The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Class 2 and Class 4 NIC are payable by self-employed earners and partners in a partnership. This guidance note considers Class 2 contributions. For Class 4 contributions, see the Class 4 national insurance contributions guidance note.
Class 2 NIC arise where a self-employed individual has income chargeable to tax as trading income, although there are certain exemptions which are considered below. Class 2 NIC are flat rate contributions which is a fixed weekly amount, payable at £3.05 for 2021/22 and 2020/21. For the weekly rates prior to that tax year, see the GOV.UK website.
Class 2 NIC give effective entry to the contributory benefits system, including the state retirement pension.
Class 2 contributions are payable by individuals aged between 16 and the state pension age. The age at which individuals are entitled to a state pension is gradually increasing.
For men born before 6 December 1953, the pensionable age is 65 years. For those born after this date, the pensionable age increases in tranches, reaching 68 years for those born after 6 April 1978.
For women born after 6 April 1950, the pensionable age increases gradually from 60 years until it reaches 65 years for those born between 6 November 1953 and 5 December 1953. From then on, the pensionable age for a woman is aligned to that of a man and so will eventually reach 68 years for those born after 6 April 1978.
There is a state pension age calculator on the GOV.UK website.
There is now a statutory requirement for the state pension age to be reviewed at least every six years. The first such review was published in March 2017. In the July 2017 response to this review, the Government proposed that the state pension age of 68 will be brought forward such that those born between 6 April 1970 and 5 April 1978 will be affected, with the state pension increasing gradually from 67 to 68 depending on the date of birth. There are
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
From 6 April 2015, an individual can elect to transfer 10% of the personal allowance (£1,250 in 2020/21 and 2019/20) to the spouse or civil partner where neither party is a higher rate or additional rate taxpayer. The legislation calls this the ‘transferable tax allowance’ but the GOV.UK website
Expenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and exclusively test. See the Wholly and
This guidance note considers the capital gains tax implications where shares are sold in exchange for new shares.The consideration paid by a purchasing company to the shareholder(s) for their shares in a target company could be in the form of either:•new shares in the vendor in exchange for shares
Preparatory workBefore completing the Inheritance Tax account for submission to HMRC, the practitioner needs to undertake a comprehensive review of the extent of the estate and its proposed distribution. The work required leading up to the submission of the account is described in detail in the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.