For accounting purposes, cash transactions between a director and a personal or family company are recorded through the director’s account. At the end of an accounting period, if the director owes the company money (i.e. the account is considered overdrawn), and the company is close (broadly, one that is controlled by five or fewer shareholders (participators)), there will be tax consequences to consider.
The Spring Budget 2020 announced a significant restriction on future availability of entrepreneurs’ relief (ER) for individuals who dispose of all or part of their business, individuals who dispose of shares in their personal company, and trustees who dispose of business assets.
Furnished holiday lettings – What can you do if you fail to meet the occupancy tests due to the Covid-19 pandemic?
Lets that qualify as furnished holiday lettings (FHL) enjoy special tax rules compared to other types of let, allowing landlords to benefit from certain capital gains tax reliefs for traders and to claim plant and machinery capital allowances for items such as furniture, fixtures and equipment.
Late or unpaid rent – Impact on the calculation of a landlord’s taxable profits
As with other sectors, landlords may be adversely affected by the Covid-19 pandemic. Tenants suffering cashflow difficulties may be unable to pay their rent in full or on time. The impact that unpaid or late paid rent has on the calculation of taxable profits depends on whether the landlord prepares accounts on the cash basis or under the accruals basis.
Mortgage payment holidays and interest relief for landlords
In March, the Government announced that homeowners struggling to pay their mortgages due to Coronavirus would be able to take a three-month mortgage payment holiday. They confirmed that this option would also be available to buy-to-let landlords, who may suffer cashflow difficulties if, as a result of the virus, their tenants were unable to meet their rent in full when it is due.
Check your tax code – And what to do if it is wrong
The tax code is fundamental to the operation of the PAYe system. The tax code represents the allowances (or ‘tax-free pay’) to which an employee is entitled, or, where the code is a K-code, the additional income that the employee is treated as having received.
Deferring self-assessment POA – is it is good idea
To help those suffering cashflow difficulties as a result of the Covid-19 pandemic, the Government have announced that self-assessment taxpayers can delay making their second payment on account for 2019/20. The payment would normally by due by 31 July 2020.
The Coronavirus Job Retention Scheme (CJRS) enables employers who are unable to maintain their workforce due to the COVID-19 pandemic to furlough their staff and claim a grant of 80% of the employee’s wages to a maximum of £2,500 a month.
Eligible property rental expenses and how to use property rental loss
Landlords incur various expenses when letting out a property. These may be directly related to the property itself, such as repairs and maintenance, or in relation to finding tenants and managing the let. To ensure that tax is not paid unnecessarily, it is important that the landlord claims relief for all allowable expenses.
A landlord may provide domestic items in a property which is let out. This may include white goods, such as fridges, freezers and washing machines, and also furniture and furnishings where the property is let furnished. Fixtures, such as fitted bathrooms and kitchens are outside the scope of the relief.
From January 2019, businesses considering investing more than £200,000 in plant and machinery may benefit from a change to the capital allowances rules, which should allow them to obtain tax relief earlier than under the normal annual writing down allowance (WDA) rules.