 Investments
for Couples
If you and your partner have joint investments you could save
tax by transferring them to the individual who pays tax at the
lowest rate. If the individual concerned does not utilise their
personal allowance it may be possible for a repayment of tax to
be reclaimed from the Inland Revenue. If you are married, assets
can be given to your spouse thereby creating a 'deemed disposal'
without incurring capital gains tax. This can reduce any potential
capital gains tax liabilities as individuals each currently receive
an annual capital gains tax exemption of £7,900.
Capital Equipment
If you are in receipt of self-employment income, the most tax
advantageous time to buy new capital equipment (e.g. computer)
is immediately before your accounting year end. Capital allowances
will then be obtained on the asset as if it were owned for the
whole financial year (potentially at a rate of 100%).
Motor Expenses
Motoring costs can be claimed as a business deduction. Under the
self-assessment regulations you are required to maintain a business
mileage log to justify the level of expenditure claimed. This log
must be an accurate reflection of the whole accounting period and
it is recommended this should reflect a period of at least two
months.
Failure to keep a business mileage log could result in interest and penalties
being levied by the Inland Revenue in the event of an enquiry.
September Deadline
If you pay tax under the PAYE system and owe less than £2,000
for a particular tax year, make sure that your self-assessment
return is lodged before 30 September (e.g. September 2003 for 2002/03).
The Inland Revenue will then collect the tax you owe through your
PAYE notice of coding, as opposed to direct collection improving
your cash flow.
Starting Self-employment
If you have recently commenced self-employment, you need to register
as self-employed with the Inland Revenue. This is done by completing
form CWF1. Failure to register within 3 months of commencement
will result in a penalty of £100.
Self-Assessment Filing
Under self-assessment there is a statutory deadline for submitting
your annual tax return. This is 31 January after the tax year end
(e.g. 31 January 2004 for 2002/03.
There is a fixed penalty of £100 if the return is not received by this
date. Any unpaid tax at this date is also subject to interest and surcharges. |
