By Katie Business Advice • Tax Advice 0 Comments

Consider other tax efficient investments

If you are looking for tax efficient investments opportunities, have you considered the Enterprise Investment Scheme (EIS)? These investments in certain qualifying companies allow you to set off 30% of the amount invested against your tax bill as well as the ability to defer capital gains tax (CGT) until the shares are sold.

An even more generous tax break is available for investment in a qualifying Seed EIS company where income tax relief at 50 per cent is available and in addition it is possible to obtain relief against your 2019/20 capital gains. Shares in EIS and Seed EIS companies are risky investments and you should seek specialist advice before investing.

30% income tax relief is also available by investing in a Venture Capital Trust or by investing in a qualifying Social Enterprise.

Need more information?

If you need further guidance on tax efficient investments, please do not hesitate to get in touch with our team. 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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    By Katie Tax Advice • Tax News 0 Comments

    Have you used your 2019/20 ISA allowance?

    Your maximum annual investment in ISAs for 2019/20 is £20,000.  Your investment needs to be made before 6 April 2020.  In addition, have you thought about investing for your children or grandchildren by setting up a Junior ISA? In the 2019/20 tax year, you can invest £4,368 into a Junior ISA for any child under 18.

    What is an ISA?

    It’s a savings or investment account you never pay tax on. Each tax year, you get an ISA allowance which sets the maximum you can save within the tax-free wrapper from April to April. You must save or invest by 5 April – the end of the tax year – for it to count for that year. Crucially, any unused allowance doesn’t roll over – so if you don’t use it, you lose it – forever. You’ll get a new allowance the next tax year, but won’t be able to contribute anything to the old ISA.

    Need more information?

    If you need help with ISA’s, our team have a wealth of experience in this department. Please do not hesitate to get in touch at any point. The 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 0 Comments

      Pension planning before the end of the tax year

      It is important to start pension planning now. For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers both contributions by the individual and their employer.

      Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the current year, but then lapses if unused. Hence the unused pension allowance for 2016/17 will lapse on 5 April 2020. Note that under the current rules the net after tax cost of saving £10,000 in a personal pension for a higher rate taxpayer is only £6,000.

      Will pension tax relief change in the budget?

      There are frequent rumours that pension tax relief will change in the Budget. This is even more likely this year as the new Government looks for additional tax revenue to fund its ambitious spending pledges such as the HS2 rail link.

      There is speculation that the restriction for those with income over £150,000 may be removed but at the same time higher rate tax relief may be removed. One suggestion is that tax relief may be “simplified” by limiting relief to say 25% or 30% so that the government would increase a £750 pension saving to £1,000 but with no further tax relief.

      If you have surplus cash you might wish to consider maximising your pension relief before Budget Day.

      Need more information?

      If you need any guidance on pension planning, please do not  hesitate to contact our expert tax team. We offer a wide range of services which are unique to you. 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

        Don’t lose your personal allowance!

        For every £2 that your adjusted net income exceeds £100,000 the £12,500 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.

        The restriction applies between £100,000 and £125,000 adjusted net income. Another way that you could avoid this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax-free benefit in kind such as an additional pension contribution.

        HMRC have provided more background to the measure below:

        The government has an objective to raise the Personal Allowance to £12,500, and the higher rate threshold to £50,000 by 2020 to 2021.

        This measure will increase the Personal Allowance for 2019 to 2020 to £12,500, and the basic rate limit will be increased to £37,500 for 2019 to 2020. As a result, the higher rate threshold will be £50,000 in 2019 to 2020. This meets the government’s objective one year early.

        Changes to the basic rate limit will apply to non-savings and non-dividend income in England, Wales and Northern Ireland and to savings and dividend income in the UK. Since April 2017, the Scottish Parliament sets the basic rate limit and higher rate threshold for non-savings, non-dividend income for Scotland.

        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 • Wealth Planning 0 Comments

          Year end Capital Gains Tax planning

          Capital Gains Tax

          Have you used your 2019/20 £12,000 annual capital gains exemption? Consider selling shares where the gain is less than £12,000 before 6 April 2020.

          Also, if you have any worthless shares consider a negligible value claim to establish a capital loss. You may even be able to set off that capital loss against your income under certain circumstances which could save tax of up to 45% of the loss.

          What is Capital Gains Tax?

          It is a tax on any profit you made on the disposal of an asset and it applies to most assets when they’re sold. However, There are some exceptions, for example, you don’t pay Capital Gains Tax when you sell your car, unless you use it for business. Other exemptions include your main place of residence if you own your home, and personal possessions sold for £6,000 or under. Also, you won’t have to pay Capital Gains Tax, if you inherit an asset. You will only need to pay CGT when you sell it.

          Capital Gains Tax also applies to assets received as gifts from other people. A valuation needs to be made of how much the asset is valued at when gifted, and if a capital gain arises when you dispose of the asset, tax is applied. There is tax relief available for gifts, so please speak with an accountant for more advice.

          Need more information?

          We offer a wide range of services for businesses who need guidance on Capital Gains Tax. Our team of chartered accountants have a wealth of experience in a broad range of sectors. 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

            Further changes to entrepreneurs relief?

            Another tax relief that may be further restricted or even abolished is CGT entrepreneurs relief.  This relief allows business owners to pay just 10% CGT on the first £10 million of capital gains when they dispose of their business and was tightened up in the Autumn 2018 Budget.

            When first introduced, the relief only applied to the first £2 million of gains but the limit has been increased twice since 2008 to the current lifetime limit so the relief may be limited again in the March Budget.

            The Conservatives’ general election manifesto signalled the government would curb or scrap the relief, but it is popular with many Tory MPs and party members.

            Rishi Sunak is expected to target entrepreneurs’ relief, a tax break which halves the capital gains tax paid when people sell their businesses.

            The move was attacked by some business leaders who claimed it would hurt entrepreneurship, as well as Conservatives MPs concerned about a backlash against Mr Sunak’s first Budget.

            Need more information?

            Our team of chartered accountants have a wealth of experience in a broad range of sectors and work with many entrepreneurs.

            If you need further guidance on the entrepreneurs relief please do not hesitate to contact the team.

            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

              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.

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                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.

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                  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

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