Posts Tagged ‘tax help’
The Often Ordinarily Missed Earnings Tax Deductions For Self Employed People
Posted by Tax Tips in Tax Deductions For Self Employed on February 21st, 2011
Looking to the eleventh hour to record your taxes could drive you to lose out on past tax reductions for you or your passive income opportunities. The laws are changing day in and day out so make sure you can get the finest write-off you may get.
You have to comprehend that there are tax write offs that you might never known about that you may qualify for. So many individuals merely apply the EZ forms the Internal Revenue Service provides and satisfy it in and direct it out not realizing that if they would have utilized the much longer version that they might got reclaimed money. Some of the virtually usually unmarked tax discounts could be found in your medical relevant needs. Objects like eyeball spectacles and hearing aids or expedients, canes and orthopedic shoes could also be deducted. Still your alcohol and drug overdose habits could be written off if you know how to do this. But you did not get this because you did your taxes at the eleventh hour.
Additional generally unnoticed tax write-offs are job relevant. Have you heard that you may have your union dues deducted? Even the expense of searching for a application possessed more or less economic value or the tools you use at your occupation. How about for self working groups. Something as standard as your hotel reservation software for hotel founders could be written off. You might score half of your self employment tax paid or have your self employed wellness insurance policy premiums handled to some magnitude. If you endure dues to authority establishments or purchase to issues that are similar to your business then this likewise might help. So can the expenditure of a cell phone for occupation. Understand what you can be lacking?
There are still overlooked tax reductions that are related to physical objects that persons flunk to take. Things like personal property taxes on automobiles and boats. Your traveling disbursements may too save you some money. Even the commissions to brokers or officials for the merchandising of your habitation could be written off. Yielding support payment? This likewise could render you a write-off. If you engage an individual to execute your taxes then consider that likewise in your write-offs. Lose any bucks while gambling? Your betting misses to the level of your profits can aid as well.
Now do you understand why it isn’t a good idea to hold off to the eleventh hour to record your taxes? I accept it is no fun but will all of the overlooked tax decreases out there you need to start earlier so you don’t miss out on anything. There are much more out there than what was talked about here so start searching today so when tax schedule roll around again you can be ready. See this self employed taxes tutorial if [you are|you're[/spin] generating your own income.
UK Tax Queries Answered
Posted by Tax Tips in UK Tax Questions on February 16th, 2011
This article answers questions about UK taxes.
Q. As I was made redundant last year I decided to take time out and build my own house. A neighbour told me I could claim back the VAT on my costs, even though I am not a VAT registered builder. If that is true, how do I go about claiming?
A. You can reclaim VAT correctly charged on your building materials and on most of your building services, using the VAT refund scheme for DIY builders. The claim form for new builds under this scheme (VAT 431NB) can be downloaded from the HMRC website, but be sure to also read the guidance notes. There is a different form (VAT 431C) to use where you are converting a property rather than building it from new. In either case you can’t reclaim the VAT charged on professional services connected with the build, such as architectural or legal services. We can help you compile and submit your claim to the VAT office.
Q. A large UK company has made a late payment of fees owed to my company. They paid interest on the late paid amount, as they are required to do so under the contract, but they deducted tax from that interest. How do I deal with that tax in my accounts?
A. Your customer should not have deducted tax from the interest it paid, as both parties involved in the transaction are UK resident companies trading in the UK. Companies used to have to deduct income tax from annual amounts of interest paid, but that requirement was removed from 1 April 2001 where the recipient is a UK company. Ask your customer to pay you the amount of interest it has withheld as ‘tax’. We can provide a longer explanation of the legal position if you need it.
Q. I have received several emails recently from organizations claiming I could use an employee benefit trust (EBT) to reduce tax. Is this a scam, or is there something in it?
A. In outline a lot of EBT schemes works like this: the company pays money into the EBT and employees of the company receive a loan from the EBT in place of all or part of their salary. The employees pay tax and NI on just 4% on the loan per year. This all sounds good, but there can be various problems in practice. Some schemes are more aggressive than others and you should be prepared for the Taxman to look very closely and try to challenge such arrangements. They are not for those not willing to take some risk and you should be made aware of all the risks involved before proceeding.
For specific taxation it is recommended to contact a Chartered Accountant.
For tax tips and information visit Bridgend Accountants or Swansea Accountants.
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.
More UK Tax Questions Answered
Posted by Tax Tips in UK Tax Questions on February 15th, 2011
These questions relate to UK tax.
Q. I incorporated my business last year, but I haven’t got round to opening a bank account in the company’s name. All the business receipts and payments have been processed through my personal bank account. Will that have any tax implications?
A. You must open a bank account for the company as soon as possible as using your personal bank account could create a number of problems.
