It's common practice for clients to put family on the payroll. This can be tax efficient despite HMRC viewing such arrangements suspiciously. How can you support your clients in their claim for a tax deduction? Tax deductible or not? A particular area of contention between businesses and HMRC is whether an expense has been incurred "wholly and exclusively for the purpose of the trade". If it hasn't, no tax deduction is allowed. With this rule in mind, a tax inspector's intere
The Finance Act 2019 created relief for intangible assets including goodwill. The new relief applies to qualifying expenditure incurred on or after 1 April 2019. Will your clients qualify if they acquired the asset prior to this? Recap - relief lost for goodwill Rule changes made in December 2014 and July 2015 saw tax relief for companies on the cost of goodwill attacked twice. The first change blocked relief for goodwill where it was internally generated, i.e. built up by th
With the tax year almost half-way through, directors of your corporate clients can take advantage of tax and NI-free trivial benefits. What advice can you give them to ensure they get the maximum advantage from the exemption? Trivial recap Since April 2016 employers have been able to provide any number of small (trivial) benefits in kind to their employees without them counting as taxable perks. HMRC relies on three factors to prevent the exemption being exploited: • The exe
HMRC has been forced to make changes to its approach to the anti-avoidance rule which can apply to shareholders who wind up their companies. What advice can you give to affected clients? Targeted anti-avoidance Since April 2016 if your client winds up a company are they are involved with a similar business in the following two years, a targeted anti-avoidance rule (TAAR) can increase their tax bill. Normally, they'll pay capital gains tax (at 10% or 18%) where they receive mo
Your client intends to transfer their business to a company. They think that any resulting tax charges can be legitimately avoided. However, you believe there will be tax to pay. Who's correct? Tax and other advantages One of the main motives for transferring a sole-trader business to a company is tax saving. Your client may have read about the process, and how it's possible to legitimately avoid paying capital gains tax (CGT) through the use of special claims. However, what'