However, our accountant can help you bring down your IHT bill by taking benefits of available exemptions and reliefs. For example, if 10% or more of the total estate is donated to any registered charity, the IHT rate will lower down to 36%. For all residential properties that are valued below £2 million and where the deceased has lived at time of death, there is additional nil rate band of £175,000 for individuals and £350,000 for married couples.

WHICH ASSETS ARE VALUED FOR INHERITANCE TAX?

Essentially, all assets in form of money, property and personal possessions must be included in probate valuation. These will include;

• All bank accounts held in UK or abroad,
• Pensions,
• Properties; whether residential or commercial,
• Shares and investments,
• Vehicles,
• Any jointly held assets,
• Jewellery and all other valuable personal effects.
• Pay-outs from insurance policies

Properties and other such unique assets like jewellery will need to undergo professional probate valuation. For assets like vehicles, you can always use publicly available data like second hand vehicle price guides. It is essential that you submit source of valuation as evidence to HMRC. If you have no IHT payable, you will submit Form IHT205. You will submit Form IHT400 if you have any IHT payable.

Please note that you have to declare any foreign assets and any gifts made by the deceased in last 7 years for the valuation of Estate. In case, you discover any assets after the forms have already been submitted, it is your legal duty to notify HMRC within six months of the date when forms were submitted.

WHEN DO YOU PAY INHERITANCE TAX?

Inheritance tax must be paid within six moths after the end of month in which the deceased passed away. For example, if the deceased died on 20^th March, 2020, you must pay the IHT within six months of 31^st March 2020, that is 30^th September 2020.

If you delay the payment, you will be bound to pay statutory interest which is currently calculated at 2.60%. In order to avoid accruing this statutory interest, you six months to sort out probate valuation and other gifts issues.

If you want to avoid paying interest, you can use prepayment before probate option. You will submit Form IHT422. HMRC may reduce interest on early payments and will refund with interest any overpayments. Where the money is tied up in properties, you can opt to pay in instalments with interest over 10 years period.

HOW TO CALCULATE INHERITANCE TAX PAYABLE ON GIFTS?

Every individual has an annual allowance of £3000 per tax year. Unused allowance can be carried forward for one year only. This means you can have a maximum of £6,000 exemptions on gifts received. Beyond which they will be charged at a rate depending on time between when the deceased gifted you and when they passed away.

Please note that the gifts use nil band allowance before any balance is applied to the individual’s estate.

There are also certain exemptions to taxable gifts which include;

• Any wedding or civil ceremony gift up to value of £1,000 per person. The exemption bar is raised to £2,500 for grand-children or great-grand children and £5,000 for children.
• Birthday/Christmas presents that were made out of normal income
• Gifts to any registered charity or registered political party
• Any payments made to elderly relative or a minor for assistance with normal living costs

HOW CAN YOU PAY THE INHERITANCE TAX?

You can pay the IHT from the deceased’s account, joint account held with deceased or your personal account.

When you are using personal account or joint account with the deceased, you can use online of telephone banking, CHAPS or BACS.

When you pay the IHT from the deceased account, this is called Direct Payment Scheme. You have to submit Form IHT423 . Please fill in these details very carefully;

• Inheritance Tax Reference Number
• Deceased’s account details
• Amount to be transferred

This form will also need signatures of Personal Representative appointed by nomination in deceased’s will or by legal nomination where there is no will. The signed form will be forwarded to the building society, bank or National Savings & Investments; who will make the payment to HMRC from the deceased’s account themselves.

if you have quire then visit our Tax Consultant page!

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Following are Changes to Business Taxes and Reliefs that have been announced in Spring Budget 2020-

Changes to Corporation Taxes:

It was expected that corporation rate for financial year beginning 1 April, 2020 will be reduced to 17% from 19%. However, Chancellor Rishi Sunak has announced that the corporation tax rate will remain 19% for the period 1^st April, 2020 to 31^st March, 2021.

Changes to Capital Allowances:

• For Corporation Tax, the annual rate of capital allowance for qualifying investments to construct new structures and buildings, or upgrade existing ones will increase to 3% from 2%. This change is effective from 1^st April 2020.
• For income tax, capital allowances for qualifying investments to construct new or upgrade old non-residential structures will also increase to 3% from 2%. This change will however, be effective from 6^th April 2020.
• Spring Budget 2020 has announced 100% first year allowance for investments in new plant and machinery in marked Enterprise Zones. This will be available till 31^st March, 2021; after which it will be subject to Spring Budget 2021 announcement.
• There is an extension to 100% first year allowance for zero-emission business cars and zero-emission business goods, vehicles and equipment by four years beginning April 2021. Beginning April 2021, CO2 emission thresholds will be reduced from 50g/km to 0g/km for low emission cars first year allowance and from 110g/km to 50g/km for purpose of writing down allowance for business cars. This means that cars with CO2 emissions of only 0g/km will be eligible for writing down allowance at 18%. Cars with emissions exceeding 50g’km will only be eligible for 6% writing down allowance.

