Quick Tax Tips and Hot off the Press

QTT - Donated to Charity?

If you have or intend to give to charity this year, don’t forget to claim “Gift Aid”. The charity will then be able to claim tax direct from the government of 28% on your donation.

If you are a higher rate taxpayer then in addition you could get tax relief of 23% on the donation yourself, providing the gift is shown on your Tax Return. If a couple wish to make a donation and one is a higher rate taxpayer, then the higher rate taxpayer should make the payment and get tax relief on the donation.

QTT - Make the most of pensions

Have you made the most of your pension contribution tax allowances this year? In addition to payments made into pension schemes by individuals (whether they pay tax or not) the Inland Revenue will contribute over 28% of the net payment into the pension policy. Higher rate taxpayers could get at least a further 23% of their net payment in tax relief when calculating their tax bill.

QTT - Beware! Childcare vouchers could cost you dear.

Claiming tax credits for help with childcare? Do your sums before accepting childcare vouchers from your employer. The vouchers may reduce the amount that you can reclaim through tax credits and could end up losing you more in tax credits than you save in tax and NI contributions.

QTT - Market your business tax efficiently!

Do you want to market your business without spending too much? Well have you considered using business gifts as a marketing tool?

If not then it may be worth a thought, as with the right gift not only could you promote your business, but you could also save tax. Gifts given to customers could get tax relief if they:

• contain a conspicuous advert for your business, and
• are NOT food, drink, tobacco or tokens or vouchers exchangeable for goods, and
• they do not cost more than £50 per person per annum.

This could be one time that giving could not only result in tax savings but also increased business.

QTT - Taking dividends?

If you own shares in your own company, have you maximised the amount of dividends taken? Providing your own gross income remains below the higher rate tax threshold in a tax year (currently £38,335), there is no personal tax to pay on the dividend. Care is required to ensure the correct documentation is completed and approved prior to the payment.

QTT – Reward long service tax efficiently

If any of your employees have been with you for more than 20 years, then the business can reward them with a really special long-service present that is completely tax free for both the business and them. Tax-free gifts can now be worth up to £50 for each year of service (up to a maximum of £1,000). The gift must not be cash or vouchers.

QTT - Tax efficient incentives!

Have you considered allowing key staff to have an interest in your business to retain them? According to Government figures, over 75,000 employees have been able to take advantage of the tax efficient share option arrangement known as Enterprise Management Incentive (EMI). The scheme can be set up relatively cheaply to ensure key personnel are retained and incentivised in a very tax efficient manner.