Tax Saving Tips Archives - Page 8 of 9

SDLT Multiple Dwellings Relief – A Beginner’s Guide!

George / 11/08/2022

People often wonder about available reliefs to offset their taxes when it comes to purchasing or selling a property. We will delve into the discussion of SDLT multiple dwellings relief, which will help you to learn about offsetting the payments of stamp duty when you plan to make a purchase of several properties at the same time. In such a case, the transactions are also done in the same go. This guide will help you gather imperative information about what SDLT multiple dwellings relief is, how you can be eligible to qualify, and the method to claim MDR. This will help you reduce your Stamp Duty Land Tax. We recommend finding professional help to further learn about SDLT multiple dwellings relief. Talk to our guys and get your queries answered quickly. What Is SDLT Multiple Dwellings Relief? Have you planned to purchase several properties in one transaction? Let’s take the example of an individual who is interested in buying properties from a developer, it can be multiple flats in one transaction. Or an individual who has planned to transfer his properties to a limited company. You have a chance to reduce your tax bills and save money with the help of multiple dwellings relief. Moreover, with the help of multiple dwellings relief, it is calculated on the average value of your property. The implementation of SDLT is then the rate is related to this average figure now. You are not considering the price of an individual property or the total price of a property purchase. This saves your amount of money and helps to reduce your tax bills. Several people get confused with the term dwelling. In simple words, a dwelling is known to be a flat or a house that provides living shelter to people. Moreover, regarding multiple dwellings relief, HMRC defines dwellings as a suitable building for one household. The properties that are in the process of construction are also considered dwellings according to HMRC. There are a few types that can come on the list of multiple dwellings relief. See the following listed options: The property is mixed-use like a flat that has shops with it. An annexe that is self-maintained and was bought with the main house. Flats and houses that are purchased in bulk. How to Qualify For Multiple Dwellings Relief (MDR)? There is a condition for purchasing two or more properties or dwellings in other words. This process has to be completed with the same transaction. The other option could be a series of linked transactions that are allowed to make you qualify for making multiple dwellings relief. In case a person is up for buying properties that are 2-5 in number. The condition of the residential property will be applied. On the other hand, if the person is up for buying multiple properties that are 6 or more in numbers. The property could be possibly for commercial purposes or residential. You can opt for no residential SDLT rates that are comparatively lower than the rates of residential SDLT. Introduction of A Linked Transaction When the process of buying multiple properties is carried out, the seller and the buyer remain the same in this condition. That is when it comes to the use of linked transactions. Transfer of personal property to your limited company is one such example. It is possible with the help of liked transactions that the value of all the properties is put together and that’s the figure on which SDLT will be applied. However, the disadvantage of this scenario is that the tax bill will turn out to be higher in comparison to an individual property. This makes multiple dwellings relief a better option to apply to like transactions. Learn to Claim Multiple Dwellings Relief You can save a lot of thousands from stamp duty by applying for multiple dwellings relief. It is advisable to reach out to a solicitor when you are buying a property to claim multiple dwellings relief successfully. In some cases when people overpay in form of stamp duty and realise it later. You have the option of retrospective multiple dwellings relief for a year. The starting date will be the date of filing the case. Moreover, there will be a requirement to provide solid shreds of evidence for multiple dwellings. The property floor plan and surveyor’s report can help in this matter. You should get help from a property tax expert in case you do not find a reliable solicitor. The Bottom Line Now that you have gathered a fair amount of information about SDLT multiple dwellings relief, we can bring the discussion towards wrapping up. It is important to have a basic understanding of multiple dwellings relief to reduce your tax bills and the amount of money you pay as stamp duty. However, the crucial criteria to qualify call for an expert’s help for seamless processing and to make the claim successfully. Most people tend to get the help of solicitors in this regard without knowing the fact that some of the solicitors are not good at handling such a case. It is suggested to speak to a property expert in this case. This way you will keep yourself protected from overpayment of stamp duty and go under the processor to get the overpaid amount back. We have these few minutes of reading that will help you to handle the SDLT multiple dwellings relief well and it turns out to be advantageous for you. Get in touch with our young, clever and tech-driven professionals if you want to know more about the SDLT multiple dwellings relief and how does it work? Disclaimer: The information about SDLT multiple dwellings relief provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

Tax Issues, Tax Saving Tips

A Basic Guide About Taxable State Benefits!