Increase in Research and Development Expenditure Credit (RDEC):

In order to rebuild UK economy after the COVID-19 Outbreak, the UK government announces a huge increase from 1% to 13% for tax credit for all companies that are eligible for RDEC schemes. This increased tax credit rate is effective from 1^st April, 2020.

In another happy move for RDEC scheme eligible companies, the Chancellor has announced that the 2018 Budget Restrictions for qualifying loss making companies’ tax credits will be delayed till 1^st April, 2021; as of now. Previously, 2018 Budget announced that effective from 1^st April, 2020, the amount of R&D tax credit for all qualifying loss making companies will be restricted to maximum of three times of net Total PAYE and NIC Liability of a given year.

Corporation Tax Loss Relief Proposed Changes in Spring Budget 2020:

Draft legislations have been issued to restrict deduction allowance to £5 million inclusive of all capital losses brought forward, from 1^st April 2020. This will impact where companies have been carrying forward capital losses to reduce their chargeable gains.

Corporate Tax Relief for Intangible Assets from 1st July 2020:

On the other hand, the government has announced extension to corporation tax relief so that all Pre-finance Act 2002 intangible assets acquired on or after 1^st July 2020 will also be covered. This means companies can now claim relief for older intellectual property rights also. All intangible assets will now be taxed under a single regime.

Business Rates Tax Holiday and Cash Grants for Small Businesses:

The government has announced a 100% Business rates Tax Holiday for all small businesses with Rateable value of less than £51,000.  This applies to all businesses in retail, leisure and hospitality sectors. These may include shops and restaurants, museums, art galleries, theatres, cinemas, caravan parks, gyms and sports clubs, small hotels, Bed & Breakfasts, guest houses, music venues and night clubs. All business rates will be discounted for £5,000 for the year up against the £1,000 for the year for Pubs.

All small businesses eligible for Business Rates Relief have been promised £3,000 cash grant. The Chancellor announced that currently there are about 700,000 such businesses in UK.

Changes to National Insurance Threshold in Spring Budget 2020:

From 1^st April, 2020, the National Insurance Threshold is up to £9,500 from £8,632.

VAT amendment in Spring 2020 Budget:

Only two changes to VAT have been mentioned in the recent budget.

1) Tampon tax stands abolished from 1^st January 2021 when Britain’s Transition period for exiting EU ends. This includes scrapping of VAT on all women sanitary products; no longer classifying them as luxury or non-essential products.
2)VAT will also be abolished from 1^st December, 2020 for all digital publications, e-books,

Academic journals and newspapers.

New Digital Services Tax:

Spring Budget 2020 announces implementation of new Digital Services Tax of 2% on all revenues generated from search engines, social media platforms and online market places that are derived from UK users only. This new tax applies only when two conditions are present:

1)The group’s worldwide revenue from digital activities exceed £500 million.

2)At least £25 million are derived from UK users.

Diesel Tax Relief Amendment:

Previously some companies enjoyed Diesel Tax Relief where they paid just over 11p/litre as compared to the regular 58p/litre consumption. The Government has now announced complete abolishing of Diesel Tax for such companies; majority of which belong to agriculture sector. This means they won’t even be required to pay the 11p/litre tax now.

New ‘Green’ Tax Introduced:

The UK Government has been trying to achieve ambitious green targets. In a new bid, the government has announced that all manufacturers or importers of products that have less than 30% recyclable material composition will henceforth be charged at £200/tonne.

Amendment to the Entrepreneur Relief:

Contrary to the expected, The Entrepreneur Relief has not been abolished completely. However, the lifetime allowance has been reduced to £1 million from £10 million.

Proposal for Ten New UK Free Ports:

The Chancellor has announced that UK Government is considering establishing ten free ports across all four UK nations. The proposal revolves around following tariff benefits:

• No Tariffs/ import VAT/ Excise or Duty suspension for all goods being brought from across border into the Free ports. The taxes and duties will apply only when goods leave the free port for domestic market.
• Duty Inversions for all goods where the duty of final product is lower than duty on component parts. In such cases, the government will allow duty free import of component so that businesses pay duty at finished product rate when goods enter domestic market.
• Duty exemptions for re-exported goods. This will allow businesses to import components duty free in free ports, manufacture final product and then export it without any tariff.
• Simplification of customs processes and documentation requirements for all businesses accessing free ports.

