Tax
September 23, 2024
As concerns grow about imminent tax rises, Murray Patt of Hale-based accountants Alexander Knight & Co, takes a look at possible areas that could be targeted by Rachel Reeves (the Chancellor) and the ‘new’ Government.
As children return to school for the new term there are plenty of parents worried about the impact of VAT on future school fees. Recently the Chancellor confirmed that this 20% levy will be introduced, together with legislation to prevent those looking to pay early and avoid the levy, as the Government seeks to implement a key manifesto pledge.
Even those not affected by VAT on private school fees are anxious about the prospect of handing more money over to the taxman from elsewhere.
It’s no secret that changes have been promised and are actively being planned but the key question is exactly where will they seek to raise revenue? Here are some possible areas:
The removal of certain tax breaks looks increasingly likely. Politically, it is a safer move than simply hiking up existing taxes. We are keeping a close eye on what is commonly referred to as ‘business asset disposal relief’ (formerly known as ‘entrepreneurs’ relief’) which reduces the rate of capital gains tax on disposals of businesses or business assets from 20% to 10%. Another area under threat could be Research and Development (R&D) tax credits which have been helpful for innovative companies over the past few years.
The freezing of tax thresholds means that people will pay more tax.
Simply put, earning more money tips you into a higher tax band and a higher income means a higher proportion that can be taxed.
- Introduction of additional income tax thresholds
The Government may consider introducing an additional rate of income tax, perhaps on earnings over £250,000. Currently this is taxed at 45%.
The sale of property by landlords could possibly be targeted as a revenue stream. Landlords with buy-to-let portfolios are already offloading stock at record levels as they seek to minimise the risk to their investments.
This hugely unpopular tax for swathes of the population doesn’t look like disappearing. In fact, there is likely to be significant reform in this area which will presumably be aimed at raising tax revenues not reducing them.
Labour has already pledged to provide HMRC with 5,000 more staff to help reduce what it calls the ‘tax gap’. We already expect to see compliance enforcement activity increased over the next five years with SME’s targeted first, much to the frustration of business owners.
As the rumour mill continues to swirl, we are ruling out nothing. We will support our clients to limit the amount of tax they pay whilst being compliant with ever changing legislation in every way we can.
If you run a business and want to make sure you are optimising all the available tax reliefs and need support navigating future tax rises contact Murray Patt on (0161) 980 8788 or email murray@alexanderknightacccountants.co.uk
March 4, 2024
Our practice in Hale, Cheshire is expanding. If you are an experienced tax professional and you’d like to join our team – or you know someone suitable – please send a confidential email to Alison Spier in the first instance.
We have an exceptional list of loyal clients with multi-million turnover businesses. The majority of these companies have been working with us for many years and we are highly focused on building long term, meaningful relationships.
We are growing our team and have created this new Tax Senior Manager role. Part-time will also be considered for the right candidate.
Suitable candidates will have experience working in a fast-paced accountancy practice, dealing with clients both face to face and over the phone, advising them on a variety of tax issues, including corporation tax, including R&D, & CGT. You must be able to demonstrate exceptional client relationship skills, and have an approachable, professional manner. Experience with income tax, IHT & SDLT would also be extremely useful.
As part of MGI Worldwide, the global accounting network, you will also join the Tax Forum, enabling you to network with peers from other practices across the UK and worldwide. International tax conferences are also organised by MGI Worldwide and you will join delegations to these when they occur.
If you feel that your experience is a good fit and you are looking for a modern accountancy practice – based in Grade A offices in the heart of Hale – to develop your career, and you would like to find out more, please email Alison Spier with your updated CV and details of your current package.
Disclaimer
Alexander Knight & Co is an equal opportunities employer and no terminology in this advert is intended to discriminate on the grounds of a person’s gender, marital status, race, religion, colour, age, disability or sexual orientation.
All candidates will only be assessed in accordance with their merits, qualifications and abilities to perform the role expected. Only successful applicants will be invited to the next stage consisting of an interview and assessment.
