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March 2017

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To this month’s Tax Tips & MYOB News.

Beware Scam letters and Emails
We recently received a letter in the post from the ‘Commercial Register’, purporting to be acting on behalf of Companies House, asking for us to update our details. Beware! This scam has been around before: if you return their form you might get an unpleasant bill (around 1000 euros) from Madrid for placing an advert in the ‘commercial register’.

If in doubt don’t click on links or reply to emails or letters.  Ask us for advice.

March 2017
· IMPORTANT: Our Contact Details are Changing until June.
· Tax-free access to pension advice
· Salary v dividend
· Changes to company carry-forward of losses confirmed
· March questions and answers
· March key tax dates
IMPORTANT: Our Contact Details are Changing until June. top
Tax-free access to pension advice top
From March 8th to June 8th 2017 our office will be relocating to Montreal, Canada. During this time please contact us by email:  , or on our landline, 01422 847500 after 12 noon (calls will be redirected at our expense).  We won’t be answering mobiles.  Otherwise we don’t anticipate any change to our service.  Mark will be back in the UK in April to see clients who need an onsite visit.  The Treasury has confirmed details of the new Pension Advice Allowance, which will take effect from April 2017, and which will enable people to withdraw £500, on up to three occasions, from their pension pots tax-free to put towards the cost of pensions and retirement advice.

Following an eight-week consultation period, the Economic Secretary to the Treasury, Simon Kirby, confirmed that the £500 allowance:
Read More
Salary v dividend top
The questions surrounding the issue of how best to extract profits from a company in a tax-efficient manner remain as popular as ever. Despite the introduction of the dividend allowance, and the personal savings allowance, extraction by as remuneration and by way of dividend remain the two most widely used methods. The tax effects of these methods may be broadly contrasted as follows:
  • Provided the amount is justifiable, remuneration is generally allowed as a deduction in arriving at the taxable profits of the company. The recipient is taxed on the remuneration through the PAYE system at the date of payment including a charge to NIC.
  • Dividends are not deducted in arriving at the taxable profits.
Dividends are now taxable by themselves.  You get £5k tax free, but beyond this dividends above this level are taxed at 7.5% (basic rate), 32.5% (higher rate), and 38.1% (additional rate).
A simple answer is to start getting your company to pay rent or interest to yourself … rather than dividend.  Rent is not subject to NI or Dividend tax.

It must be remembered here that payment of a salary will give rise to a liability to National Insurance Contributions (NICs), whereas payment of a dividend does not. Read More
Changes to company carry-forward of losses confirmed top
March questions and answers top
Initially announced at the time of the 2016 Budget and following a period of consultation, Finance Bill 2017 contains provisions to reform the tax treatment of certain types of carried-forward loss for corporation tax purposes with effect from 1 April 2017.

Losses arising from 1 April 2017, when carried forward, will have increased flexibility and can be set against the total taxable profits of a company and its group members (referred to as the ‘loss relaxation’). Read More
Q. Will I have to pay stamp duty land tax on a property I am about to inherit? Answer

Q. I run a small business but I am registered for VAT. What are the advantages and disadvantages of using the annual accounting scheme? Answer

Q. I live in a leasehold flat in a property in which there are six other leasehold flats. The opportunity has arisen for the leaseholders to buy the freehold reversion from the landlord and all of the leaseholders have agreed to contribute equally towards the purchase. Our solicitor has advised a limited company should be set up to buy the freehold. Are there any tax consequences involved here? Answer
March key tax dates top
8 – Spring Budget 2017

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/3/2017
Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.
About Us top
Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Solar Accounts, Quickbooks, Wave or Clearbooks.

‘All clients using these software packages can benefit from our support. Visit our website for a look at the resource on offer.’

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95 Bridge Lanes, Hebden Bridge, Yorkshire, HX7 6AT
Simple Accounting is a trading name of Simple Accounting Limited
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