WARR & CO ACCOUNTANCY BLOG
Most businesses entertain customer, suppliers and useful business contacts from time to time. It has long been the case that tax relief is not available on entertaining expenses, but in large companies, employees whose role includes entertaining will always seek to reclaim these expenses to avoid being out of pocket.
In the summer budget the Chancellor announced that from 6th April 2016 the tax credit on dividends would be replaced by a £5,000 tax free dividend allowance available to all. He went on to say that a dividend tax would also be introduced so that basic taxpayers would pay 7.5% tax, higher rate taxpayer would pay 32.5% tax, and additional rate taxpayers would pay 38.1% tax.
Last time round we looked at the effect of the new dividend tax on three fictitious single taxpayers and looked at the opportunities available for the tax planning. This time we look at three married taxpayers. First however, a word of caution. The draft legislation showing precisely how the new tax will work has not yet been published and these examples reflect our understanding based on statements made in the summer budget.
For the next few months we will be looking at how the new dividend tax impacts on all areas of tax planning with a series of worked examples. In this first blog on the subject we look at single tax payers.
There is an inequality in the tax system that affects businesses. The owner of a business operated through a limited company who draws all of his profits in the form of a low salary and dividends will pay less in tax overall than a person operating a similar business as a self employed trader.
George Osbourne presented his first budget under a majority conservative government on 8th July 2015. We focus in this blog on some of the key measures that we believe will be of interest to our clients.
e4 e5 2. Nf3 Nc6 3. Bb5 a6 4. Ba4 Nf6 The opening moves of a game of chess form the title of this blog. Anyone who plays chess regularly will immediately recognise these particular moves as the first 4 moves of the Ruy Lopez opening. This opening will have been played many times this year by those who play chess be they school children just learning chess or grandmasters. There are however about 319 billion possible ways to play the first four moves of a game of chess. Most have never and will never be played. It is a widely held view that there are more possible 40 move games of chess than there are electrons in the universe.
Over many millions of years the rotation of the moon has been slowed down so that only one hemisphere is ever visible from the Earth the invisible hemisphere is known as the Dark Side. If you’re a contractor you may be approached by companies promoting tax planning solutions which will make you just as invisible to HMRC as the Dark Side of the Moon is to the Earth.
Tax avoidance schemes have been around for many years, but until about 20 years ago these were used by rich individuals and large companies to shelter very large sums (typically £1m +) from the taxman. They were usually designed by the very large firms of accountants with the help of senior counsel and high fees were charged to participants, often over £100k.