Other Business Grants and Reliefs in Spring Budget 2020:

• The government will refund employers; with less than 250 employees, Statutory Sick Pay Costs for up to 2 weeks per employee that has either contracted COVID-19 or is self-isolating.
• For Self Employed, the minimum income barrier of Employment Support Allowance is temporarily removed. This means self-employed will have access to such benefits from day 1 of illness or isolation. This was previously only available after 1 week.
• Government has also announced Business Interruption Loans of up to £1.2 million to any SME has incurred additional costs as result of Covid-19 outbreak.
• The chancellor has also promised a review of High street business rates system in coming few days.
• The Government’s Time to Pay Scheme ensures that all businesses are given a pre agreed deferral period and time frame to eventually pay their HMRC liabilities.

Certax Fitzrovia Ltd prides itself on keeping all its Clients up to date with changes in Taxes and Reliefs, as announced by the government. Book your appointments now to see how the Spring Budget 2020 will impact your business and how can you take benefits from latest Reliefs and Grants announced by the government.

The post CHANGES TO BUSINESS TAXES AND RELIEFS IN SPRING BUDGET 2020 appeared first on Blogs or News Offical Certax London.

Let’s begin to understand costs and benefits of company cars and car allowance separately. But to understand how these costs and benefits work with your over all circumstances, you need a professional accountant advice so that you optimise your overall expenses and tax amount.

Benefits of Company Car Scheme:

With a company car, you will be saved from paying upfront a larger amount for car purchase. It usually comes with shining advantages of freedom from most administrative tasks of owning a car and buying and latter selling the car at personal will.

In most company car agreements repairs, MOTs and services are usually paid by the employer. Chances for additional savings are even greater if your agreement covers insurance and fuel costs. You can claim back cash for fuel used for company related travels. Company car mileage rates also vary as negotiated.

And the cherry on the top is, most companies will offer you a replacement new and latest car every three to five years; which translates to the benefit that you will have advance fuel saving and low emission technology in your car.

Costs of Company Car Scheme:

It all sounds amazing so far with all the benefits given above. But you need to look at the other side of the coin also.  While the insurance is cheaper on company cars, you may negotiate a cheaper one on personally owned car if you do a good survey. The road car tax will still be borne by you either way. But road car tax varies between car makes and models. With company car, you will have restricted or no choice of car make and model. Employers usually bother least for the company car road tax brackets since it will not be borne by them.

Employees receiving fuel benefits will also have to pay Car Fuel Benefit because benefit in kind is always calculated into salary equivalent for tax purposes. Company car tax brackets will depend on company car’s make and model, CO2 emissions and your current income tax brackets. You may find HMRC calculator of use. (https://www.gov.uk/expenses-and-benefits-company-cars/work-out-the-value)

There are some obvious restrictions with company car schemes. You cannot upgrade or install any modification in your cars. You will not be able to buy or sell at your own choice and you will never own the car. If you swap jobs, it could mean you are without a car!

Benefits of Car Allowances:

Normally the costs of company cars become the benefits of car allowances. But careful consideration should go into decision; company car or car allowance. It will be good to know what the exact cash value of the company car benefit is and does it cover leasing cost or leasing costs and tax, both.  Car allowance gives you freedom of choosing a car that will be your asset; regardless of whether you continue the same job or not.

For those who already have a car and covering its expenses, the allowance is like a cash boost in your salary. You can always use the money elsewhere. But most of the times, people who do not have a car or still want to buy a car, cash allowance can be used towards Personal Contract Purchase (PCP). The allowance will cover car instalments that will be your asset eventually.

With PCP, employees often charge employer the government set rates that allows fuel mileage rates and 45p per mile maintenance rate for a maximum of 10,000 annual miles. Ultimately actual benefits will depend on what is negotiated between employer and employee.

Costs of Car Allowance:

What can be disadvantages of car allowances? The obvious answer is the benefits of company car. Car maintenance and MOTs are to be paid out of your pocket as well as the car insurance and unexpected repairs. You will also pay tax on the allowance. There is always a risk on defaulting on monthly car installment.  You many never be able to buy the latest car models on your personal pockets.

Company Car or Car Allowance

Do you want to make an informed decision? Contact our London Accountants to book an appointment today! Our qualified tax experts provide tailored UK tax advice for both employees and companies. We work with our clients to analyse the value of benefits in kind in empirical tax scenarios.  We cater to a wide range of personal and company clients. We work with each client’s individual circumstances to see how we can claim tax relief on car tax, saving you hundreds of pounds each year. For company or business clients we also help them with treating either company cars or car allowance in annual accounts and outsource payroll services.

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WHICH EMPLOYEES CAN BE FURLOUGHED?

