Tag: tax planning
One of the oldest adages in the world of tax is ‘never let the tax tail wag the commercial dog’ and we hear it repeated time and again. No one likes to pay high taxes but being seduced by the prospect of lower tax should never cloud one’s judgement and become the sole justification for a business decision.
When making tax planning decisions there are many factors to consider, not least of which is the long term consequence of a particular action. Today’s tax policies may have changed in two or three years’ time and reversing a decision can be costly. In some instances, flexibility can be the most important consideration for a business, even if it means paying slightly higher taxes; this issue often lies at the heart of deciding which business structure to adopt. (more…)
April 25, 2013
The issue of whether or not to incorporate your business into a limited company is a topic previously discussed in our blog. There can be clear tax planning advantages to incorporation as it creates flexibility over levels of income chargeable to personal tax, and prevents profits immediately becoming chargeable to tax at the highest personal tax rates. There are other, commercial benefits too. (more…)
April 19, 2013
Each year at Budget time we consider how positive the announcements are for owner managed businesses in particular. For instance, the news of the corporation tax reduction to 20% from 2015 is for those paying the main rate and not relevant for small businesses. Similarly the extension to the ‘above the line’ R&D tax credits initiative is also for larger companies only. This blog has also been published in Growth Business magazine. (more…)
March 21, 2013
Tax planning and the work undertaken by a company secretary are closely connected. Directors of owner-managed companies often misunderstand this inter-relationship. For limited companies, there are issues relating to shareholdings and dividend payments, which can impact tax levels, depending on the way they have been allocated. Below are two scenarios highlighting how your tax bills might be impacted by poor company secretarial advice. (more…)
March 21, 2013
January can be a time when a small number of clients can get an unwelcome surprise, because their tax bills are slightly higher than expected. This highlights the importance of having regular tax planning reviews to ensure that one’s financial affairs are structured in the most tax efficient way possible. This year, one specific situation has prompted us to write a blog about property and tax relief. In doing so, we hope to ensure all our clients understand how tax relief for mortgages work and which mortgages qualify.
March 19, 2013
Now as the tax year draws to a close, it is a good time to ensure that you have considered all the options when it comes to reducing your tax bill with tax planning. In this article we look at what you could be thinking about now to legitimately reduce your liabilities. (more…)
February 26, 2013
Inheritance Tax (IHT) is one of those issues that fills many clients with dread. However we live in an affluent part of the country with high property prices and inheritance tax is something that will affect most of us. (more…)
February 26, 2013
Over the years, our tax planning advice when buying property has varied according to a client’s tax position and funding availability at the time. We are always being asked the question “should property be bought personally or through a company?” The answer to this question is not clear-cut; in recent years the tax relief available on the disposal of commercial property favoured the purchase of this type of property personally, but the reliefs are ever changing, and the answer has become more subjective.
January 22, 2013
Increase to Annual Investment Allowance (AIA)
Top of the announcements for SMEs was the 10-fold increase to AIA. As of January 2013, the amount business owners will be able to write off as tax deductible capital expenditure in the year of purchase will increase from £25,000 to £250,000. This is a massive boost and far more significant than the previous government’s attempt at encouraging investment amongst business owners. In April 2010, the relief was £100,000, which was also generous, but not large enough to enable a lot of companies to write off all their capital purchases in the first year. This new limit however will achieve that in a single hit and we expect a lot of businesses will take advantage and upgrade their infrastructure. (more…)
January 18, 2013
Share ownership has always been a powerful motivator for companies looking to recruit and retain talented and loyal staff. It’s something Nick Clegg referred to last year when he talked of the ideal John Lewis Partnership model for companies to aspire to. The Deputy Prime Minister believes companies that offer shares to their workers tend to be more dynamic, have higher levels of morale and staff who are more motivated to work hard.
At a time when salary increases may not be a viable offering for many companies, share options are set to become an even more attractive proposition, provided new proposals earmarked for inclusion in the 2013 Finance Bill are adopted. In the past, what the Government has announced in the Autumn Statement has tended to be introduced, so we expect this tax planning opportunity to become available to clients later in 2013. (more…)
January 7, 2013