George / 26/07/2022

People are often confused about the way tax is paid when it comes to taxable state benefits. We all know that it is a little complicated tax affair to understand well. If you are among such a group of people, we are here to help. In the case you are lucky enough to get the state benefits, it is mandatory to be aware of the relevant facts about it and they are important. Be aware of the information that even if the state benefits are taxable, there is no amount of tax that will be taken off at the source. One of the reasons that may be the relevant person is below the threshold and is not eligible to pay the tax according to tax rules. On the other hand, when other sources of taxable income like your main employment source are considered too. In such a scenario when you are getting the state benefits and your threshold goes above the limit, you have to pay the tax on your taxable income. We have covered the basic details for you to develop an understanding of taxable state benefits and how to inform HMRC about it. Reach out to one of our experts to know more about the taxable state benefits. Call us on 02086868876 or email us today. We will offer instant help! How to Understand what Are Taxable State Benefits? It might sound surprising to many of you that a few of the state benefits are taxable for sure. The state pension is one fine example of taxable state benefits. However, you need to be well aware of the list of state benefits that are taxable and non-taxable to avoid any overpaid tax and other mistakes. A few examples listed below for you can be taxable only when you have paid based onset of the national insurance contributions. Allowance of Jobseekers (JSA) Employment and Support Allowance (ESA) Moreover, there are chances for the same state benefits to be non-taxable if there is any involvement of means tested. Your financial situation matters here a lot. You need to keep a vigilant eye on the receipt of the state benefits because this can affect your ability to claim universal credit or tax credits. If you still seek further about it, GOV.UK provides a wide range of informative discussions about it. You can gather accurate knowledge about the specific benefit that you are associated with. This is an integral part as it will keep you protected from the overpayments of tax and your ability to claim the refund in case you need it. How To Let HMRC Know whether I am Getting the Taxable State Benefits or Not? It is the responsibility of DWP which is a department of work and pension to be in touch with HMRC to let them know about state benefits every individual is getting. We will take an example of daily updates that the department of work and pension is liable to communicate to HMRC that explains they are starting pension for a particular individual. This includes the details of the payable amount of money and the required date to pay it. They can even advise the changes that have to be made in the amount of pension. The system of giving advice is slightly different when it comes to annual increments. However, the advisable words are to reach HMRC in advance to make the required changes before the payments are calculated. The system works in the same way in the case of JSA and ESA. Moreover, know that the other state benefits in the list are not following such a smooth system. Therefore, it is advisable to get in touch with HMRC when you are getting any other taxable state benefits. This will avoid any uncertainty about your tax bills. Your national insurance number has to be correct to keep everything going smoothly. This will ensure that other records are linked promptly. How Are State Benefits Taxed In The UK – JSA and ESA? The set of rules is very special when it comes to the state benefits like JSA and ESA. The popular state benefit that is taxable is considered to be the state pension. This is important to state that PAYE is not even operated on state pension by the department of work and pension. In case an individual has more sources to gain income and the payment is made through PAYE, HMRC tends to collect the due tax on the taxable state benefits. The code that your pension provider or the employer uses will be changed. The state benefits you are getting will not come under the coding notice automatically. So you are liable to speak to HMRC about it. The following points are important in the process: It is not an easy task for even HMRC to ensure that all the tax amount is collected using your PAYE code. In other ways, the simple assessment is issued by HMRC to collect the due tax. You can be required to complete the self-assessment tax return for this purpose as well. The collection of the due tax is considered a part of the calculation self-assessment. The Bottom Line Now that you have gathered the required information about the taxable state benefits, we can bring the discussion toward wrapping up. There is no doubt that the process of ensuring the due tax is collected and the taxable state benefits is a complicated task. However, if the advisable instructions are followed religiously by all the individuals getting the state benefits, it will be a lot easier for HMRC to complete the process. We hope the gathered information has helped you to develop a better understanding. Are you stuck with your tax affairs? Why don’t you speak to our young and clever team members and get your queries answered quickly? Call us on 02086868876 or email us today. Disclaimer: The information about the taxable state benefits provided in this

Dividend Allowance, Finance, Insurance, Tax Saving Tips

How to Claim PIP Successfully?

