Selling goods and services overseas for beginners…
Internationalising your client base can be an intimidating prospect for small business owners with no experience of trading overseas.
Depending on your sector and your export destinations, deciding to sell products and services abroad can increase your expenditure, consume your time, and introduce new regulatory and administrative complexities.
Last year 608,110 businesses were incorporated according to data from Companies House. This is a year-on-year increase of 26,937 on the 581,173 businesses started in 2014. However, figures from the Office for National Statistics show that 55% of new businesses fail within 5 years.
In order to avoid becoming part of this statistic, it is important to lay the groundwork before starting off on the path of business ownership and management.
A guide to rewarding your staff and the tax treatment of employee benefits.
Many of us do not really think about the commitment that employees make to their employers in terms of time. The average 9 – 5 worker with their 5.6 weeks of statutory holiday is likely to work around 1,880 hours a year.
Understandably, many employers want to provide their staff with a range of benefits to make their employment more enjoyable and to reward them for doing a good job.
The way that these employee benefits and rewards interact with tax is also going to factor into a business’ decision about what kinds of benefits they offer their employees. There are a number of different tax considerations for companies to consider.
For landlords holding properties personally there are limited opportunities to mitigate inheritance tax and CGT. They may be left to the spouse free of inheritance tax liability, but on his or her death the inheritance tax problem will then certainly arise. Alternatively, properties may be given away in lifetime and so long as the gift is more than seven years prior to death it will be free of inheritance tax liability, but a lifetime gift is a disposal for capital gains tax purposes and any gain accrued to the date of disposal of the property will then be liable to capital gains tax.
Where properties are held in an investment company, it is possible to pass on shares in the company much more tax efficiently. The main drawback with the use of a company is that gains realised within the company will be liable to corporation tax on capital gains.
One option is to make your children or grandchildren shareholders of the company. They would have to pay tax on any dividends, capital distributions or sales of shares.
The company would have to pay tax on any rental profits, but as the value of the company rose the value of the beneficiaries’ shares would also rise. If a property is sold and the proceeds distributed to shareholders, the children or grandchildren could receive a distribution from the firm, which would be taxable as above.
More than 150,000 people have bought a home using the Help to Buy Scheme since its launch in 2013.
The mortgage guarantee scheme, which allows lenders to buy a guarantee on mortgage loans, has proved popular with first-time buyers. The Treasury reports that 79% of mortgage completions through the mortgage guarantee scheme were people buying their first home.
Help to Buy ISAs have also provided a boost to those hoping to get on the property ladder. Chancellor George Osborne said that the scheme has already helped 250,000 first-time buyers save for their first property since it was launched in December 2015.
Help to Buy ISA
Help to Buy ISAs allow prospective first-time buyers to save up to £200 per month. A lump sum of £1,000 can be deposited in the first month of setting up an account.
If you have savings between £1,600 and £12,000, the government will provide a 25% bonus (up to £3,000) if you use the funds towards a mortgage deposit. You must be 16 or over and planning to purchase a home to apply for the scheme.
From April 2017, you can transfer your savings from a Help to Buy ISA into a lifetime ISA.
Chancellor George Osborne delivered his Budget 2016 on 16 March 2016 and outlined several changes national insurance, corporation tax and stamp duty.
Some of the headline measures relating to businesses announced in the Budget include:
Corporation tax – the rate of corporation tax will reduce to 17% by 2020
Business rate relief – the doubling of small business rate relief will be permanent from 1 April 2017. The relief threshold will rise from £6,000 to £15,000 and is tapered between £12,000 and £15,000
Stamp duty – the way stamp duty is applied to commercial properties will change to a marginal rate system with a zero rate band on purchases up to £150,000
Self-employed – from 2018, class 2 NICs for the self-employed will be abolished
Tax-free allowances – there will be 2 allowances of £1,000 on goods and services and property income from April 2017
Loans to participators – the tax rate for loans to participators will increase from 25% to 32.5% from April 2016.
Carolyn Fairbairn, director general of the Confederation of British Industry, said:
“After a year of surprises, this was a stable Budget for business facing global stormy waters. The chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit.”
A guide to reducing an individual’s tax liability.
The overriding aim of all personal tax planning is to legally reduce the amount of tax paid on an individual’s income. This income can come from a number of sources and the tax reduction strategies available will be based on the reliefs and allowances applicable to each source.