Why use a tax adviser or an accountant to prepare your personal tax return?
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(This is a sticky post, please find current news items below) By andrew cazalet in tax |
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Rather an odd question for a tax adviser to ask you might think? I was asked recently by someone why they should instruct me specifically to do their tax return which set me thinking...
There are many reasons of course but mainly clients tell me they want to be sure they are doing it right and have not missed anything they can claim ie for peace of mind.
Others are just busy people and want to park the hassle with someone else.
Even for pure advisory clients I find the process of completing the return helps identify areas in which a client had not realised there might be savings.
Some clients want a second opinion on personal and business financial matters. Many clients are in the financial area themselves and they could talk about it with friends and family but some people prefer a more confidential different voice.
There is a good article here albeit from a US perspective which explains why you can do better than just using google and online software. But then I would say that wouldn't I?
Tax Refunds on Holidays Lets within Europe
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Wednesday, 10 June 09 - 02:26 PM (GMT) By andrew cazalet in tax tips |
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Do you own property in Europe....Has it made a loss in any tax year since 2006/07?
Did you know that under new HMRC guidelines you may be able to claim these losses against other income often leading to substantial tax refunds?
The conditions are:
• The property must be situated in the European Economic Area
• It must be let furnished not empty
• Available for Letting at least for 140 days a year
• Must be actually let for at least 60 days in the year
• Not normally occupied by any one tenant for more than 31 days at a time.
Further benefits of the relief are as follows:-
• Losses can offset against general income eg salary, self employed profits
• Entrepreneur’s Relief is usually available on the sale of such properties meaning an effective rate of capital gains tax of 10% not 18%
• Roll- over or Hold Over available to defer gain on sale
• Capital Allowances available on equipment used in the property
• Pension contributions can be paid if the property is profit making
• Possibly qualify for Business Property Relief thus exempting the property from IHT on death or gift to others
Deadline
HMRC have said that the cut off date to claim back these losses for 2006/07 is 31 July 2009.
Please get in touch if you need any help.
Budget 2009
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Thursday, 23 April 09 - 09:37 AM (GMT) By andrew cazalet in tax |
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Some thoughts and information re the Budget 2009
New Higher Rates of Tax
The new marginal rate of income tax of 50% applies to income over £150,000 starting from April 2010. This is above the planned increase of 45% and a year earlier! What has been less publicised is the progressive withdrawal of the tax free personal allowances by £1 for every £2 income exceeds £100,000. This means those earning between £100,000 and £112950 suffer a marginal rate of income tax of 60%.
Where possible it would seem sensible to advance income and pay tax now before 5 April 2010 at only (!) 40%. Or consider using a company to control the extraction of profit or maybe share options possibly taxed as capital gains at only 10-18%?
Further Extension of Carry Back of Trading Losses
The ability to carry back losses of up to £50,000 up to three years (instead of just one under the old rules) has been extended for unincorporated businesses to 23 November 2010 ie tax years 2008/09 to 2009/10. For limited companies the extension applies to those with accounting periods ending between 24 November 2008 and 23 November 2010.
Help with Time to Pay Taxes
The Business Payment Support Service http://www.hmrc.gov.uk/pbr2008/business-payment.htm has been instructed to accept “time to pay” arrangements in a wider range of circumstances. The advisers have been asked to take account of reasonable estimates of current year losses in pressing for previous years taxes.
Relief for Pension Contributions restricted at Higher Rates
From 6 April 2011 the relief for pension contributions for higher rate taxpayers earning above £150,000 will be restricted gradually so that those individuals with an annual income of £180,000 or more will effectively receive only a 20% tax deduction, the same as a basic rate tax payer. This may mean that some individuals will only receive relief at 20% but will later be taxed on their pension income at 50%.
Furnished Holiday Letting Relief to be abolished
The relief for loss making short term letting businesses will be abolished from 6 April 2010. These rules currently allow the offset of losses often made on holiday letting income against other taxable income subject to certain conditions.
However in the meantime HMRC does accept that it cannot discriminate as it did previously against individuals owning property in the EU – as opposed to in the UK. This means properties within the EEA area now qualify for relief until it’s general abolition in April 2010.
Budget Funny!
Some tweets below captured live on Wednesday from inside the Treasury (allegedly)
“ BUDGET CONSULTATION: Please tweet us your ideas for the Budget as Alistair has not got a clue. The final TwitBudget will be published here.
BUDGET2009. Treasury msg to HMRC: Sh+tting ourselves here, we haven't finished writing the Budget yet and Alistair has gone AWOL
Budget2009 update: Alistair has locked himself in the toilet and won't come out. Gordon has called in MetPolice to break down the door.
