Tax Saving Tips Archives - Page 11 of 15

News,May 2018

Tax Deductible Travel Expenses for Self Employed

George30/11/2022tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

When you claim your travel expenses as a self-employed individual, the first important thing you need to do is identify which travel comes under a specific category. Whether you are self-employed or working with an organisation, the travel that you are covering daily as a commute to your permanent workplace will not be considered an expense that is deductible. It becomes an allowable expense when you are travelling to a workplace that is temporary. The cost and amount of money that you spend on ordinary commuting can not come under the allowable expenses. Many of you must be wondering by now what are self-employed tax-deductible expenses then. Further, this guide will help you to gather information about what are permanent and temporary workplaces, how are they related to travel expenses, what are allowable tax-deductible expenses for self-employed individuals, and what points you should be considering before you plan to claim the costs for tax purposes. Reach out to one of our professionals to get to know self-employed tax-deductible expenses for your earnings in the UK. Get in touch and you will be provided instant professional help! What are Temporary and Permanent Workplaces? Sometimes the regular workplaces are temporary, however, the grey area is still there and the point becomes complicated. When you are associated with a construction project and you expect to work there for a duration of two years at least, many of you might confuse it with a temporary workplace. However, the case is entirely different because of the duration. This is a permanent workplace. How are Temporary and Permanent Workplaces Related to Travel Expenses? If we talk about the salesperson who works in the field, this will also be considered his permanent workplace. The commute and travelling expenses from some areas will not be considered allowable expenses in this scenario. The travel that is done for the business meeting can be claimed while you’re doing your tax returns. In some cases, you might require to travel to visit a client. If you travel from the permanent workplace, these expenses will be considered, however, if you travel from home to the client the expenses will be allowable in a few circumstances. You can seek the help of a professional to understand the rules of HMRC for your unique situation. What are Self-Employed Tax-Deductible Expenses? Travel for business purposes comes first on the list of tax-deductible expenses. While you are on a business journey, it is imperative to understand that you need to keep all the related receipts for any transport you have used. This includes the uses of public transport as well like buses, vans, cabs, and taxis. The journey that is purely related to the business purpose will be considered. You can even use Transport for London’s “TFL App” if you are travelling in London. You should keep the receipts intact that are related to the toll booth charges, car rental, parking costs and congestion charges. A few salient features to consider in this regard are explained below. 1- Mileage Tracking In case you are the one who is driving, you will have to keep a track of the mileage. This should be 45p per mile for the initial 10,000 miles. This is the instruction for the cars and vans. This will help you to save a lot of money. 2- Cost of Travelling One of the frequently asked questions that people ask is whether you have to avail of a cheap form of travel while you are on a business trip. The simple answer is no. For example, you are travelling in the UK and the tube cost you pay is £5.90, however, if you find it easy to take a cab you can have one. Even if the cab is an expensive commute, you do not need to worry about that. What are the Things to Remember Before You Claim Expenses for Tax Purposes? The take-home points you must remember before you plan to claim the allowable business expenses are listed below. You should keep the record of your business travel intact to get approval and provide any kind of evidence that is required. Keep a record of the purchases that you have done for your business and ensure to keep it separate from your personal expenses. Your mileage log should be as detailed as possible. You can better use the automatic mileage tracking app. The partial parts of the journey may not include in the list of allowable expenses and your claim may not be successful if you add them. Ensure to understand your journey details to make an accurate tax return and get the claim of the maximum that you have spent. It sounds like a time-consuming process but it will help you to provide pieces of evidence when required. You can get in touch with the professionals if you are unable to understand the details of your journey and how to record them. The Bottom Line Now that you have gathered a fair amount of information about self-employed tax-deductible expenses, we can bring the discussion towards wrapping up. The deductible travel expenses for a self-employed individual might sound complicated to record every detail of the journey, however, you can use the automatic apps to do the needful and save time. The more detailed your record is, the more accurate the tax return you will be able to file. You can even take the help of an advisor for a better comprehensive guide. We hope these few minutes of reading have helped to develop a better understanding of self-employed tax-deductible expenses and tax rates. Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for self-employed tax-deductible expenses in the UK. Disclaimer: The information about the self-employed tax-deductible expenses provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

How to Avoid Capital Gains Tax on Inherited Property?

