With the emphasis on self-assessment, we all need to get to grips with the array of taxes levied by government. This guide, now in its ninth edition for the 2009/2010 tax year, will provide you with quick, digestible answers to practically all your everyday tax questions. It includes dos and don'ts and experts' tax-saving tips that may help you save money when it comes to tax planning and investments. Clear and concise tax answers are given on: income tax and employment; national insurance; pensioners and tax; self-employment and partnerships; income from land and property; income from dividends and interest; life assurance policies; capital gains tax; trusts and estates; corporation tax; working overseas and non-residence inheritance tax; vat; stamp duty; and a glossary, checklists and templates are also included.
Table of Contents
Tax in general What are the different taxes that we have to pay? How much does the Government raise in tax and what does it spend it on? When are the tax rates changed? What is the Income Tax year? What are business rates and Council Tax, and how is that money spent?What is HM Revenue & Customs and what is the Treasury? Tax and civil partners What tax do I pay when I buy a motor car? What tax do I pay when I buy fuel? What tax do I pay on celebratory fizz? Income Tax What is Income Tax and what do we pay it on? What is an annual Income Tax Return? How do I know if I have to fill out a Tax Return and how do I get old of one? What are Child Tax Credits and Working Tax Credits? How do I work out how much tax I have to pay and when to pay it? What if my tax payments are late? What happens if I fail to complete a tax return on time? What can I set against my tax bill? What is the difference between earned and unearned income? Personal reliefs and allowances What tax relief can I claim against my payments of interest? Can I get tax relief on my mortgage? Is there a right time to get married for Income Tax purposes? Is there a right time to get divorced or separated for Income Tax purposes? What happens to someone's Income Tax affairs when they die? What should one do about the income of children and Income Tax? What are the most sensible sorts of investment for children for tax purposes? What are the rules for charitable giving and Income Tax? What is 'Payroll Giving'? How do I reclaim overpaid tax? What are the rules regarding pre-owned assets? What might be the effect on my Council Tax banding if I work from home and use my home as an office? National Insurance What is National Insurance? What are the different classes of National Insurance? Who pays what? What do I get for my money? How are National Insurance contributions paid? How do I find my National Insurance number? What happens if I should be paying National Insurance contributions but fail to do so? What should I do if I'm worried that my National Insurance contributions are not up to date? What is Class 4 National Insurance? What if I have paid too much National Insurance? If I'm self-employed and have not been paying National Insurance, what are the chances I will get away with it? Employment and Income Tax What do I do if I employ somebody? Is the person I'm taking on an employee or self-employed? Employed or self-employed? A questionnaire to help you decide What if I take on someone part-time or casually? What is PAYE? What is a tax code and what is a notice of coding? What if I fail to operate PAYE properly? What records does an employer have to keep? What is the National Minimum Wage? What is Statutory Sick Pay and Statutory Maternity Pay? What tax deductible expenses can an employee claim? What is the Working Time Directive? What about holiday pay? What are the rules about directors and tax? What if I provide benefits for my employees? What are Authorised Mileage Payments? What are advisory mileage rates? What are the rules for paying tax on motor cars provided by an employer? What is the tax on employees' vans? What are the car benefit charges based on CO2 emissions? What are the fuel benefit charges? Can I get dispensation for travel and subsistence payments? How do I provide a pension scheme for my employees? What are the rules if I provide shares and share options for my employees? What are the different schemes for providing shares for employees?What National Insurance is payable on employees' benefits? What do employers and employees have to do at the year end? What changes are being made to the filing of employers' End of Year Returns? What are the rules for charitable giving through the PAYE system?What tax is payable on payments for compensation for loss of office?What are the tax rules if I'm employed outside the UK? What are 'fixed deductions'? Pensions and tax What is pensions simplification? Is it worth paying into a pension scheme? What are SIPPs? What sort of state pension can I expect? Self-employment and partnerships Should I tell the taxman if I'm going self-employed or starting a partnership? What is trading? How do I calculate my taxable income from trading? What expenses can I claim? Can I pay myself? What is the tax significance of holding trading stock? What is the tax significance of work in progress? What are debtors and what do I do about them? What are creditors and what do I do about them? What are capital allowances and agricultural and industrial buildings allowances? What is the Annual Investment Allowance? What are life long assets and what allowances do they get? Can loss-making companies claim cash back in lieu of their capital allowances? Is there any special tax treatment for farmers? Is there any special tax treatment for visiting sports stars and entertainers? Is there any special tax treatment for Lloyd's insurance underwriters? Is there any special tax treatment for subcontractors? Is there any special tax treatment for owners of mineral rights and royalties? How do I get tax relief for losses in my business? Are there any special rules about claiming farm losses? How many years of farm losses can one utilise before having to carry forward those losses? What is Class 4 National Insurance? What is a partnership? Should I go into partnership with my spouse? Do I need to have a partnership deed? What are limited liability partnerships? What happens if partners change? How are partnerships taxed? How long do I have to keep my accounting records? How might HM Revenue & Customs inquire into my tax affairs? Income from land and property What is the wear-and-tear allowance? How do I claim losses from land and property? What is the difference between furnished lettings and furnished holiday lettings? What is rent-a-room relief? Woodlands - what are the rules about selling timber? How are property developers taxed? What is the tax wheeze for buy-to-let investors? What is the difference between people owning property as joint tenants and as tenants in common? How are lease premiums taxed? What are the rules for leases and Stamp Duty? Income from dividends and interest How are dividends taxed and can I claim the tax back? How do I pay the tax on interest I receive that is not taxed at source? What is the tax position on bank interest? What is the tax position on building society interest? What is the tax position on annuities? What are ISAs? What are Venture Capital Trusts? What are Enterprise Zone Investments? What is the Enterprise Investment Scheme? What are REITs? Life assurance policies What do I need to know about the taxation of life assurance? What are chargeable events? What are bonds? What is 'top slicing relief'? What are 'partial surrenders'? Can I claim tax relief on my permanent health insurance payments?What are 'purchased life annuities'? Capital Gains Tax What is Capital Gains Tax? What does Capital Gains Tax catch and what does it not catch? What are the new rules introduced on 6 April 2008? What is entrepreneurs' relief? Who pays Capital Gains Tax? Is there an annual exemption from Capital Gains Tax? What can I set against my Capital Gains Tax liability? Can I get any relief for capital losses? How and when is Capital Gains Tax paid? What are the rules for part-disposals? What are the rules for private residences and Capital Gains Tax relief? What are the rules for chattels sold for less than GBP6,000? What Capital Gains Tax relief is there for the disposal of business assets? What Capital Gains Tax relief is there for gifts? What are the aspects of Capital Gains Tax if I live abroad? Can I sell shares one day, creating enough gains to use up the annual Capital Gains Tax allowance, and buy them back the next day? Trusts and estates What is a trust? Does a trust have to complete a Tax Return and what tax does a trust pay? How are trusts in Wills affected by tax? What are accumulation and maintenance settlements(A&M trusts)? What are discretionary trusts? How do discretionary trusts pay Inheritance Tax? How do trusts pay Capital Gains Tax? Trust modernisation Corporation Tax What is Corporation Tax? How is Corporation Tax assessed and paid? What is Corporation Tax Self-Assessment? How are company profits calculated? What do I have to do about the Corporation Tax Return? What is the rate of Corporation Tax and how does the small company rate of tax work? When is a company trading and how does this affect its tax position?Do dormant companies have to pay Corporation Tax? What are 'associated' and 'subsidiary' companies? What is the significance of a 'close company'? What is the difference between a public and a private company? What do UK companies with overseas income have to do about it? What are the tax rules about companies buying their own shares? How do I pay myself from my company? What are the tax rules about a company paying dividends? How does a company get relief for its losses? How does group relief for losses work? How does a company pay Capital Gains Tax? Can a director borrow money from their company? Do companies claim capital allowances, agricultural and industrial buildings allowances in the same way as sole traders and partnerships? At what level of profits should I incorporate my business? What are Personal Service Companies and how are they taxed (IR35)? Non-residence, working overseas, etc. What is the significance of my tax domicile? What is the significance of my tax residence? What income is taxable and where? What is 'double taxation relief'? How do I change my tax residence? When does someone who goes abroad become non-UK tax resident? What tax do I pay on foreign income? What tax do I pay on foreign pensions? What is the tax position on professions conducted partly abroad? What tax do I pay on earnings from overseas employment? What allowances can non-UK tax residents claim? 128 If I go abroad, do I have to pay tax on the rent I receive from letting out my home while I'm away? Can I go abroad to avoid Capital Gains Tax? What should I do if I have just arrived in the UK to take up work here and will the rest of my overseas income be taxed? If I have just arrived in the UK, will the rest of my overseas income be taxed? Should I put my money in an offshore trust? Inheritance Tax What is Inheritance Tax? How and when is Inheritance Tax paid? How should I approach the subject of Inheritance Tax? Should I make a Will? How do I choose my executors? The new nil-rate band rules How can I reduce Inheritance Tax? What are periodic charges? What is 'quick succession relief'? How will assets be valued? Help, I've done nothing about Inheritance Tax. What are the first few essential golden rules that I should follow? What is a Gift with Reservation of Benefit? VAT What is VAT? What records do I need to keep if my business is VAT-registered? How do I complete my VAT Return? What is the Fuel Scale Charge? What is Annual Accounting for VAT? What is Cash Accounting for VAT? What is the optional flat rate VAT scheme for small traders and is it worth joining? When can I deregister? Stamp Duty What is Stamp Duty? When and how is Stamp Duty paid? What is Stamp Duty Land Tax? Other tax issues Tax planning dos Tax planning don'ts Tax-saving tips Notable tax dates What is the difference between tax 'avoidance' and tax 'evasion'? How should I deal with the Tax Office? Should I use an accountant? How should I handle tax investigations? How do I appeal against a tax demand if I think it's too high?
The authors are tax specialists at the national award-winning firm of H.M.Williams Chartered Accountants, based in Plymouth. They are holders of three prestigious awards: the 2020 trophy for the most innovative medium-sized firm of chartered accountants; a Daily Telegraph/Energis Customer Service Award for professional services; and a Butterworth Tolley Best Tax Team award. Their clients range from individuals to multi-million-pound organisations.