March Blog from John Robson CIMA Member in Practice
Happy Easter that does not seem right as I write this on a dark February evening.
Thought for the month, “If you take the easy choices in life. Life will be hard. If you take the difficult options in life. Life will be easy.”
Tips for Self-employed people as we approach the end of 2015/16 Tax year
If you are planning to do your own self-assessment please consider the following:-
Would you be better off running your business as a limited company? This would generally allow you to plan your tax affairs more efficiently and protect your personal wealth should the business fail. Note that personal tax is paid in advance but Corporation tax on a company’s profits is paid 9 months after the year end. If you switch from self- employed to a company it is quite likely you will get a tax refund, depending on your personal circumstances.
Claim mileage at 45p per mile for all business use of your car. It is a clean HMRC approved method of claiming motoring expenses all you need to do is keep a mileage log of all business related journeys. Note that mileage over 10000 miles is claimed at a reduced rate of 25p per mile.
Make sure you claim all direct business costs that are wholly and exclusively for the business.
Make sure all HMRC deadlines for submitting returns and paying tax due are met because the penalties are harsh.
Claim capital allowances on all plant and equipment purchased in the business.
You cannot stop completing a self- assessment return until HMRC tell you to do so even if you switch to a job which is under normal PAYE.
Always check with HMRC website to see what you can claim for your particular business.
If you have income from property rental always declare it as HMRC now have access to land registry files and they will know if you own more than one property. Also there are significant changes from April 2016 on the expenses you can claim, the 10% wear and tear allowance on furnished rentals will go and mortgage interest relief can only be claimed by basic rate tax payers.
But the best tip I can give you is take advice from a professional you will normally save much more in tax than you would pay in fees. The professionals do hundreds of returns every year covering all businesses you will be doing just the one and it could prove to be very expensive in the long run.
If you want me to help you legally minimise your taxes please try to contact me before your year end as there are many more options available to you and your companies than after the year end has passed.
Under our new Tax Options strategy I can visit you anywhere convenient to yourself to discuss these issues.
What are you in business for? Do you want to build a business to sell and retire to the sun?
Do you want to build a big Pension fund to see you through your later years?
Do you want a business to pass on to your children?
Do you not have a plan and is your business drifting?
Give me a call I may be able to help.
Is your business struggling, can you not pay the bills as they fall due or is there nothing left for you to live on after you have paid the bills? We have helped a number of our clients in this position and if you find yourself struggling ask for help before it becomes too late and there is nothing left to salvage from your years of hard work. Don’t let pride stop you asking for help.
Personal Tax Allowances for Married Couples
You can transfer your personal tax allowance to your spouse if you are not working. This only applies to Basic Rate taxpayers and you must make an election to HMRC to do this before 06/04/2016. Click on to the link for full details.
Another tax year is coming to a close for all of us and a financial year end for many of you so let us get your affairs in the best possible shape for the current year and look forward to the new tax year with optimism.