Pre-letting expenses – capital or revenue?

Pre-letting expenses – capital or revenue? Guidance on whether repairs are a capital or revenue pre-letting expense.   For tax purposes profits from UK land or property are treated as arising from a business. The broad scheme is that rental business profits are computed using the same principles as for trades (ITTOIA 2005, s272). Expenses are allowable if they are incurred ‘wholly and exclusively’ for the rental business.   If a property is let at less than the fu...
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Rental Accounts – Wear and Tear Allowances

Wear and tear allowance If the property is let furnished, the landlord is able to claim a wear and tear allowance. This is 10% of the ‘net’ rent and covers plant and machinery that a landlord would normally provide in a furnished accommodation, such as furniture, fridges, carpets and curtains. ‘Net’ rent is the total rent for the year, less any expenses paid by the landlord that would normally be borne by the tenant, for example utility bills.   Changes to wear and tear allowance ...
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5 Reasons you need an accountant

AGA Accountants 5 Reasons to have an accountant A good accountant and advise you on legitimate tax saving advice. And also tax efficient strategies for profit extraction. Accountants can advise you on the best way to keep tabs on the health of your business Accountants can advise you on the profitability of your business and where you could need to save more money. Compute and file yearly tax returns. Accountants help you get rid of the financial headache of paperwork and maint...
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Dividend Allowance

Dividend Allowance Question: When is an allowance not an allowance? Answer: When it is the dividend allowance. The taxation of dividends changed significantly from 6 April 2016. Gone is the 10% tax credit and the need to gross up to find the taxable amount and in its place a new dividend allowance and new rates of tax. What is the allowance? The dividend allowance is set at £5,000 for 2016/17. It is available to everyone, regardless of their marginal rate of tax, and means that th...
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Overview of some of the common tax issues on rental expenditure.

Rental expenses Overview of some of the common tax issues on rental expenditure. The general rule when calculating rental business profits is that expenses will be treated as revenue expenditure provided they are incurred wholly and exclusively for the purposes of the business and are not of a capital nature. Expenditure incurred before a property is first let out The tax deductibility of expenditure incurred before a property is first let out depends on whether it is capit...
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Tax saving initiatives

Businesses of all shapes and sizes are currently facing a highly favourable environment for investment. A number of tax reliefs and incentives are available to business seeking to secure investment, in addition to the growing sources of finance such as peer-to-peer lending and crowdfunding. Businesses may also qualify for help with business rates or tax relief for research and development. In this article we list the various reliefs and incentives available. Business rate relief Ma...
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CIS employed or self-employed

CIS employed or self-employed? Source: HM Revenue & CustomsThere are sound tax reasons for contractors to engage the services of self-employed labour as opposed to employed labour. For example there are significant savings in employer’s National Insurance.There are advantages too for the self-employed subcontractors: they are treated as a business for self-assessment purposes and can claim a wider range of allowable expenses.For these very reasons HMRC will seek to challenge a subcontra...
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Building the finance function in growing businesses

Building the finance function in growing businesses The global drive for economic recovery has placed a huge focus on supporting small and medium-sized enterprises (SMEs) as a vehicle for job creation, economic stability and wealth creation. Governments are also capitalising on the opportunities presented by SMEs for market innovation and its value in building social capital. In order for SMEs to achieve their maximum impact, efforts to promote them cannot be limited to encouraging more of th...
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Common myths about accountants!!

Many accountants will have lost count of the number of times they have been asked to check the bill in a restaurant (whilst out with family or friends…”because they are an accountant!”. As a traditional industry with centuries of history, accountancy has gained more than its fair share of myths. Here are a few you may have come across: Myth 1: Accountants add up rows of figures in their heads So many people assume that accountants have an inherent ability to add up long rows of figures in thei...
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The importance of effective cashflow management

The importance of effective cashflow management We see it all too frequently, businesses of all sizes getting into financial trouble and struggling to pay their suppliers, the taxman and their own staff. This can happen because the people running the business are so focused on their product or service or customers that they forget to take care of cashflow management, which is key to sustainable growth. Cash is the lifeblood of every enterprise, but although entrepreneurs want to make money, i...
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