Category Archives for tax

What is the green tax break?

The green tax break. Why going electric in your company? Car is a smart move. So are you tired of high tax bills on your company car? It’s time to go electric. In today’s society, the tax system is used not only to raise revenue, but also to encourage certain behaviors and discourage others. . And when it comes to company cars, the government is just giving a green light to those who choose to go electric.

Drivers of electric and low emission cars attacks less heavily compared to those with high emission models. Employers can even provide workplace charging facilities tax free and meet the cost of electricity for employees private journeys. Without triggering a fuel benefit charge, so this means significant tax savings for both employees and employers.

For instance, if you have a 30,000 pound car with emissions of at least 160 grams per kilometer, You should be paying an annual tax bill of 4440, but going electric could save you up to 4,200 in tax each year. And it’s not just the employees who benefit. Employers will also see a lower class one, a national insurance contribution charge.

If the value of the tax will benefit is lower. And it’s not just the tax savings. There’s a fuel benefit too. So normally if an employee provides an employee with fuel for private motor, It would result in a taxable benefit, but there’s no fuel benefit charge when it comes to electricity for electric cars.

This is because HMRC does not consider electricity a fuel, and there are also Class one A N I C savings for the employer. So it is win-win situation. So by getting electric, you’re not only saving taxes, but you also contribute to a greener. What do you think? Please, like, follow and comment does. Just stay informed with my latest content.

And also, please get in touch with me via my website in my profile, redboxfinancial.com. If you’ve got any questions about anything. So did you already know about all this? Do you think it’s a good idea? What, what are your thoughts on switching to electric cars in your company? So just let us know in the comments.

Office of tax simplification

So, have you heard of the fantastically named Office of Tax Simplification? It’s released this review on residential property income in the uk and I’m here to break it down for you. So according to HMRC data, nearly 25% of all tax returns had a portion of property income. The OTs conducted a review and have, have released their recommendations to the government, including revamping the furnished holiday lets.

Changing the allowable expenses for landlords and adjusting the reporting of income for joint. Putting a halt on making tax digital for landlords and reforming the non-resident landlord scheme. So one thing to note is the consistent use of the word business in relation to property, including a suggestion of bright Line business test for residential properties.

So the government may be slow to act on the OT S’S recommendations, but the report still influences policy discussions. With changes to tax coming up. So now’s the time to review your affairs and take advantage of all tax reliefs before it’s too late. Please like, follow and comment to stay informed with my latest tax tips.

Also, please get in touch with me via my website redboxfinancial.com if you need help with this or any questions. So, have you heard of the Office of Tax Simplification? Do you think is a good. , what do you think is better? That tax law just stays really complicated, so Norm really understands it. What do you think?

Let us know the comments.

What is the difference between ordinary, preference and deferred shares?

So running a limited company is all about making smart decisions. When it comes to shares. There’s more than one type to choose from. So there’s ordinary shares which everyone knows about, and that gives you a say in the company’s decisions and share the profits and so on. Also, preference shares, uh, and then maybe that could give you a guaranteed dividend, but no voting rights.

Finally, there’s deferred shares, these could give you a share the profits at a later date. So by creating different categories of shares, you can attract a wider range of investors and raise more capital and just do it all in a more flexible way. And best of all, it gives you more control over how your company’s run and also how profits are distributed.

So please like, comment, share to get more tips, and go to my website for more. Or if you want to ask me a question, so do you think it’s a good idea to have different classes of shares, or do you think it’s better just having them all the same as ordinary shares? What do you think? That’s all for now.

“Diabolical HMRC service hurts economy – Accountants” ICAEW are not happy!

So, I don’t know about you, but I really hate it when people moan. They just moan all the time and nothing ever gets resolved. They just, but sometimes it is really important to point out things that are going wrong. And today I was just looking at the BBC News website and I noticed there’s a news item on the business section.

Diabolical HMRC service hurts. Economy, accountants. So diabolical is a strong word. And also the fact that it’s apparently hurting the economy, which you know, is not. So since the whole point of the HMRC is to try and get money to help fund everything, if it’s hurting the economy, that’s not a good start, is it?

Because then it is not gonna get as much. And they’re gonna have to tax everyone more. So I don’t wanna be one of the mos, but I just thought I’d scroll down cuz you know, I’m quite interested in the HMRC and also interested in my accountants. And I actually find it’s not just accountants in general.

