The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note considers some of the planning points in relation to the accounting period end. This includes:
planning work prior to the year end
considerations in finalising the accounts
Prior to the end of the year, it may be possible to consider the timing of significant items of income or expenditure. There are two potential advantages in bringing expenditure forward into a tax year:
tax relief is received at the earliest opportunity
relief may be received at a higher rate
These are essentially two different points, but they should be considered at the same time.
It is difficult to accurately predict profits a year in advance, but it may be possible to estimate which rate the taxpayer will fall in. In some cases, there may be specific reasons for a change, eg the turnover may be increasing, or the taxpayer may be winding down the business.
In order to effectively advise a trader whether to bring forward expenditure, the marginal rates of tax and National Insurance Contributions (NIC) need to be considered. This can be complicated when considering multiple sources of income and care needs to be taken in considering the effects of earned income pushing savings income, dividend income or capital gains into higher rates of tax. For this reason, it is sensible to draft calculations and state the assumptions regarding other income and other relevant factors. This gives the taxpayer an opportunity to correct any assumptions which maybe erroneous. However, where a self-employed taxpayer has savings and dividend income which is covered by their respective nil rate bands, and no complicating factors, an estimate can be made using the applicable effective rates.
The following table shows the thresholds and effective rates for income tax and NIC (for non-Scottish taxpayers):
**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
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
Summary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions over 50g/km but not more than 110g/km (to be reduced to 50g/km and below from April 2021)18%CAA
This guidance note explains the general rules surrounding the availability of indexation allowance on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview of the general position regarding company disposals, please refer to
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
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.