As the business was previously run in your own name the Taxman may not accept that the business has been transferred to your company, and want to tax you on any business income received into your personal bank account.
If the Taxman accepts the business was transferred to the company, you have further tax problems as your personal account holds funds that belong to the company. The Taxman will argue that those funds represent either a loan to you, or your salary. In either case a tax charge will arise unless you can repay the funds to the company, and this will be difficult without a company bank account! A third option is the funds you hold represent dividends. However, to pay a legal dividend the company must first show that it is making a profit.
Q. One of my employees frequently sustains injuries while playing sport, and as a consequence he takes regular periods off sick. Do I have to pay him statutory sick pay (SSP) for the time he takes off due to these self-inflicted injuries?
A. You are required to pay SSP to your employee if he earns at least £97 per week, for sick periods that last 4 days or more. Your employee needs to notify you of the sickness within the period set by your company rules, or by the 7th day of absence. You may require your employee to provide you with evidence of his incapacity to work from the 8th day of absence, by say providing a certificate from his GP (now called a ‘fit note’). Don’t forget you can reclaim the amount of SSP that exceeds 13% of the class 1 NIC due for the month of payment.
Q. While collecting together the papers for my self-employed accounts to 30 November 2009, I noticed £1,500 of sales should have been recorded in the accounts to 30 November 2008, but were missed from that year. Should I add those old sales receipts to the 2009 sales and declare the total in my 2009/10 tax return?
A. The correct approach is to amend your 2008/09 tax return with the increased sales figure for the 2008 accounts, so the extra income falls in the 2008/09 tax year. This adjustment will increase the tax due for 2008/09 and you will have to pay some interest on the late paid tax. If you supply the Taxman with a full explanation of the error, without being asked to do so, you will probably get away with a zero penalty.
If, as you suggest, you add the missing 2008 income to your 2009 accounts and include the total in your 2009/10 tax return you will pay approximately the right amount of tax overall, but for the wrong tax years. This mis-timing of tax payments can attract penalties as you need to pay the correct amount of tax at the right time. Both your 2008 and 2009 accounts will be technically incorrect. You would need to declare the adjustment to your 2009 accounts on your 2009/10 tax return. If you don’t make a full disclosure of the error on your 2009/10 tax return and the Taxman discovers the ‘fix’, he may conclude you have deliberately concealed the error and impose a penalty of up to 100% of the tax underpaid for 2008/09.
For specific it is recommended to contact a Chartered Accountant such as Bridgend Accountants.
For tax tips and information visit the Accountants Swansea website.
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasized that much of the information provided in this article is time sensitive and information contained within it may be out of date.
UK Tax – Answering Your Questions
Posted by Tax Tips in UK Tax Questions on February 15th, 2011
The following questions and answers relate to UK tax.
Q. My family has invested in rental properties over a number of years. Some properties are held in my name alone, others are owned jointly with my sister. The properties held with my sister have made losses in the last year. Can I set those losses against the profits made on letting the properties held in my own name?
A. Yes you can. All your UK property interests are treated as one property business. So the net income from your own properties is amalgamated with your share of income and expenses from the jointly held properties, and the total needs to be reported on the property pages of your tax return. The Taxman will not treat jointly held let properties as being a partnership, unless the letting of the property is ancillary to a proper trading business.
Q. I have a holiday cottage that just managed to qualify as furnished holiday lettings as it was let for 70 days in 2010/11. How will it be taxed in 2011/12 and what tax relief will I get for any loss I make on that property?
A. The Government is expected to announce changes to the way profits and losses from furnished holiday lettings are taxed, with effect from 6 April 2011. The proposals include increasing the number of days the property must be let per year from 70 to 140. Unless you manage to let your holiday cottage for the new number of qualifying days (expected to be 140) in 2011/12, it will be taxed just like any other let property. This means any loss you make on the letting can only be carried forward and set against a profit you make from your lettings business in the future.
Q. My company is planning to get a new Freelander car (emissions 185g/km). It will keep the car for three years and then trade it in. What tax allowances will the company get for the cost of the car over those three years?
A. As the vehicle has high emissions the full cost of the car must be allocated to the special rate pool for capital allowances. Currently 10% of the balance of the special rate pool is set against the company’s profits for tax purposes each year. However, from April 2012 only 8% of the balance in the special rate pool will be tax allowable. When the car is traded in after three years the trade-in value will be deducted from the balance on the special rate pool. However, if the company makes a loss on the car that loss cannot be deducted from the company’s profits for the year.
For specific tation advice it is recommended taht you contact a Chartered Accountant such as Accountants Bridgend.
For tax tips and information visit the Accountants Swansea website.
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.
Help With UK Tax
Posted by Tax Tips in UK Tax Questions on February 15th, 2011
This article related to UK tax questions.