Let us now understand, some additional bullet points for Coronavirus Job Retention Scheme and Furlough Grant system

• To begin with, there is a cut-off date; 19^th March 2020. This means that the employee that needs to be furloughed, must have been on the employer payroll on 19^th March 2020. New employees that have been hired after 19^th March 2020 are generally not covered by the Coronavirus Job Retention Scheme.
• Employers must have documented proof that their business is not doing well due to COVID-19 and how it has impacted their workforce
• There should be evidence that there is no work for each furloughed worker
• Employees can be furloughed if they need to self-isolate for themselves or for a person, they live with, in accordance to the government guidelines
• Employees can be furloughed if COVID-19 has altered their childcare commitments.
• Those employees who had been on sick leave can begin their furlough term as soon as the sick leave ends.

Which Type of Employees can be Furloughed?

Given, they are on employer’s payroll on 19^th March 2020, following employees can be eligible for furlough scheme.

1) Full-time employees (generally understood to work 35 hours or more per week)
2) Part-time employees
3) Any agency employees that work on agency contracts (they are eligible only if they have no work at all)
4) Zero-hour contract workers in circumstances where they your employees on flexible contract basis

What will be maximum furlough salary for employees with two or more jobs?

If a person has two or more jobs, he will receive 80% of his salary for each job. The £2,500 cap will apply to each job individually. This means he will have £5,000 cap if he works two jobs.

What is legal position on working elsewhere while being furloughed?

This is a very subjective question. It will depend on individual circumstances rather than a one fit for all situation ruling. If an employee agrees to be furloughed but uses his free time to top up his salary to manage his outgoings by working in a totally unrelated job, the employer cannot reasonably withhold the employee from doing so. For example, a furloughed computer operator can work as a delivery driver and the first employer cannot reasonably object.

If the furloughed employee work in a related job like a competitor, the employer can reasonably object to the employee taking such a job while on furlough. But let us say the employer had two same level employees. He furloughed one and retained the other. The furloughed employee will be losing 20% or more if the £2,500 cap applies. This will be unfair given one of his colleague is still taking regular salaries. If this furloughed employee is offered a well-paid job elsewhere, the first employer has two choices now. He can either top up remaining salary or cancel the furlough agreement. If both not suitable, the employer can start a redundancy process; in which case the employee will no longer be furloughed.

Ultimately what happens is matter of what agreement is reached between the employee and employer. The UK government has cleared its position that it will not announce a law that will prevent any individual from earning extra in these hard times. The employee and employer can seek regular tribunals and other arbitrary methods where available in case of discord.

Can Business Owners or Partners furlough themselves?

Business owners and business partners will be covered only till the extent of what they receive through PAYE system. If a small business director takes a salary as well as dividends, the furlough conditions will work for salary only. Partner owners or LLP members who receive no payments through PAYE payroll are excluded from furlough grants.

Coronavirus Job Retention Scheme and furlough grant will be of no or very less benefit to people whose major home takes are made up of dividends. These people will be in a better position if they apply for Coronavirus Self Employment Income Support Scheme if their taxable profit is below £50,000 annual threshold.

The post More Things That You Need To Know About Furlough Grant appeared first on Blogs or News Offical Certax London.

What is Job Retention Covering?

Even if the businesses are being shut down temporary, HMRC allows employers to claim a grant that can cover a majority proportion of their payroll expense. Employers will furlough every employee, who otherwise would have been made redundant. For each employee, employers can claim

• 80% of their usual monthly wage
• Or £2,500; whichever is lower of the two
• And associated Employer NI and pension Contributions on the subsidized furlough pay

What does furlough mean?

Essentially, furloughing employees is just like giving them paid leave. Instead of having employers lay off employees in COVID-19 crisis, the earlier can retain the later temporarily on their payroll. It helps in letting the grant reach systematically to those who would otherwise not have any kinds of wages and salaries. During the furlough time, employers cannot ask the furloughed employee to do any kind of work or provide any services that directly or indirectly leads to revenue generation for the business. The employee can, however, voluntarily agree to do any side-line work that does not lead to revenue generation.

The employees will be retained up till 30^th June 2020 or to any further date Government announces for the Furlough period. Beyond the said date, if businesses reopen and revive, employees can be taken back on regular payroll paid by employers. In case the business permanently closes, employees can then be made redundant as per their original employment contract terms and conditions.

What is Time Frame for Furloughing?

Employees can be temporarily furloughed from 1^st March 2020. As of Friday, 17^th April 2020, the UK Treasury has published formal rules on operating the Coronavirus Job Retention Scheme. The Chancellor of Exchequer, Rishi Sunak has confirmed that the scheme will be available up until 30^th June; with a possibility of further extension if deemed necessary.

