1. Travel Allowance
Many of you will know about the HMRC approved mileage allowance payments, paying 45p per mile for the first 10,000 miles travelled and 25p thereafter. However, under certain circumstances, there may be an opportunity to claim more than these standard amounts – potentially up to 60p per mile.
2. Joint Income
Usually jointly owned assets, such as a rental properties, are taxed 50:50 between parties regardless of the actual proportional ownership. If however the ownership is actually split 80:20 you are able to make a claim to HMRC to have the income taxed at these proportions instead. Consider shifting some of your income across to a spouse to become more tax efficient.
3. Annual Investment Allowance
A business will usually be able to claim an annual investment allowance on the purchase of new equipment of up to £200,000 in one tax year, meaning that if you buy a new computer for £1,000 the whole £1,000 will be deducted against the trading profits. The timing of this is important so get your tax planning done early.
4. Utilising EIS for Capital Gains Tax
The practise of transferring the share of a property to a spouse before sale in order to utilise their annual exemption amount and a potentially a lower tax rate is very common when dealing with capital gains tax. The lowest rate of Capital Gains Tax achievable will still be 18%. A different way of dealing with the gain which may arise is to use an Enterprise Investment Scheme, where the lowest rate of tax paid will be only 10%.
5. Reclaiming VAT on the purchase of a car
The rules for reclaiming the VAT incurred in the purchase of a car for your company are strict and hard to get around. However, if a car is used exclusively for business purposes and there is no element of private usage, then VAT may be able to be reclaimed. Have a chat with us – there’s all sorts of things to consider.