Jon Stow Consulting – Tax Solutions

Making the tax system simpler is an admirable aspiration but it does not necessarily make it fair. The recent changes in the capital gains tax rules, or at least in calculating the charge to capital gains tax demonstrate this amply.

As expected and as heralded well in advance by the Coalition, the rates of capital gains tax were increased. Although effectively for basic rate taxpayers the main rate stayed at 18%, for the majority including the basic rate taxpayers deemed to go into the higher rate threshold by dint of … Continue Reading

Following George Osborne’s “Emergency” Budget in June and still in the middle of a downturn, it is been hard to assess the immediate impact of the changes announced on small businesses. This practice acts for many who are wondering how they will be affected, and whilst there was a good deal of immediate reaction in the aftermath, there has been time for some more considered thought.

I am not blessed with second sight, but will dive into the debate anyway. Firstly, here are the basic measures:

• For small incorporated businesses the … Continue Reading
  

Rather than bore you with another “Emergency” Budget Summary, and many of us including me have been inundated with very similar emails and documents containing the “key” facts, I am going to be picking out and expanding on a few items of interest. I think Furnished Holiday Lettings are a good place to start because they are an area of entrepreneurial potential and should be of interest to many.

In the 2009 Budget Chancellor Darling announced that the special arrangements distinguishing Furnished Holiday Lettings (FHL) from other types of letting … Continue Reading

There has been a great deal in the professional tax press recently about HMRC’s intention to compel submission of corporation tax returns on-line using iXBRL from April 2011.

Quite apart from the expense issue from the taxpayer end in terms of the extra software costs required in development, it fills me with foreboding when the existing system, which is less complex, simply doesn’t work well.

I did try using HMRC’s own software on an experimental basis, but it involved downloading a huge editable PDF … Continue Reading

We now know that the “Emergency Budget” will be on 22nd June. In the interim we will have further flapping about the headline rate of capital gains tax going up to the highest marginal income rate (40 or 50%), as opposed to the 18% flat rate we currently have for non-business assets and an effective 10% rate for business assets.

Well hang on, isn’t that what we had up to April 2008, only two years ago? The rate then was effectively 10% for business assets … Continue Reading

Complaints about accountancy charges from SMEs and small business owners trading through companies are common, but often the answer lies with the businesses themselves. I would be the last to deny that some accountants are lazy in looking after their clients and in ensuring that they are getting good value from the services they provide. In our profession as in any industry we get those who are not serving their clients or customers well and are surprised when their clientele vote with their feet.

There is another reason why accountants may charge quite a lot, and that is because they really … Continue Reading

We have a new Government in place and a new fiscal policy which we will learn about in the coming weeks. We know that there are going to be tax rises and we know something of what they will be, as well as of other measures.

• The National Insurance increase planned for April 2011 will be only for employees. The “jobs tax” element of the increase which would have been imposed by the previous administration is not going to take place; at least not until the economy and jobs market seems to be recovering.
• The tax free income tax Personal Allowance will … Continue Reading
  

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I am not going to tell you how long I have been working in tax, but suffice it to say I have a lot of experience. Things have changed so much that it seems to me that the public in general still entertains ideas about tax which are long outdated if indeed they were ever correct in the first place.Once upon a time in the UK tax system, people did not get … Continue Reading

Having talked about golden handshakes I ought to mention the “golden hello”, which is a payment made to a future director or employee. It is just possible (only just!)that a payment received from someone other than the new employer – a third party – could be construed as non-taxable. Where a lump sum payment is made to a prospective new employee, it will be taxed as advance pay for future services unless it represents compensation for some right or asset given up on taking up the employment. An example going back to the 1950s was where an … Continue Reading

Golden handshakes are payments to an individual upon termination of employment and may also be known as lump sum payments.There are cases where such payments are not taxed at all, which are those post-death when an employee has died in service, and in some cases payments due to disability may qualify for exemption. Those are outside the norm.For the most part termination payments are taxable under special rules. The first £30,000 of a leaving payment will be exempt from tax if it is an ex-gratia payment and therefore non-contractual. One may have to make the case … Continue Reading