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Some things are too important to leave to politicians
Whatever you think of Gordon Brown (wrong place at the wrong time, be careful what you wish for etc) he did one very important thing for the UK economy, which was to cede control of interest rate policy to the Bank of England. Unusual as it is for a politician to voluntarily opt for less power over something important, I think this has been very important to economic stability over [...]
Self-employed status – fact or fiction?
Self-employed status - fact or fiction? The recent rise in national insurance contributions (aka the social care levy) has once again focused minds on the cost of employing people, and the advantages of self-employed status for both engager (employer) and worker (employee). However, self-employed status needs to be supported by the facts, so what you call a self-employment should actually be a self-employment. The risk of getting this wrong is [...]
Expensive borrowing – the tax issues with overdrawn directors’ loan accounts
Expensive borrowing - the tax issues with overdrawn directors' loan accounts The tax legislation relating to overdrawn directors' loan accounts could be seen as the flipside of the advantages of limited liability for company debts. The company's money is not the directors', and treating it as if it were comes with potentially painful tax consequences, particularly for the company but also to some extent for the director. Given that directors [...]
Super deduction – not hyperbole?
Super deduction - not hyperbole? Those who have played Monopoly may recall paying Super Tax as a cheaper alternative to landing on Park Lane or Mayfair with hotels on, but the word super had not appeared in the tax system since super tax was replaced by higher rates of income tax, until the advent of the super deduction. So does this merit its ambitious title? The first thing to say [...]
Pitfalls of VAT registration rules
Pitfalls of VAT registration rules VAT is a deceptively complicated tax, not least when dealing with issues relating to registration. Some of the points that can arise and catch people out are: The need to keep a running 12 month total of turnover so that you can identify when the figure exceeds the registration threshold (£85,000 until at least 31 March 2024). You then have a month to register from [...]
Stamp Duty – the residential property surcharge minefield
Stamp Duty - the residential property surcharge minefield So you don't pay stamp duty land tax (SDLT) when you buy a residential property for less than £125,000, right? Well, not necessarily, if the 3% SDLT surcharge applies. In simple terms, you can own one residential property at any given time that has not suffered the surcharge - the acquisition of second and subsequent residential properties will be liable for the [...]
Is your home your tax-free castle?
Is your home your tax-free castle? In view of the movement in property prices over the past few decades, probably the most valuable tax relief over that period has been the capital gains tax principal private residence (PPR) exemption, which exempts gains arising on properties which have been used as the taxpayer's main residence. It is such a valuable relief that it is vital to ensure that you maximise its [...]
VAT partial exemption
VAT partial exemption This is definitely the most often disregarded and misunderstood aspect of VAT, which can affect your ability to recover all of the VAT you suffer and lead to significant misdeclarations of tax. So you need to understand if and how partial exemption applies to you, and how best to structure things to maximise your input tax recovery. If your accountants have already done this, that is great, [...]
BADR deal for entrepreneurs? The successor to entrepreneurs’ relief
BADR deal for entrepreneurs? The successor to entrepreneurs' relief Business Assets Disposal Relief (BADR) is the lesser successor to entrepreneurs' relief (ER), offering capital gains tax relief on a more limited scale than the latter, but still a very worthwhile relief for business owners disposing of some or all of their business. It allows up to £1 million of gains to be taxed at 10% rather than 20%, and so [...]
Opting to incentivise employees
Opting to incentivise employees Are you having difficulty finding new employees, particularly at a senior level? In the current job market, having the edge on your rivals in your offering to key employees is critical. So has your accountant talked to you about employee share options, and in particular Enterprise Management Incentive Schemes? These are schemes that offer share options to employees on favourable tax and price terms, with no [...]