George29/11/2022tax , Tax Issues , Tax News and Tips , Tax Saving Tips

Any type of property or house that is inherited is able to increase the value of an estate. However, you need to be very careful regarding this matter because if you do not handle it efficiently, you will end up paying more tax than you ever expected in higher tax bands. This mostly happens in cases where the inherited property is a house and its value has increased since the period you got it inherited. You are in a position to pay the capital gains tax when you plan to sell it. A hefty increase in tax liabilities is expected if the property value is raised. People often enquire about how to make the avoidance of capital gains tax possible on inherited property, in such cases. The good news is that there are a few tips on how you can avoid paying a hefty amount of capital gains tax in such a scenario. In this guide, we have outlined whatever you wish to know about capital gains tax. This involves the discussion of what is capital gains tax, what is capital gains tax allowance, how to avoid paying capital gains tax on inherited property, and how can you calculate the amount that you owe in form of capital gains tax on your inherited property. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get ensured instant help if you want to know about how to avoid capital gains tax on inherited property. What is the Capital Gains Tax? Capital gains tax is implemented when a property is sold out with a price that is more than its original price when the individual purchased it. If you consider the investment portfolio, the capital gains tax are normally considered as selling stocks in terms of tax. It is implemented to the tangible assets in a similar way. This helps us to know that capital gains tax means that you are taxed on the profits that you have earned by the increases in the value of the inherited property. This relates to the benefits you get when you sell an asset. Let’s take the example of an artwork that you have purchased for £6,000, but the value of the asset increased at the time of selling and you sold it out for £36,000. Now consider the profit you have earned which is £30,000 in this case, this is the figure on which you will have to pay the capital gains tax. The amount of capital gains tax totally depends on what kind of taxpayer are you. Whether you are a higher-rate taxpayer or an additional-rate taxpayer. The number of your gains has also done a lot here and it helps decide the amount of your capital gains tax further. What Refers to the Allowance of Capital Gains Tax? For the year 2025-26, the amount of capital gains tax allowance is £3,000. Capital gains tax allowance refers to the amount you have earned as profit after selling an asset. This is before you have paid the tax on your profits. Your allowance will be combined if you have a joint account or join a venture of selling the assets with another individual. The previous capital gains allowances can not be used or carried forward to the next year. This is something important to understand here. However, you are able to combine the gains with another individual who is with you selling the assets. How to Avoid Capital Gains Tax on Inherited Property? There are observed two possible ways that can help you to avoid the capital gains tax and they are listed and explained below. 1- As Soon as You Inherit the Property, Gift it or Sell it: In this scenario, you will not wait for any further increase in the property value. This will help you to keep the value of the property the same at the time of inheriting the property and at the time of selling it. If you make it possible there will not be any capital gains tax for you to pay. However, this practice is not very appreciated by professionals because this decreases the value of a property. 2- The Inherited Property is Your Principal Property: When you make the inherited property your principal property, this will help to avoid paying the capital gains tax and you can sell the property on a later date as well. You will have to ensure that not any home out is happening during this period. How Do I Calculate the Capital Gains Tax on Inherited Property? People often find the calculation of the capital gains tax amount as a complicated process. If you break down the steps and follow one step at a time, you will be able to do it. The first step you will consider is to calculate your total gains. You will get the answer when you minus the value of the property at the time of inheriting from the selling value of the same property. Then you will have to deduct your capital gains tax allowance from the amount to get the exact taxable gains. This can be written as: Total gain = (value of the property when sold – the value of the property when inherited) – additional costs The Bottom Line Now that you have gathered a fair amount of information about how to avoid capital gains tax on inherited property, we can bring the discussion towards wrapping up. There are a few ways to avoid capital gains tax, however, if you follow them efficiently they will be beneficial for you. We hope these few minutes of reading will help you to develop a better understanding of how to avoid capital gains tax on inherited property. This will further allow you to handle your tax affairs efficiently in the future. Are you seeking professional help to know how to avoid capital gains tax on inherited property? Why not get help from the experts at the CruseBurke? Talk to us …

How Do I Get My Tax Refund After Leaving the UK?