It is the Institute of Chartered Accountants in England and Wales, which is my body, which is what I pay fees to every year. That regulates me. So when they say so, , they know what they’re talking about. And I take it seriously. And they said that securing basic tax details takes months and is causing delays for companies.

And then one accountant who is nameless, it’s not me, but No, it is. But it says one accountant called the service diabolical and the institute wants an emergency task force drafted in. Now, I love the I C A E W. But I’ve never ever seen them get so worked up about something. So it indicates to me there is something seriously wrong, ongoing on.

So, um, in emergency here, 70,000 calls a day, blah, blah, blah. That’s their excuse. That’s saying, well, that’s why they’re so busy. They did collect 731 billion pounds in tax last year. And then they’re saying about they’ve cut the numbers. Quite drastically. Digitalization, blah, blah blah. So basically load of excuses and covid pandemic.

Yeah, of course. I mean, obviously everyone’s got problems, but even so, if these delays are hurting the economy, hopefully someone’s gonna do something bad and sort it out. What do you think about it? Have you noticed any delays with HMRC or do you think they ought to pull their finger out and get cracking, and what do you.

Are you familiar with the HMRC PAYE Tax Codes? Here is what you need to know!

So a lot of people don’t really understand what the HMRC PAYE codes mean with weird letters and numbers. So here I’m gonna just discuss the components of them. Every person in the UK who receives income through employment or PAYE is taxed based on their tax code initially, which is assigned by HMRC to their employer.

So everyone begins with a personal 12,517 the time of recording this video, which is recording the tax code 1257L, that means you get 1048 tax-free per month, or 242 pounds per week. The letter L in your tax code indicates that you are entitled to the standard personal allowance, so other letters that may appear paid your tax code include m.

So that indicates you’ve received a marriage allowance from your partner and that increases your personal allowance. T means that your tax code includes additional calculations, for example benefits, deductions, or expenses, which may reduce your personal allowance. If your tax code is zero t, that means that your personal allowance has been fully used or your employer does not have the necessary information to issue a tax code.

BR stands for basic rate. That means that all of your income from that source will be taxed at the basic rate without the use of allowance. D zero means that all of your income from that job will be taxed at 40% without any allowances, and D one means that all of your income from that source will be taxed at the additional rate of 45% without any allowances.

Finally, NT ensures that none of that income is subject to tax. Particularly if you are abroad. So please like, follow and comment and get in touch with me via my website if you have any questions. So, which tax code do you have and do you think this is a good system? Did you understand it already?

How is mortgage interest allowable as a UK tax relief?

So how is mortgage interest allowable as a relief in your tax return in the UK? Well, it depends if you own the prop investment property in your own name, personally, or if you do it for a company. So this was all made much more complicated by George Osborne, a few years ago when he introduced Section 24.

And basically he clobbered. Investment landlords who own property in their own name because for some reason he thought they were a bad thing. In fact, they are a good thing because they’re helping the supply of rental property in the uk, which is really important. In the old days, if a landlord had investment property and mortgage interest, then the full cost of that mortgage interest was allowable.

But, now the situation is none. None of it is liable in the first calculation, but you. Entitled, once you’ve worked at a tax bill, you can take 20% of the mortgage interest. Off your tax payment, which is sort of okay if you’re low rate taxpayer, but if you are a high rate taxpayer, you are getting 20% relief, but you’re paying 40% or 45% tax on your income, your rental income.

So in other words, your clobbered, you’re paying excess tax. This might not be so bad if you just have one or two rental properties, but if you have more and more properties. This could be a significant expense and you could end up paying a fortune in tax. So normally for that reason, most property investors tend to get five properties for a limited company, and for most people, that is by far the better solution, even though it does involve a few more complexities with compliance and so on.

But the good news is that all your mortgage interest relief for a company. Fully deductible against your corporation tax on your rental income for that, those properties. So many people also, if they’ve got lost properties, their name are thinking about. Transitioning them to a company, just selling them to a company that I own.

This has a lot of benefits, but unfortunately being a transfer, then there’s a couple of gain tax on the sale, and there’s stamp duty to pay on the purchase but so it could work out quite expensive, but there are reliefs available if you do it properly, if you are very careful and so on. And you fit the criteria, but it’s very important to get expert advice.

