Steven Mugglestone

The more I learn, the less I know

Posts Tagged ‘Tax Savings

Forget the spin for 2014, here are some of the key tax changes for 2013:

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Tax and spending changes get announced well in advance of their impact dates and all governments prefer to point to key favoured changes for the future.  To bring us all back to reality, here are some of the key changes that will affect businesses, their owners and individuals alike coming into effect in 2013:

Personal allowances

There is a target to get the personal income tax allowance increased to £10,000 by April 2015.  The April 2013 rise to £8,015 has already been announced but if there is any scope to show a continuing upward path it will help provide some comfort to those on lower income levels and a little comfort for those who are due to lose their child benefit from January 2013

Entrepreneurs’ relief and negative tax

Employee share option schemes through the Enterprise Management Incentives (EMI) were a tax favoured share option, initially very efficient.  Following the introduction of Entrepreneur’s Relief most people who had EMIs could not benefit from the 10% tax rate as they did not have the required 5% of the company’s shares nor they did not own the shares for a year prior to sale.

From April 2013 both of these requirements have been relaxed meaning the individual can access a 10% tax rate whilst the company gets tax relief at 20%…….. This gives a negative tax rate.

Patent tax relief

This will reduce the tax rate for those who have income from patented products or processes down to 10% on qualifying profits.

Changes will be phased in starting from April 2013 and will apply to pre-existing patents as well. The impact of this is that it may encourage those working in research and development to patent their products or technology.

Tax relief capped

From April 2013, there will be a cap on income tax reliefs to ensure that those on higher incomes cannot use income tax reliefs excessively.

This will mean that anyone seeking to claim more than £50,000 of relief, a cap will be set at 25% of earnings of income.  This new cap does not extend to charitable donations as previously suggested it might but it does, however, limit relief from trading losses against general income and interest on certain loans, including loans to buy an interest in a company or invest in a partnership.

Corporation tax

The tax rate for large organisations will be reduced to 23% in April 2013 and will then go down to 21% in 2014. This will mean that businesses will get to keep more of the money they make and will so have more to invest – they can also take the lower tax rate into account when structuring group operations and the number of companies owned. 

Residential property

A new annual charge will be introduced for high value properties (valued over £2m) owned by non-natural persons to further discourage ownership of property through envelope structures. Various reliefs have been introduced for the annual property charge and the 15% SDLT charge for property developers and those exploiting property as a source.

Statutory residency test

This has been delayed for a year but the SRT will come into force on 6 April 2013. This is an historic landmark for tax in the UK, as for the first time we have clear and definitive legislation on this critical area. Historically whether someone has been resident or not has been decided by application of practice and an evolution of tax cases that have been interpreted in different ways.

As expected, there will be matters of interpretation that will evolve but it represents a significant advance from the current position.  The anti-avoidance clauses around this are quite large and complex.

Annual Investment Allowance

The big surprise announcement of the Autumn Statement – the AIA increased tenfold from 1 January 2013 to £250,000 for the next two years. Companies considering investing in capital equipment over the next couple of years should review the timing of that expenditure in the light of this additional relief now available.

Share Incentive Scheme

There will be a new share incentive scheme, under which the recipient gives up employment rights, to get tax efficient gains on a final disposal.  However, reservations regarding the income tax and NI treatment seem to have fallen on deaf ears and all are left wondering just how attractive this scheme will be.

Steven Mugglestone BA FCA
FD Services

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Leicester               0116 233 8500
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Written by Steven Mugglestone

January 9, 2013 at 12:24 pm

Posted in HMRC, Tax

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McGregors join up with Senior Entrepreneurial Tax Consultants

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McGregors join up with Senior Entrepreneurial Tax Consultants

McGregors Corporate, the independent firm of Chartered Accountants and Business Advisers, have agreed a consultancy contract with The Ironbridge Tax Consultancy Limited and its managing director, Keith Richards, to add to the firms tax support for Nottingham and Leicester.

Mr Richards is formerly a tax director for RSM Tenon and Grant Thornton and is well known amongst the business communities of Nottingham and Leicester.

