Archive for the 'Quick Tax Tips' Category

Save Tax on Selling the Business Premises!

 Are you in the process of selling or about to sell the business premises?  With such transactions there are always tax issues and the amounts involved can be quite significant.

The first complication to consider is, should VAT be charged on the sale?

This can depend upon a number of aspects, including whether input VAT was reclaimed on the acquisition or development of the property.

A second complication is that there may be tax on the uplift in the value of the property.  Consideration needs to be given to whether this tax can be mitigated and whether any action is required prior to the sale?  It may be too late to make some tax savings after the sale goes through.

Finally, it may be possible to increase the proceeds received for the sale of the property.  If a claim for Capital Allowances on integral fixtures to date has not been made, then it maybe more beneficial not to claim the allowances in order to negotiate a higher selling price.  The purchases may be able to claim allowances on a much higher figure than you ever could.

This may become a very important part of the sale negotiations. We would be delighted to discuss further how you can save tax on the sale of the business premises.

Extract taken from our 2011 Winter edition Tax newsletter – if you would like to subscribe please leave your details here.

Drive into 2011/1012 in style!

In April 2011 the rules concerning company cars are being completely overhauled.  By looking at your choice of company car now, you can ensure that the changes don’t mean that you pay additional Income Tax on your benefits in kind.

From April 2011 the £80,000 restriction on the price of the car is removed and the reduction in benefit for different types of fuels is removed.  This could mean that simply by keeping your existing company car you could be paying substantially increased income tax without even realising it!

Now is the time to review whether or not having your company to pay for your private fuel would be a better alternative to paying for the fuel yourself.  By comparing your mileage, both business and private to the amounts of tax and fuel costs you could determine which would leave you better off in real cash terms.

As of 1st March 2011, HMRC have also introduced new advisory rates for fuel payments for companies to pay to company car drivers.  The new rates are advised below;

 Engine Size           Petrol          Diesel          LPG
1400cc or less        14p              13p           10p
1401 – 2000cc       16p              13p           12p
over 2000cc           23p              16p           17p

 Simply being aware of the new rules and rates can mean that you are able to make an informed decision when it comes to choosing company cars and meeting the fuel costs.

Training Costs – are you missing the point?

It can be more tax efficient for an employer to pay for training than employees paying themselves. 

Where an employer provides one of their employees with work related training, the cost of providing the training is tax deductible for the employer.  In addition to that, the cost of the training isn’t taxable upon the employee.  By structuring payments this way the employee can save money and the employer can obtain a tax deduction for the costs, as well has having a more skilled workforce.

Could you make your employee's training part of their salary package?

Many employers, including the NHS still don’t make full use of this tax exemption and their workers may have to pay for training cost, trying to claim a personal tax deduction themselves.  Unfortunately the rules for employees are much stricter and more often than not they cannot claim the training costs against their employment income for tax purposes.  It can often make sense to include training costs as part of a salary negotiation and employment package. For more information on what needs to be done please contact us to find out more.

Extract taken from our 2011 Winter edition Tax newsletter – if you would like to subscribe please leave your details here.

Maximise Your Capital Allowances Claims

With the tax year end coming up fast you should consider the timing of purchases so as to maximise the capital allowances available.  Bringing forward capital expenditure into the current tax year you can increase the amount of relief available and reduce your income tax significantly. With the changes to the annual investment allowance such that for 2010/2011 and 2011/2012 the amount available is £100,000 for each tax year, business owners should consider utilising these amounts before the Annual Investment Allowance reduces to £25,000 for 2012/2013.

In addition, claiming the annual investment allowance may also impact upon your Tax Credits Claim for the year.  Given that the Tax Credits regime is becoming less generous, you should consider maximising your claim now and see the cash flow and tax advantage utilised earlier.

With Government incentives for energy efficient plant and machinery, environmentally friendly vehicles and energy efficient plant, you could get 100% first year allowances on a whole host of items purchased through the business.

Extract taken from our 2011 Bonus edition Tax newsletter – if you would like to subscribe please leave your details here.

Review your business structure regularly

How your business is structured can have a dramatic effect on your annual tax bills.  In the early years of a business it may be more advisable to be a soletrader or partnership.  However, as profits increase there can become a time when transferring a business into a limited company can make more sense.  The tax savings alone can be quite substantial.

If the business is breaking into new markets or establishing a new product then by structuring this new business separately from the main business, may save you thousands in tax on new profits.

We offer business health checks to review the current business structure and identify the possible annual tax savings by restructuring the business.  Please contact us if you are interested in finding out more.

Are you sure that you are operating within the best structure for your business? If not, get advice!

Extract taken from our 2010 Summer edition Tax newsletter – if you would like to subscribe please leave your details here.

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