Tax Tips

Annual Investment Allowance Budget Changes

Question.   I own a food processing business and considering a significant investment in equipment to upgrade my food production facility. What will the increase in the annual investment allowance in the recent budget mean for my business?   Answer.   Capital allowances can reduce a tax payer’s income tax (self-employment) or corporation tax liability (Company) by reducing the taxable profits. The Annual Investment Allowance (“AIA”) rate is currently 100% on ...

VAT Voucher Changes

Question.   I own a hair and beauty salon and have recently started to issue gift vouchers. I understand that the VAT treatment depends on the type of voucher, could you please clarify?   Answer.   Vouchers issued by the same business that will redeem them are known as retailer vouchers and can take three forms: Experience vouchers, which have no face value but entitle the bearer to redeem for a ...

Incorporation of Rental Business

Question.   I own a few rental properties and due to recent restrictions on mortgage interest I am thinking of transferring the properties into a Limited Company, will I get incorporation relief?   Answer.   It will be a question of whether your rental property portfolio is classed as a business or whether the rental properties are just held as investments. There must be a genuine business carried as this is ...

National Insurance Changes

Question.   I have several self-employed clients all of whom are subject to the Class 2 national insurance rules and currently pay contributions. I had been reading that Class 2 was to be abolished but now I have heard recently that this is not happening. Is this correct?   Answer.   Class 2 National Insurance Contributions are payable by the self-employed. The contributions are payable at a flat rate and entitle ...

Reminder to file your tax return

Question.   I have received a reminder from HM Revenue & Customs to file my 2017/18 tax return. I always file mine online in January. Why do they want it submitted earlier?   Answer.   The tax return filing deadline for manual tax returns is fast approaching on 31 October 2018, but there is an extended deadline for online submissions of 31 January 2019. These are, however, the very latest dates ...

Overdrawn Director’s Loan Account

Question.   I have an overdrawn director’s loan account in my limited company. What are the tax implications if I do not have the funds to pay this back?   Answer.   An overdrawn director’s loan account may create tax implications for both the company and its director.   When a director who owns at least 5% (or less and loan greater than £15,000) of the ordinary share capital of a company, is ...

Transferrable Marriage Allowance

Question.   I got married a couple of years ago, and my wife works part-time. Some of my colleagues have said I am entitled to claim an additional allowance, is this correct?   Answer.   The transferable Marriage Allowance was first introduced in the 2015/16 tax year and should not be confused with the age related Married Couple’s Allowance which is for people born before 6th April 1935.   To be entitled to ...

VAT on property sale

Question.   I am selling my business premises to a developer who intends converting it to flats. I assume that I will charge VAT on the sale. Am I correct?   Answer.   The first thing to consider is the age of the property, as the sale of a new commercial building is always standard-rated for VAT. New in HMRC terms is a building less than three years from completion. If, ...

Cross Border Employment

Question.   I live in Newry and have been offered employment with a private company based in Dundalk and have been told I will be paying Irish tax. Is this correct and would I also have to pay UK income tax?   Answer.   The fact that your employer is situated in the Republic of Ireland (ROI) does not mean you will automatically be on an Irish payroll. If for ...

Tax implications on purchase of a commercial vehicle

Question.   I have recently bought a double cab pickup to use in my business, can I reclaim the VAT on the purchase? And are there any income tax implications?   Answer.   For tax purposes there are different treatments for cars and commercial vehicles. Usually a double cab pickup would be considered a car, however there is a clause for double cab vehicles to treat as a commercial vehicle ...

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