George / 22/07/2022

Are you an individual who is looking for income support because of an illness, mental health condition, or disability? You can be the one who can get help from Personal Independence Payment (PIP) can able to know how to claim PIP successfully. If other support schemes have denied your support in these challenging times, you can try to claim Personal Independence Payment. There is confusion among people that to be eligible for Personal Independence Payment, you need to pay the national insurance. This is not at all the case. Moreover, to claim Personal Independence Payment, you don’t even have to be a working individual or save any kind of money. However, in the case of terminal illness, the rules are a bit different to be eligible. In this guide, you will be able to gather information about the eligibility criteria to claim PIP, and what is the process of claiming Personal Independence Payment. Reach out to our young, clever and tech-driven team members to learn the eligibility criteria for Personal Independence Payment. How to Claim PIP Successfully? If you have decided to claim PIP successfully, it is vital to have an understanding of the process to make it a successful journey. Generally, the proclaiming aim about PIP is considered in three steps. These basic steps are listed and explained in the following: The first thing to do is to get in touch with the department of work and pension. You will be required to fill out the form named PIP1. This part can be done over a phone call as well. Next, you have to explain how your disability has affected you and your income. You can choose the online forum or email to do so. If you want to do it on paper and post it, that is a possible option as well. You will be required a medical assessment. Moreover, consider that it can be a process of 6 months from the moment you initiate it till you receive your first Personal Independence Payment. If the DWP find you the neediest, you can even get their first payment from the day you started the claim process. There is no such possibility of getting the amount before the date you made the claim. Get in Touch with DWP (Department of Work and Pension) It is advisable to be in touch with the department of work and pension over a phone call. This is a swift process rather than writing an email and waiting for a response. If the DWP find you eligible, there are chances that you get the payment right from the date of a phone call. Before you plan to make a phone call and get in touch with them, have the following information available to you: Dates and details in case you have stayed somewhere abroad for more than a month during the past three years. Immigration status or the details of your nationality If you have stayed in residential care or at a hospital, have the details with you. If there is a health professional who is dealing with your health matter, have his contact details. Account details of your bank or the building account details National insurance number your basic details that include your address, phone number, and name. The process over a phone call takes about 20 minutes. If you are comfortable someone can talk on your behalf. However, you should be around them to grant the permission and required information. The department of work and pension can even ask you if you need the forms through posting or online medium. Moreover, they will investigate your mental health and other medical conditions just to be sure that whether you need any additional support with the PIP or not? Eligibility Criteria to Claim PIP The main point to be eligible as per the PIP criteria is to have a medical condition that is a hurdle in your day-to-day tasks. This could be a physical condition as well as a mental condition. The major and prominent points to meet the required standard of the eligibility criteria of PIP include the following listed points: This condition must be with you for three months and will be there for the least nine more months. You are required to be a resident of Scotland, Wales, or England. Your age should be 16 or more to be eligible for Personal Independence Payment. In case you have reached the age of state pension, there are a few exceptions in the set of rules. The Bottom Line Now that you have gathered a fair amount of information about how to claim PIP successfully, we can sum up by saying that the process of making a claim is not very complex and you can easily handle it seamlessly on your own. However, you must consider the required standard to be eligible to get the money from PIP. Your queries will be answered when you will get in touch with the department of work and pension as well. The easy and swift way is to communicate over a phone call and they will even offer to fill the forms if you are ok with providing the necessary information. This possibly will take around 20 minutes and you will be done with the process. It has been observed that the deserving individuals start to get the money right after initiating the process of claim if they meet the required criteria. We hope these few minutes of reading will be helpful for you to check if you qualify according to the required eligibility criteria as well as how to initiate the process of claiming PIP. Get in touch with one of our experts if you are stuck with your Independence Payment We will offer to provide instant help. Disclaimer: The information about how to claim PIP successfully provided in this blog includes text and graphics in general. This does not intend to disregard any of the professional advice.

Tax Issues, Tax Saving Tips, Taxation

A Beginner’s Guide About Tax when You’re Self-Employed!

