28/09/2016, by Tax Insider, Tax tip - General Tax
The basic personal allowance is reduced where a person has ‘net adjusted income’ in excess of £100,000. The personal allowance (£10,600 for 2015/16) is reduced by £1 for every £2 by which this limit is exceeded until the allowance is fully abated.
This means that anyone with income of more than £121,200 in 2015/16 loses all their personal allowance.However, it is possible to preserve entitlement to the personal allowance by reducing income to below £100,000. ... Continue Reading
26/09/2016, by Tax Insider, Tax tip - General Tax
For 2015/16 there are three rates of income tax – the basic rate of 20%, the higher rate of 40% and the additional rate of 45%.
By transferring income to a lower earning spouse or civil partner it is possible to save tax at the higher rates, thereby reducing the combined tax bill.It should be noted that to transfer income to a spouse or civil partner, the underlying asset, such as shares, must be transferred, rather than the income (for example, the dividend) itself.Example:Stuart is an additional ... Continue Reading
23/09/2016, by Tax Insider, Tax tip - General Tax
ISAs provide the opportunity to receive tax-free income and gains.Using an ISA to invest £10,000 each year for ten years will provide a pot of £100,000 plus accumulated interest and dividends which also generate tax-free returns. Over a number of years this can be a viable alternative to a pension fund as proceeds can be taken at any time and there is no requirement to wait for retirement age and no limit on the amount that can be withdrawn. However, unlike contributions to a registered ... Continue Reading
21/09/2016, by Tax Insider, Tax tip - General Tax
If your taxable turnover is below the VAT threshold then you may not have considered whether registering for VAT could be advantageous for you. The VAT registration threshold is £82,000 from 1 April 2015.If you incur VAT on supplies and the majority of your customers are registered for VAT, then it may be beneficial to register for VAT on a voluntary basis.This will allow you to recover the input tax paid on the supplies and also allow you to charge VAT on your invoices.It will also be beneficial ... Continue Reading
19/09/2016, by Tax Insider, Tax tip - Business Tax
A person may decide to stop trading if they are making losses. Although the loss can be relieved in the usual way against income of the same and previous year, an additional relief is available for the loss made on the cessation of the business (known as a terminal loss).A claim for terminal loss relief can be made if the person permanently ceases to carry on a trade and makes a terminal loss. The terminal loss is the loss made in the period beginning at the start of the final tax year and ending ... Continue Reading
17/09/2016, by Low Incomes Tax Reform Group, Tax article - General
LITRG has appealed to HMRC to ensure that Concentrix do not suspend or stop any more tax credit payments until the problems preventing claimants from raising queries have been resolved.
The LITRG reports that in September they have experienced a significant spike in contact from tax credit claimants who are unable to get through to the main Concentrix helpline number, although they have seen – and made representations to HMRC about – problems with poor service levels going right back ... Continue Reading
16/09/2016, by Tax Insider, Tax tip - General Tax
If you are self-employed and usually make large profits, but incur a loss for one year, then you may be eligible to claim working tax credits or universal credit for that year.It is worth submitting a protective claim during any year for which you are uncertain of the level of your income as you can only backdate claims for one month from the date of claim.Example:John is married to Mary, who does not work. They have one child age 10.
John usually makes £100,000 per annum as a self-employed ... Continue Reading
14/09/2016, by Tax Insider, Tax tip - Business Tax
Many benefits, including childcare vouchers up to the exempt limit and mobile phones, can be provided free of tax and National Insurance.
While a tax-free benefit is valuable in the hands of the employee, the employer is left to meet the cost.By using a salary sacrifice arrangement it is possible for the employer to pass the cost of the benefit to the employee and for the employee to save tax and National Insurance and the employer to save National Insurance.Under a salary sacrifice arrangement ... Continue Reading
14/09/2016, by Low Incomes Tax Reform Group, Tax article - Income Tax
HMRC launch a new Worldwide Disclosure Facility encouraging taxpayers to put things right if they have not declared all of their UK tax liabilities relating to offshore income or gains.
This LITRG article outlines the new opportunity to tell HM Revenue and Customs (HMRC) about any problem with your tax.
Worldwide income
If you have income and gains that arise outside the UK, you generally have to tell HMRC about them, as you may have to pay UK tax on them. If you have worldwide income that you ... Continue Reading
12/09/2016, by Tax Insider, Tax tip - Property Tax
If a property was at some point your PPR then the last 18 months are exempt from tax. Where the disposal took place prior to 6 April 2014, the last 36 months of ownership were exempt. The last 36 months of ownership remain exempt for post April-2014 disposals where the owner or their spouse or civil partner is disabled, or one of the couple have moved into a residential care home.This means that if you have a second property that you now live in, then you are still entitled to PPR for the last 18 ... Continue Reading