Originally, any employee that has been on payroll on or before 28^th February, qualified to be furloughed. The employee can be re-employed and then furloughed if he/she has been made redundant any time after 28^th February. Any employee made redundant before 28^th February does not qualify.

For further details on which employees qualify to be furloughed, Read our next blog.

Who can claim under Coronavirus Job Retention Scheme?

Before any employer can claim furlough grant for employee wages, they need to ensure:

1)They have an already operational PAYE payroll scheme on or before 19^th
2)They have enrolled for online PAYE
3)They have a UK based bank account

All employers, big or small, across UK are eligible as long as they meet the above conditions.

Employers further must ensure that their employee retention calculations include only employees that have been on their payroll on or before 19^th March. The date has been revised in recent announcements. The original date announced was 28^th February.

Can you backdate the furlough pay?

Yes. Furlough pay can be backdated to as far as 1^st March. The online portal for applying for the furlough scheme has just been operational. So, all those employers who have paid their employees themselves can claim the backdated employee pay from HMRC for periods starting 1^st March. The Exchequer believes that the payments will reach the employers by end of April. Many may have received the grant already. The UK Government is urging employers to pay employees on time; where they can and not wait for the Grant, with assurance that sooner or later, the Grant will be disbursed to them.

What is UK Government Furlough Guidance about Employee Retention Agreements?

The UK Government has advised all the employers to seek written Furlough Agreements from their employees. They should do so retrospectively if they have not already done it. In case, an employee is not informed that he/she has been furloughed, he/she may claim full wages or salaries as opposed to 80% furlough pay. Such disputes may employee altogether ineligible for the Coronavirus Job Retention Scheme. The Employee Retention Letter with furlough terms and conditions must be signed by the employee and retained by employer for minimum 5 years. This is because employment laws allow employees to back claim unpaid wages and salaries as far as five years old.

The post What is Coronavirus Job Retention Scheme? appeared first on Blogs or News Offical Certax London.

Raza Laghari, Director Certax Fitzrovia has put together the information in this article so that you can know all there is to know about Dividend Taxes in UK for Tax year 2019/2020. This article has updated information till its time of publication.

WHAT IS YOUR TAX FREE DIVIDEND ALLOWANCE?

There is a certain threshold, below which your dividends are not subject to tax. In effect, up to this threshold there is no difference between your gross dividends and take home dividend income. Dividend up till this threshold are call Dividend Allowance.

All tax payers are allotted this dividend allowance. It makes no difference which UK tax bracket they fall in. This means no matter at which rate they pay their dividend tax eventually, their initial threshold for tax free dividend allowance remains universal for all tax payers.

For all practical purposes, the dividend allowance is a 0% tax bracket. For tax year 2019/2020, dividend allowance is £2,000. This is same threshold as for the previous year. For Dividend earnings above £2,000, you will have to know which dividend tax bracket you fall in.

DIVIDEND TAX RATE BRACKETS:

There are three dividend tax rate brackets:

• Basic Rate- 7.5%
• Higher Rate- 32.5%
• Additional Rate- 38.1%

How you actually work tax on dividend is a bit complex. You need to know your Total Income Tax Band. Add your dividend income in your all other income to know your Tax band. You may pay tax at more than one rate. The Table Below and the following worked example can give you a better outlook

DIVIDEND TAX UK WORKED EXAMPLE:

Mr. A gets £30,000 in wages and £3,200 in Dividends for Year 2019-2020.

Mr. A’s Total Income: £30,000 + £3,200= £33,200

Income after personal Allowance: £33,200- £12,500=£20,700

This is Basic Rate Tax Band.

Therefore Mr. A will pay:

20% on £17,500=£3,500

No Tax on first £2,000 dividend

Basic Rate of 7.5% on remaining £1,200= 90

Total Tax Due is £3500+£90=£3590

HOW YOU PAY TAX ON DIVIDENDS?

Now that you know about UK tax Brackets and Dividend Tax Rates, it is important that you know how you pay dividend. All self employed individuals will use their Self Assessment Returns to declare their dividend earnings to the HMRC. In case you are earning less than £10,000 in dividends you need to contact HMRC and have your tax codes changed.

In all circumstances, Tax on Dividends is usually complicated and if you have more than one source of earnings, it is better you seek services of Professional accountant. If you need a professional accountant service in central London, you may contact Certax Fitzrovia Ltd. We are not only expert in UK dividend Tax Calculations but also excel in VAT management, Tax consultancy, bookkeeping, Self Assessment Returns and Payroll Accounting.

The post ALL THAT YOU NEED TO KNOW ABOUT UK DIVIDEND TAX appeared first on Blogs or News Offical Certax London.

