Category: Startup

Weighing up LLPs

A limited liability partnership (LLP) is similar to an ordinary partnership in that a number of people or limited companies join together and share the costs, risks, and responsibilities of the business. They also take a share of the profits and pay income tax and NICs on their share of the partnership profits. However, an…


Just starting out in business? Here’s how you can get tax relief

Just starting out As long as HMRC can be satisfied that a business is being run on a commercial basis with a view to making a profit, they will usually allow taxpayers to claim tax relief for a trading loss in one tax year against other taxable income (for example PAYE income or a pension)…


Wanting to employ a family member? Read this first #familybusiness #tax

Employing family members It is permissible for a business to claim a tax deduction for the cost of a reasonable wage paid to a family member who helps in the business. Their duties could, for example, include answering the phone, going to the bank, bookkeeping and other administrative tasks. The tax legislation specifies that ‘in…


How to make your work’s summer barbeque tax-free!

A statutory exemption exists, which allows employers to meet the cost of certain social events for staff without triggering a liability to tax or NICs, providing certain conditions are met. The legislation refers to ‘an annual party or similar annual function’. Although HMRC does not seem to interpret this to mean that the same event…


Practicalities of forming a partnership

Although a partnership can be a simple and flexible way for two or more people to own and run a business, unlike limited company status, partners do not have any protection if the partnership fails. If one of the partners resigns, dies, or goes bankrupt, the partnership has to be dissolved, even though the business…


Thinking of buying a doer upper as a buy-to-let? Get tax relief on the interest

Interest relief for renovation or development costs Often, when a property is purchased there is work to be done before it can be let out or sold. Where this work is financed by a mortgage or other loan, the way in which and the extent to which relief is available for the interest costs depends…


Salary Vs Dividends: how to be tax efficient for 2019/20

A popular profits extraction strategy for personal and family companies is to extract a small salary, taking further profits as dividends. Where this strategy is pursued for 2019/20, what level should be the salary be set at to ensure the strategy remain tax efficient? Salary As well as being tax effective, taking a small salary…


Is tax payable on tips?

The question of whether tips and gratuities are taxable and subject to National Insurance Contributions (NICs) often results in a lively debate. Broadly, their treatment will depend on how they are paid to the recipient. Cash tips handed to an employee, or say, left on the table at a restaurant and retained by the employee,…


Thinking of selling a rental property? Get in quick before the rules change!

In his Budget on 29 October 2018, the Chancellor outlined a number of changes to main residence relief. The changes affect the final period exemption and the availability of lettings relief, which applies where a property which has at some time been an only or main residence, is let out. Main residence exemption No capital…


Expenses that Landlords can deduct

Landlords must pay tax on any profit from their property rental business (although income from property of less than £1,000 a year can be ignored). In working out the profits, expenses are deducted from rental income. To ensure that the landlord does not pay more tax than is necessary, it is important to deduct all…