May 2012

The Government is thinking of changing the tax law so that individuals who take-up officer positions within companies, but who are paid for that position as freelance workers through their own personal service companies, will be required to be paid through the payroll of the companies they act as officers for. This could affect non-executive directors, as they are office holders. If you hold a number of non-executive director positions, and are paid through your own personal service company for that work, we should review those arrangements.

CLICK HERE - Non-executive directors and IR35

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Where you take out a loan to invest in a small private company. The interest paid on that loan can qualify for tax relief at your highest rate. Your investment can be in the form of shares, or a loan, as long as the funds are used for the company’s trade or the trade of an associated company, or for paying off another loan that was used for the company‘s trade. You must have a material interest in the company you invest in. Ask us to check if any loans or investments you have made qualify for tax relief.

CLICK HERE - Case illustrating tax relief for interest: TC1907

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The Government is proposing an annual cap on income tax reliefs at the higher of £50,000 or 25% of the taxpayer’s income, to take effect from 6 April 2013. This could apply if your have significant losses from one business to set against your other income, or claim tax relief for large amounts of interest paid or charitable donations. We don’t have full details of how the cap will operate yet, but it may be worthwhile discussing how your business could be restructured to make the best use of any losses. 

CLICK HERE - Treasury statement re cap on tax reliefs

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When a person dies their tax obligations do not disappear, they are inherited by the deceased’s personal representatives (if there is no Will) or their executors (where the deceased left a Will). HMRC realise this is a significant burden for such personal representatives or executors, so they have opened a helpline devoted to assisting the bereaved. We can help you complete the necessary forms to conclude the deceased’s tax affairs.

CLICK HERE - Bereavement service for taxpayers

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Currently companies are not prohibited from paying pension contributions on behalf of people who are not their employees. Such arrangements are normally made for family members of the directors, through a self-invested pension scheme such as a SIPP or SASS. It is proposed that from April 2013 companies will not be allowed to pay pension contributions for non-employees. If your company makes pension contributions for your family members we need to review how such pension provision can be provided in the future.

CLICK HERE - Pension contributions for controlling directors & shareholders

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As an employer you must file a form P35 online for your PAYE scheme by 19 May 2012. This year HMRC will send you a reminder in early May 2012, if they have not received your P35 form. Where the P35 form has not  been received by 31 May 2012, HMRC will issue a penalty warning letter.  At this stage you will be subject to a penalty but the amount is not finalised until the P35 form arrives with HMRC. Please contact us if your receive one of these penalty warning letters.

CLICK HERE - Late P35 returns

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