On The Spot Blogs

Become A Limited Company - Should You, Shouldn't You? Top 5 Questions To Answer

Here are the main questions we ask our clients before making a recommendation:

1. ARE YOU MAKING TAX LOSSES?

Yes - If you are a Sole Trader in your first 4 tax years of trading you can offset these losses against other taxable income from the previous 3 tax years.

 

Continue reading

Sole Traders - Six #Tax Numbers You Must Know

1. 4 Years - If you are in the first 4 years of your business and make a loss, you can use this loss to reduce your tax bill in the previous 3 years, such as from the job you had before you set up your business. You will receive a tax refund.

2. £5,725 - If your profits are lower than £5,725, you don't have to pay the annual £140 Class 2 NI, unless you need a credit towards your state pension. Ask for a repayment for earlier years.

3. £7,755 - If your profits are higher than £7,755, you will pay 9% Class 4 NI. This gets you no state benefits and effectively increases your tax rate from the 20% income tax rate to a total 29% tax rate.

 

Continue reading

How does George affect his parents' after-tax income?

Meaning the baby, not the Chancellor!

If his father's only income was his RAF's officer income, with a salary under £50k, and with a non-earning mother, they would receive the full child benefit of £20.30 per week, or £1,055.60 per year until as late as 31 August 2033 if he is in qualifying education or in the armed forces by then.

If his father receives a pay rise in the next 16 to 20 years, taking his income over £50k, child benefit is reduced or if it reaches £60k, becomes £NIL. This assumes the thresholds aren't increased with wage inflation which is probably the intention.

 

Continue reading

Why it might pay to furnish your buy-to-let property

When you spend money on your buy-to-let property, you expect to get a tax deduction against the rents received to help keep your tax bill down.

For those with children, this is even more important if your rented property might take you into the 'no-go' £50,000 - £60,000 income level where child benefit might be reduced or taken away completely.

With residential properties, costs like agent's fees and gas certificates are easily deductible. But what about the costs of white goods and furniture?

 

Continue reading