Candid

Accountants

FAQs | Terms and Conditions

Our Guidance

Autumn Statement

Homeowners. The Chancellor’s shock announcement was the reduction to the capital gains tax (CGT) relief on homes. Currently, even where you aren’t living in a property as your main home, but have in the past, the capital gain for the final 36 months you own it is tax free. This CGT-exempt period is to be cut to 18 months.


Profit Extraction

Should you always pay dividends if you can? Your company started small but is now making fair profits. However, you don’t need to draw this out as you have enough other income. So is it better to take out the profit now or leave it to accumulate?

For 2014/15 draw enough profit as dividends to take your income for the year up to £41,865, as no income tax will be payable on them. Otherwise, leave it in the company so that it can be taken when you sell or wind up your business - tax rate in this case will be 10%.


Property

Negotiating a tax-efficient new lease. You need to renew your lease or relocate to new premises, either way you’re looking for a financial incentive from the landlord to sign on the dotted line. There are a couple of options on the table, but which offers the best tax advantage? Tenants’ market. The tough trading conditions over the last five years have inevitably led to tough times for landlords of commercial property. And while there are signs of recovery in the economy, if you’re looking to lease premises it’s still a tenants’ market. This gives you a good chance of negotiating an incentive to sign a lease; preferably a tax-efficient one.

Getting the landlord to pay for improving the property is one option. But  a better one is for your business to pay and be compensated with a rent-free period. This ensures you and not the landlord receive a tax deduction for the cost while the loss of tax relief on the rent holiday can be spread over several years.


VAT

VAT on road fuel - the new flat rate option. We recently told you about changes to the VAT fuel scale charge for non-business journeys which take effect next month. There have now been further developments. What are they and how they apply?

From February 2014, where a business pays for fuel used for private journeys made by a self-employed individual, business partners, directors or employee it can adopt one of four ways to deal with the VAT on the cost. It can choose: 1. Not to reclaim VAT on any fuel purchased; 2. Reclaim VAT only on fuel used for business mileage; 3. Reclaim all VAT and repay the VAT in respect of the private mileage; and 4. Reclaim all VAT on fuel and account for VAT using the new optional flat rate charge.

An optional fuel “flat rate” charge replaces the existing scale charge from 1 February, but it works in the same way. You can switch options each quarter.

Taxation

If you want to discuss any issues regarding the above or any other tax matters, please call our office to book an appointment with one of our consultants who will be happy to give you the best advice.