VAT when buying or selling a business

The purchase of a business as a ‘going concern’ is not subject to VAT. So if you continue with the existing trade in place of the seller, you do not have to pay VAT on the transfer of the trading assets. A common example would be taking on a public house, if the changeover happens…

On your bike – tax free!

The Government has changed the “tax-free bike scheme” which has been developed in response to the “Green Transport Plan”. Basically the employer buys a bike and hires it to the employee until it has been paid for. The repayments are made from pre-tax rather than post taxed income. The scheme enables employees who are basic-rate…

Tax credits – can you claim?

You may be eligible for tax credits if you fit into the following criteria: – If you are responsible for at least one child or young person who normally lives with you, you may qualify for Child Tax Credit. – If you work, but earn modest wages, you may qualify for Working Tax Credit. In…

Letting your home

There is no tax relief on purchasing your own home. Where possible, business owners should try to structure their affairs so that the business has borrowings and minimise the mortgage for the home. The mortgage is a major outgoing for most people, and both interest and capital repayments have to be funded out of our…

Running your company from home

If you run your business through a limited company and your base of operations is your home office, it is possible to charge your company rent. Of course if you do this the company will be able to deduct the rents from its profits and you will need to declare the rents on your self-assessment…

Employed or self-employed

Whether an individual is employed or self-employed is often far from clear, it is a case of shades of grey rather than “black and white”. There have been numerous court cases over the years, and the judgements in these cases form the law on this area. HM Revenue & Customs have recently published new guidelines…

HMRC further online incentive

From 1 October 2008 HMRC will no longer send taxpayers a postage paid envelope to use when paying their tax or filing/paying their VAT returns. This apparently is a signal to us all to make returns and payments online. To ease the payment process HMRC are also about to make it easier to pay our…

Capital Allowances and personal tax planning

There has been a big change to the amount small businesses can claim for tax purposes when they invest in capital items such as plant and machinery (these are known as capital allowances). From the 6 April 2008 sole traders and partners can claim up to £50,000 a year as a direct write off against…

Immediately vested pension contributions

If you are of pensionable age, (presently 55 or 50 if you were born before 6 April 1960) here is some information you could find very interesting. The illustration below shows you for example that a higher rate tax payer can start to draw an income (pension) from a fund of £37,500 at a cost…

Borrowing from your own company

If you are the owner of a company it is a breach of Company Law, except in specific circumstances, for you to borrow money from your company. Ironically there are no fines payable if you break this particular aspect of company law! However there are a number of tax consequences, two of which are outlined…