Archive for the 'Tax Planning' Category

Disclosure Agreements With Isle Of Man, Jersey And Guernsey

These new agreements involve a planned automatic exchange of information from 2015 on all accounts held in these offshore areas. So for any UK residents with savings accounts in these offshore areas, be aware that HMRC will know all about them from 2015.The new arrangements include a disclosure facility to allow UK resident investors with accounts to come forward and settle their past UK tax affairs before information on their accounts is automatically shared between the governments. Similar arrangements are expected to be announced for Luxembourg.

The disclosure facility operates from 6 April 2013 until September 2016. It will not be open to individuals already under investigation but will cover liabilities dating back to April 1999 at the earliest.

These types of arrangements are proving a real money spinner for HMRC. They were originally expected to bring in over £5billion over the next six years but they have upped that to £9billion based on what they have collected so far!

This article was compiled by Ashley Barrowclough, Partner at Balance Accountants.

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.

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.

Surcharges and Interest on Late Payment of SA Tax

Right then, it is now February, and if you’ve all done as HMRC require, all your tax returns for the year to 5 April 2010 are now submitted and the tax man knows how much tax to collect from you.

People can sometimes find it difficult to get their hands on funds to pay their tax bill due by 31 January on time, and can worry about impending penalties and fines.  Whilst there are some financial disadvantages to paying late, it’s not the end of the world so long as you are aware of what charges are applied and when.

A large number of you will have been told by your accountants or the HMRC online software, that you do have an amount to pay by 31 January 2011, and possibly an amount to pay by 31 July 2011. 

The amount that you have to pay by 31 January is most likely to be made up of two figures: a balancing payment of tax due for 5 April 2010, and the first payment on account towards tax due for 5 April 2011.

The amount due by 31 July 2011 (if applicable) will be the second payment on account towards tax due for 5 April 2011.

Surcharges
A surcharge of 5% will be applied to any part of the balancing amount due for 5 April 2010 that is still outstanding at 28 February 2011.  A further 5% surcharge will be applied to any outstanding amount at 31 July 2011.

This 5% surcharge does not apply to the first payment on account element of the total amount due.  Therefore, if you are finding it difficult to get together enough money to cover the whole amount payable, at least try to pay enough by 28 February to cover the balancing amount, to help avoid this surcharge.

It is worth pointing out here, that if you owe tax from earlier years, then any payment you make now will be allocated against the oldest debt first, leaving this current tax bill outstanding and surcharges will be applied.

Interest
Interest starts to accrue on all outstanding amounts from 1 February, including the payment on account element.  Interest is applied on a daily basis until the debt is cleared.

Example

            Balancing payment for 2010                                     £1,500
            First payment on account for 2011                            £2,000

            Total payable by 31 January 2011                            £3,500

If nothing is paid off before 28 February 2011 then a surcharge of £75 will be applied, being 5% of the £1,500, but interest will start accruing on the £3,500 from 1 February 2011.

This post was compiled by Deborah Bradley on behalf of the Balance Team.
Please note any comments below.

Save tax with advanced tax planning

We have teamed up with the very best tax experts in the UK to bring leading edge advanced tax planning strategies to you.  These strategies can save many thousands of pounds in tax. 

For companies that are looking to pay their key employees/directors in excess of £100,000 in discretionary bonuses and have cash available, then there are strategies that could result in significant savings.  We offer a remuneration review to identify the possible tax savings on some alternatives to bonuses and dividends.

Don't rely on a crystal ball when it comes to your tax planning

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

Save tax with advanced tax planning

We have teamed up with the very best tax experts in the UK to bring leading edge advanced tax planning strategies to you.  These strategies can save many thousands of pounds in tax. 

For companies that are looking to pay their key employees/directors in excess of £100,000 in discretionary bonuses and have cash available, then there are strategies that could result in significant savings.  We offer a remuneration review to identify the possible tax savings on some alternatives to bonuses and dividends.

Don't rely on a crystal ball when it comes to your tax planning

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




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