George24/11/2022tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

Are you the individual who is planning to work abroad or to live there and leave the UK? The first thing you must gather information about is the tax refund entitlement. This has to do a lot with the current tax status and the unique circumstances of your case that will help HMRC decide whether you are eligible for a UK tax refund. You will have to get in touch with the tax authority of the UK and HMRC to inform them about the date when you are leaving the UK and finally going overseas. This will help them to make the right calculations for your tax refund, if any. Moreover, there are plenty of online calculators available that you can use to calculate your amount of tax refund amount yourself. In this guide, you will find out what is leaving a UK tax refund is, what is the eligibility criteria, what is the amount of tax refund, and how can I get the tax refund before I leave the UK to settle overseas. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help whether you want to learn about leaving the UK tax refund. What is the Leaving the UK Tax Refund? Leaving the UK tax refund refers to an amount that you will have to claim within four years after leaving. This works as the timescale of the refund. The tax office will require a claim to be received, considering the limit of the timescale before you expect to receive the amount of refund. This can be the overpaid income tax that you paid in the same year when you left the UK to settle abroad or to move back to your country. Who is Eligible to Claim the Tax Refund after Leaving the UK? The UK residents who have now planned to move overseas are in a position to claim a tax refund. This is allowed because of the fact that you will no longer have the status of being a UK resident, and the tax implications will not be implemented anymore. You will have to pay the tax in the new country that you are planning to move in. For the cases who have lived for a long time in the UK or have worked here, and now want to move back to their own country, it is allowed to claim the tax refund before they leave the UK. However, you will have to be a PAYE employee and must have left the UK within the past four years. Also, consider that you were earning an amount that you were able to pay the income tax in the year of claim. How Much UK Tax will I Get after the Refund Claim? According to the information provided by HMRC, there is no upper limit decided for such cases. There are multiple factors that you will have to consider and it depends on the unique circumstances that will decide the amount of tax refund. Especially when you have more than one income source. For these factors, your situation will be considered to provide the amount of tax to your unique case. Because it always varies from one person’s case to another. The common practice is that you get the income tax refund for the same year in which you plan to leave the UK. HMRC will decide the amount of tax you have paid in the situation of leaving and the amount you would have paid if you were planning to stay in the UK. How will I Get the Refund if My Claim is Accepted? It is the job of the tax office to provide an accurate calculation of any overpaid tax and generate a P800 form that will have all the details about the amount of your tax refund. The breakdown of your tax refund will also be updated on your personal tax account if you own one, and the tax authority will post the form to your available address. Moreover, you are even allowed to explain to HMRC how you are comfortable getting the tax refund. You have the option of getting the tax refund to one of your UK banks through a bank transfer or receiving a cheque for the payment. There are several cases when people do not have a personal bank account in the UK. If that is the case with you, you have the option to nominate someone who will receive the tax refund in their account on your behalf. The Bottom Line Now that you have gathered a fair amount of information about leaving the UK tax refund, we can bring the discussion towards wrapping up. Getting a tax refund might sound exciting and add up to your existing amount of money while you are leaving the UK and planning to settle overseas. However, there are multiple factors that are considered to be entitled for the tax refund. If you meet the eligibility criteria, you will be lucky enough to get the amount. We hope these few minutes of reading will help you to develop a better understanding of how to be eligible for a tax refund while leaving the UK. Are you seeking professional help to know about leaving the UK tax refund? Why not get help from the experts at the CruseBurke? Talk to us now! Disclaimer: All the information provided in this article on leaving the UK tax refund includes all the texts and graphics. It does not intend to disregard any of the professional advice.

Time to Pay Arrangements with HMRC

George23/11/2022tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

There are several companies and organisations in the UK that fail to meet the deadlines for tax bills. If you are also one who is carrying out a business in the UK and struggling with the tax bills, you might be offered an instalment plan by the HMRC to pay your tax bills easily. This will allow you to get your payments cleared by having a long period of time and in the form of instalments. To avail of this opportunity, you must have a basic understanding of the time-to-pay arrangement. This article will turn out to be helpful in this regard, and you will be able to gather information about what a time-to-pay arrangement is, what the criteria are to check eligibility, how you can negotiate with HMRC, and how to apply for the instalment plan. Reach out to one of our professionals to get to know what is the time to pay arrangement HMRC for your business in the UK. Get in touch now and get your queries answered quickly. What is the Time-to-Pay Arrangement with HMRC? The time-to-pay arrangement refers to a kind of agreement that is working between the taxpayers and HMRC in case you fail to pay the tax. This allows you to pay the tax in instalments by availing of a long period of time. This is the agreed duration of the period that is specified for the payment plan. This plan can work for all kinds of taxes; however, it is most commonly used for the sake of corporation tax. The companies use it for the payment of VAT and PAYE. If you are a limited company that is struggling with short-term cash flow difficulties, the time-to-pay arrangement is your handy solution. However, for the companies that have a usual habit of having tax problems and paying the tax late, HMRC will not entertain the instalments for such cases. What are the Criteria to Check Whether I am Entitled to Get a Time-to-Pay Arrangement? The main thing to consider for the HMRC when a company applies for the time-to-pay arrangement is that the company needs time to clear the payment in an easy way or to find an escape from the tax bills. When a company applies, it has to prove the genuine reasons with shreds of evidence that can explain the reason why it can not pay the tax bills at the moment. The genuine shred of evidence will be able to make HMRC feel considerate about the case to approve the time-to-pay arrangement. Moreover, the payment history from past records will also be checked by HMRC. HMRC makes decisions after checking the ability of a business to pay the instalments by its financial position. Also, the chances of future tax bill payments will be considered by HMRC. Is there a Possibility of Negotiation? There is a limit to the matter of negotiation, but HMRC is flexible for this. This is not the idea to put more pressure on a business that is already going through a rough patch. This means that HMRC is open to negotiating in such hard circumstances for a business. You can even hire a professional to do the job on your behalf. Because HMRC will respond well to a person who has a better understanding of their rules. How to Apply Online for a Time-to-Pay Arrangement with HMRC HMRC now allows eligible individuals and some small businesses to apply for a Time to Pay arrangement online, making the process quicker and more accessible. This service is ideal if you are experiencing temporary financial difficulties and want to spread the cost of your tax bill into affordable monthly payments — without needing to call HMRC directly. Who Can Apply Online? You can apply for a Time to Pay plan online if all the following conditions apply: You owe up to £30,000 in tax. Your tax return has been submitted on time. You are within 60 days of the payment deadline. You don’t have any other active Time to Pay arrangements. You can pay the full amount in monthly instalments within 12 months. If you meet these conditions, the online service is the quickest way to set up your instalment plan. Taxes You Can Pay with an Online Plan Self Assessment Tax (most common) PAYE (for sole traders) Corporation Tax or VAT may still require phone-based arrangements. How to Apply Log in to your Government Gateway accountYou’ll need your login details and your UTR (Unique Taxpayer Reference). Go to the HMRC Time to Pay portalApply for a payment plan Follow the on-screen steps Enter your tax owed Choose how much you can pay upfront (if anything) Select how many months you want to spread the payments over Review and confirm your arrangementIf accepted, your direct debit will be set up automatically. What If You’re Not Eligible? If you: Owe more than £30,000, or Need more than 12 months to pay, or Are outside the 60-day window …then you’ll need to contact HMRC directly by phone to request a manual arrangement. The Bottom Line Now that you have gathered a fair amount of information about the time-to-pay arrangement with HMRC, we can bring the discussion towards wrapping up. The business that is going through a struggling phase will have to prove the genuine reasons behind it to HMRC before expecting the payment plan and the flexibility of HMRC. We hope these few minutes of reading will help you to develop a better understanding and you will be able to deal with business struggles well in the future. Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for the time-to-pay arrangement with HMRC for your business in the UK. Disclaimer: The information about the time-to-pay arrangement HMRC for your business in the UK provided in this blog includes text and graphics of a general nature. It does not intend to disregard any of the professional advice.