HMRC allows you to claim for your capital expenditure that you have incurred, against any taxable profit. What ever you can claim is known as Capital Allowances. There is a wide range of assets that, if purchased for business use, can be eligible for Capital Allowances. Equipment, research cost, renovation expenses can all be claimed for. Any spending on non-durables cannot be claimed for under Capital Allowances.

However, you should know that not all assets are eligible under Capital Allowances Scheme. For some assets, only partial value can be claimed for. There is a possibility that you may claim capital allowance in one year or deduct the allowance over several years. Whatever the case may be, you will mention your capital allowance and how it is being claimed when you submit tax returns to HMRC.

DO ALL CAPITAL EXPENSES BECOME ELIGIBLE FOR CAPITAL ALLOWANCES?

No. All capital expenses do not become eligible for capital allowances. As a general rule only purchased assets are eligible. Leased or Hire Purchased Assets do not count under capital allowances scheme. There are however, tax reliefs available on revenue expenditures for lease or rental value of such assets.

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The most common assets that qualify for capital allowances are Vehicles, Computers, printers, specialist tools like lawn mowers and specialist machinery. Costs of buildings and property are not included, although some of it may be a part of integral features or fixtures. There are further allowances available if you buy energy efficient plant and machinery.

Things like buildings itself, utility systems like gas systems or water heads, structures like roads, bridges, lands and any item used solely for entertainment like office karaoke machine in café will strictly not be included in capital allowances.

HOW TO CLAIM CAPITAL ALLOWANCES?

You will claim capital allowances in your annual Self-Assessment Returns. Any claims you make must be within 12 months after the 31^st January deadline for filing the returns.

CAN CAPITAL ALLOWANCES BE CLAIMED FOR ASSETS USED FOR PART-BUSINESS AND PART-PERSONAL USE?

This is allowed. However, you will claim capital allowances only for the part you use for business. Let’s take an example of a car that you purchase but use 25% of time for non-business personal use. If your capital allowances are calculated as £2000, you will claim on 75% of this which is £1,500. The value of car that will be carried forward into next year will be reduced by £2,000 however.

HOW DO CAPITAL ALLOWANCES WORK?

There are generally two types of capital allowances available.

• Annual Investment Allowance: under AIA you will deduct the entire value of the asset up till £ 1 million annual limit of Capital Allowances. You will claim this deduction in the same tax year when you have acquired the asset. Generally, all plant and machinery are eligible for annual investment allowance. However, most cars and items that were initially purchased before they were used in the business are not eligible for AIA.
• First Year Allowance: this is alternatively known as the enhanced capital allowance. This is available in addition to the basic AIA for certain assets only. The deduction can be made in the year the asset was purchased. This explains why its is called first year allowance. FIA is generally available on energy or water efficient plant, machinery and equipment, low CO2 emission cars and zero emission vehicles.

In case you have not claimed AIA or FYA that you were entitled to, you cannot backdate your claim. However, you can claim part of the cost in following accounting periods by writing down allowance schemes. Writing down allowance scheme are even available for some assets that were initially not eligible for AIA or FYA. Most items are eligible for a 18% writing down allowance rate. Certain assets like integral building features like air conditioning systems and escalators, items with more than 25-year life, thermal insulations systems of building or cars with higher emission rates will be eligible only for 8% deduction rate instead of 18%.

FINAL WORDS ON CAPITAL ALLOWANCES:

This blog is a staff contribution. If you wish to met our experienced accountant or tax consultants, you can call today to book an initial free consultation. Contact Certax Fitzrovia at info@certaxlondon.co.uk or call us at 020 8004 4608. We offer a wide array of services including Accounting and Bookkeeping services, payroll services, business start up services, tax and VAT consultancy and self-assessment services. We inform you about all available tax saving schemes and make your business legally complaint and tax efficient.

The post CAPITAL ALLOWANCES- ALL THAT YOU NEED TO KNOW appeared first on Blogs or News Offical Certax London.

Growing big does not mean you need an in-house accountant on your own payroll. You will find more than one London accountant for small business to outsource your growth related book keeping, accounting and taxation challenges to. Certax Fitzrovia Accountants can be your smart and new age small business accountant London and actually across UK. We continue the Certax tradition of excellence and quality services. We are a qualified accountant in London that can provide online accounting services across UK. You will end up saving more by using your valuable time in your business pursuits rather than accounting and tax issues.