George / 15/07/2022

The basic information about self-employment tax and insurance is often confused among people. As a self-employed person, you are responsible for paying income tax and class 2/class 4 national insurance. You must ensure to stay on top of record maintenance, as this will help you to pay the right amount of tax and will save you from troubles in the future. To know the exact amount that you are liable to pay as tax, you have to identify your exact employment status. By this, we mean to know whether you are employed or a self-employed individual. This might sound like a straightforward matter; however, identifying the employment status becomes a complex question at times. This happens when you are employed for your first job and also registered as self-employed for your second source of income. If you are wondering about your employment status by now, you will get your queries answered in the discussion further. Are you a sole trader or self-employed and want to have another business in the United Kingdom? Whether you’re managing one business or juggling multiple ventures, make sure you’re registered the right way. It’s easy and quick to Register as Self-Employed with CruseBurke. Identify Your Employment Status If you wish to be more clear about your employment status and self-employment tax, you can use the tool that has a series of questions to identify your exact employment status. This is offered by HMRC. You need to be aware that this tool only works as an indicator. Here is the link to check employment status for tax. Moreover, this is mandatory that you get yourself registered immediately when you become a self-employed individual. In case of delaying the registration, you will have to deal with the penalty. Tax-Free Earnings when You’re Self-Employed This does not matter if you are employed or self-employed in the case of tax-free earnings. You will be eligible for just the same tax-free allowance as an employed individual. In the year 2025-26, the standard personal allowance is £12,570 for every £2 of the amount that you make over the amount of £100,000. This depends on how much earnings you can make. Consider this before you plan to pay the income tax. In the case, your earnings go over the figure of £100,000, the figure of standard personal allowance is £12,570 in the tax year 2025-26. On the other hand, if you are doing two jobs and one of them is self-employed, the case becomes a little complex in this scenario. You are eligible to get only one personal allowance. This depends on HMRC as to how they views your source of income. As well as which one is considered the main source of your income. Usually, people consider their main employment according to their earnings. By this, we mean to consider the job that is giving you more earnings as your main employment. Moreover, the tax code is a simple way to figure this out and be clear about your main employment. Self-Employment Tax for Self-Employed Individuals You are liable to pay tax on the trading profits you are making from your business, in case you are a self-employed individual. Several people confuse paying the trading tax on the total income, but it is not the case. However, the question that arises here is how to work out what your trading profits are. This can be calculated through a simple formula. Simply, you can deduct your business expenses from your total income. The figure you will get after this will give you the amount on which you have to pay the tax. In case you are a self-employed individual, you will pay the same amount of income tax as you do for your employed income. Are you now wondering about the rate of income tax? This also depends on the amount of money you make as earnings. In case your limit is somewhere between £0 to £12,570, you will have to pay no tax on the trading profits you are making. If your limit is between £12,571 to £50,270, you will pay 20%, which is the basic rate of tax on the trading profits. In case of the higher rate, you will pay 40% tax on your profits if you are between £50,271-£150,000. Furthermore, if you cross the limit of £150,000, you will have to pay additional tax. That is 45% of your trading profits. Always remember to consider your tax bracket when you plan to pay the tax. It is vital to understand what is the tax rate according to your trading profits to pay the right amount of tax. National Insurance for the Self-Employed From April 2024, Class 2 NICs have been abolished. In 2025–26, self-employed individuals pay Class 4 NICs at 6% on profits between £12,570 and £50,270, and 2% on profits above that. The Bottom Line In conclusion, we can say that paying the right amount of tax is a complicated process. You must be aware of the right tax bracket according to your trading profits to make the process error-free. Moreover, you must realise the amount of profit in which your earnings become tax-free as well. This information will protect you from future troubles and any kind of penalties. We hope this gathered information will be helpful for you to develop a better understanding and deal with your tax affairs in a more professional way. Get in touch with one of our team members to know more about the tax percentage if you are a self-employed individual. We will ensure to provide the best possible tax advice for your business. Disclaimer: The information provided in this article about self-employment tax includes text and graphics in general. It does not intend to disregard any of the professional advice.

Personal Tax, Tax Issues, Tax Saving Tips

Understanding the Basics of Self Assessment!