Tax Fears and How to Solve them

Chris22/11/2022tax , Tax Issues , Tax Saving Tips

If you are a new individual associated with the status of self-employment, you need to know everything about your relevant tax implication to avoid ending up in the fluster. Putting off the tax liabilities is not recommended because you will have to deal with unfavorable circumstances. You will also screw up if you plan to leave your tax submissions for the eleventh hour. The best practice is to keep a good track of the income and expenses dates. The tax fears and how to solve them is the query of several beginners. You all must have experienced the stress of being new to filing tax returns. If you aim to breathe and live in the tax implications even at the first experience, this article is the right kind of search for you. Talk to one of our intelligent and clever professionals to get your further queries about tax fears and how to solve them. We will ensure to come up with the best possible solution. How Do Beginners View Tax Fears? For any individual who is associated with freelancing and offering the services like content writing, being a co-founder, influencer, and an artist, the first ear of tax returns is always stressful. This is because of the uncertainty and not being clear on what exactly to do with the process of filing tax returns. Beginners often find the atmosphere of the tax industry intimidating. Navigating the whole process of filing tax returns is quite a hassle for the first time. There are plenty of services and professionals that can help to reduce the tension in such a case. Five Tips to Help to Do the Tax Returns If you are a beginner in filing tax returns, you are not alone in this. The fears you might stress about are the common fears among people while dealing with tax implications. Here are the listed five popular tips for doing tax returns for the first time with less hassle and in a stress-free manner. 1- Focus on the Way Expenses Work Keeping a track of expenses and income is quite confusing in the middle of process for the beginners. What is the exact amount that is allowed for you to deduct from your taxable income is a big question especially when you are new. When you are sure about the expense that is associated purely with the business purpose like the training courses fees, the office furniture etc. Such an amount can be deducted from the income to ensure that the tax is paid on the profits only. If you still be unsure about the exact amount of your expenses, the easy way is to get in touch with HMRC to get your queries answered. 2- Keep Some Amount of Money Aside This is not suggested to wait for the eleventh hour and then be shocked about the amount of money you have been keeping for the sake of tax is less than what you actually owe. It is better to put some money aside on a daily basis maybe 20% of your earnings to be well prepared for the tax bills and payments on time. You can even use the tax calculator to get an idea of what is the amount you owe for the tax bills. 3- Keep a Track of the Deadlines The deadlines within the frame of a tax year are important to keep a track of. This will help you to be prepared for the payments before the time and you will be able to avoid any fines and late submission penalties. 4- Open a Business Account If you aim to make things easier for yourself, open a business account for yourself. Several free offers will benefit you in the process. However, you must ensure that the account is being used for the sake of earning and spending on the business activity. This will further help you to keep a difference between your personal spending and your business spending. When you will collect the data, you will find out that everything is in one place. 5- Record on Google Sheets The google sheet and the excel sheets will work for your ease to maintain the records. When the time of final submission will come, you will get the information in an organised manner. This will help you to have a clear picture of the amount that you have spent on the business and earned from the business. The Bottom Line Now that you have gathered a fair amount of information about tax fears and how to solve them, we can bring the discussion towards wrapping up. When you are new to filing a tax return, tax fears are common. However, if you keep yourself maintained and organised by using the tips discussed above, you will be able to experience a hassle-free process of filing tax returns. We hope these few minutes of reading will help you to develop a better understanding of tax and related fears as a beginner. As well as how to deal with them professionally in the future. If you seek professional help, learn more about tax fears and how to solve them. Why wander somewhere else when you have our young and clever team of professionals at CruseBurke? Disclaimer: The information provided in this blog is about tax fears and how to solve them, including the text and graphics, in general. It does not intend to disregard any of the professional advice.