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WE HELP YOU WRITE A BUSINESS PLAN :

We are a team of qualified business accountants UK. Writing  a business plan is part of our expertise. We use professional accounting software to include calculated financial projections in your business plan and other reports. Most small businesses will not have the necessary expertise to tackle with technical financial calculations. We help our clients produce a realistic and professional business plan that is more likely to succeed. We are not only a small business accountant London but an apt business growth consultant. Hiring us at this early stage will give you access to a better advice and financial knowledge. And we promise we will stick with you through ups and downs of your growth journey and small business challenges.

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Different legal structures have different implications on how how you invoice, how you file your tax returns, how you deal with your finances and and how you deal with debt and losses. Our small business accountant London packages include Legal structure consultancy for new start ups and growing businesses. We can help you determine the best legal structure for your business by explaining you pros and cons of each option and keeping in view your unique circumstances and personal goals. We also cover all legal registration and documentation requirements involved in change of existing legal structure.

WE REPRESENT YOU IN TAX INVESTIGATIONS:

Small business accountant London have been increasingly in demand because HMRC has introduced stricter tax regulations for small enterprises. Just like large businesses, smaller ones also have to face tax investigations for failure to pay, incorrect payment and misrepresentation. Most self employed and small business owners have to now prepare statutory records, keep in line with updated tax laws anf manage payroll and other employment related regulations. It is impossible to do it on your own. This where Certax Fitzrovia  comes in picture. We are small accounting firm in UK, affiliated with one of the largest accounting and tax related services provider.

WE HELP YOU MAKE COST SAVING DECISIONS:

Most small business owners do not know that there are multiple ways of treating accounting transactions and that UK government and HMRC allows options in certain cases how you records income, expenses, assets, liabilities, and tax calculations. You also can choose various VAT schemes. As your accountant, it is our duty to inform you of all options and help you make decision that lets you have highest profits and least tax liability.

What else we can do as your small business accountant London?

• Financial Reporting for Management Accounting
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• Self Assessment and Tax returns

For complete list of our services click here.

Remember your expertise is running your business and not accounting and tax related issues. We help you focus on what you are good at and do for you what we are good at doing. If you want us as your small business accountant London, call us 020 8004 4608 at or email us at info@certaxlondon.co.uk.

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Your VAT tax Consultant is responsible for managing your VAT liabilities  in general  and as well as informing you of VAT implications of specific transactions too. What jobs your tax consultant does do or shoukd do depends very much on what services you have contracted with him/her.

Some General Responsibilities of a VAT Tax Consultant:

• Ensuring VAT Compliance with proper Reporting
• Ensuring minimization of VAT liability
• Identifying Risks and opportunities with Due Diligence Tax Planning
• Liaising with HMRC for all audits, enquiries and documentations
• Managing all month end processes on time
• taking care of all relevant deadlines so that you can focus on your primary business.

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Remember, a good tax consultant will make sure you do not have to pay heavy taxes, do not commit any noncompliance or do not end up paying penalties for filing returns wrongly. A focused VAT and other Taxes Strategy can save you millions over the life of your business.

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Qualities of a Good VAT tax Consultant:

• Experience

VAT is one of the most complex UK laws. Most entrepreneurs and business managers are still striving to understand what difference VAT makes to their business sustainability and profitability. Almost none can claim that they know how to file VAT accurately or manage VAT account with HMRC properly.

Unfortunately, most VAT tax cosultants, or so they claim, also do not know enough about VAT and its calculations. Constant changes to the VAT system makes things more complicated. Ironically, after charging VAT to its citizens for almost 5 decades now, the UK VAT system still seems to be developing.

Remember to choose a VATTax Consultant that has experience enough to understand  the workings of UK tax laws. Do not go by just brand name; look at track record of your designated tax consultant in person.

Meet Certax Fitzrovia Tax Consultant Raza Laghari

• Creative Thinking

Is your VAT tax Consultant a creative thinker? Does he/she think out if box solutions to actual complex VAT issues that your business may face? Can he suggest you alternative plans to lower VAT liability? Essentially, any tax consultant should be Creative at heart. Their problem solving skills need to be sharp and proactive.

You would know your tax consultant is good enough if he warns to tax implications of multiple scenarios in advance rather than when situations actually occur. Tax consultants think in Long run implications rather than just immediate implications.

• Interest in your business

Your VAT tax Consultant should have interest in your business. This is not to say he should know how to run your business, but he should be broadly aware what your business is about and show willingness to understand your industry norms. Remember VAT implications vary from industry to industry.

Make sure  you and your tax consultant are on same page regarding your goals and aspirations about your business growth and expansion. Your VAT strategy should reflect your furture business objectives and your tax consultant should know what these are!

Always check if your tax consultant has attention to details of your business? Is he interested in just you paying for his services or has interest in understanding your business so that he can develop a tailored strategy for you.