McGregors Corporate who recently started to operate in Leicester, have already built a senior team with partners from the likes of Grant Thornton and PKF, together with a mix of former finance directors, are looking to establish themselves as an independent alternative to the large accountancy firms in Leicestershire and Nottinghamshire.

Director, Steven Mugglestone, said, “I am certainly extremely pleased to be working with Keith and his company in helping us support our clients and building our presence in Leicester and Nottingham.  Keith has significant tax advisory experience within the SME sector, as well as helping individuals with all aspects of their personal tax planning and we see our relationship with his company as providing a huge benefit to both of us, together with both of our respective client bases as well as potential future clients. We are also very keen on building on the success that we are achieving in winning new clients in the Leicestershire area and establishing our practice in the city.”

Keith Richards of Ironbridge continued, “Ironbridge has agreed a working relationship with McGregors, as we see them as a really good fit of pro-active and experienced business advisers and accountants.  All of their directors have worked with the same types of growing owner-managed businesses as we have and our outlook and approach are very similar.  I think that together, we can help support many clients and I am certainly looking forward to working with Steven and his team in the Nottingham and Leicester areas.”

McGregors are a full service firm of Chartered Accountants and business advisers, providing a varied range of services to SME businesses in the Midlands region.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/

T: 0845 519 5659                T: 0121 236 3317    T:0115 9415193
steven@mcgregorsbirmingham.co.uk
steven@mcgregorsleicester.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

 

Written by Steven Mugglestone

June 15, 2012 at 10:08 am

Businesses need to act now to avoid missing out on £millions of unclaimed capital allowances:

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Businesses need to act now to avoid missing out on £millions of unclaimed capital allowances

If you have acquired a freehold commercial property in the last 15 years you may be sitting on a fortune in unclaimed capital allowances. McGregors have carried out a number of successful claims for clients and our staff are experts in capital allowances claims and will be able to assist you but action is required NOW!!

The Government has signalled the Death Knell for retrospective capital allowances claims. At present claims can be made going back several years and we have obtained large refunds of tax for clients. From 1 April 2012, you will only have a further 12 months to submit a Retrospective claim and then the window will be closed and any unclaimed allowances are lost for ever.

If you own a freehold commercial property you need to ACT NOW. Please contact us, and we will carry out a FREE assessment to determine whether a capital allowances claim is possible.

As outlined in many previous articles, many businesses are missing on a number of allowances and, in particular on millions of pounds in un-claimed tax allowances.

In our experience, most businesses whether they are sole traders, self-employed persons or partnerships, as well as companies and organisations liable for Corporation Tax have under claimed on capital allowances. Usually, this is due to a lack of expertise and understanding of the qualifying criteria, the time and knowledge of how to present the claim, and a reluctance to deal with HMRC.

In brief, you can claim capital allowances for what your business spends on certain assets that it owns and uses in the business, provided certain conditions are met. The aim is to give tax relief for the reduction in value of qualifying assets that you buy and own for business use by letting you write off their cost against the taxable income of your business.

For example, if you buy an asset – e.g. a car, tools, machinery or other equipment – for use in your business, you are not able to deduct the expenditure on that asset from trading profits, but you may, subject to certain conditions, be able to claim a capital allowance for that expenditure.

The area where most capital allowances are missed is where they are available for certain building-related capital expenditure such as property refurbishment and renovation. However, please note that in most cases, you will not be able to claim capital allowances against the purchase price of or other investment in land, buildings or property.

When assessing your business, some examples of expenditure that may qualify for capital allowances are as follows:

  • Certain fixtures and integral features in buildings – expenditure on sanitary ware, fitted kitchens and certain other fixtures in a building may qualify for plant and machinery allowances. Expenditure on certain integral features of a building – e.g. electrical wiring, cold water systems, heating and air conditioning systems, and lifts might also qualify.
  • Renovating business premises – capital expenditure on the renovation of business premises in designated ‘disadvantaged areas’ may qualify for BPRA (Business Premises Renovation Allowance.
  • Flat conversions – capital costs of conversion or renovation of empty flats above commercial premises might qualify for the flat conversion allowance.
  • Capital expenditure on research and development (including equipment used for research and development) – if you are a trader and your research and development (R&D) relates to the trade that your business carries on, and meets other conditions, it may qualify for research and development allowances.
  • Gifts of equipment to charity – if you donate used assets that have qualified for plant or machinery allowances to a qualifying charity or community amateur sports club, you may be able to claim plant and machinery allowances on any left-over written down value.
  • Equipment that you own and use in your business – tools, machinery, office equipment, computers, vehicles, pieces of plant and factory equipment.