Budget2009: Back of fag packets currently being assembled into final document
#budget09 Alistair forgot to say "minus" before the growth forecast figures for 2010 and 2011. Next government's problem anyway “
Hat tip for that to http://twitter.com/HMRevenue
You can follow me on Twitter http://twitter.com/andrewcazalet
There is a good summary of the main general Budget provisions here
Please do get in touch if you have any questions or clarification. Feel free to pass this on if you know anyone who might be interested.
Would like to help your artiste reduce their tax bill whilst on tour or competing in the UK?
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Tuesday, 17 February 09 - 07:04 PM (GMT) By andrew cazalet in tax tips |
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Under the terms of most UK double tax treaties there is a clause excluding the services of entertainers and sportspeople from the “independent services” provision. This means they are taxable here even if they are not tax resident in the UK and do not have a permanent establishment or place of business here.
The artiste will usually obtain tax credit for the FEU UK deducted through his or her overseas tax return. However under many countries’ domestic tax legislation the tax payer is required to mitigate his or her liability as far as possible otherwise they will only get credit for the tax that was due in the UK not just the possibly higher amount they actually did pay on gross turnover. It is not enough therefore just to pay the tax and expect to get credit for it back in the home country. Relief may be restricted.
I have over ten years experience in this area with major and upcoming artistes and would pleased to help any clients legitimately reduce their UK tax liabilities.
Seasons Greetings
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Thursday, 25 December 08 - 04:02 PM (GMT) By andrew cazalet in humour |
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Season’s Greetings
A little light Christmas Cheer below..
I spotted this in the readers queries section of the leading magazine for tax advisers – a message from a seasonal character seeking help with his tax affairs.
On a visit to the UK last year I picked up a copy of your magazine and wonder if readers can advise me. I am non-domiciled and non-resident (I think) in the UK – no permanent home here – but each year I work temporarily in the UK for a short period.
The work is unpaid, but I do receive benefits in kind; glasses of port, mince pies and the like. I am rather concerned that I have not declared these to HMRC in the past. Should I have done so and is there an annual tax liability to be paid on these gifts or benefits? And if there is, how is the tax calculated under self assessment? “
Best Wishes for a Merry Christmas and Happy New Year
ps if you need any help with your tax returns whilst you have some time off over the Festive Season please do get in touch. I am of course happy to help with your tax returns, give tax advice, offer help as a tax consultant/ advisor, give tax advisory services as a tax advisor / accountant covering London and all points west - West End, Ealing, Mayfair, Knightsbridge, Chiswick, Fulham, Chelsea, Notting Hill, Belgravia, Bayswater, Kensington, Ladbroke Grove, Kingston, Marylebone, Barnes, Putney, Richmond, Wandsworth, Kew, Putney.
New Service – A Free Tax Health Check
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Tuesday, 04 November 08 - 09:59 AM (GMT) By andrew cazalet in tax |
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As a firm of specialist Chartered Tax Advisers with over twenty years of experience we are confident we can save most businesses and families money. We will review your accounts and financial affairs at no charge and make suggestions to save you tax. All this usually involves is rearranging your tax and business circumstances to take advantage of legally available reliefs for those in different circumstances. We will then give you a fixed fee quote to implement the strategy.
If you want to continue with your existing accountant for compliance services – tax returns, accounts etc we are happy to work alongside him or her. If you want a quote for a full comprehensive service we can of course provide this.
For this service qualified tax advisers would normally charge at least hundreds of pounds. We offer this service for free for a limited period until 31 December 2008.
We are based in West London but provide tax advice and tax consulting services for all areas of Central and West London – West End, Ealing, Mayfair, Knightsbridge, Chiswick, Fulham, Chelsea, Notting Hill, Belgravia, Bayswater, Kensington, Ladbroke Grove, Kingston, Marylebone, Barnes, Putney, Richmond, Wandsworth, Kew, Putney and beyond.
Tax Advice services in West London
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Friday, 17 October 08 - 06:21 PM (GMT) By andrew cazalet in General |
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I have had a few kind remarks on the postcard I created to promote my presence in Ealing Studios.
The picture is below for those who have not seen it.
The drawing of Ealing Studios is by a very talented friend of ours Stella Swain. She does lots of lovely pictures – mainly sort of like this one. She does business or private commissions and is very reasonable. She can be contacted on 01962 854 275 stella.swain@ntlworld.com www.stellaswain.com
How to obtain tax relief for childcare?
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Tuesday, 14 October 08 - 12:40 PM (GMT) By andrew cazalet in tax tips |
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Childcare Vouchers are popular with those who work with large employers. They provide a tax & National Insurance free way to provide up £2860 per child to each employee. However largely because of the administration and hassle they are less common with smaller owner managed businesses. If you have children, run a business and pay for childcare (not schooling) please read on…
Under these arrangements an employer can establish a Childcare Voucher scheme which allows you to take up to £55.00 per week or £243.00 per month in the form of a Tax & National Insurance free voucher from their employer. This voucher can then be presented to a childcare provider who may apply to the employer for the voucher to be redeemed for cash.
