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Capital gains tax new rules 2010

This post will be of interest to anyone likely to pay capital gains tax (CGT) as a result of a sale of an asset in the 2010/11 tax year.  The June Budget introduced an overnight change to the CGT regime and HMRC have produced a fairly readable Budget Note 20 and a copy of the Example 1 from that release is reproduced at the foot of this article.  The example uses a taxpayer whose income is taxed at the basic rate but in adding capital gains the inclusive income will be in the higher rate band. read more

June Budget 2010 Highlights for individuals and SME Business Owners

We have been complimented on the updates posted on Twitter live during the Budget and hope to continue this by summarising the main points of interest to small business owners and individuals in the street.

The Chancellor George Osborne started by painting the picture of the poor state of the economy and among various political comments stated that due a cautious approach fiscal goals would be met one year earlier than expected in 2014.  The inflation target will remain at 2% which has already been exceeded, this will peak at 2.7% later in the year and then reduce.  In terms of the approach to the deficit a lower spending rather than higher tax route is being taken, read more

Green company car – is there such a thing?

I was speaking to a client yesterday regarding the options of having a company car and coming from a carbon reduction background he was keen to have a low emission car and wanted to know the tax effect.  This is an area where the government are encouraging growth using the taxation system as a carrot, to encourage lower emissions, the arguments regarding the costs and environmental impact of battery materials and technology we will leave to other forums. read more

Is my tax code right?

A tax code or what HMRC call a PAYE Coding Notice is the means by which your tax free allowance is allocated to the pay for your job if you are an employee.  Every month a portion of your income will not be taxed, and the rest will be taxed at the basic rate of 20% for the next £37k then 40% and 50% thereafter (for 2010/11) depending on how high your income is.  Many employees and employers will be aware of the number of tax code notices issued early in 2010 and with many of these being incorrect many people are concerned as to whether this is correct.  read more

Status – employee or self employed

There is a significant difference between the rights of an employed person as opposed to a self employed person, and this is most clearly reflected in their tax treatment.  An employee has many more rights such as holidays and maternity leave but at the expense of higher taxes.  It is therefore necessary to have an understanding of the differences.

One of the major tests is the degree of control exercised by the employer read more

Dates and deadlines for the new tax year

With the passing of the old tax year we are presented with returns to file and tax to pay.  Some memorable dates are listed below, with a few more interesting ones too:

• 19 April – PAYE must be paid for the period up to 5 April (usually just the March payroll) – and monthly on 19^th for each subsequent month read more

March Budget 2010

The key budget announcements follow, we can of course expect another post election budget when more significant changes may be made such as the much vaunted increase in VAT:
For business

• The Annual Investment Allowance (AIA) will be increased to £100k pa for expenditure incurred on or after 1 April 2010 (companies) and 6 April 2010 (unincorporated businesses).
• No changes have been made to the main and small companies’ rates of corporation tax which for 2010 remain at 28% and 21% respectively.
• A 100% first year allowance will be available for new zero-emission goods vehicles for a five year period from 1 April 2010 (companies) and 6 April 2010 (unincorporated businesses)..
• Business rates cut for one year from October meaning a tax reduction for more than 1/2 million small businesses in England and 345,000 will pay no business rates at all.

For individuals

• The lifetime allowance for entrepreneurs’ relief has been increased to £2m and may be claimed for disposals made on or after 6 April 2010.  Capital gains tax rate remains at 18%. read more

Tax returns – do I need one and what information must I keep?

Under self assessment anyone who has a tax liability must inform the Revenue and pay the additional tax.  For the majority of employed taxpayers this does not apply as tax is collected by their employer every month and any adjustments are made in their tax code.  The opposite rule however does not apply as the Revenue is not obliged to tell you if you have overpaid, so if you are in doubt it makes sense to check which you can do on the Revenue website or ask your accountant to do.  Some people such as directors of companies and the self employed must complete a tax return. read more

Get advice and plan early for the most tax opportunities

I have just signed up a client who has a limited company which he set up over a year ago although he did not start trading until the current tax tax.  From previous posts you will be aware that one of my recommendations for the biggest tax saving opportunities read more

Why you should have an accountant and how to choose one

As new research from business software and services provider Sage shows that

accountants are now seen as the most trusted source of business advice

for UK firms, we consider why you should have an accountant and how to choose one.

A qualified accountant is an experienced professional read more