Over the last decade, corporation tax rates for most companies, irrespective of size, have fluctuated between 19% and 21%. The main rate of corporation tax is expected to be cut to 17% from April 2020 which makes business incorporation an attractive proposition.
It’s worth considering, given current tax rates, whether to pay a dividend rather than a salary to Directors. It will often be a more cost-effective way of withdrawing profits from a company.
Once a business is up and running, the next major administrative area to be considered relates to VAT. At first glance, the VAT legislation can be complicated and time-consuming – particularly for small businesses.
Read how making use of statutory exemptions for certain benefits-in-kind offers an opportunity to extract funds from a family company without triggering a tax charge.
Timing the date of a dividend payment from a company can determine both the amount and the due date of the tax payable. This may be a particularly useful strategy in a close or family-owned company.
HMRC’s property rental toolkit highlights errors commonly found in tax returns in relation to property income.
A member’s voluntary liquidation (MVL) can be an attractive option when the taxpayer’s personal circumstances are such that it is beneficial for the remaining funds to be taxed as capital (and liable to capital gains tax), rather than as a dividend. However this depends upon the level of funds to be extracted the costs of the liquidation may be more than covered by the tax savings that can be achieved.
Airbnb-type hosts can enjoy rental income of up to £7,500 tax-free under the rent-a-room scheme.
Employees with a company car are taxed – often quite heavily – for the privilege. The charge is on the benefit which the employee derives from being able to use their company car for private journeys. The rates are different if it’s a diesel car.
The annual tax on enveloped dwellings (ATED) is a tax that applies, in the main, to companies owning residential property which is valued at more than £500,000.