Literally, millions of pounds are waiting to be claimed from the Treasury in previously unclaimed Capital Allowances. This is not a tax avoidance strategy. You have a legal right to claim these allowances.

McGregors Corporate work with a specialist dedicated capital allowance company who are able to carry out retrospective, current year, and new build capital allowance claims, both for individuals and companies in relation to commercial properties right across the commercial sector. Most retrospective capital allowance claims that we handle lead to a significant tax refund.

We enjoy an excellent relationship with the HMRC and we do not seek to replace your current accountant. Instead we seek to work with them to achieve the best possible outcome for you.

If you would like a review of your capital allowance position, particularly in relation to building or renovation of a commercial property please contact us.


Steven Mugglestone BA FCA
,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Written by Steven Mugglestone

January 30, 2012 at 6:08 pm

Consider The Green Car or Bike Options to Save Tax

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Consider The Green Car or Bike Options to Save Tax

In the current economic environment, the focus of most employers is increasingly on reducing costs and to provide maximum value to their employees for minimum spend.

As a consequence, Green Cars and the associated tax breaks remain firmly on the reward agenda and companies are reconsidering the way that they make purchasing/leasing decisions, how they provide cars and what categories of worker will have the opportunity to have a company car and in recent years the provision of a company bike.

Since the company car tax rules were changed in April 2009, the tax relief available to businesses has been based on CO2 emissions.  This means that cars with emissions that do not exceed 110g/km or are electric can currently qualify for a 100% first-year allowance and those with less than 160g/km emissions attract a 20% capital allowance rate.

Car manufacturers are increasingly introducing vehicles including hybrid cars with lower CO2 emissions as demand for Green Cars increases and now there is are a variety of executive and even prestige cars which have emissions under 110g/km.

In addition to these savings, there is a growing trend towards the introduction of salary sacrifice for company cars, with many businesses not restricting take-up to the traditional ‘perk’ or ‘essential user’ categories.  Instead, there is a move towards offering cars to the wider workforce with the following advantages:

Employees: make tax savings by sacrificing salary taxed at 32% (tax and NIC for a basic rate payer) in return for a car with emissions below 110g/km and pay tax on only 10% of the list price.  This makes driving a new car affordable for all staff who are able to sacrifice salary and the option is there for employees to take a 2nd or even a 3rd car for their spouse or university aged and over children, where the Employer’s scheme permits.  In addition, cars with lower CO2 emissions generally use less fuel which means less fuel cost, thus generating further savings.

Employers: benefit from volume discounts, can recover some VAT and save on NIC costs.  There is also the corporate responsibility benefit of knowing that your employees are driving roadworthy vehicles and that your own Green Agenda is being met.

It is, however, worth keeping a note on the VAT issues in respect of salary sacrifice, including the recent announcements made by HMRC at:

http://www.hmrc.gov.uk/briefs/vat/brief3611.htm

Use of bikes

The provision of tax free company pool bicycles or loans of bikes is also proving to be popular. Full details of the HMRC rules for bikes can be found at:

http://www.hmrc.gov.uk/manuals/eimanual/eim21664.htm

Organisations such as Cyclescheme, http://www.cyclescheme.co.uk/ have also become more and more popular in the provision of individual bikes to employees and administering this for businesses and employees.  Savings of around 40% are common, utilising this scheme.  To check the easiest way to do this, go to:  http://www.cyclescheme.co.uk/get-a-bike

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Written by Steven Mugglestone

December 5, 2011 at 11:06 am