The UK Royals Who Pay their Taxes

George21/11/2022tax , Tax Issues , Tax News and Tips , Tax Saving Tips

There is no denying that there are so many benefits of the Royal family in the UK. The joy of having almost free personal butlers, lavish properties, crown jewels, and corgis are some fantastic examples. However, there is a set of rules that are specified for the royal family members that make their lives a little strict than normal people. Are you wondering about UK royals who pay their taxes by now? One of the strict rules is to fulfill the requirement of paying tax. The only difference you will find out is that the royals do not spend hours and hours filing self-assessment tax returns. This blog is based on the discussion of everything that you need to know about the tax liabilities of the UK royal family members, how are they taxed differently than normal people, are they being taxed at all or not. This will help you to understand the explanation of the exact tax liabilities that are to be fulfilled by the UK royals. Reach out to our smart and clever-minded guys to get an understanding of the UK royals who pay their taxes queries answered quickly. We will help to answer your queries instantly. The UK Royals Who Pay their Taxes? We all know that people are often of the view that they do not have any tax liabilities at all, but this is not true. The implications of tax are a little different in the royal member’s case. No one from the royal family is considered to be exempted from the royal family. The tax implications of the royal family are considered to be more complicated than the normal people’s tax liabilities. If you are a beginner, this is imperative to understand that the royal family members are not taxed in the usual way as you do. This is because of the fact that the royals are not considered ordinary British citizens. So the tax is implicated differently too. Normal Jobs and the UK Royals – How are They Taxed Differently? A normal job like the ordinary citizen is not associated with any of the Royal family members. However, on behalf of the Crown Estate, there are a few responsibilities to fulfil for them as well. This Crown Estate is not under the ownership of any of the royal family members and not even the government. The hereditary possessions of The Sovereign in the right of the crown are considered to be something associated with it. Moreover, HMRC takes the responsibility of collecting the profits of the crown state. The fund share is then provided to the royal family members. Furthermore, Sovereign Grant is a way to pay the royal members. Crown state funds or any other relevant income that goes to any of the royal family members is not taxed and there is no tax paid on it. Precisely we can say that the royal family pay the government itself to provide them with the funds. This is why there is no tax on such funds. Are UK Royals Being Taxed at All? This is a myth that the UK royals are not obliged to pay the tax of any kind. The funds that are received from the government through Sovereign Grants are not taxed. The major reason behind that is that this money is going from the royals. In simple words, the royals are paying this money to the government to pay them. When it comes to the personal income of the royal family members, they are required to pay the highest tax band because they come under the relevant category of being high earners. They pay the council tax on the properties they own, vat, and road tax as well. Moreover, this is surprising to know how much council tax can be generated on royal properties like Buckingham Palace just because of being big in the size. As council tax, an amount of approx £1,500 is paid every year for the royal properties. So you can imagine how much is being generated by the royals. The Bottom Line Now that you have gathered a fair amount of information about UK royals who pay their taxes, we can bring the discussion towards wrapping up. The UK royals only get an exemption from tax on the amount that they receive through the Sovereign Grant. Otherwise, they are being taxed under the highest tax band because they are considered the highest earners. We hope these few minutes of reading will help you to understand the tax implications for the UK royal family members and whether there are any tax exemptions for them or not. Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly. Disclaimer: The general information provided in this blog about UK royals who pay their taxes includes its text and graphics. It does not intend to disregard any of the professional advice.

