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Tuesday 1 May 2012
Tuesday 3 April 2012
Tax Incentive
Seed Enterprise Investment Scheme - SEIS
This is a new and very generous tax incentive scheme where it is possible to save £78 for every £100 invested or looking at it another way £22 would buy you £100 shares in a start-up company.
How does the scheme work?
• The scheme is effective from 6th April 2012.
• The maximum investment by an individual is £100,000 per annum.
• Income tax relief is given at 50% irrespective of the individual’s tax rate for the year.
• The individual cannot hold more than 30% shares in the company.
• The investment must be made in a start-up company with no more than 25 employees and assets less than £200,000.
• The companies must be trading companies and not investment companies.
• Under the scheme there is a capital gains tax holiday in the first year only (2012/2013). For example if a capital gain is realised, this gain will be exempt under the SEIS.
• If the individual holds shares in a SEIS for more than three years, any gain realised on the gains will be exempt from tax.
• Start-up companies can raise up to £150,000 under this scheme.
• The maximum investment by an individual is £100,000 per annum.
• Income tax relief is given at 50% irrespective of the individual’s tax rate for the year.
• The individual cannot hold more than 30% shares in the company.
• The investment must be made in a start-up company with no more than 25 employees and assets less than £200,000.
• The companies must be trading companies and not investment companies.
• Under the scheme there is a capital gains tax holiday in the first year only (2012/2013). For example if a capital gain is realised, this gain will be exempt under the SEIS.
• If the individual holds shares in a SEIS for more than three years, any gain realised on the gains will be exempt from tax.
• Start-up companies can raise up to £150,000 under this scheme.
Why?
The intention is to stimulate economic recovery by attracting additional business investment in new British start-ups. The intention is to attract funding to parts of the market that have been traditionally too risky for banks.
The intention is to stimulate economic recovery by attracting additional business investment in new British start-ups. The intention is to attract funding to parts of the market that have been traditionally too risky for banks.
Caution
It is recommended that you do extensive research before investing in such a scheme. Studies show that 50% of new businesses fail in the first year and 95% go out of business by the fifth year. An attractive tax break will not turn a bad investment into a good one.
It is recommended that you do extensive research before investing in such a scheme. Studies show that 50% of new businesses fail in the first year and 95% go out of business by the fifth year. An attractive tax break will not turn a bad investment into a good one.
Tuesday 6 March 2012
Tax Planning
Tax planning tips for the 2012 tax year
It seems that no sooner have we filed 2011 tax returns that March 2012 is upon us. There are a number of things that you may wish to consider before you file your 2012 return.
1. File on time
You can save yourself £100 by filing on time. The filing date for the 2012 tax return is 31st January 2013 (if filed on line). Interest is calculated on outstanding tax as well as a 5% penalty. If you don’t file on time penalties of £10 a day are also charged (from April 2012).
2. Personal allowances
You can save tax by ensuring that you have used your personal allowance (and your family – children have allowances too). The allowance for 2011/12 is £7,475. You can also make sure that you use basic rate tax band of £35,000 and the capital gains tax limit of £10,600.
3. ISAs
You can use your maximum ISA allowance of £10,600. You can open a cash ISA which is a tax-free savings account that every UK adult can put £5,340 per tax year in. Once in, it remains tax-free year after year. But if you don't use a year's allocation, you lose it.
4. Dividends
If you have a family company, you can use dividends to distribute surplus profits. This depends on your rate of tax and advice should be taken.
5. Pension
You may wish to take advice concerning contributions to your personal pension scheme before 5th April 2012, especially if you are a higher rate tax payer. This is most relevant if you earn over £100,000 as part of your income is effectively taxed at 60%. For those in this position a gift aid donation will attract tax relief at 60%.
6. More adventurous tax investments
You may wish to take advice if you are a more adventurous investor and consider investments such as Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT).
7. Childcare Vouchers
You may wish to investigate the use of childcare vouchers if childcare costs are relevant to your personal circumstances.
If you would like any advice in this area or any other areas of accounting or tax, please contact me on 07834988638 or mail@sjhaccounting.co.uk. Please also feel free to visit my website at www.sjhaccounting.co.uk. Sarah Hamilton takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Sarah Hamilton. You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances.
It seems that no sooner have we filed 2011 tax returns that March 2012 is upon us. There are a number of things that you may wish to consider before you file your 2012 return.
1. File on time
You can save yourself £100 by filing on time. The filing date for the 2012 tax return is 31st January 2013 (if filed on line). Interest is calculated on outstanding tax as well as a 5% penalty. If you don’t file on time penalties of £10 a day are also charged (from April 2012).
2. Personal allowances
You can save tax by ensuring that you have used your personal allowance (and your family – children have allowances too). The allowance for 2011/12 is £7,475. You can also make sure that you use basic rate tax band of £35,000 and the capital gains tax limit of £10,600.
3. ISAs
You can use your maximum ISA allowance of £10,600. You can open a cash ISA which is a tax-free savings account that every UK adult can put £5,340 per tax year in. Once in, it remains tax-free year after year. But if you don't use a year's allocation, you lose it.
4. Dividends
If you have a family company, you can use dividends to distribute surplus profits. This depends on your rate of tax and advice should be taken.
5. Pension
You may wish to take advice concerning contributions to your personal pension scheme before 5th April 2012, especially if you are a higher rate tax payer. This is most relevant if you earn over £100,000 as part of your income is effectively taxed at 60%. For those in this position a gift aid donation will attract tax relief at 60%.
6. More adventurous tax investments
You may wish to take advice if you are a more adventurous investor and consider investments such as Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT).
7. Childcare Vouchers
You may wish to investigate the use of childcare vouchers if childcare costs are relevant to your personal circumstances.
If you would like any advice in this area or any other areas of accounting or tax, please contact me on 07834988638 or mail@sjhaccounting.co.uk. Please also feel free to visit my website at www.sjhaccounting.co.uk. Sarah Hamilton takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Sarah Hamilton. You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances.
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