The potential maximum saving for a higher rate taxpayer is £1,195 per year. For an individual who is liable at the basic rate of tax the maximum saving would be £904 per year. There is an additional saving for the employer of up to £373 being the employer’s national insurance that would otherwise be payable if cash were offered instead.
The main conditions of the scheme are as follows:
- The child for whom the voucher is provided must be under 16 and be a child of yours who lives with you and for whom you have parental responsibility.
- The childcare provider has to be registered/ approved with the appropriate authorities. Informal arrangements with relatives are therefore usually excluded unless they can arrange to register. Nannies or au pairs are usually allowed provided they are able to register.
Please be aware that if you are entitled to children's tax credits you are required to notify HM Revenue and Customs that your childcare costs have reduced. This may reduce your entitlement to tax credits.
We have developed a toolkit of documents that enable you to implement the scheme for a fixed sum rather than the % of the voucher usually charged. One flat sum means you only pay once rather than a % each time.
If you have any questions or want to consider implementing a scheme please do get in touch.
Let the Taxman pay for your bike ride to work!
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Wednesday, 12 December 07 - 06:39 PM (GMT) By andrew cazalet in tax tips |
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Under the Cycle To Work scheme an employee is allowed the tax and National Insurance free use of a bicycle for a period agreed between the parties but typically say three to four years.
It would normally be treated as a benefit in kind but in this instance the loan is free of income tax and national insurance. At the end of the term the employee would need to hand back the bike to the employer or more likely purchase it from them.
A purchase price at that point of say 10% or 20% of the original cost would seem possible as the second-hand value of bicycles is of course not very high.
Benefits of Scheme
- The loan is free of income tax and national insurance. This would save each higher rate employee 41% of the market interest charged that would otherwise arise on the loan.
- Often there is a Salary sacrifice arrangement between the employee and employer where the employee agrees to forgo salary over the life of the loan equivalent to the value of the bicycle at purchase.
- Reclaim VAT at 17½% of the cost of the bicycle.
- Capital allowances on the cost of the bicycle. Under present rules (possibly to change soon) this means the company would have been able to claim a tax deduction for 66% of the cost of the bicycle after three years. After six years this figure rises to 90% of the cost. Both this and the VAT saving can be passed onto the employee.
Conditions for the Scheme
Please do get in touch if you want me to help you establish the scheme for your company.
Oldie but Goldie
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Tuesday, 11 December 07 - 05:53 PM (GMT) By andrew cazalet in humour |
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There are precious few funnies in tax but below is the text of a letter from an HMRC officer allegedly genuine which hopefully might amuse...
" Dear Mr R Murphy
I am writing to you to express our thanks for your more-than-prompt reply to our latest communication, and also to answer some of the points you raise.
I will address them in order.
Firstly, I must take issue with your description of our last correspondence as a "begging letter". It might perhaps more properly be referred to as a "tax demand". This is how we, at HM Revenue & Customs, have always, for reasons of accuracy, traditionally referred to such documents.
Secondly, your frustration at our adding to the "endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat" has been noted. However, whilst I have naturally not seen the other letters to which you refer, I would cautiously suggest that their being from "pauper councils, Lombardy pirate banking houses and pissant gas-mongerers" might indicate that your decision to "file them next to the toilet in case of emergencies" is at best a little ill-advised.
In common with my own organisation, it is unlikely that the senders of these letters do see you as a "lackwit bumpkin" or, come to that, a "sodding charity". More likely they see you as a citizen of the UK, with a responsibility to contribute to the upkeep of the nation as a whole.
This brings me to my next point. Whilst there may be some spirit of truth in your assertion that the taxes you pay "go to shore up the canker-blighted, toppling folly that is the Public Services", a moment's rudimentary calculation ought to disabuse you of the notion that the government in any way expects you to "stump up for the whole damned party" yourself. The estimates you provide for the Chancellor's disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is spent on "junkets for Bunterish lickspittles" and "dancing whores", whilst far more than you have accounted for is allocated to, for example, "that box-ticking facade of a university system".
A couple of technical points arising from direct queries:
- The reason we do not simply write "Muggins" on the envelope has to do with the vagaries of the postal system;
- You can rest assured that "sucking the very marrows of those with nothing else to give" has never been considered best practice because even if the Personal Allowance did not render it irrelevant, the sheer medical logistics involved would make it financially unviable.
I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to "give the whole foul jamboree up and go and live in India" you would still owe us the money. Please remit it by Friday.
Yours sincerely,
Mr Dave Harnett
Customer Services Manager "
... More items are available in our News Archive