Q. The Taxman has told me I owe him £3,300, and I must pay at least £200 per month or a distraint order will be served. I can only manage to pay £150 per month, so what happens now?
A. A distraint order means tax officers, or bailiffs acting on behalf of the Tax Office, will come to your home or business and ask for full payment. If you don’t pay immediately, they will make a list of your possessions to take away and sell at a later date. They can’t take anything that is not owned by you, or is jointly owned, but you may need to provide proof of ownership such as receipts. The bailiff should also not take any essential tools of your trade, but your vehicle may not be regarded as essential. Your best option is to try to negotiate a schedule of payments you can afford with the Tax Office as soon as possible, or you may loose your possessions and possibly be made bankrupt.
Q. I own a very successful company in the UK, which is now largely run by the management people in the UK. This allows me to live in Spain for much of the year. I charge fees to my UK company through a Spanish company which is wholly owned by my wife. Does this set-up have any implications for UK tax?
A. Your UK company and your wife’s Spanish company are considered to be associated companies by the UK Taxman, because the people controlling the two companies are married to each other. It makes no difference that the companies are registered in different countries. The profit thresholds that determine the rate of corporation tax paid by your UK company must be divided by the number of associated companies plus one. For example the higher rate of corporation tax (currently 28%) is due when profits exceed £1.5 million, but where there is one associated company this higher tax rate starts when profits exceed £750,000.
Q. The technology company I jointly own has suffered in the recession, so the directors’ fees due for 2009 have not been paid, although the fees are shown as owing in the company accounts. Should I make any adjustment to the accounting loss for the unpaid fees, before I send the loss claim to the Tax Office?
A. If the directors’ fees are not paid within nine months of the year end they must be excluded from the loss for corporation tax purposes. However, you should check whether the contracts with the directors include a firm promise to pay the fees by a particular date. Such a promise could create a tax point for PAYE purposes, so PAYE would be due even though the fees had not actually been paid.
For specific taxation advice we recommend that you contact a firm of Chartered Accountants.
For more tax tips and information visit Accountants Bridgend or Cardiff Accountants
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.
UK Tax Queries
Posted by Tax Tips in UK Tax Questions on February 15th, 2011
These answers are provided by a UK firm of Pontypridd Accountants and relates to UK tax.
Q. My company has bought a classic motorcycle as an investment. Can it claim a tax deduction for the cost? If the motorcycle is kept at my home, but not used at all, will I suffer a tax charge?
A. If your company buys a motorcycle for use in its trade, including providing the motorcycle to the director, it can claim a tax deduction for the cost. If the motorcycle is purchased as an investment and not used in the trade, the company cannot claim a tax deduction for the cost.
If the motorcycle is kept at your home it is available for your use. The benefit in kind tax charge applies if the motorcycle is made available to you, not whether you actually ride it. The same tax charge would apply whether the motorcycle was a ‘work of art’ or a functioning motorcycle, as it remains a company owned asset which is made available to you for your private use.
Q. I’m looking to buy the property my company trades from. Should I buy it in my own name or should my company buy it? I have the reserves for either.
A. If you hold the property personally and let it to the company you will be able to extract funds from your company as NIC-free rents. However, when you sell the property, the gain may well be taxed at a higher rate in your hands (up to 28%) than in the company (possibly 20%). You will only get entrepreneurs’ relief on the property if it is sold in association with your withdrawal from the business that involves a disposal of some, but not necessarily all, of the company shares. The entrepreneurs’ relief on the gain is reduced where rent for the property has been paid by the company.
If the company holds property this removes the possibility of NIC-free rents. When the company sells the property it will get indexation relief on the value and the net gain may be taxed at a lower tax rate. However, the proceeds will be trapped within the company. Both you and the company could roll-over a gain arising on the sale of the property in the future, if it has been used for the purpose of the trade carried out by your personal company. As you can see there is a lot to consider and expert advice in your own situation is important
For tax tips and information visit Accountants Bridgend website or Cardiff Accountants.
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.
UK Tax Issues
Posted by Tax Tips in UK Tax Questions on February 15th, 2011
This article relates to questions about UK tax issues answered by a firm of Pontypridd Chartered Accountants.
Q. I work as a self-employed decorator. If I transfer my business to a new company will I be able to take advantage of the NIC holiday announced in the last Budget?
A. The full details of how the NIC holiday scheme will operate have not yet been released, but we do know it won’t apply to businesses established in London, the South East or East regions of England. However, even if you are based outside of those areas, we also know the scheme will only apply to new businesses set up after 21 June 2010. ‘New’ will be defined as a new economic activity, so where an existing sole-trader business such as yours, is transferred to a new company the business is unlikely to qualify as ‘new’ for the NIC holiday scheme.