October 4, 2022
Following changes to Government policies since the original ‘Mini Budget’ we’ve updated our Mini-Budget Report. You can download it here.
February 17, 2022
We’re growing our practice in Hale, Cheshire. If you’re an experienced tax professional and you’d like to join our team, send a confidential email to Alison Spier to arrange an informal chat about the role.
We have an exceptional list of loyal clients with multi-million turnover businesses. The majority of these companies have been working us for many years and we are highly focused on building long term, meaningful relationships.
We are now looking to grow our practice.We have vacancies for a Tax Manager/Senior Tax Manager.
Suitable candidates will be experienced working in a fast-paced accountancy practice, dealing with clients both face to face and over the phone, advising them on a variety of tax issues, including corporation tax, including R&D, & CGT. A mixed tax background would also be of interest. You must be able to demonstrate exceptional client relationship skills, and have an approachable, professional manner.
As part of MGI Worldwide, the global accounting network, you will also join the Tax Forum, enabling you to network with peers from other practices across the UK and worldwide. International tax conferences are also organised by MGI Worldwide and you will join delegations to these when they occur.
We will consider full time or part time, (including term time contracts), and would consider a hybrid working model for the right candidate.
If you feel that your experience is a good fit and you are looking for a modern accountancy practice based in Grade A offices in the heart of Hale to develop your career and would like to know more please email Alison Spier with your updated CV and details of your current package.
Disclaimer
Alexander Knight & Co is an equal opportunities employer and no terminology in this advert is intended to discriminate on the grounds of a person’s gender, marital status, race, religion, colour, age, disability or sexual orientation.
All candidates will only be assessed in accordance with their merits, qualifications and abilities to perform the role expected. Only successful applicants will be invited to the next stage consisting of an interview and assessment.
PS – no agencies, thank you.
January 24, 2022
We are pleased to have extended our specialist tax advisory service by forming a strategic alliance with a fellow MGI Worldwide member firm.
Freestone Jacobs is a leading specialist tax advisory firm founded by Paul Taylor together with Allison Walker. Paul in particular has over 35 years of experience as a Chartered Accountant and a Chartered Tax Advisor and will enhance the strategic planning for clients in a range of scenarios including mergers, acquisitions and restructuring.
Murray Patt, founder of Alexander Knight & Co, said:
“There is a natural fit between our two practices as a result of us both being member firms of MGI Worldwide, the global network of accountants. It means that as our client base grows, both in terms of size and sophistication, we can be confident that we are continuing to provide the appropriate level of tax specialism that our clients both need and expect from us.
“We’re being innovative and ambitious with our growth and development in 2022 and we’re dedicated to working with and hiring the best people in the accountancy marketplace. We’re enjoying working with Paul and Allison and we’re looking forward to building on this relationship to bring the benefits of their experience to our range of entrepreneurial clients.”
Paul Taylor, founder of Freestone Jacobs, said:
“Allison and I are delighted to be working with Murray and his colleagues and look forward to providing a bespoke solution to the particular requirements of the Alexander Knight & Co clients, as they undertake significant business transactions or transformation. We’ve already formed a good working relationship and it helps that we have the same vision for providing the accountancy expertise required by the modern business owner.”
If you – or your client – requires specialist tax advice involving a merger, acquisition or restructure or other significant business transaction – contact us now on (0161) 980 8788 or email murray@alexanderknightacountants.co.uk
Murray Patt of Alexander Knight & Co
March 3, 2020
Coronavirus tax credits should be introduced for businesses that suffer from the impact of coronavirus – as well as more measures to assist SMEs.
The Italian government has introduced tax credits for businesses effected by coronavirus and tax experts say the UK should follow suit to lessen the impact for SMEs.
The Government has now announced an action plan which includes help for businesses. In our view, this should include tax credits for firms who have been hit especially hard like in Italy where firms who see a 25% drop in revenue as a result of the virus can secure further tax breaks.
