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May 2017

Sage and Cashplus join forces, to ease the pressure of Making Tax Digital for small businesses

Sage and Cashplus have announced that they have joined forces in order to support small businesses in getting ahead of the making tax digital legislation.

Should we give shares to children and pay £5,000 dividends tax free?

The introduction of the £5,000 tax free dividend allowance has tempted many family company shareholders to give shares to other family members so that they can be paid £5,000 a year tax free. (Note that this allowance reduces to £2,000 from 6 April 2018).

Tax diary June

June is a very busy times in the tax calendar, with critical filing dates.  

Strength amidst uncertainty in 2017: the real estate & construction view

Our survey, completed by 691 business leaders from across the UK, finds continued uncertainty amongst owner managed businesses (OMBs). This view is shared in the real estate and construction sector where, although they are more confident than owner managed businesses overall, their confidence has dropped significantly compared to last year. 61% are confident about the general outlook for 2017, compared to 84% in previous year's survey. Combined with their lowered optimism, real estate and construction businesses are more likely than OMBs generally to have already experienced some negative impact from the Brexit vote (38% compared to 30% overall). Alongside this, again compared to OMBs in general, RE&C OMBs appear relatively unwilling to commit to specific strategies in 2017, and yet have little reticence about identifying the issues that concern them this year, both from a business and economic perspective.

Better to pay interest on your loan account than dividends if higher rate taxpayer

Ever since the introduction of the 7.5% increase in the rate of tax on dividends in April 2016, it has been more tax efficient for owner managed business shareholders to pay interest on their loans to the company rather than pay themselves dividends.

Expenses and benefits for employees

Until 2015-16, it was possible to apply for a dispensation to exclude certain expenses and benefits provided to employees from the year end returns to HMRC: primarily the submission of forms P11D. These dispensations ceased to be effective from 6 April 2016. From this date many of the expenses covered by dispensations were exempted from the benefits legislation. The sorts of expenses covered include:  

Beneficial loans to employees

In many cases, making loans to your employees or their relatives can create an obligation to report a beneficial loan to HMRC. The deemed benefit would be a taxable benefit in kind for the relevant employee, and would increase the employer’s Class 1A NIC bill at the end of the tax year.