Corporate and business tax
Concise information on the taxation issues you need to consider for both unincorporated and corporate businesses.
The cost of purchasing capital equipment in a business is not a tax deductible expense. However tax relief is available on certain capital expenditure in the form of capital allowances.
Companies – tax saving opportunities
Pre-year end tax planning is an important consideration and this factsheet outlines some of the key areas. Topics covered include corporation tax, capital allowances, dividends payments and capital gains.
Corporation tax – quarterly instalment payments
Under corporation tax self assessment large companies are required to pay their corporation tax in four quarterly instalment payments.
Corporation tax self assessment
There are a number of procedures for filing your company’s tax return and paying the tax due
Fixed rate expenses
An optional system of fixed rate expenses has been introduced for unincorporated businesses.
Homeworking costs for the self-employed
If you are self employed and work from home this factsheet will summarise what homeworking costs you can claim for tax purposes. If the self-employed carry on some of their business from home, then some tax relief may be available. HMRC accept that even if the business is carried on elsewhere, a deduction for part of the household expenses is still acceptable provided that there are times when part of the home is used solely for business purposes. To quote: ‘If there is only minor use, for example writing up the business records at home, you may accept a reasonable estimate without detailed enquiry.’
Generally, HMRC will accept a reasonable proportion of costs such as council tax, mortgage interest, insurance, water rates, general repairs and rent, as well as cleaning, heat and light and metered water.
Other allowable costs may include the cost of business calls on the home telephone and a proportion of the line rental, in addition to expenditure on internet connections to the extent that the connection is used for business purposes.
The issue of whether to run your business as a company or a sole trade or partnership is an important decision.
IR35 personal service companies
The ‘IR35’ rules are designed to prevent the avoidance of tax and national insurance contributions through the use of personal service companies and partnerships.
The Patent Box provides a reduced rate of corporation tax for companies exploiting patented inventions or certain other innovations protected by intellectual property rights.
Research and development
Research and development (R&D) by companies is being actively encouraged through a range of tax incentives including an increased deduction for R&D revenue spending and a payable R&D tax credit for companies not in profit.
The Construction Industry Scheme
The Construction Industry Scheme sets out special rules for tax and national insurance for those working in the construction industry.
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