In the December edition of this newsletter we flagged up that new anti-avoidance legislation in Finance Act 2016 will tax certain transactions in UK land as trading transactions instead of capital gains.   Just before Christmas, HMRC issued guidance to clarify the scope of the new rules. The legislation as enacted in Finance Act 2016 was drafted in such a way that it could be interpreted as catching certain

  In order to qualify for CGT entrepreneurs’ relief on the disposal of shares, the shareholder must have been an officer or employee of the trading company or group throughout the twelve months up to the date of disposal. Although there is no minimum number of hours, it is important that there Is evidence that this condition is satisfied, so for example the employee/ director should not resign before the

  Entrepreneurs’ Relief reduces the rate of CGT to 10% on the first £10 million of gains on the disposal of qualifying business assets. This would include sole traders disposing of their business and partners disposing of their interest in a partnership carrying on a business. With many businesses operating as limited companies these days it is important to appreciate that not all shareholdings qualify for this generous relief.  

  Directors have a responsibility to maintain, preserve and deliver records that are adequate to explain the financial position of their company. If they fail to do so, they run the risk of being disqualified from acting as a director.   In a recent Insolvency Service investigation, a director was banned for seven years. His transgressions are illuminating. They included:   He was unable to explain payments taken for his

  Business owners may be considering their options for investment in new equipment especially if their trading year end is March, as is often the case. There are a number of considerations:   Cash flow, can the business afford the cost or fund loan or other financing arrangements? Will the new equipment make a positive impact to the bottom line? What are the tax breaks?   Points one and two

  The Treasury Select Committee has reviewed the proposals for the introduction of “Making tax digital” (MTD) and have agreed with the various professional bodies that if the new systems are introduced too quickly there could be a disaster. It would significantly increase burdens on small businesses. In their report they comment that the overall benefits of mandating the digitising of record keeping and quarterly reporting, as is currently envisaged,

08

Feb 2017

Storm damage

  Costs that businesses incur to clean up after the recent storms, that affected the north and east coasts in particular, need to meet the usual qualifying criteria that they are incurred “wholly and exclusively” for business purposes in order to be a legitimate write-off for tax purposes.   If the costs are covered by insurance, no tax relief would be due. If costs are discovered to be partially covered

  This is also an appropriate time of the year to consider your CGT position if you have already disposed of (or are considering a disposal) of an asset subject to CGT during 2016-17.   Most of our readers will be aware that they can make chargeable gains of up to £11,100 in the tax year 2016-17 and pay no CGT. This exemption cannot be transferred to a future tax

  All UK taxpayers may benefit from pausing, taking a deep breath, and considering their planning options as we approach the run-up to yet another tax year end.   Individuals   The prime areas for consideration are where income levels are threatening to break through into the higher rates of Income Tax. For 2016-17, these are:   If your taxable income exceeds £32,000 (after deducting your £11,000 personal allowance) you

  From 1 December 2016, the advisory fuel rates have changed to:   1400cc or less: petrol 11p per mile, LPG 7p per mile 1401-2000cc: petrol 14p per mile, LPG 9p per mile Over 2000cc: petrol 21p per mile, LPG 13p per mile   Diesel rates:   1600cc or less: 9p per mile 1601-2000cc: 11p per mile Over 2000cc: 13p per mile   These rates can be used from 1