Taxation

The best way to achieve tax efficiency for taxpayers throughout their lives and their business’ life is to secure professional advice from a dedicated team.

As a firm of Accountants in Doncaster we specialise in small company corporation tax.

Our tax team can advise you on:

  • Tax breaks for individuals, partnerships and limited companies
  • Corporation Tax
  • Capital Gains Tax
  • Employment Tax
  • Workplace pensions
  • V.A.T.
  • Stamp Duty
  • Inheritance Tax
  • Trusts and Estates
Company Taxation

As a firm of Accountants in Doncaster we aim to minimise your corporation tax liability.

As a business taxpayer, you will realise that self assessment for limited companies adds another burden to your responsibilities. The consequences of inaccurate reporting can be serious under HM Revenue & Custom’s enquiry processes. Even so, we know that you do not want to pay any more tax than is necessary.

Our corporate tax compliance service covers:

  • Preparing the company’s Corporation tax computations and Capital Allowances claims based on your annual accounts.
  • Preparing and submitting your company’s Corporation Tax Return.
  • Calculating the company’s corporation tax liability for the period and advising you of the due date for payment.
  • Dealing with all the routine enquiries and liaising with the Revenue following submission of the Return.

By working with us, you can help your company to make the most of any tax incentives, reliefs and claims through advanced tax planning such as:

  • Efficient withdrawal of profits from your business.
  • Company cars
  • Purchasing commercial property
  • Research and development
  • Tax incentives for outside investors

 

Self Assessment

Filing your self assessment looks easy but its becoming less straightforward. Filing late earns you penalties.

We provide an all-inclusive personal tax compliance service for all individuals, partners and partnerships filing under self assessment.

Our services include:

  • Collating the information provided by you for inclusion on your return.
  • Completing your personal tax return by including all income from all sources and claiming all allowances and reliefs available to you.
  • Calculating your liabilities for the year and advising you of the amounts together with the due dates for payment.
  • Dealing with claims to reduce your payments on account whenever your profits are falling which can be a cash flow benefit for you.
  • Dealing with HM Revenue & Customs investigations and aspect enquiries.

As a taxpayer the best way to maintain a level of tax efficiency at all stages through your life is to take on support of a professional adviser.

Our tax specialists can advise you on:

  • Tax breaks for individuals and partnerships
  • Capital gains tax
  • Inheritance tax
  • Trusts and Estates
Dividends or Bonus?

If you own and/or run a small limited company you have control over how the profits should be taken out of the company. The key points are;

  • Corporation tax is due on the profits after allowing for salaries and wages so they help to reduce the company’s own tax bill. However, it’s cheaper to take out a dividend which is treated like a bonus but this does not reduce the taxable profit figure, but you have to save the Corporation Tax  in the Company’s bank account everytime you take those dividends. 
  • Income tax is due on the profits you take out of the business. PAYE is due every month on a salary for instance. However, when you take out dividends these do not save on the company’s tax bill. As a shareholder you pay no income tax on the first £5,000 worth of dividends per year but above that as a;

             basic rate taxpayer you have to pay – 7.5%

             higher rate taxpayer – 32.5%

             additional rate – 38.1% 

  • National Insurance is due on wages and salaries but not on dividends. The employee pays at the rate of 12% and your company pays at the rate of 13.8%. Currently no contributions are paid on the first £8,000.
  • You can claim an allowance so that you do not pay the company anything on the first £2,000.
  • Company law dictates that salaries can be paid even though the company may be making losses but in that case basically, dividends cannot be paid. 
  • Dividends are only ever paid in the same proportion as the shareholdings on that day. If you are a director who does not own shares you will not receive a dividend. If you are a shareholder but not an employee you will not receive a salary.

You cannot just decide to pay a dividend because there is enough money in the bank. You only pay dividends if there are sufficient profits in order to work out how much you can pay as a dividend on a particular day start with the bank balance and then basically, add on money due to be received and deduct any money owing out including the corporation tax that will be due on your profits to date. You cannot leave out the money owing out or else you are paying yourselves money as a dividend which is rightly someone else’s. This point is one of the prices you pay for operating as a limited liability company. You may well need your Accountant’s advice before paying a dividend.

