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Archive for the ‘Tax Relief’ Category

Corporate Expenses Guide – What business costs are tax allowable for Limited Companies

Wednesday, September 15th, 2021

In general, tax-deductible expenses in a Limited Company must be wholly and exclusively for the use of the business.

If an expense has a dual purpose for both personal and business, you can only claim for the business element.

A summary of the rules for typical costs incurred by a company include:

 

 

If you are unsure if a cost is tax allowable or would like further advice on any of the above, then please get in touch with us.

 

 

 

 

 

 

Micro-trader tax breaks get the chop

Thursday, May 11th, 2017

 

 

Over 600 pages of the 2017 Finance Bill have been hastily axed in order to pass the Bill prior to parliament being dissolved.

Unfortunately, two of the casualties of this cull were the micro-trader and property allowances which were due to take effect from 6th April 2017.

As things stand taxpayers are advised to record all sources of income regardless of how small and to watch this space for further information.

 

 

 

 

Micro-trader Tax Breaks

Wednesday, March 15th, 2017

Micro-traders are to benefit from new tax breaks!

With effect from 6th April 2017, two new allowances will come into effect thanks to the rise in eBay trading and Airbnb.

To try and remove some of the confusion that surrounds when a ‘hobby’ becomes a trade the government have announced two £1,000 allowances to be known as:

• Micro Entrepreneurs Allowance and

• Property Allowance

So how will this work?

Well, any individual who receives gross income of less than £1,000 a year from a small trade or land and property will no longer be required to tell HMRC and will not need to register for a self-assessment tax return. Alternatively, if their income exceeds £1,000, then they can opt to make a deduction from gross earnings of £1,000 and report no expenses, this is particularly useful for a micro trader with limited expenses.
These new reliefs were created with the online trader in mind but of course, may benefit many small traders from cake decorators to dog walkers.

HMRC guide explains new home allowance for inheritance tax will work

Thursday, November 10th, 2016

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HMRC have published a new guidance explaining how the residence nil rate band (RNRB), or home allowance, for inheritance tax applies in most circumstances.

An estate will be entitled to the RNRB if the:
• individual dies on or after 6 April 2017
• individual owns a home, or a share of one, so that it’s included in their estate
• individual’s direct descendants such as children or grandchildren inherit the home, or a share of it
• value of the estate isn’t more than £2 million
An estate will also be entitled to the RNRB when an individual has downsized to a less valuable home or sold or given away their home after 7 July 2015.
The maximum available amount of the RNRB will increase yearly .

More details are available here

If you would like to discuss the above please call Cheadles accountants in Stafford on 01785 254550

Farmer Averaging Rules

Tuesday, November 1st, 2016

Announced in the March 2015 budget and brought into effect from April 2016, farmers have been given greater flexibility with an extension to the two-year farmers averaging rules. The new rules that allow farmers the option to average profits over five years will run alongside the existing two-year averaging system. With farmer’s profits often affected by uncontrollable external factors like the weather, a year of high profits can often be followed by a year of losses. It is hoped that the new option will increase tax planning abilities in these situations.

The relief is also available to market gardeners and the term ‘farming’ includes the intensive rearing of livestock or fish on a commercial basis for the production of food for human consumption.

The general rules will still stay the same where relief is only available to sole traders and partnership. It is not available to companies or those using the cash basis and calculations are done on an individual basis. This means calculations should be on individual partners rather than the partnership as a whole. Claims cannot be made in the year of commencement or cessation and losses will still be treated as NIL profits.

To claim relief over five years a ‘volatility condition’ still needs to be met, this is done retrospectively. The original two-year rules gave full relief if the profits of one year were 70% or less than the other and marginal relief where profits were between 70% and 75%.

The ‘volatility condition’ requires the four previous year’s profits to be averaged and compared to the current claim year profits tadalafil over the counter. If one profit is 75% or less than the other a claim can be made, marginal relief no longer applies.

Five-year averaging will require an increase in time-consuming and complicated calculations, however, may not lead to greater tax savings. It is believed there will need to be large fluctuations in profits for the new five-year rules to be beneficial. Averaging will need to be carefully considered especially with possible changes to subsidies and support following Britain’s exit from the EU.

If Cheadles Chartered Accountants in Stafford can be of assistance with any of the above please call on 01785 254550