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Family Member Pension Contributions

Although there continues to be plenty of speculation over possible pension tax relief cuts, as things currently stand, paying into a pension generally remains a tax-efficient way of saving for old-age. Given that there may well be future changes in this area, it might be beneficial to consider starting, or topping up, pension plans sooner…

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Using a SIPP to Save for Retirement

A SIPP is a self-invested personal pension which is set up by an insurance company or specialist SIPP provider. It is attractive to those who wish to manage their own investments. Contribution to a SIPP may be made by both the individual and, where appropriate, by the individual’s employer. Investments The range of potential investment…

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Inheritance Tax and Spouses and Civil Partners

Special rules apply for inheritance tax purposes to married couples and civil partners. To ensure valuable tax reliefs are not lost, it is beneficial to consider the combined position, rather than dealing with each individual separately. Married couples and civil partners benefit from exemptions that are not available to unmarried couples. Inter-spouse exemption The main…

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Government Childcare Scheme – Tax Free Top Up

Working parents can receive a tax-free top up from the Government to help with their childcare costs. The top up is worth £500 every three months (£2,000 a year). A higher top-up of £4,000 a year (£1,000 every three months) is available where the child is disabled. To receive the top-up, eligible parents must open…

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Optimising Tax-free Benefits in Family Companies

Making use of statutory exemptions for certain benefits-in-kind offers an opportunity to extract funds from a family company without triggering a tax charge. The essential point to note is that to make the tax saving, the benefit itself, rather than the funds with which to buy the benefit, must be provided. Mobiles No tax charge…

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Timing Dividends Right Could Help Save Tax

Timing the date of a dividend payment from a company can determine both the amount and the due date of the tax payable. This may be a particularly useful strategy in a close- or family-owned company. The dividend allowance, which was originally introduced from 6 April 2016, was cut from £5,000 a year to £2,000…

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Are Low Emissions Cars Tax Efficient?

Significant changes are being made from 2020-21 to the company car tax benefits-in-kind bands affecting ultra-low emission vehicles (ULEVs). The taxable benefit arising on a car is calculated using the car’s full manufacturer’s published UK list price, including the full value of any accessories. This figure is then multiplied by the ‘appropriate percentage’, which can…

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Tax-free Mobile Phone

Mobile phones are ubiquitous – they are also subject to a tax exemption which enables employees to enjoy a mobile phone provided by their employer without suffering a benefit in kind tax charge. However, as with all exemptions there are conditions to be met for the exemption to apply. Nature of the exemption The exemption…

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Student Loan Deductions

Employers fulfil many collection roles for HMRC, one of which is the collection of student loan repayments. There are now three types of student loans for which employers may be responsible for deducting loan repayments from an employee’s pay. These are: Plan 1 Student Loans; Plan 2 Student Loans; and Post-graduate Loans (PGLs). Repayment thresholds…

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Penalties for Late Self-Assessment Returns

The normal due date for a self-assessment return where filed online is 31 January after the end of the tax year to which it relates. This means that self-assessment tax returns for 2017/18 should have been filed online by midnight on 31 January 2019, and self-assessment returns for 2018/19 must be filed online by midnight…

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