 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 HMRC. 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 £10,100.
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 HMRC 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 December (e.g. December 2010 for 2009/10). HMRC 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 HMRC. 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 2011 for 2009/10).
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. |
