Category: Tax

Key changes announced are: Corporation tax – A surprise reduction in the main corporation tax rate was announced. From 1 April 2012 this rate drops 2% to 24%. The small companies’ rate remains unchanged at 20%. Bank levy – This is adjusted so that banks do not pay less tax as a result of the … Continued

A VAT group is a special arrangement where two or more entities can elect to be treated as a single taxable person for VAT purposes.  When a VAT group is set-up one of the VAT group members is nominated as the representative member. The representative member must account for all the group company activities and declare … Continued

Due to EU legislation the UK is no longer able to add to the zero rate categories. The minimum VAT rate that can be applied to any new category is 5%. Accordingly those items that can be treated as zero rated have been taxed at zero rate for some time. The main categories that are … Continued

HMRC campaigns are broadly based on similar principles which involve three main stages: HMRC identify taxpayers from a specific group who may have outstanding tax liabilities. Stage 2 – HMRC offer a limited time disclosure facility with reduced penalties offering taxpayers the opportunity to bring their tax affairs up to date Stage 3 – HMRC … Continued

A reminder that HMRC will not look favorably on any scheme that aims to minimise VAT liabilities by splitting businesses up in order that the annual turnover of each remains below the registration threshold. HMRC are required to consider the extent to which businesses are ‘closely bound to one another by financial, economic and organisational … Continued

The current problem: Employers are required to file an annual PAYE return, form P35, with HMRC containing details about their employees’ earnings during the tax year, along with information about the amount of income tax and National Insurance contributions (NICs) deducted from the employees’ salaries. This return is due on 19 May following the end … Continued

If you own a private limited company and its taxable profits do not exceed £300,000 you will pay corporation tax at the small companies rate of 20% from 1 April 2011. Profits in excess of £300,000 up to £1.5m will be taxed at a marginal rate of 27.5% and over £1.5m at the main rate … Continued

A default surcharge is a penalty levied on businesses that submit VAT returns after the nominated filing date, or make payments late. VAT registered traders should take the following factors into account: There is no penalty for a first offence, however a business that submits a VAT return late or makes a late payment is … Continued

We have listed below some of the more commonly encountered business expenses where VAT input tax recovery is prohibited or restricted. Cars – cannot reclaim VAT added to purchase price unless the vehicle is used to directly create income for the business: for example a taxi, a self-drive hire car or a car for driving … Continued

What does this mean? Disincorporation is the process of moving a trade from a limited company to its shareholders who would then use the business assets to trade as a sole trader or partnership. Presently there are a number of significant tax disadvantages when a trade is disincorporated. It is with this in mind that … Continued