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Learn more about the personal tax services an accountant can provide.

Allowances and Reliefs

Tax allowances are used to reduce a tax bill and for personal taxes include the tax-free personal allowance, married couples’ allowance, marriage allowance, blind persons allowance, etc.

Tax reliefs can be provided based upon expenses incurred ‘wholly and exclusively’ for the work activity or other items such as pension contributions, charitable contributions, etc.

Allowances and reliefs vary depending upon if the individual is employed or self employed and can become complex in the cases of travel, subsistence, capital items and more.

An accountant can help navigate the minefield and make sure reliefs have been used to the maximum allowed and within guidelines to reduce tax paid. In addition, reliefs can be claimed for previous tax years (up to 4 years).

Capital Gains Tax

If an ‘asset’ is sold for more than it was purchased – and there is an increase in value – then it may be liable to capital gains tax.

It is a complicated tax with many definitions of what is classed as a ‘chargeable asset’, a number of reliefs to exclude or reduce the liability of assets and tapering to correctly judge an asset’s value.

There is also an annual exempt amount as an allowance and losses can be brought forward in cases too.

Foreign Earnings and Overseas Tax Planning

A very complex area due to the taxation depending on whether the individual is defined as ‘domiciled’ or not. Essentially there is a test to determine the country of ‘permanent’ residence.

Factors to determine residence status include property, family and business associations. Once the residence has been determined tax can be calculated.

Contact an accountant to correctly determine residence status, plan overseas income and the impact of bringing the income into the UK.

Inheritance Tax

Passing on property or any other asset of value to descendants will incur IHT once the amount exceeds a certain value. There are many ways to maximise the allowances in place and advice should be sought on using avenues such as trusts, gifts etc. as vehicles to reduce liability.

National Insurance

National insurance can be applied in many different classes (for differing income types), rates (known as NIC Letters) and for both employers and employees.

There are also allowances in place for employers, exemptions for individuals in cases and special calculation scenarios for certain occupations.

Contact an accountant for further advice.

P11D Advice

The form P11D is used to notify the Taxman of any benefits in kind received. Items that are provided by a company to an employee in addition to salary that are not monetary e.g. company cars, health insurance, special rate loans, travel subsidies, etc.

Any director or employee earning over a certain amount or holding a percentage shareholding in a company requires a P11D to be filed.

The company files the P11D not the employee – although if using a company as a wrapper and contracting/self employed the individual will act as both.

An accountant can file P11D forms for employees, contractors etc. make sure penalties and fines are avoided and have all extraneous factors covered such as credit card usage, directors’ loans and home expenses.

Property Tax

Taxes associated with property include stamp duty, capital gains tax and income from lettings.

An accountant can advise on any circumstance where property taxes are involved.

Self Assessment Tax Return

If the following scenarios apply HMRC will require a Self Assessment Tax Return to be submitted:

  1. Income in excess of £100,000.
  2. Multiple income sources.
  3. Self employment income.
  4. Rental income from property.
  5. Company directors.
  6. There are capital gains to disclose.
  7. There is foreign income to disclose.

If there is rental income or self employment income a set of trading accounts will also need to be compiled to back up the information on the tax return.

An accountant can compile accounts, complete the tax return and make sure expenses are correctly deducted, reliefs properly applied, allowances maximised, losses utilised and records are kept aligned to obligations.

Share Schemes

There are employee share schemes that offer tax efficient advantages as they allow shares to be purchased without having to pay national insurance and tax on their value.

Schemes include:

  1. Share Incentive Plans – an employer can provide the employee with up to £3,600 of shares per tax year and no tax/nic or capital gains are incurred if the shares are not sold by the employee for 5 years.
  2. Save as you earn (SAYE) – Up to £500 a month can be saved under this scheme. Money accrues pre-tax and at the end of the SAYE contract the pot value is used to buy shares.

An accountant can advise on the above schemes and others such as Company share options and the Enterprise management incentives (EMI) scheme.

Tax Efficient Investments

An accountant can advise on the various schemes and structures available to invest whilst saving tax. ISA’s come in many forms and the correct on to utilise can depend upon the individual circumstances of the saver – especially newer additional to the ISA wrapper such as Help to Buy ISA and the Innovative Finance ISA.

Tax Planning

Planning to minimise the amount of tax paid sounds like a broad objective due to the wide array of different taxes any individual incurs. An accountant can look into the taxes applicable and make sure not only that records are being kept correctly but any personal objectives that could negatively affect the amount of tax paid are fully explored before action is taken.

Trusts

Assets can be set up to handle assets separately to an individual. The main participants of trusts include, the settlor (puts assets into a trust), the trustee (manages the trust) and the beneficiary (benefits from the assets in the trust).

There are many different types of trust and the tax treatment of each varies. Some types of trust require no further tax to be paid by the beneficiary, others require the beneficiary to be responsible for declaring and paying tax on income from the trust.

An accountant can go provide assistance for any participant within a trust.

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