Impact on business
We are in uncharted waters with regards to the impact of the virus on UK businesses. We know that the FTSE100 has been volatile but we also need to look at the impact on SMEs who are the backbone of the economy.
Tax credits should be introduced for firms who get hit hard and they should be announced in the Budget next week. With companies doing their very best to take precautions to protect their staff we must give SMEs all the support and confidence they need.
February 24, 2020
February 21, 2020
Rising demand for electric cars amongst our business owner client base – coupled with new tax breaks means we launched the UK’s first dedicated electric car tax accountancy service – back in 2020.
Now, in 2023, our electric car service is popular as increasing numbers of our clients enjoy the generous tax breaks offered to company owners who use electric vehicles on the road.
Electric company car owners will pay hardly any benefit-in-kind on certain fully-electric vehicles, compared to as much as 37 percent on vehicles with high CO2 emissions.
Electric Car Tax Savings
As a result of this, premium electric vehicles could save business owners £1000s – compared to traditional vehicles.
Luxury models such as the Mercedes-Benz EQC, Audi E-Tron, together with Porsche and Range Rover variants follow the success of the Tesla Model 3 which is already considered to be a cult company car for British sales executives
Company cars have been deeply unfashionable for more than a decade now. In that time, most business owners have understood that they were better off buying a car personally and then claiming the associated expenses.
Electric cars are a game changer for the humble company car. The new tax breaks laid out by the Government have reversed this trend and we predict there will be an upward swing in demand for electric vehicles, not least from business owners but also socially responsible fleet managers in the business world.
Murray Patt of Alexander Knight & Co charges up his own electric car.
Huge tax savings
One client of ours saw more than £10,000 knocked off his tax bill because he plumped for the Range Rover hybrid model over the diesel version.
With these tax breaks about to kick in, more e-charging points being installed across the country, improvements to the range of electric engines and a steady fall in the price we are predicting a renaissance of the company car.
Get your FREE electric car tax guide here.
Download our FREE electric car tax guide for entrepreneurs and business owners.
Watch our video about electric car tax breaks for company directors:
If you are a business owner and you want to get a tax-free electric car – speak to us first and we will help you. Call us on 0161 980 8788 or email cars@akco.pixelair.net
November 30, 2018
From 1st April 2019, if you are VAT registered and have a turnover of more than £85,000 then the making tax digital (MTD) scheme for VAT will be mandatory.
If you are eligible you must join the scheme and if, for whatever reason, your turnover falls below the £85,000 threshold you must stay on the scheme and cannot revert to the old way of submitting returns – unless you deregister or become exempt for MTD.
If you qualify then you will need to change the way you file your VAT return with HMRC starting for your VAT period starting after the 1st April 2019:
- If your VAT quarter end is March then your first MTD submission will be June 19
- If your VAT quarter end is April then your first MTD submission will be July 19
- If your VAT quarter end is May then your first MTD submission will be Aug 19
The new regime means that HMRC will receive the same VAT return information as before, but it needs to be sent by an API (electronic) link to HMRC and can’t be typed in manually via online services.
VAT frequency and payment deadlines will remain the same as will eligibility for VAT special schemes.
When filing your return, the transactions that make up the return need to be kept digitally, this can be done using an accounting software package or by using spreadsheets.
Some software accounting packages that are up to date will have the API link required already in (SAGE ONE for example) so you will just need to send your return via the software package.
However, some older versions and spreadsheets won’t have this capability and therefore two options are available:
- Upgrade your software for the latest version with the API link. This may not be practical, or possibly cost prohibitive.
- Use our software to send the data to HMRC. We have already invested in the new software to enable our clients to maintain their existing VAT return process in a compliant way.
If you have any questions about ‘making tax digital’ and what it means for your business, speak to Jane Marquez in our team and she will help you make the transition.
November 12, 2018
We are delighted to have boosted our team of accountants in Hale with the appointment of experienced tax specialist Clare Bradbury.
Clare is an experienced tax specialist and will advise our SME clients on tax planning issues as well as guiding company directors on tax issues during and after a corporate transaction. During her career she has worked at EY, KPMG and Mazars in Manchester.