George / 27/06/2022

Are you seeking help to gather information about the basics of what is self-assessment? Every year, this process will help people to pay taxes with HMRC. This system is set up for the use of HMRC to have a fair collection of tax. The usual practice is that the automatic deduction of the tax is done from the amount of pension, savings and wages. In the case of the companies and individuals associated with any kind of business get the income through other ways as well, they are required to report the other ways of earning in the tax returns also. If you’re a business owner regardless of the size of your business, your annual earnings are sent through a report to HMRC. The process of self-assessment tax returns has the part of details that explains all the possible sources that give you earnings. The process is named self-assessment because it involves the list of responsibilities to make calculations of the tax amount that your business owes. Further in this blog, we will explore the introductory explanation of self-assessment along with its required timeframe and what will be the condition if you are not liable to pay any kind of tax. What is Self Assessment Self assessment refers to a way of bringing the information about your gains and taxable income for the time duration of the tax year. This is done by completing the process of self-assessment tax returns. The major concern of the process is to work out and calculate the amount of money that you owe to pay as tax returns. Our young and clever team of experts offers the best possible solution to your tax problems. Get in touch today to discuss your queries and enjoy instant help. Call us on 02086868876 or email us today. Timeframe of Self Assessment Tax Return The requirement is a compulsion if you have received a notice that explains you have to pay the tax returns. The situation can only turn around if HMRC decides to cancel the tax returns, otherwise, you have to go through the process. In the case of an income source that is untaxed, even then you are required to do the process of tax returns. The most common situations in this regard include the following: When your role is of a partner in the business. As a director role of the company, you get the income and the tax is due on that. However, under PAYE the income is not taxed. You have a source to get saving income that comes under untaxed income. HMRC still aims to get the tax amount and even when you are not in the process of tax returns. You are associated with the capital gain tax that is not paid as yet, this makes you bound to pay the tax. If you are getting child benefits, you have to pay the tax in that amount as well. Furthermore, there are several other points added according to the difference in situations in the process of tax returns. There is a tool offered by the government of the UK that helps you to be more clear about your tax return calculations. The question that arises here is how is this possible? The tool puts different questions for you to answer. The collected information from your answers will help to explain the results. This will help you to know if you have to complete the tax returns or not. What Is The Requirement if I Don’t Have Tax to Pay? People often get confused if they are not bound to pay any taxes, they think that there is no requirement for the tax returns as well. Unless the tax return requirement is not cancelled by HMRC, you have to make the process complete. This does not matter what are your circumstances. In a case where there is no notification sent to you for the process of tax returns, you are liable legally to get HMRC informed that you have to complete the process. This is because you are liable to national insurance, capital gains and income tax. This way you will get the notification of tax returns on time and you can begin the process as well. This process will further keep you protected from any kind of late fines, hidden charges and penalties. Moreover, there are chances to have exceptions that have different obligations. One such example is the income that is taxed fully under PAYE and there are no gains that are chargeable. The Bottom Line We can bring the discussion towards wrapping up as you have gathered a fair amount of information about the basics of what is self-assessment. We can sum up by saying that you might need a professional to make the right and error-free calculations of your tax returns. This is because the process of tax returns is considered to be quite complex. To ensure seamless processing, these few minutes of reading will help you to do the task well. We further hope this blog has helped to develop a better understanding of self-assessment tax returns. Learn more about tax returns and self-assessment with our professionals at CruseBurke. We will love to hear about your problems and offer the help you are looking for. Disclaimer: The information about what is self-assessment provided in this blog is general in nature. It does not intend to disregard any of the professional advice.

Tax Issues, Tax Saving Tips, Taxation

A Guide Based on Key Ways to Reduce Corporation Tax!

George / 20/05/2022

If a business owner aims to find key ways to reduce corporation tax, he can find more than 100 ways to do so. The will of reducing the taxes will help find a way. In this comprehensive guide, the smart and easy keyways are narrowed down for you which will be really helpful. Especially in the case of owners who carry out small businesses, there are multiple options to do so. If you are in the UK and associated with the business world the chances of reducing your taxes are even higher. There is no need to panic as according to research there are actually 32 ways to reduce the tax with the owners who carry out small businesses. Let’s discuss the most prominent keyways here to make the deadly tax year-end a little relaxing. Pay Your Civil Partner or Spouse In case you tend to pay your civil partner or your spouse for working without business as a salary. This will come under allowable expense and will save you from the tax bills. Consider the following ways to make it possible: Your spouse or civil partner earns an amount that is less than the amount of income tax-free allowance. The process will be free of tax and the amount goes straight into their pockets. This will help to grow family wealth and reduce taxes. So get ready to treat your family to some family trips with this smart earned amount. Moreover, in the case of a family member having shares in the business, he can additionally get the tax-free amount of dividends. This way makes it possible to extract some amount from your limited company and pay no tax on it. Furthermore, it is important o follow the right share structure for your business if you want to avail such benefits from the company. Our young and qualified team of professionals can actually give easy solutions to your tax problems. So pick up the phone and reach out to us now for instant help. Call us on 02086868876 or email us today. Gift Shares to Family It is to be considered that while you decide to gift shares to any of your family members, there is the possibility of tax implications. However, this is still worth doing as you will definitely be in a win-win situation. Employ Your Children Several people who are even carrying out their own business are unaware of this option and the possibility. This is important to know that your child should be over the age of 13. Some conditions for the working hours have to be followed as well as the child has to practically do some work for your business. Furthermore, a fair commercial rate can be given to the child. There can be a discussion on if you are paying your children, should it be a tax-deductible amount or not. Pension Contributions For those who are tired of dealing with the high tax rates, this one is the best solution to go with. The contributions we make for pensions are normally free of tax. Business and Personal Assets Sometimes businessmen use their own personal assets for the business. In order to reduce the tax liability there is a possibility to make a claim. An example of such businesses where you are using your gadgets like a laptop and mobile phone are considered as personal assets. You can make a claim for this personal asset. Wrapping Up Finally, the discussion of ways to reduce corporation tax can be summed up as the important information is well gathered and discussed in the guide. Dealing with taxation is often considered a complicated process, business-related individuals usually seek professional help to get rid of paying high amounts for tax bills. We hope these few minutes of reading will further help you to make smart and accurate choices to save your amount from paying taxes over the end of the financial year. If you are looking for a helping hand to talk about taxation, we offer a one-hour free consultation. Call and discuss your requirements with us for an instant solution. Disclaimer: The information about ways to reduce corporation tax provided in this article is general in nature. It does not intend to disregard any professional advice.