• Personal Qualities

Always look for a VAT Tax Consultant who you can work with comfortably on a table. Choose a person who you can talk to and who can listen to you, your issues and understands your goals and objectives. Your accountant  and your tax consultant shoukd be a person who you can talk over a coffee or lunch! Always select a commercially aware person to be your tax consultant. best tax Consultancy services take account of all recent and expected changes in laws.

If you are looking for an experienced VAT Tax Consultant in UK, contact Certax Fitzrovia. We are certified accountants and Tax Consultants based in Central London. CONTACT US here or call us at 020 8004 4608. We offer a free one hour initial consultation to new clients.

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What is Marriage Tax Allowance?

Marriage Tax Allowance is government scheme that lets you transfer your unused £12,500 tax free personal allowance to your spouse or civil partner. To take benefit of the scheme, one of you must be earning lower than £12,500 and the other must earn above £12,500. You can use the Marriage Tax Allowance Calculator if you want to see how much tax liability you can save for your total household income.

In case you are receiving other incomes like savings interest or dividends, call the Income Tax Helpline  to check for your particular eligibility for Marriage Tax Allowance. This helpline is dedicated for personal tax accounts and must be used to notify HMRC about any changes that affect your tax code. You can contact HMRC here for your tax estimations. Automated assistant ‘Ruth’ answers al your queries.

CAN I BACKDATE MY MARRIAGE TAX ALLOWANCE CLAIM?

Yes. You can claim up till last four years marriage tax allowance. This means you can claim for any tax year since 5^th April 2015.

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WHAT HAPPENS IF MY SPOUSE OF PARTNER DIES?

If your spouse or partner has died, you can still claim his/her unused tax free personal allowance; given that the person managing his tax affairs calls the Income Tax Helpline.

In Autumn Budget 2017, widows or widowers were allowed to claim up till £900 in backdated marriage tax allowance for each year they were married to their spouse or were in civil partnership with their partner. However, you cannot backdate your claim before 2015; i.e. 4 years in past.  Even if your spouse of partner dies on day 1 of the new tax year, you are eligible to claim marriage tax allowance for that year.

If the deceased partner or spouse has transferred you some of their personal allowance, your allowance will stay at higher level till the end of that tax year. Meanwhile, your partner/spouse’s estate will have a lower personal allowance.

If you are the low earning partner, and your high earning partner dies after you have transferred your personal allowance to them, the said allowance will be treated as personal allowance for their inheritance. Your personal allowance will be reverted to what it was before the transfer.

AM I ELIGIBLE FOR MARRIAGE TAX ALLOWANCE?

Make sure you fulfill the four criteria listed below in order to be eligible for marriage tax allowance.

• You are married or you are in a registered civil partnership. Living together is not sufficient for claiming Marriage Tax Allowances.
• Between the two of you, one must be a non-taxpayer; which means earnings less than £12,500 per year between the years 6^th April 2015 to 5th April 2019 for a resident of UK or Scotland.
• One of the partners must be the basic rate tax payer i.e. 20% and earning less than £50,000 in UK or £43,430 in Scotland. If a partner is paying additional rate higher than 20% on high income bands, the couple is not eligible for Marriage Tax Allowance.
• Both partners must be born after 6^th April 1935. If any one of you has been born before 6^Th April 1935, the couple as a whole will be eligible for Married Couple’s Allowance

HOW TO APPLY FOR MARRIAGE TAX ALLOWANCE?

The easiest way is to apply online. It will be the non-taxpayer partner or spouse who will have to apply. You will need one of following to prove your identity;

• The last 4 digit of your account where all pensions, child benefits and tax credits are paid into.
• The last 4 digit of your account that pays you interest.
• Your P-60 specific details
• Details of three most recent payslips
• Passport number with expiry

You also need to know your NI Number as well as your partner’s or spouse’s NI Number. The recipient partner will have a changed tax code. Your unearned personal allowance will keep on transferring to your partner or spouse until and unless there is a change in circumstances. You do not need to apply each year; applying once is enough.

Any change of circumstances, like death, divorce or change in pay scales must be reported to HMRC on their Income Tax helpline.

Acceptance of Marriage Tax Allowance Scheme for your couple will be communicated in email or by post.

MARRIAGE TAX ALLOWANCE-FINAL WORDS:

It has been criticized that Marriage Tax Allowance is discriminatory towards people who are not married. To be honest, yes it is. But this is a government policy that aims to uphold the institution of marriage. The UK monarchy believes in sanctity of marriage and upholds the view that marriage provides stable foundation for upbringing of future generations. In recent years, it has accepted civil partnership as equivalent of marriage and rewards the commitment being made.

Happy or Not, Marriage Tax Allowance has been aimed to benefit only the couples that are married or in civil partnership.

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