There is high demand for specialist tax advice in the region and we are delighted to have appointed Clare to our team. We are confident that our clients, who range from fast-growth businesses to seasoned entrepreneurs will be well served by her specialist tax skills.
Clare Bradbury (pictured above with our founder Murray Patt) said:
I’m delighted to join the team and I’m looking forward to working with our clients to make sure their tax position works effectively for their business at whatever stage it is at in its lifecycle.
March 8, 2018
Investors’ Relief (‘IR’) is a relatively new tax relief available to investors who sell shares in unlisted trading companies.
This tax relief shares many similarities with Entrepreneurs’ Relief (‘ER’) – under both reliefs there is a 10% capital gains tax rate available (as opposed to 20% for higher rate taxpayers) & both have a lifetime limit of up to £10 million.
On the basis of the above then there doesn’t appear to be a need for IR!
However, we have recently advised on a number of transactions where the shareholder group included a number of investors who held less than 5% of the company – making them ineligible for ER. This is where IR comes in.
Investors’ relief doesn’t require a minimum shareholding, & therefore a 10% capital gains tax relief is still possible, with the appropriate planning & advice.
IR applies to new ordinary shares issued on or after 17 March 2016. The relief requires that shares are held continuously for three years – in other words the first IR claim will be made in the 2019/20 tax year…..so now is the time to plan for this, given that it’s only a few months away.
There are a few other simple rules to follow on IR – the most notable one being that the investor should not be a paid employee of the investing company, although they can act as a director of the company.
IR may also provide a ‘next best alternative’ to the other excellent tax reliefs available: Enterprise Investment Scheme (‘EIS’) and Seed Enterprise Investment Scheme (‘SEIS’).
Whilst EIS/SEIS may offer more tax benefits, there are several conditions which must be met in order to qualify, & as a result these options may be too cumbersome for some investors.
IR can also be treated as a top-up to ER i.e. having 2 x £10 million of gains by utilising both tax reliefs.
The team at Alexander Knight & Co is hugely experienced in advising on capital gains tax cases.
If you’d like a second opinion, or just some idea of which options could work for you then contact Murray Patt.
Want to be nominated for loveliest employer of the year? With the Trivial Benefits in Kind Exemption (we know…hardly a smooth trip off the tongue phrase) that emerged from the Finance Bill 2016, you can now treat your employees without them facing any tax hassles. So what kind of treats apply?
- Gift vouchers (up to the value per head – see “small print” below)
- Taking a group of employees out for a celebratory birthday meal
- Flowers on the birth of a new baby
- A summer garden party for employees
And it gets better……you can also treat yourself!
If you are the director of a Limited Company, then you, too can receive up to £300 per tax year -which will not be subject to tax or NI – in the form of gift vouchers from your favourite retail or on-line store. A director of multiple companies can take advantage of this opportunity for each company! But be quick, as great tax breaks like this often disappear just as quickly as they appear!
You can get £300 of gift cards (in £50 tranches) on or before the 5th April – and then another £300 (in £50 tranches) on or after the 6th April 2019 – giving you £600.
There are obviously a number of conditions that a trivial benefit for an employee has to satisfy in order for it to qualify for the new exemption & these are outlined below in some detail. However, the basic lowdown is that it has to be a freely given gift related to employee welfare & goodwill, not employment service or performance.
The small print…
- No more than £50 per benefit (or average of £50 if the benefit is provided to a group of employees, & it is not possible to work out the exact cost for each individual). The £50 limit (fortunately) does not apply to company directors.
- If the employee exceeds this amount then the whole lot becomes a benefit in kind & therefore the normal tax rules apply.
- Cash or a cash voucher are not eligible but gift vouchers eg for a shop, are acceptable
- There must be no entitlement to the benefit as part of the employee’s contract (including salary sacrifice schemes).
- The benefit is not provided in recognition of a work related service or employment duty.
For additional information, tailored to your company, please contact a member of the Alexander Knight & Co team.
