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Should I buy property through a pension?

If you already own or are looking to buy commercial property then you should consider it.Residential property cannot be held in a pension so if that's all your investing in then the rest of this article will be irrelevant.Most people when they think about 'pensions', the big insurance companies and the pensions scandals come to mind. People don't feel that they are control of their pensions. They are at the mercy of the big pensions companies and the markets as to whether they'll be left with mu...

April 9, 2019

Can I claim back VAT on property?

The default position is that the activity of renting out a building is considered an 'exempt supply' for VAT purposes. This means that VAT doesn't have to be charged on rents but conversely, VAT cannot be reclaimed on expenses incurred.As far as residential lettings are concerned, they are always considered exempt from VAT and you will never see VAT added to residential rents. That means you can also never reclaim VAT on expenses incurred in conducting your property rental 'business'.When does V...

March 26, 2019

Can I avoid the 3% stamp duty surcharge?

A purchase of a second residential property is now subject to a 3% stamp duty surcharge. That is the case whether you buy in your own name OR even via a company you own.Is there any way round this?  Unfortunately not for single buy to let investments. However, there are some property type purchases and transactions that don't attract the 3% surcharge.In the main these are listed below:Commercial propertyMixed use property Whilst the first is probably obvious to most, commercial property is ...

March 26, 2019

Do I need an in house Finance Team?

There comes a point in the stage and growth of a business where you think you might need to recruit additional finance staff. Or does there? Technology has massively changed the way financials and accounting are now maintained. Dedicated roles of accounts payable, credit control, sales ledger clerk etc now face extinction due to software being able to largely do the same thing. However, the plethora of skill sets required to navigate and properly handle a growing business' financials has grown s...

March 26, 2019

What is an SPV?

If you're in the property world either looking to invest in a project or involved in developing properties for a profit, then you've probably come across the term 'SPV'.SPV stands for 'Special Purpose Vehicle'. When used in the context of a property deal it essentially is a posh name for a Limited company!The term SPV is generally used to reflect an understanding that a project will be run through a separate legal entity set up for that particular project only.Why use an SPV?SPV's are commonly u...

February 28, 2019

Should I transfer my properties to a Ltd Company?

If you own buy to let properties, chances are you've heard that it might be beneficial to transfer them to a limited company. When is this appropriate? One of the main reasons why ownership of buy to let properties is more tax efficient via a company these days is due to the introduction of the mortgage interest relief restriction by HMRC. This means that you no longer receive a full deduction for the interest paid on any mortgage against your tax relief. It is mid way through being phased ...

February 28, 2019

What expenses can I claim on my buy to let properties?

In a nutshell, any expenses that are wholly and exclusively incurred for running your property business, as it were, are deductible against your rental income. The obvious ones you are probably claiming already - such as mortgage interest, maintenance / repair bills and agency management fees.The type of expenses that are often under-claimed or are not claimed at all are:Travel expensesComputer equipment and office expensesUse of home as officeOther professional feesLet's look at each of th...

November 26, 2018

Should I buy a property through a company?

The last few years we have witnessed an unprecedented wave of legislation against buy to let landlords. First there was the 3% rise in stamp duty for second or more properties. Then there was the removal of tax relief on interest payments for higher rate taxpayers. If that wasn't enough, the wear and tear allowance worth 10% of rents on furnished was also abolished.Tax bills for landlords holding property in their own name will undoubtedly have risen substantially - and keep rising until 20...

October 10, 2018

The most powerful lever in the profit equation

You can’t manage profit. Profit is simply an end result. It’s the end result of a series of processes.It’s the business model.Numbers drive that business model. When you fully understand your business model and how the numbers work you will be able manage and improve the drivers of profit.Every business is different and will have its own unique business model and profit drivers. Nevertheless, for most businesses there is a generic model. This model has 9 drivers, s...

September 25, 2018

Why do businesses fail?

There are many reasons why businesses struggle, and in some cases, ultimately fail. It happens for both Start Up businesses and established businesses. Here are some of the common causes. Starting out in business According to research more than half of new businesses don’t survive beyond 5 years. Here are some of the reasons for such high failure rates: An inability to build a profitable business model with proven revenue streams, Failure to create and communicate value propositions in a clear...

September 25, 2018

Should my accountant be helping me to grow my business?

Running a business can be a lonely experience. You have people to manage, customers to keep happy, bills to pay and mouths to feed. And the buck always stops with you.  Having someone to lean on, to help you navigate through the rough seas that business can bring, to act as a sounding board and to just be there when you need them, can work wonders.  This someone needs to be someone you can trust. Someone who understands your business. Someone who appreciates the challenges and pain you...

August 22, 2018

Why do I have to make a tax payment in July

There's always a confusion around the July tax 'payment on account' for income tax under the self assessment regime.If you are business owner, chances are you're under the self assessment regime and have to submit a tax return every year. One of the advantages of being self-employed or a company director is that you do not have to pay income tax monthly under PAYE like normal employees. Given that you are in control of how you pay yourself - mainly via dividends - you can also control to some ex...

July 30, 2018

What's the best way to run my car through the business?

This is a question we get asked a lot here. The answer as with most things in tax is, it depends! It depends on what kind of car you have for a start. The tax rules these days are based on the CO2 emissions of the car i.e the higher the CO2 emissions, the greater the potential tax charge. By contrast, there are tax incentives available for cleaner electric and hybrid cars such as being able to write off 100% of the cost of the car against profits if Co2 emissions are less than 75g/km e.g Tesla e...

