Insights

Declaring rental income on your foreign holiday home

Question.   I have recently sold my Spanish Holiday Home. I live in Belfast and have never declared any rental income as I believed it to be outside of the scope of UK taxation. Is this correct?   Answer.   All UK resident taxpayers are liable to income tax on their worldwide income regardless of the situation of the asset that generates the income. You should have declared the rental income ...

Planning my tax payments on account

Question.   I am due to make my 2nd Payment on Account before the 31 July 2018, to HM Revenue & Customs. My accountant advised me of my payment for the end of July some time ago but suggested that I could reduce the payment as my business profits have reduced in comparison to last year. What are the implications if I do not pay the full ...

VAT cash accounting – let’s keep it simple

Question.   I own and operate a small business and my annual turnover is around £1m. Some of my customers take a long time to pay me and I have paid the output VAT to HMRC perhaps 2 or 3 months sooner than I get paid. I have read about the cash accounting scheme – how does it work?   Answer.   Cash accounting enables a business to account for ...

Summer jobs need not be taxing

Question.   I’m home from university for the summer and I’ve started working full time in a local café to help pay off some of my student debt. I have just received my first month’s wages and there has been tax and national insurance deducted from my pay. Why is this happening when my pay is less than the annual personal allowance and can I do anything ...

Tax Free Childcare – What is it?

Question.   As a self-employed builder with a young family, I am interested to learn more about tax benefits of childcare costs. I was reading that there are new rules in force. Can you explain how these new rules work?   Answer.   Tax-Free Childcare is a new scheme which is being rolled out gradually from April 2017 and will offer working families 20% support towards qualifying childcare costs up ...

What’s your business worth?

Question.   One of my employees has built up a close relationship with many of our key customers, so to incentivise him to stay with the company for the long term I would like to offer him the opportunity to acquire shares in the business. To do this I need an estimate of what the shares in the company are worth. Can you give me some advice ...

Claiming VAT back in bad debts

Question.   I operate a small business and I give my customers 30 days credit. I have noticed in the last 6 months that I am waiting for longer to collect the monies from these sales. I have paid the VAT on these sales but I have not received any payments. Can I recover the output VAT paid?   Answer.   In these times of economic uncertainty, it is more ...

Property losses – do I need to do a tax return?

Question.   I have a Buy to Let property, but because of the size of the mortgage, I do not make any profit from it. I am employed and have never submitted a tax return before- do I need to now?   Answer.   What with mortgage interest, repairs and empty periods to deal with, most buy-to-let property investors sometimes make a rental loss on their property. They then want to ...

Is Inheritance Tax Being Reformed?

The UK has arguably one of the most generous Inheritance Tax (IHT) regimes in the world. Generally, the current Potentially Exempt Transfer (PET) regime enables wealth to be passed down the generations by way of lifetime gift without the beneficiary paying any Inheritance Tax (IHT) provided the donor survives the gift by seven years. This is a very general summary of the PET regime, and ...

How to use trusts to pass on family wealth

Question.   I am approaching my mid sixties and I want to pass some wealth to my adult children but I would like to retain some control over these assets. Can I use trusts to do this?   Answer.   Trusts are a long established mechanism which allows individuals to benefit from the assets without assuming the legal ownership of those assets as the trustees have day to day control over ...