Just when it looked as if things couldn’t get any worse for prospective buy-to-let investors – in particular the gradual withdrawal of higher rate tax relief for finance charges – the Bank of England’s Financial Policy Committee (FPC) will be granted new powers by the government to help it protect the financial system from future risks in the buy-to-let mortgage...
The season to be merry
If you are involved in planning the staff Christmas party for your firm don’t forget to consider the income tax consequences. Here’s a short reminder of the points you should add to your check list. The cost of an annual staff party or similar function is allowed as a deduction for tax purposes. However, the cost is only deductible if it...
Making tax digital – nothing to worry about
Readers will be relieved to note that their professional advisors and other interested organisations, have recently lobbied HMRC to temper their agenda for making tax digital (MTD). In case you have not heard of MTD, HMRC intend to require businesses with income over a de minimis limit (presently set at £10,000), to upload summary accounting data on a quarterly basis from...
Muras Matters: The Patent Box: A Patently Underclaimed Tax Relief
The Patent Box: A Patently Underclaimed Tax Relief Background The Patent Box was introduced on 1 April 2013, to give tax relief to income and gains received by a limited company and earned through patented items. The relief works by applying a lower tax rate to the related profits, with the tax rate reducing year on year to 10% by 1 April...
Muras Matters: Tax Relief for Employment Expenses
Tax Relief for Employment Expenses Background Some unusual employment related tax exemptions have been in the news recently, therefore today we cover the rules generally together with some specific examples of tax deductible employment expenses. Employees are subject to more restrictive rules than the self-employed, however if tax relief is due then a refund could be claimed from HM Revenue & Customs through...
Annual Investment Allowance (AIA)
From 1 January 2016, the AIA was increased to an annual limit of £200,000. Unlike previous changes, this is a permanent increase. The AIA allows businesses to write off 100% of expenditure in qualifying assets and equipment, up to the appropriate limit, against their tax liabilities. In effect, qualifying expenditure is treated as any other business expense: it reduces taxable profits. There...
When is a hobby a trade
We have received enquiries from a number of clients, concerned that HMRC is going to try and tax them for the small amounts of cash that they make from pursuing hobbies. For example, buying and selling on eBay or setting up stalls at their local drive in markets – car boot sales. If you establish a regular pattern of making money...
Deferring taxable gains until future sales
It may be possible to delay paying Capital Gains Tax (CGT) if you sell a business asset that is subject to a charge to CGT, but you use all or part of the proceeds to buy new business assets. The relief you can claim is called Rollover Relief. This relief means you won’t usually pay any CGT until you sell the...
How long do you need to keep tax records
The length of time you need to keep tax records depends on the types of income you earn and the types of tax you are paying. A list of time limits is set out below: Income Tax and Capital Gains Tax 1. If you are not in business One year from the 31 January following the end of the tax year. For 2016-17,...
Limits on certain claims for tax relief
From 6 April 2013, the total amount of certain Income Tax reliefs that can be used to reduce your total taxable income is limited to £50,000, or 25% of your adjusted total income, if higher. The main reliefs subject to this limit are: trade loss relief against general income and early trade losses relief - claimed on the self-employment, Lloyd’s underwriters or...