July 19, 2018

How can I use my children's tax allowances to reduce my tax bill?

It's that time of the year when the kids are about to break up for the holidays - which means that the bank of mum and dad is set for an assault yet again! Whether it is activities during the school holidays, childcare, tuition fees and related university living costs or private school fees needing to be paid, there is a way to make the paying of these a little less painful. You see, the tax-free earning allowance (currently £11,500) applies to everyone from birth. This means you if you can fi...

July 12, 2018

Top 5 ways to super-charge your business

Running a business can be highly rewarding but it can also be highly stressful. Whilst most business owners enjoy the freedom and flexibility of being your own boss, it also means that that you are in charge of everything and when something goes wrong, it is ultimately your problem to fix it. Below are five areas to focus on to super charge your business, make it more enjoyable and ultimately reap the rewards that you hoped for when you first started in business... 1. Systems, systems, systems A...

July 5, 2018

So what else can I put through the business?

If you're a business owner, no doubt you have asked yourself - and maybe your accountant - this question. The correct answer is - anything that is 'wholly and exclusively' for the purposes of your business can be 'put through' and therefore qualify as a tax deduction. The obvious ones you are probably already capturing, however there's a few outlined below which you may not be fully claiming: Your home expenses - as business owners we have a hard time switching off. That means there will in...

July 2, 2018

Investing (tax efficiently) in a new business

A friend has an idea for a small business startup and wants you to help fund it. You’re interested, but is it more tax efficient to do it through your company or use your own cash?  What is tax efficiency? Putting money into a new company is nearly always risky, but doing it tax efficiently can mean that at least you’ll get something out of the deal if things go wrong. The trouble is, you need to decide what form your investment will take from the start, but because of the way the rules...

February 1, 2018

Maximising VAT recovery on motoring costs

It’s not well known, but employers can reclaim VAT on more than just the fuel element of the mileage allowances paid to their workers. What’s involved?  Mileage rates  For a long time, companies have been allowed to pay employees flat rate tax-free mileage allowances for business travel: 45p for the first 10,000 miles and 25p thereafter. Since April 2013 partnerships and self-employed individuals can claim similar flat rate tax deductions. HMRC would have you believe this simplifie...

January 5, 2018

Do two directorships mean double the NI?

If you’re a serial entrepreneur you might have two or more directorships, each of which pay a salary. This sometimes results in excessive NI charges. Is there a legitimate way to dodge this?  NI - the hidden tax It’s easy to think about NI contributions as a minor cost, but nothing could be further from the truth. For example, in 2017/18 someone with a salary of £25,000 will pay tax of £3,000 while the total NI bill for them and their employer will be £4,344. In reality, NI is simply...

November 30, 2017

When is the right time to make a tax-efficient gift?

Most tax exemptions are capped for each tax year, but the inheritance tax gifts-out-of-income exemption is different. How can you make the most of it?  IHT exemptions Compared to income tax and capital gains tax, inheritance tax (IHT) has a rather meagre annual exemption of just £3,000. This is the maximum you can give away without eating into your nil rate band. Perhaps that’s why some people turn to complex IHT saving schemes, but if you go down that path, you should consider an IHT ex...

November 23, 2017

A change of date can reduce your company’s tax bill

Varying profits can play havoc with cash flow, especially when it’s time to pay corporation tax. Changing your company’s accounting date can help, but when are you allowed to do it? Company law When you form a company Companies House automatically sets the date to which the first accounts must be drawn up. Specifically, it’s one year from the end of the month in which the company was registered, e.g. if the company was formed on 12 March 2017, the first accounting period will run to 31 Mar...

November 14, 2017

Keep your capital and protect your estate from inheritance tax

As your estate grows so does the potential inheritance tax bill. What steps can you take to minimise tax while keeping hold of your underlying wealth?  IHT-effective gifts The simplest way for someone to reduce their estate for IHT purposes is for them to pass their wealth to their beneficiaries by making gifts during their lifetime. However, the maximum that an individual can give away to others entirely exempt from IHT is £3,000 per year. While there are a few other special exemptions, e...

November 7, 2017

Legitimate ways to dodge a self-assessment penalty

Submitting your self-assessment tax return late automatically triggers a penalty. But if you don’t have all the data you need to complete the return by the deadline how can you avoid being fined?  SA statistics According to HMRC, every year around 40% of personal self-assessment returns are submitted in the last month before the deadline. Starting to prepare your return at the eleventh hour is OK, but it does mean that if you then find you haven’t got all the data you’re in risk of mi...

October 27, 2017

Pool cars - avoid basic errors

Pooled company cars are tax and NI free for the employees who drive them. However, HMRC closely scrutinises any claim for pool car treatment. What key conditions should you impose on the use of a car to keep on the right side of HMRC?  Is a pool car a perk? Pooled company cars are often seen as a potential tax and NI-free benefit in kind, but with tricky qualifying conditions. We think that’s the wrong way to look at them. The reason they aren’t taxable is because they must not provide ...

October 20, 2017

When does a house become a residence?

HMRC doesn’t consider all homes to qualify for capital gains tax private residence relief. If you move into in a property which you previously let, what steps can you take to increase your chances of qualifying for relief? Private residence relief A property that has, even for a short while, been your only or main private residence (home) during the time you’ve owned it, qualifies for a period of exemption from capital gains tax (CGT). This is known as private residence relief (PRR). PRR app...

October 10, 2017 Posts 1-25 of 35 | Page next
 

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