So please get in touch if you are in that situation or you want to explore that. Or have you got any other tax related or cancer related questions? Please post your comments below.

Maximize Your Child Benefit

Do you get child benefit? If so, you need to watch and understand this video if you are a UK taxpayer. So if you or your partner earn more than 50,000 pounds perham, you may have to pay some of that benefit back in the form of taxes. So you will need to register for self-assessment and declare both your income and the child’s benefit you received for.

And then you’ll have to pay back a portion of the child benefit every January through self-assessment. So some families who earn over 50,000 pounds have chosen to stop receiving child benefit to avoid paying back taxes. However, it’s important to note that even if you don’t want to receive the benefit, you should still fill out the child’s benefit form and register your child with.

This is very important because your child’s national insurance number will be linked to their HMRC record and they’ll need it when they turn 16. So even if you don’t want the child benefit, just make sure to, to register a child with HMRC by filling out the form. And as always, uh, get in touch with me if you’ve got any tax related or counting related questions or need any help in that regard.

So, are you affected by this child benefit? let us know in the comments.

HMRC Is Cracking Down On Crypto In 2023

So UK crypto tax update for 2023. So make sure we disclose your gains, or you could face big penalties. If you’re in any type of cryptocurrency and you’re resting in the UK, you need to know how much tax you have to pay. HMRC views Bitcoin and other cryptocurrencies as taxable assets and has the data sharing program with UK exchanges.

So because HMRC sees crypto as a couple asset, that means that when you dispose of. You will need to pay capital gains tax and disposals include things like selling crypto for a fiat currency or another cryptocurrency, or spending it on Goodson services or gifting it. Also, the government recently announced a cut to the capital gains tax allowance from 12,300 to 6,000 pounds from April, 2023.

So don’t get caught out. Find out how much tax you have to pay on your crypto disposals in the UK now, and. Did you know about this? What do you think about it? And do you have any questions? And you might like to consider if you’ve got any disposals, the timing of it, maybe it’s better to dispose of it before April or after April, depending on your own personal situation and what allowances you are using for other things.

Avoid the UK’s 60% Tax Rate

In the UK, earning over £150K means you’ll face a 45% tax rate on your salary. 

But, did you know there’s a sneaky 60% tax trap for those earning between £100K and £125K? That’s right, the £25K in that range is taxed at a whopping 60%. 

Every £2 you earn over £100K means your personal allowance decreases by £1, making your tax rate soar. 

So, smart earners in this bracket boost their pension contributions to lower their taxable salary and keep more of their hard-earned cash. 

Don’t get caught in the 60% tax trap – plan your finances wisely!

Do not give the HMRC a red flag to investigate you – play safe!

It’s absolutely essential to be aware of the common triggers that can prompt an HMRC investigation. These investigations can waste a lot of your time, incur a lot of cost in getting someone to help you, and can also lead to a substantial penalty. So it is very important to know these 5 triggers and make sure you avoid them at all costs.

1. Failure to Include Income on Self-Assessment Tax Return

The first thing HMRC looks for is if you have failed to include any sources of income on your tax return. This could include rental properties, foreign income, foreign gains, crypto gains and more.

2. Undeclared Bank Accounts and Investments

HMRC has access to vast amounts of information and can easily cross-check if you have undeclared bank accounts, even if they only have small amounts of interest. The same goes for foreign accounts and investment portfolios.

3. Overstated Expenses for Self-Employed or Property Business

If you’re self-employed or have a property business, HMRC can compare the expenses you’ve claimed in one year against other years. If there’s a significant difference or a loss, this could trigger an investigation.

4. Incorrect Claims for Business Asset Disposal Relief

Claiming business asset disposal relief in the wrong way, such as not including the necessary notes or ticking the right boxes, can also prompt an investigation.

5. Late Tax Returns or Reclaiming Refunds

Finally, if your tax returns are late or you’re reclaiming a refund, this can open up an investigation. HMRC typically starts with one area and uses that as a basis to examine the rest of the year.

In conclusion, it’s crucial to stay on top of your tax affairs and have a good accountant helping you. Please follow and like this video to get my latest tax tips, and get in touch with me via the website in my profile if you have any questions

Have you ever received a nudge letter or investigation from the HMRC? How did you handle it? Please share your experience in the comments!