Its time to prepare for the end of the tax year – click here for details
Steve Bicknell, Vice President of BCTC, was invited by Alice Stevens to set the over 100 students at AUB a task to make short videos and films to present CSR.
The social media videos will focus on
1. Why do Millennials want to work for Ethical CSR businesses
2. Why do consumers prefer to buy from CSR and ethical businesses
3. What is CSR (covering – Charities, Employees, Buy local and Sustainability)
The work will be completed by the students in early January 2018.
Special thanks to Alice and the Students.
Find out more about CSR at https://csr-online.org/
We have a new company Simple Probate Limited which has now been authorised by the Institute of Chartered Accountants in England & Wales to carry out the reserved legal activity on non-contentious probate in England and Wales.
Details of our probate registration are available to be viewed at icaew.com/probate under our registration number C006147902.
Probate is the legal process to obtain the right to deal with someone’s property, money and possessions (their ‘Estate’) when they die.
Please see our website for more details http://www.simple-probate.co.uk/
Many property investors lend to other property companies via their company, often in a Joint Venture approach because 100% LTV isn’t available.
Their property business could have losses from their trading activity but the losses can’t be offset against interest received unless its an integral part of the business.
General test – whether an integral part of the business
The general test is that interest normally rank as trade receipts only where it is an integral part of the business operations to employ capital to produce such income, for example, in the case of banks and other financial concerns.
HMRC practice regarding interest
In the particular case of interest on investments, the HMRC view is that interest on an investment may be treated as trading income if:
# the investment is for a short term and
# it is an integral feature of the trading activity to make such an investment and
# the funds deposited can be regarded as continuing to be employed in the business and to form part of the current working capital.
Investments made in the course of banking, insurance and other financial trades will normally meet these conditions.
Investments by non-financial concerns are unlikely to meet these conditions, if for example they:
# endure from one period of account to another, or
# represent capital even if it is only temporarily surplus to requirements, or
# although short term, represent part of a series of deposits which together constitute a long term setting aside of part of the capital.
The rules are in
How will yesterday’s budget affect you?
Download our report to find out Click Here
Budget Highlights 2018
• The personal allowance threshold, the rate at which people start paying income tax at 20%, to rise from £11,850 to £12,500 in April – a year earlier than planned
• The higher rate income tax threshold, the point at which people start paying tax at 40%, to rise from £46,350 to £50,000 in April
• After that, the two rates will rise in line with inflation
• National Living Wage increasing by 4.9%, from £7.83 to £8.21 an hour, from April 2019.
Off Payroll IR35
• The employer will be responsible for deduction of tax and NI for personal service companies
• Small organisations will be exempt
• The crackdown is the biggest revenue-raising measure in this year’s Budget
Support for the High Street
• Small retail businesses will see their business rates bills cut by a third for two years from April 2019, saving them £900 million.
• Local high streets will benefit from £675 million to improve transport links, re-develop empty shops as homes and offices and restore and re-use old and historic properties.
• Public lavatories will receive 100% business rates relief.
• This adds to previous reductions in business rates since Budget 2016 which will save firms over £12 billion over the next five years.
Annual Investment Allowance
• The government will increase the Annual Investment Allowance five-fold from £200,000 to £1 million to help businesses to invest and grow.
• Also, from October 2018, businesses will be able to deduct 2% of the cost of any new non-residential structures and buildings off their profits before they pay tax.
Following the success of my Making Tax Digital Seminars and I am making 3 filmed webinars for MBL on Property Tax
Furnished Holiday Lets & Serviced Accommodation – Tax Matters
Using a Company Vehicle for Property Investment – A Guide for Accountants
Option to Tax on Commercial Property Conversions – A Guide for Accountants & Tax Advisors
These are a useful guide to current tax and accounting rules and include tips on how to avoid problems.
I have recently taken out Relevant Life Insurance and this explain why.
When you are formally employed and working for a large company, you can benefit from group life schemes and death in service.
When you work for yourself however, as a contractor and company Director, you will likely be paying for life insurance out of your own pocket and taxed income.
This no longer needs to be the case.
Relevant Life Insurance was designed to afford small businesses the opportunity to benefit from the same tax breaks large corporations enjoy through group life schemes. Essentially,
a Relevant Life Policy allows for you to pay your personal life insurance through your company and as a business expense, rather than through taxed income.
Paying for your life insurance through your business in this way means that you can make significant savings:
Let’s use the example that you own your own business and pay £100 a month on life insurance from your own pocket.
If you’re a 40% taxpayer, there’s income tax and 2% employee national insurance contribution, plus 13.8% employers’ national insurance contribution.
In fact, after 19% corporation tax relief the net cost to your company works out at £158.93
If you pay £100 a month for a Relevant Life Plan you won’t pay any national insurance contributions or income tax on the premiums but you still get the 19% corporation tax relief which means the net cost is only £81.
That’s a saving of £77.93 a month or £935.16 over the year.
To qualify for a Relevant Life Insurance policy you or your client simply need to be a salaried Director or an employee of a limited company and resident in the UK.
Assuming you own the property personally and its not your main residence (and benefiting from Principle Private Residence Relief), there are 2 rates of capital gains tax 18% for lower rate tax payers and 28% for higher rate tax payers.
You also have a CGT allowance which for 2018-19 is £11,700.
As a rough guide to assessing the tax
You can now pay CGT straight away using the HMRC online service but most people do via self assessment and pay by 31st January following the end of the tax year.
Steve Bicknell has just become a Certified Migration and Making Tax Digital Advisor under the MTD course launched by Xero.
Making Tax Digital starts in April 2019 for businesses over the VAT threshold, but many businesses owners are unaware of the impact it will have on their business and that they will need API software in order to submit returns.
From 2020 we expect to see all businesses – Landlords, Sole Traders, Partnerships, Companies, Charities – with an income over £10,000 having to report their Profit and Loss to HMRC every quarter and then prepare a 5th return for year end adjustments.
This is a massive change and many businesses are currently using incompatible software which will not create digital links, is not approved by HMRC and is not API compliant.
If you want to discuss how Making Tax Digital will affect your business, please get in touch or come to one of our MBL seminars.