Showing posts with label benefits. Show all posts
Showing posts with label benefits. Show all posts

Tuesday, July 24, 2012

VAT and Car Expenses

While owning a car in a company can be quite expensive for a director, there are instances where it makes sense to do so. The director will then be charged for a benefit in kind which depends on the CO2 consumption, benefit for both the use of the car and the corresponding fuel paid by the company.

The company will then be able to expense all related costs for the car. But it will not be able to recover all the VAT. If the car is purchased outright, then the VAT will not be recoverable if there is any private use. And if the car is leased only 50% of the purchase VAT can be recovered.

Wednesday, May 30, 2012

Business owner? Don't forget tax credits!

Tax credits are something that most accountants don't like to deal with. They are often considered as social benefits and therefore something that is outside of the scope of their offering. It is difficult however to advise properly on the tax affairs of an individual or a company without taking child and working tax credits into account. Indeed, many decisions you can take as a business owner will have consequences on eventual tax credits and your bottom line.

It is often assumed that tax credits are only available to the unemployed or the very low earners. What people forget is that there are some instances where your earnings can be very low for a limited period (say you start a new business or you incur exceptional capital expenses). In that case there is no reason not to claim this extra government money. Especially since, because tax credits are based on income and not capital, it is possible to be in a situation where you have significant capital gains, inheritance income or just savings and where you are still entitled to those subsidies.

Tuesday, December 27, 2011

Annual Party Tax Considerations

When it comes to dining either employees or clients, you have to be aware of the tax implications. If you dine your employees, it is considered an allowable business expense for the company but a taxable benefit for the employee. Unless the company has put a PAYE Settlement Agreement (PSA) in place those benefits have to be reported on the employee's P11D and the employee will end up paying taxes on those. When you dine clients however, this is considered entertainment and it is therefore not an allowable business expense from a corporation tax standpoint (effectively increasing the tax rate for the company).