Budgets & Other, Tax Issues, Tax Saving Tips, Taxation

Second Job Tax: How to Pay Tax on Second Job

George / 20/04/2022

Wondering about second job tax and how it might affect your income? If you’re thinking about taking on a second job, it’s important to understand how taxes work—so you don’t underpay or overpay. Whether you’re doing it for extra income, to support your household, or simply because you enjoy it, knowing your tax responsibilities will help you avoid surprises. Let’s explore the basics, how much tax you pay, and how to stay on top of it all. The Basics: Can I Take a Second Job? Before you start working a second job, consider these important points: Check your current employment contract. Some employers include clauses that restrict taking up additional employment, especially in similar industries or if it might affect your performance. Understand the working hours. Taking on more hours may affect your wellbeing or work–life balance. You must be paid at least the National Minimum Wage in both jobs. There’s no law stopping you from having a second job, but make sure it doesn’t breach any of your primary job’s terms and conditions. How Much Tax Do I Pay on a Second Job? In the UK, HMRC considers your highest-paying job as your main job and applies your personal allowance (£12,570 for 2025/26) to it. Your second job is usually taxed at the basic rate (20%) from the first penny you earn, as it doesn’t get any personal allowance. This is done using a tax code—typically: BR (Basic Rate – 20%) D0 (Higher Rate – 40%) if your total income is above £50,270 D1 (Additional Rate – 45%) if your total income is above £125,140 Example: If you earn £10,000 from your first job and £6,000 from your second job: Your first job will be tax-free (under personal allowance). Your second job income will be taxed at 20% using BR code. If your total income from both jobs pushes you into a higher bracket, HMRC may change your second job tax code to D0 or D1. How to Avoid Underpaying or Overpaying Tax To stay accurate: Tell HMRC when you start a second job so they can assign the correct tax code. Provide a P45 from your first job or complete a starter checklist for the second job. Check your tax codes on your payslips. Your main job should have a code like 1257L, and your second job should have BR, D0, or D1 depending on your income level. Review your income regularly to ensure you’re not pushed into a higher tax bracket unknowingly. Can I Split My Personal Allowance Between Jobs? Yes—but only if your total income from both jobs is below the personal allowance (£12,570). You can ask HMRC to split your personal allowance across both jobs so you don’t overpay tax. You’ll need to contact HMRC to arrange this. National Insurance (NI) on a Second Job You also need to consider National Insurance contributions: You pay NI separately on each job. If you earn more than £242 a week in either job, you’ll pay Class 1 NI at 12% (for earnings between £242–£967). If you’re self-employed for one job, you’ll pay Class 2 and Class 4 NI through Self Assessment if profits exceed £1,000 per year. What If My Second Job is Self-Employed? If your second job is freelance or self-employed: You must register for Self Assessment with HMRC. Submit an annual tax return by 31 January. Pay tax and National Insurance (Class 2 and 4) based on your profits. Even if your self-employed income is less than £1,000, it’s good to keep records and check whether you’re eligible for the trading allowance. Conclusion Now that you understand how second job tax works in the UK, you’re in a better position to plan your finances. The most important things to remember are: Inform HMRC as soon as you take on a second job. Watch your tax codes and total income to avoid overpaying or underpaying. Consider the impact of National Insurance and higher tax brackets. Need Help with Tax Codes or a Second Job Setup? We advise on personal tax, prepare tax returns for sole traders and directors, and help you manage your PAYE jobs correctly. Our accountants in Croydon are happy to help. Disclaimer The information in this article is for general guidance only. It does not replace professional advice tailored to your circumstances.

Dividend Allowance, Limited Company, Tax Saving Tips

How to Get Money Out of a Limited Company Without Paying Tax?

