|
|
|
IR35 TAX YIELD REVEALED |
 |
 |
|
4 January 2012
If you use your own personal services company to provide services, you will be well aware of the infamous IR35 rules. When they apply they result in the income of your company from the end-users being treated as your own earnings, with the result that PAYE and national insurance contributions are due.
In response to a recent Freedom of Information request HMRC was forced to admit that over the past 5 years only a paltry 322 cases were reviewed by way of a formal enquiry! What’s more, the tax yield from cases reviewed was only £219,000 in 2010/11, compared with £1.9 million in 2006/07.
Of course IR35 does have a deterrent effect, but even so the above statistics suggest that the complexities and uncertainties of the IR35 legislation are out of all proportion to the amount collected. Whilst it is probably wishful thinking that it will be abolished, there are grounds for suggesting that certain arrangements which have been brought within IR35 should be reviewed to see if the position can now be rectified. That includes situations where a personal services company was not established as it was thought that IR35 will bite.
  
|
|
THE TAX CATCH UP PLAN |
|
|
|
21 December 2011
We are always delighted when you kindly refer a new client to us. It shows us we are providing the service to you that we always strive for, and we then try and do our best for the person you have referred.
One area where we can help is when you come across someone who for whatever reason has not declared all of their income – or perhaps fears that may be the case. The latest HMRC initiative aimed at such a person is the Tax Catch Up Plan. Although it is primarily targeted at those delivering tuition and coaching or who use those skills in another way to supplement income, this initiative can also be used to cover any situation where income has not been declared.
The incentive to using this new plan is a substantial reduction in the level of penalty usually charged. We will always try and get the penalty reduced to the lowest possible – that can be NIL, 10% or 20% of the tax outstanding, depending on the circumstances.
That will save a lot of money as normally the penalty for paying too little tax can be as much as 100% of the tax. There is a deadline of 6 January 2012 to notify participation in the Tax Catch Up Plan.
|
|
|
JOBS AND BUSINESS SUPPORT |
|
|
|
19 December 2011
OBR forecast of total public sector job losses up from 400,000 to 710,000.
The Chancellor announced a credit easing programme to underwrite up to £40bn in low-interest loans to small and medium-sized firms, a £1bn business finance partnership to raise money for medium-sized firms and a Regional Growth regeneration fund to get £1bn in extra funding. The Bank levy will be increased from January.
In addition there will be a £250m support package for energy-intensive firms, with £500m for science.
Business rate holiday relief for small firms has been extended to April 2013
He also announced a £1bn "youth contract" to subsidise six-month work placements for 410,000 young people.
For a detailed summary of the Autumn statement please contact us and we will be delighted to provide you with a copy.
|
|
USING YOUR OWN LIMITED FAMILY COMPANY TO MEET UNIVERSITY COSTS OF YOUR SON OR DAUGHTER |
|
|
|
15 December 2011
The scope is substantial, with care, and can result in both a corporation tax deduction and no income tax charge on you to cover the benefit. The ultimate tax-efficient arrangement! As you can imagine, the rules are strict to achieve this.
Your son or daughter must be properly established as employed by your company, but that does not have to be full-time. Various safeguards must be built into the arrangement so as to resist any attack from HMRC.
Not surprisingly there are limits to the tax exemption, and in particular it does not cover tuition fees. Rather it is meant to cover lodging, subsistence and travel up to a level of £15,480 in the academic year. We will be pleased to advise of what exactly can be done in your specific circumstances.
|
|
|
|
|
|
|
Page 1 of 7 |
