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100% write down for qualifying capital expenditure

17 Aug, 2017

The Annual Investment Allowance (AIA) limit has changed significantly over the last number of years. However, the limit has been fixed at £200,000 for all qualifying expenditure on or after 1 January 2016.

When must you register for VAT?

17 Aug, 2017

The taxable turnover threshold, that determines whether businesses should be registered for VAT is currently £85,000.

Businesses are required to register for VAT if they meet any of the following conditions:

What are overlap profits?

17 Aug, 2017

The assessment of self-employed or partnership profits is relatively straight-forward if the accounting date, to which accounts are prepared, falls between 31 March and 5 April. However, year ends that fall outside these dates create overlap profits.

Overlap profits can be created in the first 3 years of the business or in any year in which there is a change of basis period and accounting date.

For example, if your business commences 1 January 2016, and your chosen year end date is 31 December 2016, your basis periods are:

Choosing a company name

17 Aug, 2017

Companies House guidance sets out the main requirements for incorporating a company in the UK. The guidance entitled Incorporation and Names also provides advice on checking which names are acceptable to Companies House when naming a company.

VAT capital goods scheme

10 Aug, 2017

The VAT Capital Goods Scheme (CGS) adjusts the initial VAT recovery in respect of certain assets over either 5 or 10 year period. The scheme seeks to agree a fair and reasonable attribution of VAT to taxable supplies and non-taxable supplies relating to the use of an asset over its lifetime. In effect, the recovery of VAT input tax following the capital expenditure, is spread out over a number of years rather than being recovered at date of purchase.

Claiming back VAT on fuel

10 Aug, 2017

HMRC offers a number of alternative methods for claiming back VAT on car fuel where there may be a mix of business and private mileage. They fall into a number of broad categories:

What qualifies for 10% Entrepreneurs’ Relief?

10 Aug, 2017

Entrepreneurs' Relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where Entrepreneurs' Relief is available CGT of 10% is payable rather than the normal main rate of 20%. This can significantly reduce the amount of CGT due.

When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to a generous £10 million from 6 April 2011.

Carry back charitable contributions

10 Aug, 2017

Donations to charities are a recognised way to benefit charities and certain tax payers. To facilitate these advantages, taxpayers must ensure they keep a proper record of all donations to back up claims on their tax return.

Donations that are made through the Gift Aid scheme allow for the recipient charity to claim 25p worth of tax relief on every pound donated. Higher rate and additional rate taxpayers are eligible to claim relief on the difference between the basic rate and their highest rate of tax.

For example:

How to roll-over capital gains

10 Aug, 2017

Business Asset Rollover Relief allows for the deferral of Capital Gains Tax (CGT) on gains when you sell or dispose of certain assets and use all or part of the proceeds to buy new assets. The relief means that the tax on the gain of the old asset is postponed. The amount of the gain is effectively rolled over into the cost of the new asset and any CGT liability is deferred until the new asset is sold.

Holiday lets occupancy rules

10 Aug, 2017

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes.

In order to qualify as a furnished holiday letting, the following occupancy criteria need to be met:

Company purchase of own shares

02 Aug, 2017

As a general principle, when a company makes a purchase of its own shares, any payment in excess of the amount of capital originally subscribed for the shares is treated as a distribution (taxed as income not a capital gain). However, there are special provisions that enable an unquoted trading company or an unquoted holding company of a trading group to undertake a purchase of its own shares without making a distribution.

Tax write downs for business cars

02 Aug, 2017

Capital allowances allow businesses to secure tax relief for certain capital expenditure. Qualifying expenditure on cars must usually be allocated to one of two general pools of expenditure. Which pool is appropriate depends on the car’s CO2 emissions.

Expenditure on cars with CO2 emissions over 130g/km will be dealt with in the special rate pool and will attract a WDA of 8% p.a.

Expenditure on cars with CO2 emissions from 76g/km of up to and including 130g/km driven will be dealt with in the main pool and will attract a WDA of 18% p.a.

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