George / 19/01/2022

Running your own company can be more tax-efficient than working through an umbrella company or sole proprietorship. Through it, you can get rewards for your work by maximising your take-home pay and taking advantage of the savings due to the number of withdrawing options available. You can extract money from your limited company through salary, dividends, pensions contribution, and director’s loans. These are great ways to save taxes while taking money out of your company. So it is important to understand the tax implications and timings before deciding the withdrawal method. Let’s find out how to get money out of a limited company without paying tax? If you want a professional accountant and bookkeeper for your company, we can help you. Our bookkeepers and accountants at CruseBurke are qualified and cost-effective. We save your time, money, and stress by handling all your finances and business problems in no time. Contact us now! How to Get Money Out of a Limited Company Without Paying Tax? Typically, there are four tax-efficient ways to extract money from your limited company. Let’s explore them: Salary You can easily extract salary from your business to your personal account. Although you can’t take the majority of your income from your salary, but you can have a monthly pack packet without any tax implications. The tax-efficient way to extract money from your salary is to keep it a minimum below the personal allowance of £12,570. You will be required to deduct all the taxes, NICs, and employers NICs to pay HMRC. Dividend Directors tend to be shareholders of the company to take dividends from the company in the form of any profits that a company makes. The company directors must declare dividends and the date of payment agreed at the board of meetings. Dividends can be a tax-efficient way to extract money from a limited company with a dividend allowance of up to £500. Above this allowance, you need to pay as per your PAYE rate band. Bear in mind that the income earned from dividends can be added to any other income. The income from other sources and dividend income may push you to a higher tax band. However, with the dividend received, you don’t need to pay NICs. Check out our company formation packages and our accounting services for small businesses. Contact us right now! Pension Contribution Your company can contribute to your pension pot through which you can save a significant amount NI and tax, instead of making money through a salary. Note that you can’t receive this fund until you reach the retirement age. The allowance for pension contribution is £60,000 for persons earning up to £260,000. This allowance decreases if you cross the higher limit. The pension allowance must not go above your total income from all sources. Director’s Loan You can take a director’s loan from a limited company to meet your short-term personal needs. Extracting money via it can be a useful interest-free and low-cost funding source. Note that this loan is taxable if exceeds £10,000 or if you make interest payments to the company below the official rate set by HMRC. You need to pay back the loan before the year-end otherwise you’d be liable to pay an additional tax charge (S455) on the due balance. Quick Sum Up Hope you have learned different ways on how to get money out of a limited company without paying tax. Many business owners find extracting money from the limited company through the mix of salary and dividend more profitable, however, it depends on different factors and your personal circumstances. Working out the most tax-efficient way to take money out of your limited company can be complicated and time taking, therefore contact our qualified accountant to do the hassle for you. We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today. Disclaimer: The information is intended to provide general information.

Tax Issues, Tax Saving Tips, Taxation

How to Avoid Capital Gains Tax on Gifts?

George / 03/01/2022

If you are wondering how to avoid capital gains tax on gifts, you’re in the right place. You might have heard this many times that gifting a property will cut down or eliminate the capital gains tax. But this assumption is not correct with every person to whom you gift. As the gift should be only given to a specified person or organisation to avoid CGT. In this quick post, you’ll learn what is CGT, and how to avoid it. So before discussing how to avoid capital gains tax on gifts, let’s start with when you actually need or needn’t pay capital gains tax. If you are stuck with accounting or tax issues, particularly the CGT? How about speaking to us via a call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today. Understanding Capital Gains Tax (CGT) Capital gains tax or CGT is the tax levied on the profit when you sell or dispose of any asset that has increased its value since it was bought. CGT is only payable on the gains you made not on the amount you receive while selling or disposing (or gifting) of any assets. You don’t need to pay CGT on the assets that are non-taxable and if the gains you made are below the tax-free allowance in a year. When Do You Need to Pay CGT? Here are the circumstances where you need to pay CGT on the gain when you sell or dispose of: a property that is not your main residence or home shares that are not in ISA or PEP assets of your business most personal possessions worth £6,000 or more, apart from your car your main home if you’ve rent it, used for business or it’s very large The assets listed here are all considered chargeable assets. When You Don’t Need to Pay CGT? In addition to the gain on the non-taxable assets, you don’t need to pay CGT on gains above any tax-free allowance (£12,300. £6,150 for trusts). Furthermore, when you gift something to your spouse, civil partner or a charity, you are not required to pay this tax. Let’s dig deeper into it. Find out: CGT rates here! How to Avoid Capital Gains Tax on Gifts? Here are some ways to avoid capital gains tax on gifts: Use your CGT allowance of £12,300 (2021-22) Offset against losses over gains Transfer your assets to spouse or civil partner Contribute to a pension Gives shares to charity Use your annual ISA allowance Reduce your taxable income Spread gains over tax years Invest in small companies Have a query or need more help? Get help from our accountants to find out how to avoid CGT! CGT on Gifts to Your Spouse The gifts you made to your spouse or charity are exempted from capital gains tax. It means that you don’t pay Capital Gains Tax on those assets you sold or gifted to your spouse or civil partner, unless: you gave them goods for their business to sell on you separated or divorced and did not live together at all in that tax year However, your spouse or civil partner need to pay tax on the gain if they further sell or dispose of the asset. You can work out the gain by subtracting the value of a first owned asset with their value when they’re disposed of or sold. You also need to keep records of the documents as evidence. Gifts Made to Charity Assets that are sold or disposed of to the charity are exempted from CGT. If you fall within both conditions, you may be liable to pay if you sell an asset to charity: less than market value more than you paid for it Calculate your gain according to the amount you are paid by the charity, rather than the asset’s actual value. Quick Sum Up Hopefully, you have got a basic overview of what is CGT, when it is taxed, when you don’t need to pay it and how to avoid capital gains tax on gifts. So, by using the above tips, you can save thousands of pounds. With careful planning and by taking the help of our accountant, you can reduce your CGT effectively without getting into any tax avoidance or evasion. Contact us right away! Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your CGT issues! So, allow us to do this at an affordable package! Disclaimer: This blog is just written for general information and should not be taken as expert financial advice in any form.

