Proper financial planning is always important, but as the end of the tax year approaches, now is the time to ensure that your business and personal finances are as tax-efficient as possible. Contact Liric for some of the planning strategies that are available to you before 6 April 2015.
The company car remains a key part of the remuneration package for many employees, but it is important to consider the tax and national insurance implications of your company car arrangements. Employees and directors pay tax on the provision of the car and on the provision of fuel by employers for private mileage. Employers pay Class 1A NICs at 13.8% on the same amount. The amount on which tax and NICs is paid is calculated by multiplying the list price of the car by an ‘appropriate percentage’. It may be worth considering paying your employees for business mileage in their own vehicle, at the statutory rates. We can review your company car policy and discuss the options available to you. An employer-provided van may be a viable tax-efficient alternative to the traditional company car. There are also special reduced car benefit rates for environmentally-friendly cars.
Future changes – The maximum taxable percentage is set to rise from 35% to 37% in April 2015. From April 2015 the five-year exemption for zero carbon and the lower rate for ultra-low carbon emission cars will come to an end. Two new bands will be introduced for ultra-low emission vehicles. The diesel supplement will also be removed in April 2016, making diesel cars subject to the same level of tax as petrol cars. With robust planning and expert advice, you can minimise the tax bill and maximise your business and personal wealth now and in the coming years. Please contact Liric for further advice.
Remember, 2015/16 sees the introduction of a transferable personal allowance for married couples and civil partners. As the amount that may be transferred is 10% of the basic personal allowance, that will now be £1,060.
The recipient must not be liable to tax above the basic rate and is eligible to a tax reduction of 20% of the transferred amount, in other words £212.
Hopefully we will pick this up where we can, but we don’t always act for both husband and wife so if you think this applies to you remember to let LIRIC know.
HMRC has never been more focused or organised in its pursuit of additional income from tax investigations than at present. During 2013/14, £9.2bn was collected in extra tax from compliance work, including £8bn from big business and £268m from the UK’s wealthiest individuals.
In total, the taxman delivered £23.9bn last year from cash it collected – and loopholes it closed – to prevent tax evasion and tax avoidance. The figures highlight that individuals and businesses of all shapes, sizes and wealth are in the line of fire as HMRC looks to achieve a record £24.5bn this year. – read more here.
If you are not currently insured with us against this and now think you should be then do let us know.
PS- LIRIC’S routine renewals will be in April.