Everything You Need to Know About Living Abroad and UK Tax

Chris19/10/2022tax , Tax Issues , Tax Saving Tips

If you are a businessman who is carrying out a business in the UK, however, you are not living in the UK but you are someone who is settled abroad. There are chances for individuals who are not residing anywhere in the UK but they have their properties here and they are earning through making them as rental properties. You will have to deal with the different scenarios of tax implication by HMRC and you are dishing pit everything that makes you obliged to have an understanding of what to do when ‘pay UK tax when I live abroad. Reach out to our smart and clever-minded guys to get your pay UK tax when I live abroad queries answered quickly. We will help to let you decide about your annual accounts with a clear mind. How to Pay UK Tax When I Live Abroad? It all depends on the unique circumstances of your earning sources. In the case you are an individual who is earning through multiple sources in the UK, you will be in a position to be obliged for the tax implications in the UK. This payment could possibly be from savings, pensions, rental property, or a business. When you have settled abroad and might have a source of income in the UK by having a rental property, you are in a position to get the allowance amount of £12,570 in every tax year. In the same way, as you are entitled to get the benefits, you will be entitled to duties and responsibilities. This means you will have to pay income tax. Am I Obliged to Pay Tax in the Country I am Settled? As discussed earlier that the tax responsibilities and tax implications are a serious matter to HMRC and when it comes to tax affairs, there is a very slim margin provided by HMRC. This makes the scenario a little complicated because you will be in a position where you will have to deal with the tax implications of the UK and the other country where you are settled in. Moreover, the only exception will be there unless the country you are living in has a double tax agreement with the government of the UK. This is also known as DTA. A double tax agreement turns out to be a very beneficial agreement for saving individuals who have settled abroad but earn in the UK as well. This way, you will keep yourself away from the edible tax payments. In other words, we can say that you will no longer be required to pay the tax in both countries, and the tax authorities will spare you in case of DTA. It will make you apply for any one of the following: You will be able to get a tax refund if you have paid the double tax. You will enjoy partial tax relief. You can enjoy full tax relief. The Prominent Differences Between a Non-UK Resident and a UK Resident It is imperative to develop an understanding of the differences between the residents of the UK and the non-residents of the UK who are settled abroad. You will have to consider the following conditions to be called a UK resident: You are required to complete the duration of 183 days to stay in the UK within a tax year to be considered a UK resident. You will have to work for a minimum of 274 days within a tax year in the UK, and this should be your main job. You should have a property in the UK, and you must spend 91 consecutive days in that property you own in the UK. Moreover, when it comes to the tax terms for the residents and the non-residents of the UK. If you are a non-UK resident, you will have to pay tax on the income earned in the UK. However, if you are not residing in the UK but are considered a resident, you are liable to all tax implications in the UK and the other country. The Bottom Line Now that you have gathered a fair amount of information about paying UK tax when living abroad, we can say that it matters a lot to know whether you are considered a UK resident or a non-UK resident to relate to your tax responsibilities. This can vary from one scenario to another because every person is in a unique situation. We hope these few minutes of reading will help you to develop a better understanding and you will now be able to handle your tax affairs efficiently in the future. Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly. Call us or email us today. Disclaimer: The general information provided in this blog about pay UK tax when I live abroad includes its text and graphics. It does not intend to disregard any of the professional advice.

What is a Provision for Income Tax and How Do You Calculate It?

George17/10/2022tax , Tax Issues , Tax Saving Tips

People often take corporate tax provisions as they work as a safeguard for your business and keep you protected from the tax fines and penalties charged by HMRC in the case you have made a late tax payment. It is also referred to as the tax burden that you might face in the current year; generally, this is set aside until the payments are made. This is known to be a unique kind of provision as well. This depends on the industry that your business is associated with that will decide what is the possibility of creating provisions related to bad debts, sale allowances, pensions, and depreciation. However, people still get confused and this article has got you covered to develop a better understanding of what is corporate tax provisions, what is the importance of tax provisions, and what is the way to calculate them. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get ensured instant help whether you are running a small business or large. What is Corporate Tax Provision? The corporate tax provisions refer to the amount of money that your business is liable to pay in the current tax year. It is an expected amount of the tax burden of your business. On the main role the provision depicts the main tax burdens of your business, however, on the other hand, it provides protection to your business from the charging of late payment fines and other relevant tax penalties. We all wish to have precise and complete details of our tax implications. The tax provisions are able to provide the most precise estimate possible for your business. Here are the current corporation tax rates and bands: £0–£50k profit: 19% small profits rate £50k–£250k profit: sliding scale via marginal relief Profits over £250k: 25% main rate In spite of the estimated provisions, the businesses tend to keep some buffer amount set aside. This kind of amount of money that is taken out from the business is referred to as income tax provisions. This will further help in the process of calculating the gross income of the company and what are the tax rates applicable to your unique situation. After the process is completed, the final figure is usually rounded off. The calculation steps might involve the following: Calculate the net income of your current tax year. You need to consider the tax rates that are relevantly applicable to you. Next, you will have to multiply both figures. Finally, you can add a small buffer. Moreover, this might sound simple to you; however, the calculations become a bit complicated practically. What is the Method to Calculate Corporate Tax Provisions? When you aim to identify the accurate amount you are liable to pay as your income tax, the process can be time-consuming. You will have to consider the involvement of the relevant professionals while you spare the time to grow your business valuations and work for the betterment of your business’s financial position. It is always a better idea to have an understanding of the corporate tax provisions when you plan to carry out your business. It is advisable to have a breakdown of the tax provisions and get an analysis of how other companies are handling the income tax and financial statements. Main Aspects of Tax Provisions The calculation of tax provisions is indeed a complicated process. This is because there is a difference between the procedures of Generally Accepted Accounting Principles and the rules of income tax accounting. However, most of the departments related to accounting follow the rules of Generally Accepted Accounting Principles. There are chances of a slight difference between the figures of the owned income tax amount and the estimated amount. Before delving further into the discussion, let us have a look at the two main aspects of the tax provisions as they are listed and explained below. 1- Current Year Income Tax Expenses By the term current year income tax expenses we mean the overall amount a business owes to HMRC. It involves the calculations of the current earning figure and the differences between calculations, whether they are permanent or temporary. The differences do not tend to reverse normally, so there should be a serious consideration while you are in the middle of the calculation procedure. Especially when your business is registered for the purpose of income tax. This might allow the factors of discrepancy in the results that you will regret later, so it s better to be accountable for them now. 2- Deferred Year Income Tax Expenses The deferred income tax expense refers to the cost that is considered a liability on the business balance sheet; however, it is not yet paid. It is also known as the opposite of the assets that belong to deferred tax. You can easily get it by calculating the difference between the rules of income tax and your company’s accounting rules. The Bottom Line Now that you have gathered a fair amount of information about corporate tax provisions, we can say that the provision of corporate income tax is a complicated procedure to make accurate calculations, even though the process and method might seem easy and simple to you. Sometimes it even requires the involvement of professionals to get accurate results. However, there is always a little difference between the estimated figure and the final calculated figure, which is usually because it is rounded off as discussed earlier. We hope these few minutes of reading will help you to develop a better understanding of tax provisions and how they work for your business. This will further allow you to handle your tax affairs efficiently in the future. Are you seeking professional help to know corporate tax provisions for a small business? Why not get help from the experts at the CruseBurke? Talk to us now! Disclaimer: All the information provided in this article on corporate tax provisions, including all the texts and graphics, in general. It does not intend …

