here to help. 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.

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          By Katie Tax Advice • Tax News 0 Comments

          Our list of tax-free benefits and perks for employees

          Below we have compiled a list of tax-free benefits and perks you can provide an employee. These perks are completely free of tax and National Insurance Contributions (NICs). If you have any queries on any of the points below, please do not hesitate to contact us.
          1. Equipment e.g. computers, laptops, iPods
          2. One mobile phone or a Personal Digital Assistant (PDA)
          3. A bicycle and safety equipment.
          4. Refreshments.
          5. Breakfast for early starters if available to all staff (see Lunch).
          6. Lunch and refreshments while at work.
          7. Travelling expenses to temporary workplaces.
          8. Subsistence costs when travelling on business.
          9. Annual parties and functions.
          10. ‘Trivial’ gifts & benefits.
          11. Round sum overnight allowances.
          12. Free vehicle parking at work.
          13. Interest-free borrowing beneficial loan.
          14. Employer contributions to company or employee’s own pension scheme.
          15. Pensions advice to the value of £500.
          16. Recreational benefits.
          17. Training and course fees.
          18. £6 per week for homeworking
          19. Medical and optical check-ups.
          20. Low benefit-cost on low emission car.
          21. Low benefit-cost on low emission van.
          22. A van for commuting.
          23. Relocation expenses.
          24. Reimbursement of travel costs when coming to work in the UK.
          25. Capital growth in your company via EMI options.
          26. Staff Suggestion Schemes: £25 to £5,000.
          27. Legal fees: employees no longer pay tax on legal support from their employer.
          28. Workplace charging facilities for electric vehicles
          29. Life assurance policy premiums that provide an employee with death benefit

          Need more information?

          Do you need further guidance on our list of tax-free benefits and perks you can provide an employee. These perks are completely free of tax and National Insurance Contributions (NICs). 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.

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

            Advisory fuel rate for company cars October 2021

            Advisory fuel rate for Company Cars October 2021

            As the result in recent increases in petrol and diesel prices HMRC have increased the advisory fuel rates that apply for the reimbursement of employees’ private fuel for their company cars. The same rates apply when the employer reimburses employees for fuel used for business journeys in their company car.

            The new rates apply from 1 September 2021, but you can continue to use the previous rates for up to 1 month from the date the new rates apply.

            Where there has been a change the previous rate is shown in brackets:-

            Engine Size Petrol Diesel LPG
            1400cc or less 12p

            (11p)

            		 7p
            1600cc or less 10p

            (9p)
            1401cc to 2000cc 14p

            (13p)

            		 8p
            1601 to 2000cc 12p (11p)
            Over 2000cc 20p

            (19p)

            		 15p

            (13p)

            		 12p

             

            You can continue to use the previous rates for up to 1 month from the date the new rates apply.  For wholly electric cars there is a 4p advisory rate.

            However, for hybrid cars use the equivalent petrol or diesel rate.

            Employees who have all the fuel for their company car paid for should consider reimbursing their employer for private use to avoid a private fuel benefit being charged.

            Need more information?

            Do you have a company car and need more support with the advisory fuel rate for Company Cars? 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.

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              By Katie Tax Advice • Tax News 0 Comments

              HMRC support with childcare costs

              HMRC support with childcare costs:

              With more employees going back to work after the end of CJRS furlough support, they need to start thinking about childcare if they have children.

              If they haven’t already done so employees should set up a “Tax-Free” Childcare Account to help pay towards the cost of childminders, breakfast and after school clubs, nursery fees and approved play schemes.

              For every £8 an eligible family pay into the special account the government adds £2, up to £2,000 a year, or up to £4,000 a year if a child is disabled. The scheme is available to parents or carers who have children aged up to 11, or 17 if their child is disabled.

              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.

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                By Katie Tax Advice • Tax News 0 Comments

                Diary of main tax events October/November 2021

                Please see below for the diary of main tax events October/November 2021. If you have any questions, please feel free to contact our team.

                Date What’s Due
                01/10 Corporation tax for year to 31/12/20, unless quarterly instalments apply
                05/10 Deadline for notifying HMRC of chargeability for 2020/21 if not within Self-Assessment and receive income or gains on which tax is due
                19/10 PAYE & NIC deductions, and CIS return and tax, for month to 5/10/21 (due 22/10 if you pay electronically)
                01/11 Corporation tax for year to 31/01/2021, unless quarterly instalments apply
                19/11 PAYE & NIC deductions, and CIS return and tax, for month to 5/11/21 (due 22/11 if you pay electronically)

                Need more information?

                Do you need more guidance on the diary of main tax events October/November 2021. 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.

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

                  Making tax digital for income tax postponed to 2024/25

                  Making tax digital for income tax postponed to 2024/25:

                  Having listened to stakeholder feedback from businesses and the accounting profession, the government have announced that they will introduce Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) a year later than planned, in the tax year beginning in April 2024.

                  This will give the self-employed and buy to let landlords an extra year to prepare for the digitalisation of Income Tax and also allow HMRC more time for customer testing of the pilot system.

                  The start date for partnerships to join MTD for ITSA has been put back still further to the tax year beginning in April 2025.

                  There has been no change to the £10,000 per annum gross income threshold which means that most self-employed traders and buy to let landlords will be mandated to comply with MTD for income tax from April 2024.

                  Need more information?

                  Making tax digital for income tax; do you need support with this? We offer a wide range of services which are unique to your business and have a wealth of experience with making tax digital! 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

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