Thanks to the COVID 19-triggered pandemic and the resulting lockdown, the economic scenario has seen a sea change in every aspect, prompting the governments from around the world to take steps on the economic front to deal with issues. The Govt. of the UK is no exception. It has brought in quite a few changes and a few more are in the offing during the days ahead. Thus, the professional accountants in Arborfield of reputed companies are expected to guide businesses in making the most of these changes. At Biz Accounting Solutions Ltd, our pros do the same.
The changes that the new IR35 Status Notice is likely to bring in….
From 6th April next year, the Status Determination Statements (SDSs) are likely to play a pivotal role in the new IR35 decision-making mechanism. From April 6, 2021, a number of vital procedural changes will come into play in the medial and large scale business. It will be their call to decide whether IR35 applies to their business operations, and if it does, the NI and PAYE tax will be deducted.
The Status Determination Statements…
In case any business wants the IR35 to apply, it will have to notify for the same via an SDS.
The Rules of SDS…
If a business decides for IR35, it is the responsibility of a professional accountant in Barkham to inform via an SDS on or before the date it pays your client after 5th April 2021. In case of failure, HMRC can deem it liable for the NI and the tax.
The Golden Handshakes….
In recent years, the tax and the NI rules for payments to employees upon the termination of their respective employment have become more stringent. For instance, all the payments in lieu of notice have become taxable as well as liable to NI.
Avoiding the Inheritance Tax (IHT) Trap
When it comes to the transfer of an unincorporated business to a company, there are a number of tax pros and cons. If we take into account the cons, one of them is….
There are a number of reasons why you should transfer your unincorporated business to a company. Tax saving is the most important of them. It involves selling the goodwill of the business to the company. This helps to convert some of the future profits of your unincorporated business into a lump sum amount of payment from the business.
Loan Account Trouble
This takes place when a business gets transferred to a company for it to make the payment for the goodwill through the process of crediting the loan account of the seller with the company.
This often happens because the company, which is still in a nascent stage, having been formed only recently still does not have enough cash in hand. This often results in a potential IHT liability. Again, in these situations, it is the responsibility of our accountants in Whistley Green to guide our clients out of it.
Tax issues relating to private use of pool cars
This is another issue that needs to be discussed in this new situation. Even if a business has stuck religiously to the HMRC rules, if the pool car meant for the company has been used for private purposes, it becomes taxable. However, this can be avoided under the following circumstances when the car is used for official purposes:
- The car must be available for use by more than one employee
- The car must not be driven by one employee to the exclusion of any other
- The car must not be used for any private purpose unless it is incidental to business purposes
- The car is not kept overnight in the custody of a director’s or employee
Occasional private uses
Some personal benefits can be enjoyed with the help of the pool car, with some tax exemptions, under the following circumstances:
- An employee or director takes the car home overnight so that they can have an early start for any business trip, the next day
- For any other use that is incidental to the business.
So you see, there are so many conditions and technicalities to take into account when it comes to taxation and other related issues. A business cannot afford to make any mistake and end up paying extra taxes in this crunch economic situation. Thus, businesses need the guidance of tax accountants from quality companies to come in terms of these new strictures and changing economic scenario. What better name can they opt for than Biz Accounting Solutions Ltd? We are available at 07877 224964 or 01183 671854.