Tax Issues, Tax Saving Tips, Taxation

How to Avoid Emergency Tax? A Basic Guide!

George / 07/10/2021

When you start work and fail to provide accurate and complete details to your employer, he will deduct the emergency tax from your paycheck. In addition to that, you will also pay an emergency tax on your pensions. So, read this blog to know how to avoid emergency tax and stop paying this. Reduce your business burden by letting us manage & record your finances! Our team could help you claim what is rightfully yours! So, Contact us now! What is an Emergency Tax? It is a tax that is charged by HM Revenue & Customs to your salary. It is charged when HMRC does not have enough details about your income and tax for a year. The other reasons for paying an emergency tax are as follows: If, after being a self-employed person, you have started working for an employer. If you have started a new job. If you have started getting benefits or state pension. How to Know if You are On an Emergency Tax Code? In order to know whether you are on an emergency tax code, check your payslips. HM Revenue & Customs will charge you emergency tax if your payslip contains any following tax codes. 1257 W1 1257 X 1257 M1 What is the 1257 Emergency Tax Code? Within the United Kingdom, almost everyone is authorised to a tax-free personal allowance. It means that a specific amount of your profits is paid to you every year without any tax charged on it. You will be provided with a tax-free allowance which currently stands at £12,570 if your tax code is 1257. It means that you will pay tax on anything above this threshold. This is because HM Revenue & Customs turned in the personal allowance of £12,570 into this tax code. Therefore, it simply means that you can earn £12,570 before paying tax if you have this tax code. How to Avoid Emergency Tax? The simpler way to avoid this tax is to provide a P45 or information about your previous income and tax payments to your employer. This information will tell about your paid tax in the last job to the new employer. Then, he will inform HMRC about these details. HMRC will send a Pay As You Earn (PAYE) coding notice to provide the correct tax code to your new employer. Then, on the recent payslip, this new tax code will appear from your employer. In case you do not have a P45, your employer will have to complete a Starter Checklist. This will assist your new employer in allocating a tax code to you that will be forwarded to HMRC. How Much Will You Pay in the Emergency Tax? This totally depends on your earnings and emergency tax code. It implies that you will be taxed on anything above your basic personal allowance (£12,570). Your personal allowance will not be taken into consideration if you have the BR code. You might pay up to fifty percent of your salary as an Emergency tax (the max it can be). Therefore, it is better to prevent emergency tax as you have to pay a high amount of tax. What is the Method to Prevent the Emergency Tax? You can stop paying emergency tax by the following method. The emergency tax code may imply that you have overpaid tax in the past; in this case, the HMRC will refund any overpayment of tax. You can call HM Revenue & Customs directly in case you have been working with your new employer for above three months and still paying the emergency tax. Final Thoughts After knowing about how to avoid emergency tax and the method of not paying an emergency tax, we will conclude our blog by saying that HMRC will charge you emergency tax if you fail to provide your new employer with your income and tax details. However, in order to avoid paying an emergency tax, it is crucial to provide these details. You can also claim back overpaid taxes, although avoiding emergency taxes is better. Turn to CruseBurke for managing finances and for claiming overpaid taxes! We have a team of skilled accountants who will handle everything with HMRC on your behalf. Contact us right away! Disclaimer: This blog contains general information about how to avoid emergency tax.