At Leon Herman we have prepared some free tax and business advice to help your organisation to grow.

Our hot tips have been prepared by experts and can be used as a handy guide to increase profitability, cut costs and reduce your overall tax exposure. However to ensure that we meet your exact needs, why not contact us today for a tailor made solution specific to your individual business?

Personal Tax Planning

National Insurance Contributions (NIC) Holiday

Qualifying NEW businesses will not have to pay the first £5,000 of employers’ NIC in the employee’s initial twelve month period of employment. Employers will enjoy NIC Holidays for their first ten employees during the initial twelve months of employment. The scheme will run for three years, which will encourage business growth during this time.

If you have started your business since 22 June 2010, you may qualify for the NIC holiday. You are advised to contact us to confirm your position. 

Giving to charity

 In addition to potentially preserving your personal allowance, a gift can provide a tax free amount to a charity at a relatively low cost to you.

 It is possible for an additional rate (50%) taxpayer to provide a charity with £100 at a total cost to the individual of £50.

Individual Savings Accounts (ISAs) for under 18’s

 ISAs for under 18’s are to be introduced from Autumn 2011. It is not yet confirmed whether there will be a restriction to these as to the source of funds, in terms of parental gifts, as there are for the usual investments for minor children.

If you have any queries regarding the above summary please do not hesitate to contact a member of the tax department.

 Capital Losses

 If you own assets that when disposed of will give rise to a capital loss, you should consider realising this loss in the current tax year. Brought forward capital losses are more valuable than losses arising in the year a capital gain is made because brought forward losses do not need to be relieved in full i.e. they can reduce a gain to the level of your tax free annual exempt amount.

Company and Business Tax Planning

Research and Development

 The deduction for qualifying research and development expenditure when computing taxable profits has increased from 175% to 200% from 1 April 2011 and will increase further to 225% from 1 April 2012.

 Company Car or Private Car?

 One of the most common tax queries raised by our clients is whether to purchase a vehicle in the company name or privately. Similarly, sole traders may ask whether to introduce their vehicle as a business asset or claim a mileage allowance for business travel. In addition, we may also be asked to offer a recommendation on whether to lease of buy.

 Such comparisons provide reassurance to our clients in a well presented, straightforward manner quantifying the tax costs and savings in writing. 

 While we aim to provide an easy to follow concise recommendation we take all relevant factors into account such as:

 Capital Allowances

 The previously announced reduction in writing down allowances is also due to go ahead reducing the rate on the main pool from 20% to 18% and the special rate pool from 10% to 8%. The length of a short life asset pool is to be increased to 8 years from the current 4 years.

 The reduction in AIA relief from £100,000 to £25,000 from 1 April 2012 has been confirmed.

 Tax Tip

Accelerate capital expenditure to take advantage of higher writing down rates and AIA

Review availability of 100% allowances for energy saving or environmentally beneficial plant

For companies acquiring commercial premises, are there unclaimed allowances on integral features?

100% Business Premises Renovation allowances cease in April 2012 for renovations of properties vacant for at least one year in assisted areas.

Third Party Pension Contributions

 Consider making a £2,880 pension contribution for minor children to be topped up by HMRC resulting in a total cash contribution of £3,600.You may also wish to contribute on behalf of your adult children particularly if they are high earners and would therefore receive tax relief at a higher rate than you.

 Salary v Dividend

 When extracting profit from your business it is important to consider whether it would be most tax efficient to take salary or dividends. There are many factors to take into account and it is recommended that a comparison is made each tax year.

Change of Accounting Date

Change of year end tax planning is advantageous for sole traders, partnerships and companies. It can delay tax payments for profitable businesses, manipulate the use of losses for loss making businesses and utilize overlap profits for unincorporated businesses with non 5^th April/31 March year ends.  In some circumstances it can generate substantial cash refunds.

Class 4 NIC Refund for Sleeping Partners

 In general Class 4 NIC is charged on the profits derived from carrying on a trade.

 A “sleeping partner” is a partner who does not take any part in the running of a partnership’s business and HMRC accept that such a partner is not liable to Class 4 NIC, because they do not fall within the definition above.

 If you are a sleeping partner and have made Class 4 NICs in recent years you may be entitled to a refund.

 Business rates relief

Small business rate relief – relief extended to 30 September 2011

You will be eligible for small business rate relief if you generally occupy only one property and your rateable value is below a certain level. Small business rate relief is administered by your local authority.

You will be eligible for small business rate relief in England if your rateable value is below £18,000 (£25,500 in London).  The amount of relief varies depending upon the rateable value of the property.

Between 1 October 2010 and 30 September 2011, eligible ratepayers will receive small business rate relief at:

- 100 per cent on properties up to £6,000 (rather than 50 per cent for the previous year), and

- a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value for that period.

Please note the rules differ for Wales. - You should contact your local authority to find out more.

VAT

 Maximise VAT Relief on Fuel

 Advisory fuel rates are used by employers if:

 Employees are reimbursed for the cost of fuel for business travel in their company cars or,

Require employees to repay the cost of fuel used for private use

 The following advisory fuel rates apply to all journeys from 1^st March 2011:

Estate Planning

Inheritance Tax Annual Exempt Amount

 Every individual can make tax free gifts of £3,000 per tax year.