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If the interest rate on your mortgage is higher than the interest you earn on your savings, then you can save a considerable amount of money and reduce your tax bill on the interest received by using spare capital to pay off the mortgage on your own property. In the current climate of low interest rates where savings earn a very poor rate of return this is likely to be worthwhile.You could also save a considerable amount by switching to an offset mortgage if you feel the need to have the capital ... Continue Reading

The ‘Rent-A-Room’ relief scheme is an optional tax exemption scheme that allows property owners who let out spare furnished rooms in their only or main home to receive up to £4,250 per annum gross and not be subject to tax.If the rent received exceeds £4,250, the first £4,250 is tax free, income tax being paid on the balance. This obviously covers income from lodgers and may also be applied to bed and breakfast or guest houses which would usually be assessed as a trade.The ... Continue Reading

If you are sent to work abroad for a continuous period of at least 60 days, then your employer can pay for two trips abroad per tax year for your spouse or civil partner and children without any charge to tax on the costs arising on you.Care should be taken to space the trips out so that only two per tax year are paid for to avoid a benefit-in-kind charge arising.If necessary, delay or bring forward a trip to ensure good use of this concession.Example:In January 2015, Daniel is sent by his employer ... Continue Reading

A limit is placed on the amount that an individual may deduct by way of certain specified reliefs from 6 April 2013 onwards. The limit is set at £50,000 or 25% of the individual’s adjusted total income for the tax year if this is greater.The reliefs subject to the limit include income tax loss reliefs, but not charitable donations and contributions to registered pension schemes. Where reliefs available for the year exceed the limit, care should be taken to ensure that maximum relief is ... Continue Reading

Expenses incurred in the running of a property business will have been spent in order to generate income and as such can be deducted from income received during the year. When the letting ceases there will be no income against which relief can be claimed. However, by ensuring that any expense is accrued (allowed) for, tax relief is available; the crucial factor is not when the expense is paid or the date on the invoice but when the need for the expense arose. Expenses:Last year Tony rented a property ... Continue Reading

For 2015/16 no employer’s National Insurance is payable on an employee’s (or director’s) earnings where the employee is under the age of 21 until the employee’s earnings exceed £815 per week (the employer’s upper secondary threshold for under 21s).This means that where the director or employee is under 21 (for example, in a family company, maybe one or more of the director’s children), the optimal salary for 2015/16 is equivalent to the personal allowance ... Continue Reading

The Low Incomes Tax Reform Group has backed new legislation to stop workers from facing tax charges on low-value benefits they receive from their employers. Introduction LITRG believes the current rules governing what constitutes a tax-free trivial benefit are too subjective and can leave employees shocked and confused as to why they end up having to foot a tax bill for receiving a minor item. The group supports the introduction of new, clearer, statutory rules on trivial benefits because it will ... Continue Reading

For 2015/16 there is no liability to pay Class 2 NICs if your earnings from self-employment are less than the small profits threshold of £5,965. However, if you have no other earnings and are not entitled to NIC credits, you may wish to pay Class 2 contributions voluntarily to preserve entitlement to the state pension as this is much cheaper than paying Class 3 (voluntary) contributions, which for 2015/16 are £14.10 a week compared to £2.80 per week for Class 2 contributions. Paying ... Continue Reading

Work carried out to an existing or newly acquired property resulting in the property being improved or altered is deemed to be a capital expense, which is deductible in the capital gains calculation on sale. Repairs such as painting and redecorating, mending broken windows, replacing tiles, etc. are an allowable deduction from the rental income. If a business rents a commercial property and under the terms of the lease the tenant is required to incur the cost of repairs, then the expense is allowed ... Continue Reading

The LITRG urges taxpayers who missed the Self-Assessment filing deadline on 31 January to appeal against penalties for late filing if they think they had a reasonable excuse. Introduction LITRG supports HMRC’s efforts to encourage people to file returns and pay tax due from them by the proper date. But it is concerned that some of those who did not make the deadline may not appeal against sanctions for late filing because they are not aware of their rights. LITRG concern The LITRG is concerned ... Continue Reading