How You Can Have Tax-Free Income of £18,570 from Savings?

George14/10/2022Personal Tax , tax , Tax Saving Tips , Taxation

How much income is tax-free if you are saving from your income and earning interest on it? Many people in the UK put some savings aside and earn an interest rate on them. However, they have no idea about the tax-free income from savings they can have. Interest in savings is a good source of earning additional income in the UK where the cost of living is increasing every day. However, this income is also not tax-free. You have to pay tax on this income too. Just like income, there’s an income allowance, you can have multiple allowances on your savings as well. If you’re also one of those people who have no idea about allowances and tax-free savings incomes, then we have got you covered. In this blog, we will walk you through different types of tax-free allowances and how you can get the maximum tax-free income from your savings. So, let’s start! Do you need help in sorting out your tax problems if you are self-employed or working with an organisation? Let’s get instant help from the qualified financial experts at CruseBurke. Tax on Interest Income Many people in the UK keep their savings either in cash Individual Savings Accounts (ISAs) or in bank accounts. For this, they earn a certain percentage of interest rate on these savings. HMRC offers tax-free allowances to these people who save. Cash Individual Saving Accounts (ISAs) are free from taxes and anyone can have these savings accounts without paying any tax on them. However, other savings are eligible for taxes in the UK after certain allowances. These allowances are as follows: Personal Allowance Starting Rate of Saving Allowance Personal Savings Allowance Personal Allowance (PA) HMRC covers all the income received from all sources of income. If you have multiple sources of income, including interest income, you will get a personal allowance after calculating the total income from all these sources. You cannot get a separate personal allowance for each source of income. In other words, you will get only one personal allowance on the total income you received in a tax year. You will get a personal allowance of £12,570 after the calculation of the total income. The rest of the income will be taxed according to the tax bracket in which your income falls. Starting Rate For Savings (SRS) Starting rate for savings is zero percent for the people earning a low level of income. On the other hand, the starting rate for savings is tax-free up to £5,000. It is calculated after the calculation of the personal allowance. For example, if your income is £16,500 and you get a personal allowance of £12,570. The remaining income will be: £16,500 – £12,570 = £3,930 Now, you can calculate the starting rate of savings that is tax-free as follows: £5,000 – £3,930 = £1,070 It means you can have £1,070 from the interest income tax-free. For example, if you are earning £50 as interest on your savings, it is tax-free as it is within the limit of the starting rate of savings, that is now £1,070. Personal Savings Allowance (PSA) Personal savings allowance is another tax-free allowance on the income earned from the interest on savings. Personal saving allowance is fixed for different tax bands. For example, Personal Savings Allowance for Basic Rate Tax Payers is £1,000 Personal Savings Allowance for Higher Rate Tax Payers is £500 Personal Savings Allowance for Additional Rate Tax Payers is £0 In other words, if you are earning more than £12,571 and less than £50,000, you are paying 20% income tax on your income. However, you can get a Personal saving allowance of £1,000 on your interest income. On the other hand, you can get £500 Personal Savings Allowance, if you are a higher rate taxpayer. Unfortunately, you cannot get any PSA on your savings if you are a higher rate taxpayer in the UK. How Much Income is Tax-Free on Savings? If we calculate all of the above allowances for a basic-rate taxpayer, you will get a total tax-free income of £18, 570. For example: Tax-Free Income = Personal Allowance + Starting Rate For Savings + Personal Savings Allowance Tax Free Income = £12,570 + £5,000 + £1,000 = £18,570 The Bottom Line Finally, we can say that you can earn more tax-free income if you earn interest on your savings. However, you have to pay no tax if you have saved your income as cash ISAs in the UK. Otherwise, you will get a personal income allowance, a starting rate of savings and a personal savings allowance. For this, you need to work out your total income and calculate the tax-free savings income. You need to keep all records of all your sources of income and tax receipts to claim tax-free income from the HMRC. Experienced and certified tax advisors at CruseBurke are the experts in UK tax laws and able to deliver the best tax solutions to you. Feel free to contact us now! Disclaimer: All the information provided in this article on How Much Income is tax-free, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.