Capital Gains Tax
  • Capital gains tax (CGT) is payable when you sell or give away an asset that has increased in value.
  • The gain or profit is taxed at 18% / 28% after claiming the equivalent of the personal allowance which stands at £11,900 per person on gains made each tax year.
  • More tax breaks may be available to reduce the gain and in particular “entrepreneur’s relief” is a deduction the disposal of a business, which reduces the tax rate right down to 10% on the first £10 million of such gains during the person’s lifetime. It also applies to certain share sales and certain assets ‘connected with’ a qualifying company.
  • There are exemptions from CGT such as on the sale of your main residence although the sale of a second home such as a ‘buy to let’ may well give rise to a liability.
  • CGT is payable on 31 January after the tax year in which the gain is made.
  • The CGT regime is so complex that we recommend you talk to a professional adviser.
Payroll & VAT

Payroll

When you run a business you will probably find that managing your payroll and understanding the regular changes to the rules that affect your staff and you as an employer are frustrating and costly in terms of your own time. As an employer you must deduct income tax and national insurance contributions from your employees’ pay before submitting forms and payment to HMRC.

By using our payroll service, you’ll find that:

  • You don’t have to pay any extra staff to take payroll processing on
  • You work with a dedicated team who understand the requirements of your business
  • Our service is accurate and on time
  • Our service also deals with the processing and filing requirements to meet the stringent Full Payment Submission (FPS) and Employer Payment Submission (EPS) deadlines in order to avoid penalties
  • We will claim your £2,000 employment allowance (£3,000 from April 2006)

Whether your business employs a couple of people or hundreds, we can take away the worry and stress by dealing with your payroll efficiently and cost-effectively.

V.A.T.

Value Added Tax is onerous and there is much stress on employers to submit their returns correctly and on time together with the payment.

Employers face ever-changing rules and the increasing demands from the Revenue make it difficult for many employers to mange this themselves.

We can:

  • Prepare your VAT returns
  • Assist with VAT registration
  • Advice you on VAT planning and administration
  • Negotiate with the Revenue in disputes
IR 35 Personal Service Companies

The rules state that if you set up a limited company to obtain work by providing your services to a customer then HMRC has a right to look at the real day to day actual working relationship with the customer and in short they can decide that what you believe to be your customer is in fact your employer In that case a limited company structure will not work and the more costly PAYE rules will apply instead. The Revenue will ‘go back in time’. This all depends on that relationship and not what any particular set of written contracts state in them.

HMRC has issued some Guidance in this area including the following key factors where you need to show that the working relationship really is one of self-employment, on the balance of the facts, rather than you really being employed by your customer;

  • Do you work from your own business premises
  • Do you have professional indemnity insurance
  • Who decides on how efficiently the work is done
  • Were you previously an employee with the customer
  • Do you correct the work yourself if it is wrong
  • Who bares the ultimate risk for the job being done
  • Who decided on the amount and frequency of invoicing
  • If you cannot carry out the work do you have a right to send someone else and then have you ever really substituted someone to cover for you
  • Do you advertise for work
  • Do you have a written business plan forecasting into the future

These are in no order of priority and each factor will only be persuasive one way or another. The Revenue has published examples with its opinion on each one.

If you accept that your company would be within the IR 35 rules then basically you would have to pay most of the income to yourself as a series of salaries under PAYE and they will not be classed as dividends, detailed rules apply.

  • payment.
  • Dealing with all the routine enquiries and liaising with the Revenue following submission of the Return.

By working with us, you can help your company to make the most of any tax incentives, reliefs and claims through advanced tax planning such as:

  • Efficient withdrawal of profits from your business.
  • Company cars
  • Purchasing commercial property
  • Research and development
  • Tax incentives for outside investors

Contact us

For an informal chat and introductory meeting in either our Doncaster or one of our two Sheffield offices, or alternatively at your premises, then please contact us.

AR Accountants is a trading division of Spring Works Services Limited, registered in England & Wales under Company Number 10750528

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