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Do you want to pay less tax?


Many people are paying far too much tax; often through lack of knowledge of the tax rules. This problem is compounded by the constant changes in the tax rules. We aim to rectify this by ensuring that we highlight some of the tax traps that can be costly if you are not aware they are there and to give you an idea of possible tax saving opportunities in certain situations.

As everyone’s circumstances are different we would be delighted to talk to you in detail about how the rules apply to you and how you could save tax.

We want to help you pay your fair share of tax… and not a single penny more!

“Inheritance Tax is theft”

Inheritance Tax (IHT for short) has been the biggest tax hot potato of the last couple of years. Barely a week goes by without the Sunday papers talking about it, The Daily Express recently ran an “Inheritance tax is theft” campaign, and even former DTI minister Stephen Byers called on Gordon Brown to abolish it.

What is clear is that IHT is here to stay, and that more and more people (even people with straightforward tax affairs) are being caught in its net because of rising property prices.

Fortunately there is some simple planning that a very high proportion of IHT payers can do to reduce or eliminate their IHT liability. They can write a tax efficient will.

For most people the kind of tax efficient will contains a Nil Rate Band Discretionary Trust. These wills work for married couples and civil partners who own their own home. And essentially what they do is protect the nil rate band on the first death so that at the time of the second death two lots of the nil rate band are allowed tax free.

At the rates in force in October 2006 this means that, on the second death, £570,000 of the estate can be passed on tax free. And this in turn saves the family the tax on an extra £285,000 – which could be as much as £114,000 in extra cash for them.

Child care: How to save tax for your business and your employees


Do you fund your employees’ childcare costs?

If so, up to £55 per week, per employee, can be paid free of tax and national insurance. The support must be offered to all employees.

For each employee in the scheme this could save you - as an employer - about £366 each year in national insurance. And it could save each employee up to £1,459 each year in tax and national insurance (although usually the saving would be about £945 each year).

To achieve this you simply reduce the employees’ wage and replace it with childcare support payments. Any reduction in wage cannot reduce the rate of pay below National Minimum Wage rates.

Care is needed to ensure that this is done correctly and appropriately documented. And we can help you get this right.

How do you do it?
You either contract directly with a registered or approved carer or supply vouchers that your employees redeem with the carer. The exemption does not apply to cash payments made to the employee.

To qualify, a child must be
  • maintained at the expense of the employee, and
  • resident with the employee

A child qualifies up to 1st September after their 15th birthday (16th birthday if disabled).

Helping your kids through University

As the new University term is well under way many parents may be getting concerned about where their sons or daughters are living.

One scenario we frequently consider is the possibility of the student’s parents purchasing a house or flat for their son or daughter to live in, and the subsequent tax implications. This train of thought often extends to buying a slightly larger property to enable the renting of rooms to friends.

Broadly speaking the tax implications will arise in 3 distinct stages:
  • on purchase,
  • during the ownership period (where rent is received), and
  • on disposal.

There are several direct taxes to consider including Stamp Duty, Income Tax, Capital Gains Tax and possibly Inheritance Tax.

It may also be possible to let one or more of the rooms to friends in a tax efficient manner using the rent a room scheme. This will depend primarily on the accommodation provided, who is treated as owning the property and the rental income received.

If you are interested in exploring this possibility in a way that minimises the tax bills please do not hesitate to contact us