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

Planning to sell your business in 2022?

Planning to sell your business in 2022?

Now that the economy is starting to recover, this could be a good time to think about selling your business. Remember that under the current capital gains rules, the first £1 million of an individual’s gains potentially qualify for a 10% rate of tax, provided business asset disposal relief applies. We can check whether or not you and other business owners qualify for this generous relief. Note that the £1 million limit applies to all disposals during an individual’s lifetime.

If your business is worth more than £1 million, you might want to consider the transfer of shares to other family members, although they will need to satisfy the conditions for business asset disposal relief for at least 2 years prior to any sale.

Need more information?

Are you planning to sell your business in 2022? 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 • Tax Advice • Wealth Planning 0 Comments

    Are you looking to reduce your tax bill?

    Are you looking to reduce your tax bill?

    If your tax payment due on 31 January is more than you expected there is still time to reduce the liability if you are prepared to take a risk. An HMRC tax planning opportunity is to invest in a company that qualifies under the Enterprise Investment Scheme (EIS) or under Seed EIS.

    These investments enable you to deduct 30% or 50% respectively of the amount invested from your income tax bill. For example, £10,000 invested in a qualifying EIS company will enable you to deduct £3,000 from your tax bill.

    Normally the shares need to be issued in the tax year in question, but it is also possible to invest in the following tax year and carry back the relief to the previous year.

    You will need to get independent financial advice as these tend to be risky companies, particularly Seed EIS companies which are smaller start-up companies.

     

    Need more information?

    Do you need further support with ways to reduce your tax bill? We offer a wide range of services which are unique to you and your businesses. 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 • Wealth Planning 0 Comments

      Pension Planning in 2022

      Pension Planning in 2022

      In the run up to the Autumn Budget many were predicting that the chancellor might announce restrictions to pension tax relief. Thankfully nothing has changed -yet.

      For most taxpayers the maximum pension contribution continues to be £40,000 each tax year. This limit covers both contributions by the individual and by their employer into their pension fund.

      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.  Thus, the unused pension allowance for 2018/19 will lapse on 5 April 2022 if unused.

      Need more information?

      Do you need further guidance on Pension Planning in 2022?

      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 Tax Advice • Tax News • Wealth Planning 0 Comments

        New Year tax planning ideas

        New Year tax planning ideas

        At this time of year, we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April.

        An obvious tax planning point would be to maximise your ISA allowances for the 2021/22 tax year (still £20,000 each).

        You might also want to consider increasing your pension savings before 5 April 2022 as the unused annual pension allowance is lost after three years. For those looking to do some inheritance tax planning it would be a good time to review (or make) your Will.

        Need more information?

        Do you  need more guidance on New Year tax planning ideas?

        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 • 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.

          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 • 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.

            Contact us below

            Fields marked with an * are required





              By Katie Business Advice • Wealth Planning 0 Comments

              Budgeting for an uncertain year ahead

              As we come to the end of 2021, its time to start thinking about the budget for next year. One thing is certain – uncertainty.

              Business planning and budgeting have become increasingly complex in today’s uncertain and volatile environment. Firms have had to adapt and become more agile in order to react quickly to changing market conditions and budgets should be created with this in mind.

              Start with your fixed costs – the things that you can be certain of such as premises, staff costs, raw materials, light, heat, electricity, IT, etc. Next, turn your focus to the longer term aspects of your budget with an analysis of existing strategic or capital spending plans.

              Stress test the assumptions, scenarios and decisions that have gone into your draft budget. What if your sales don’t grow next year? What if your annuity income falls because 10% of your customers leave and go to another provider? How does this affect the profitability of the firm?

              In uncertain times, it is important to be pragmatic. Create 3 scenarios for your budget – high, medium and low. Start with the medium scenario – the “expected” outcome and from there you can derive variations on whether things turn out better (high) or worse (low).

              Scenario-based budgeting is not intended to predict exact outcomes.

              Instead it is intended to help the business to understand the likely variances and prepare accordingly.

              Hold back some spending centrally as a contingency. This builds some flexibility into the budget so that the business can react to changing circumstances as the year progresses.

              Calculate your budget using new data, not historical projections. Budgets may have been squeezed in the past 18 months and may not reflect the current or predicted market trends.

              Finally and most importantly, build realistic income models. Ensure you provide for bad debts and write offs in each of your high, medium and low scenarios. Cash is king and in uncertain times every business must focus on getting cash in on a monthly or even weekly basis. Billing cycles and cash collection management should be at the top of the agenda for the management team and offering extended payment terms to customers should be avoided as much as possible. Build these principles into your budget and ensure you keep adequate reserves in case you encounter headwinds during the year ahead.

              Need more information?

              We offer a wide range of services which are unique to your business and can help you budget for next year. 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 News • Tax Advice • Tax News • Wealth Planning 0 Comments

                Increase in NICs and dividend tax to fund health and social care

                Increase in NICs and dividend tax to fund health and social care

                The Prime Minister announced on 7th September that the government will introduce a new 1.25% Levy to provide an extra £12 bn a year to support the NHS and social care.

