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HMRC computer isn’t always correct

2nd June 2017

HM Revenue and Customs have acknowledged that their software and some commercial software used by accountants doesn’t always come up with the right amount of tax payable! You may have seen this reported in some newspapers such as the Daily Telegraph. This arises because the tax system of different income tax personal allowances, dividend allowances, savings rates has become more…

Snap election means shorter finance act passed

2nd June 2017

The original Finance Bill published after the Spring Budget ran to nearly 700 pages. As a result of the announcement of the General Election on 8th June a significantly shorter Finance Bill was passed with many of the more detailed and more controversial measures being deferred to a later Bill. Whether those measures will reappear after the election will depend…

Does the new 16.5% VAT flat rate percentage apply to your business?

2nd May 2017

The new VAT flat rate of 16.5% started to apply from 1 April 2017 for “limited cost traders”. A “limited cost trader” is one using the VAT flat rate scheme but where the VAT inclusive cost of goods for a year is less than 2% of VAT inclusive turnover, excluding certain specified items. Those specified items include capital expenditure, food,…

Additional IHT relief for passing on family home started 6 April

2nd May 2017

For deaths on or after 6 April 2017 there is now an additional £100,000 inheritance tax (IHT) allowance where the family home is passed on to direct descendants. This was originally announced on 8 July 2015 and that date is relevant where the deceased has downsized to a lower value property. This additional relief increases to £175,000 in 2020, and…

Tax Free Dividend Allowance To Be Reduced To £2,000

3rd April 2017

The Chancellor  announced measures to limit the rise in tax-driven incorporation. The £5,000 tax free dividend allowance introduced by George Osborne will be reduced to just £2,000 from 6 April 2018. Mr Hammond claimed that many smaller owner-managed businesses have incorporated as limited companies mainly for tax reasons. Typically the director/shareholders of such businesses have paid themselves in dividends and…

Tax Free Childcare Scheme Starts 2017

3rd April 2017

The chancellor  announced that the new tax-free childcare scheme is due to start in 2017. The scheme will provide up to £2,000 a year in childcare support for each child under 12 where the parents save in a special account. If they save £8,000 the government will top up the account with 20% to a total of £10,000 which can…

2017 Budget Report

22nd March 2017

The Chancellor’s Spring Budget, announced on Wednesday 8th March 2017, caused a major storm following the announcement that national insurance contributions are on the rise for the UK’s self-employed. We summarise the key announcements below: From April 2017: new announcements Package of measures to give some relief to those small businesses particularly badly affected by business rates revaluation. Threshold for…

Have You Used Your 2016/17 Isa Allowance?

1st March 2017

Your maximum annual investment in ISAs for 2016/17is  £15,240.  Your investment needs to be made before 6 April 2017.  In addition, have you thought about investing for your children or grandchildren by setting up a Junior ISA? In the 2016/17 tax year, you can invest £4,080 into a Junior ISA for any child under 18.

Year End Capital Tax Planning

1st March 2017

Have you used your 2016/17 £11,100 annual capital gains exemption?  Consider selling shares where the gain is less than £11,100 before 6 April 2017. Also, if you have any worthless shares, consider a negligible value claim to establish a capital loss. You may even be able to set off that capital loss against your income under certain circumstances. As far…

Don’t Lose Your Personal Allowance!

1st February 2017

For every £2 that your adjusted net income exceeds £100,000, the £11,000 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%. The restriction applies between £100,000 and £122,000 adjusted net income. Another way that you could avoid this trap would be to…