A Guide About Tax-Free Rent-a-Room Scheme

George12/10/2022Tax Issues , Tax Saving Tips

People are always interested towards the idea that are useful for making a few extra pounds. Are you also the one who is seeking such profitable ideas these days? You are on the right page if so. One of the brilliant ideas for improving your bank balance is the rental income that you can make just from the comfort of your home. If you take a house visit and focus on that spare room that can help you increase your earnings. The rent-a-room scheme is for your suitability and you can sign up without any difficulty. This will allow you to enjoy an immediate increase in your income. Also, there is an opportunity for you to have an amount of income that is totally tax-free. The limit of tax-free amount is £7,500 in one tax year. If you are still wandering and need your queries answered for the rent-a-room scheme, we have got you covered here. Further, the discussion of this article involves the points like what is a tax-free rent-a-room scheme, what is the eligibility criteria, and what are the advantages of this scheme. Reach out to one of our professionals to get to know the rent-a-room allowance for your business. We will love to offer instant help! What are the Eligibility Criteria for the Rent-a-Room Scheme? This scheme is open to the tenants who have the option of the main home available for lodgers and furnished accommodation letting. Also, the owners and occupiers of the property can avail of this opportunity if they have any spare room for this purpose in their main home. Even the portion of the main house can be a perfect fit for this purpose. This venture allows the owners to enjoy an amount of £7,500 that is tax-free within the duration of a tax year. If the property is owned by the partners or in the case of jointly owned properties, the amount becomes £3,750 for each partner in the scheme. Several people confuse this with the condition to be the homeowner. That is not the case at all. Even if you are the tenant yourself and you have a spare room in the main house, you can avail yourself of the opportunity to enjoy the tax-free amount. You can simply rent the room to a lodger, however, you are bound to seek the permission of the owner. What are the Prominent Advantages of the Rent-a-Room Scheme? There is no doubt that this scheme brings in a lot of benefits it is a great source to provide accommodation for the lodgers as well as to supplement your income. However, when it comes to the benefits there are certain effects that are mean-tested. In the following, these are listed and explained. 1- Rent-a-Room Scheme and Housing Benefits This scheme affects if you are working as a social housing tenant. A lot of it also depends on the tenant who is getting the room and how is he classified. Subtenants and the broader are two classes in this regard. Sometimes the tenants avail the option of getting prepared food along with the room, such tenants come under the category of broader. On the other hand, when the tenant is only interested in availing of the room and not the prepared food, the tenant will come under the category of a subtenant. You need to get the categories classified vigilantly as it will affect the income. 2- Council Tax Reduction Some people are making a living on their own. Now they decide to use that spare room for the tenants. If such an individual is availing the benefit of a 25% single-person Council Tax Reduction because he qualifies for it, he is not allowed to have a tenant otherwise he will stop getting the discount since he no longer qualifies for this with a tenant. 3- Rent-a-Room Scheme and Universal Credit People who are on universal credit earned money through the sources of lodgers and sub-tenants will not be a part of the income up. This means no tax-free allowance amount will be up for you. This will make it a possible option for you to supplement your income. How to Opt-In or Out of the Rent-a-Room Scheme? In case the amount of money that you are earning through the source of renting a room and this earned amount is less than the threshold, tax exemptions will be automatic for you. You will not be required to do anything in this regard. On the other hand, if you are making more money than the limit threshold, you will be liable to file tax returns. Consider doing any one step from the following mentioned points: Decide to opt into the scheme. You will have to inform HMRC about this and make a claim while you are submitting your tax returns. This will let you enjoy your tax-free allowance. If you decide not to opt into the scheme, you will have to maintain a record of your expenses and income on the property pages while doing the tax returns. The Bottom Line Now that you have gathered a fair amount of information about the rent-a-room scheme, we can say that this scheme is a wonderful way to earn extra money and increase your monthly income, however, there are certain points to consider to check if you are qualified according to the eligibility criteria. To enjoy the availability of the scheme will demand to fulfil all the required standards whether you are the owner of the property or living as a tenant. We hope these few minutes of reading will help you to develop a better understanding and handle your tax-free allowances well in the near future. Get in touch with our young, clever and tech-driven professionals if you want to choose the best rent-a-room scheme for your business. Disclaimer: The information about the rent-a-room scheme provided in this blog includes text and graphics of general nature. It …