For the last few weeks we've been busy creating a special Tax Toolbox for all our subscribers. This time we have updated our Director's tax planning toolkit for 2013/14.
This is a really valuable guide - the equivalent of a three-hour lecture condensed into manageable chunks, yet pack with planning points and as always links to more detailed guidance on each topic. I hope that you all like it.
I am perturbed to find yet more situations where taxpayers find that their businesses are being affected by the cap on unlimited income tax reliefs. It is plainly absurd to cap loan interest relief and sideways losses for new start-ups. If the Government is serious about helping business it should taking a long hard look at this measure.
Scroll on down for more news, toolkits, briefings, and updates on Finance Act 2013.
Nichola Ross Martin FCA
Your online Virtual Tax Partner: practical support for accountants, tax advisers and their clients
Goodwill: accounting practice
All change in accounting for goodwill...again. FRS 102 says that if an entity is unable to make a reliable estimate of the useful life of goodwill, the life shall not exceed five years. This may have a significant affect on both company accounts and company profits chargeable to tax.
Advisers misunderstood tribunal costs
In Michael Phair v HMRC TC02752  the taxpayer's case the First Tier Tax Tribunal was assigned to the complex track. His advisers misunderstood the costs rules and so landing him with HMRC's costs after an unsuccesful appeal.
Furnished Holiday Letting and IHT Business Property relief
The executors of Mrs Pawson have been refused leave to appeal against the findings of the Upper Tier Tax Tribunal that a bungalow which qualified as a furnished holiday letting for income tax was a qualifying business asset for the purpose of inheritance tax relief. The scale of any activities undertaken in the business was limited in scope and this led the tribunal to decide that the activity consisted wholly or mainly of holding investments.
PI insurance update
Since we suggested the firms might like to check the small print in their policies for unexpected exclusions we have had some interesting feedback. One firm reports that it was surprised to find that it was excluded from providing company secretarial services.
CGT private residence relief (PRR) denied when a home is just temporary accommodation
In Piers Moore v HMRC TC02827  a taxpayer was denied PRR despite occupying a property for 8 months. Some people have criticised the decision, but on closer inspection it seems that the judge was not that happy with the quality of the evidence.
When an inspector calls
Let Property Campaign
HMRC’s Let Property Campaign is a disclosure opportunity which is aimed at property landlords who have failed to disclose rental income. Unlike other fixed term opportunities this one has apparently no deadlines for registration: it will be open for at least 18 months.
NEW: our Subscriber Toolbox
Directors: tax planning toolkit 2013/14
Add this to your favourites bar. This is a rolling planner, so we continue to update this all year as tax law evolves. The 2013 Finance Act made some significant changes to the tax rules affecting directors, our toolkit provides you and your adviser with a heads up on "what's hot and what's not" in 2013/14.
Directors' loan accounts: toolkit (freeview)
A checklist that details the main tax issues surrounding directors' loans.
Close company loans toolkit
Essential reading 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.
Shares and employees
Employee Shareholder Status - tax & planning
Update: a new type of employee and a new type of employee share scheme.
Employment Related Securities
Update: explaining what happens when you give an employee or director shares.
ABC or alphabet shares: directors & employees
This links you to guides for directors, family companies and employers.
Close Company guides and updates for advisers
Will I pay less tax if I trade via an LLP?
An overview and comparison of key points
Running an LLP in tandem with a company
Tax planning suggestions for alternative structures
Do I pay a salary or dividend?
The tax-planning points and pitfalls of using dividends to create a tax-efficient pay package.
Still coming to terms with the new Finance Act and other recent changes?
Limit (cap) on income tax reliefs
UPDATE: yet more examples of situations which are affected by this cap (from our Virtual Tax Partner helpline), surely this measure needs to be amended?
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.
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.
Travel and tax UPDATE: this is our sign-post to our guides in this area. If you are ever short of something to say to a client start here - the new rules for simplification of accounts make this whole topic quite fun.
Tax-free benefits and perks UPDATE: can you spot the changes? (scroll to the bottom to find the answers).
Staff parties and annual functions UPDATE for 2013.
Directors' loan accounts: toolkit An essential guide for directors and companies on the income tax and NICs treatment of overdrawn loan accounts.
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.
- 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.
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.
Annual Investment Allowance
Update: a handy summary with planning points.
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