We are focusing on the new measures which affect Close Companies as we head towards the Autumn. The majority of private companies resident in the UK are "close" and so even if you only advise one tiny company you will need to keep up to speed with the many changes afoot.
This time we are looking at loans to participators and aiming to ensure that we are all up to speed with the new rules on "Bed and Breakfasting" these loans; that is paying off one loan shortly before the 9 month deadline only to replace it with another loan. So this time's essential reading is our updated Close Company Loan toolkit. I suggest that you read that together with our Director's Loan toolkit (which explains the income tax and NICs treatment of loans, releases and write offs). The timing of remuneration and loans will become critical when we get to the end of the tax year because there is the claw back of Child Benefit for higher rate taxpayers as well as the loss of personal allowances for the even higher earners.
We also have a new guide which outlines the capital gains tax treatment when a loan made to a close company goes bad. The temptation may be to turn a potentially bad loan into share capital, and that way it is possible to achieve an income tax loss if the company fails, and that might be more useable. However even if you manage this then you need to consider the new Cap on Income Tax Reliefs. There are a lot of hurdles to clear when you are planning in this area!
We have an update on Furnished Holiday Letting which I think is particularly useful: we have summarised all the recent changes and so you can use this guide when you see clients to tick the boxes and ensure that you have not missed anything, even if it is only a matter of capital allowances.
The first annual return for the Annual Tax on Enveloped Dwellings is due by 31 October, however HMRC offers pre-banding checks, these need to be submitted at least 20 days before the return is due.
Scroll on down for more news, toolkits, briefings, and updates on Finance Act 2013.
Best wishes
Nichola
Nichola Ross Martin FCA Tax Director
www.rossmartin.co.uk Your online Virtual Tax Partner: practical support for accountants, tax advisers and their clients
News headlines
My Tax Return Catch Up campaign
Failed to file a tax return since 2008/09 (or earlier)? This campaign offers the "best terms" according to HMRC. You have until 15 October 2013.
RTI: have your say
Complete the survey! HMRC have launched an online survey to learn more about how employers and agents are finding the obligation to report PAYE information 'on or before' employees are paid.
Gift Aid claims move online in Oct 2013
Probably best to ask HMRC about paper filing if you are without usable broadband.
Free-view guides
Directors' loan accounts: toolkit
Guidance for directors and companies on the income tax and NICs treatment of overdrawn loan accounts.
Subscribers - new Close Company guides and updates
Close company loans toolkit
UPDATE: essential reading if you advise private companies, with a focus on new rules for "bed and breakfasting" loans to participators and measures affecting loans to LLPs. Review of latest consultation for reforming the loans to participator rules.
Loss relief (income tax) disposal of shares
NEW: summary of the conditions for obtaining relief with pitfalls and planning points.
CGT relief: loans to traders
UPDATE: tax relief when a company gets into difficulty and cannot repay your loan account.
Coming to terms with the new Finance Act and other recent changes
Employee Shareholder Status - tax & planning
NEW: the new measures introducing a new category of employee share owner are interesting for all sizes of companies. Our guide introduces the new measures.
Disincorporation Relief
The new relief applies from 1 April 2013. It may be useful for small companies which decide that it is administratively easier to scale down and become sole trades or partnerships.
Limit (cap) on income tax reliefs
UPDATE: new examples of situations which are affected (from our Virtual Tax Partner helpline).
IR35: changes from 2013
From April 2013 under measures introduced in the 2013 Finance Act office holders will become within the scope of IR35.
IHT
IHT: non-domiciled spouses
From 6 April 2013 a non-dom spouse may elect to be treated as UK domiciled, this might be a dangerous election to make without some careful consideration.
IHT: restrictions on liabilities against the estate
Provisions were introduced by the Finance Act 2013 that restrict to what extent certain liabilities may be deducted against an estate on death. HMRC has now updated its manuals to reflect the changes which may catch out advisers and taxpayers alike.
'Simpler' Accounting for tax
Accounting: Simpler Income tax (cash basis) / fixed expenses
Start here (self-employed taxpayers) to decide which of (or both) the new measures to adopt.
Board and lodging adjustments
All change from 5 April 2013.
Cash or accruals accounting toolkit
At a glance summaries with planning points and examples for all advisers in this new guide.
Flat rate expenses or actual cost toolkit
Essential briefing for advisers and clients.
Land and Property
Furnished Holiday Letting
UPDATE: our detailed guide contains a summary of all the recent changes which is useful for talking over with clients.
Wear and tear allowance and the renewals basis
The rules changed on 6 April 2011 and then again on 6 April 2013: this updated guide explains the different tax treatments year by year.
Annual Tax on Enveloped Dwellings (ATED)
The first self-assessment return for ARPT will be due in 2013/14 and made by 1 October 2013.
Joint property: legal v beneficial ownership
This guide provides you with a concise summary of the differences between legal title and beneficial ownership and explains what elections or actions are necessary to ensure that tax treatment matches your intentions.
Editor's choice
Schedule 36 information notices
Mini guide to HMRC's power's with topical tips and case law
Purchase (repurchase) of own shares
Step by step guide to ensure Companies Act and tax compliance is met to allow a repayment to be treated as capital in the hands of the outgoing shareholder.
Top Tips for directors
Converting part of a home into an office
How to create a tax-efficient home office.
Directors' tax planning toolkit 2013/14
Our rolling planner which is updated throughout the year
Can I charge my company rent for use of my home?
UPDATE: you may consider:
- Recharging the company, on the same basis as a conventional home working employee for a proportion of your bills and running costs. This is explained in Working from home (directors) or
- Formalising a licence agreement with your company in order to allow it to occupy part of your property. It then pays you rent and service charges and you then claim all your expenses under self-assessment...More
Working from home (directors)
UPDATE: the same rules apply to home working directors as other employees. However, a director is more likely to be able to charge rent and there may be some additional issues and complications by virtue of their office.
Do I pay a salary or dividend? 2013/14
UPDATE and re-write of last year's highly popular guide: this is designed to save you having to do all these workings yourself.
Tax masterclass: running an LLP & Co structure
A guide is for trading companies and professional practices: we see many different structures and so we are constantly updating this guidance.
ABC or alphabet shares: directors & employees
UPDATE: essential reading for directors.
Annual Investment Allowance
NEW: a handy summary with planning points.
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