                From April 2022 it is proposed that there will be a 1.25% rise in National Insurance Contributions (NICs) to be paid by both employers and workers. This will then become a separate Levy on earned income from 2023/24 – calculated in the same way as NIC and appearing on an employee’s payslip.

                Note that the 1.25% increase also applies to the Class 4 contributions paid by the self-employed on their profits. The Class 1 NI contributions paid by employees increase to 13.25% of earnings above £9,568 and the self-employed rate increases to 10.25%. The 3% differential remains for the time being, although there are rumours that the rates will align in the future. Above £50,270 earnings or profits the rate will be 3.25%.

                The employers Class 1 NIC rate will increase from 13.8% to 15.05% from 6 April 2022, however many small businesses are able to set off the £4,000 employment allowance against their employers NIC liability. Many workers operating through personal service companies to whom the new “off-payroll” working rules apply will also be caught by the proposed measures.

                DIVIDEND TAX RATES ALSO INCREASING FROM 2022/23

                It is also proposed that there will be a 1.25% increase in the rate of tax payable on dividends received by those who own shares in companies. This would mean that after the £2,000 tax free dividend allowance the rate of tax would be 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for those with income in excess of £150,000 a year. This will catch many family company director/shareholders who traditionally “pay” themselves by taking a low salary and larger dividends to minimise NICs.

                PLANNING ACTIONS BEFORE THE NEW RATES COMMENCE

                The announcement of the proposed changes more than six months before they take effect means that there is time to reduce the impact. Employees could consider agreeing a salary sacrifice arrangement with their employer, for example sacrificing their £5,000 annual bonus for an additional pension contribution paid by their employer. Such an arrangement would save 1.25% NICs for both employee and employer as well as £2,000 income tax where the employee is a higher rate taxpayer.

                Employees might also consider a salary sacrifice in favour of an electric company car.

                Shareholder/directors of family companies could consider bringing forward dividend payments to before 6 April 2022. Such a strategy needs careful planning as if the extra dividend takes the taxpayer’s income above £50,270 the excess would be taxable at the 32.5% rate instead of the 7.5% rate and the planning could backfire.

                Need more information?

                Do you need further guidance on the increase in NICs and dividend tax to fund health and social care? We offer a wide range of services which are unique to social care businesses. Our team of chartered accountants have a wealth of experience in this 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 • Business News • Tax Advice • Tax News • Wealth Planning 0 Comments

                  E-commerce and other businesses moving goods between UK and EU

                  E-commerce and other businesses moving goods between UK and EU

                  If you move goods between the UK and countries in the EU, you need to follow new customs and tax rules. Your business will be affected by the new rules if you: • buy goods from an EU seller and bring them into the UK • send goods you’ve sold to a buyer in an EU country • haven’t exchanged money but need to move equipment that you use for your business, between the UK and the EU. We understand this means a lot of changes are needed, and HMRC are available to help you in several ways. HMRC have a Customs & International Trade helpline on 0300 322 9434, for more help with importing, exporting or customs reliefs. The helpline is open from 8am to 10pm Monday to Friday and from 8am to 4pm at weekends.

                  There is also a SME Brexit support fund available – Please follow the link here to apply and learn more. Smaller businesses can get up to £2,000 to pay for practical support, including training or professional advice to adjust to new customs, rules of origin and VAT rules when trading with the EU.

                  HMRC have webinars available for you to attend online starting today. Please see below for a list of these to help you adjust to the new rules.

                  Exporting: what you need to do to keep your goods moving:
                  An overview of the actions you need to take now before you export goods from Great Britain to the EU and move goods between Great Britain and Northern Ireland.
                  Key processes include – zero-rated VAT, customs declarations, using an intermediary as well as licences, certificates, and authorisations.
                  Please register here to take part if you’re planning to export.

                  Customs Import Declarations: an overview: If your business or a business you represent, needs to make customs import declarations on goods you’ve imported since 1 January, our webinar helps you to understand what’s needed for simplified declarations, supplementary declarations, and delayed import declarations.
                  Please register here to take part if you’re planning to import.

                  Trader responsibilities when using an intermediary: This webinar explains your responsibilities as a trader, if you choose to use an intermediary to complete import or export declarations for your business. These are complex and an intermediary can save you a lot of time.
                  Please register here to take part if you’re planning to import or export.

                  Importing: what you need to know about staged controls: This webinar takes you through the three stages of the new border controls introduced from 1 January 2021, and what actions you need to take for each stage.
                  Please register here to take part if you’re planning to import.

                  You can also:

                  • watch HMRC’s YouTube channel to familiarise yourself with the new customs processes and what you need to do before you trade goods with the EU
                  • use the trader checklist to make sure you’re familiar with the new rules that affect you
                  • use the updated guides to understand the new customs and VAT requirements when moving goods between the UK and EU countries
                  • sign-up to the Trader Support Service if your client’s business is moving goods between GB and Northern Ireland and use their suite of educational products – including online training modules and webinars for support with the Northern Ireland Protocol
                  • you can also sign up to our weekly email updates on ‘News and information about importing and exporting with the EU’, providing hints and tips for businesses like yours, getting used to the new rules for importing and exporting.

                  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