Q. My brother and sister in law each lent my company £10,000 some years ago. The company is still trading, but it is unlikely to ever be able to repay those loans. If I write off the debt in the company accounts will my relatives be able to claim tax relief for the irrecoverable loans?
A. Lenders in this position can sometimes treat the irrecoverable loan as a capital loss, which can be set against capital gains, but not against income. However, the Taxman will only grant this tax relief if the loan really is irrecoverable. This is taken as read where the business has gone broke. While the company is still trading there is a possibility that the money could be repaid, even if the amounts have been written off in the company accounts. The Taxman will need some considerable evidence from the company’s bankers and other sources, such as Court judgements, to be convinced that the loans cannot be repaid by a trading company.
Q. I have volunteered for redundancy at the age of 59 and expect to receive a pay-off worth £60,000. The first £30,000 will be paid free of tax, but is there anything I can do to reduce the 40% tax I will be charged on the balance?
A. You could ask your employer to divert some of the redundancy payment into a registered personal pension scheme for you. You will not be taxed on this pension contribution as long as your total income for this tax year is not more than £130,000. You also need to have income below this level in the previous two tax years. If your employer is not willing to make the pension contribution, you could make the contribution yourself, but be sure to make the payment in the same tax year in which you receive the redundancy payment. Your pension contribution will be treated as being made net of 20% tax and you can reclaim a further 20% tax relief through your tax return. In both cases, as you are already over 55, you can withdraw 25% of the pension fund value as a tax free lump sum immediately. You should take advice from a pensions expert before embarking on any investment in pensions.
For tax tips and information visit Accountants Bridgend or Accountants Cardiff.
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.
UK Tax Questions & Answers
Posted by Tax Tips in UK Tax Questions on February 15th, 2011
These questions and answers relate to UK tax.
Q. My employees earn an average of £490 per week, how much more NI will I have to pay for each employee from April 2011?
A. For an employee on average earnings of £490 per week you currently pay employer’s NIC of £48.64 per week in 2010/11, but from 6 April 2011 this NIC bill increases to £48.85 per week. That adjustment appears small but it amounts to £10.92 per year per employee. The increase in NIC costs will be much larger for higher paid employees, but smaller for lower paid employees. For an employee on £210 per week, you pay employer’s NICs of £12.80 per week in 2010/11, but this will drop to only £10.21 per week in 2011/12.
Q. I had taxable income of about £60,000 in 2009/10, made up entirely of dividends and bank interest. I also pay £2,400 per year into a personal pension. Will I get 40% tax relief on that pension contribution?
A. You will receive higher rate tax relief on your pension contribution if you make the claim on your tax return for 2009/10. A contribution of £2,400 is worth £3,000 to your pension fund as the pension scheme trustees reclaim £600 basic rate tax from HMRC. Your basic rate tax limit will be expanded to £40,400 by the gross value of your pension contribution. Which means £3,000 of dividends which would have been taxed at the higher rate applicable to dividends of 32.5%, will be taxed at 10%, saving you an additional 22.5% in tax, or £675.
Q. Our trade body charges a membership fee in advance for each calendar year, but from 1 December 2010 new members who join online can pay the annual fee for 2011 and become a member immediately, effectively receiving the balance of the 2010 membership period for free. The organisation is VAT registered and the membership fee is subject to standard rate VAT. Is it correct to charge new members 20% VAT when they join online in 2010?
A. The organisation should charge VAT at the standard rate in force at the date of the tax point for the membership subscription. This tax point is the earlier of the date the membership fees is received or the VAT invoice is issued. For new memberships paid for before 4 January 2011, the correct rate of VAT to charge is 17.5%, even where the membership covers the whole of the year 2011.
For specific taxation advice we recommend that you contact a Chartered Accountant such as Accountants Pontypridd.
For tax tips and information visit the Accountants Cardiff website.
The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice. In addition it is emphasised that much of the information provided in this article is time sensitive and information contained within it may be out of date.
Tax Break for New Car Purchases and Tax Relief for Hardworking Americans with IRS Problems
Posted by admin in US Tax Questions on June 22nd, 2010
The KLOS Tax Man, Tax Tip #58: Buyers of new cars can deduct a sales tax even if they don’t itemize! This break applies to vehicles purchased after February 2009 and before next January. Sales tax on the first 500 is deductible. But who the hell is buying cars now? More than ever, due to the current economy and real estate melt down, many hardworking Americans who never before qualified for tax relief now qualify. Are you tired of those unfiled returns and the certified letters from the IRS? Then give the attorneys a call at Tax Resolution Services, Co., for a free confidential consultation to see if we can help. Be a man! And stand up for your rights. Call 866-477-7762 or 866-IRS-Problems or visit www.taxresolution.com