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Free Guides for new and growing businesses from HRBS - fixed fee accountants and business advisors

Planning for your self assessment tax bill

hrbs.biz guide to paying your self assessment tax bill Planning for your self assessment tax billThe UK income tax year is 6 April to the following 5 April and so the tax year 2018/19 ran from 6 April 2018 to 5 April 2019.

You will need to complete a self assessment tax return if you are self employed, have untaxed income (eg rent, dividends), or if you, or your partner, have an individual income of more than £50,000 and one of you gets Child Benefit or contributions towards the upkeep of a child. Limited company directors are often required to submit a tax return.

A self employed person will pay both income tax and class 4 national insurance (NI) on their profits, the fixed rate of class 2 NIC plus income tax on any other income and capital gains tax on any relevant capital gains in the tax year.

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Charge rent for use of your home office

hrbs.biz guide to home office rent agreement Charge rent for use of your home officeAs a limited company company director you can charge your company a rent for using a room in your home as an office. We recommend that you have a rental agreement in place between you and the company and the agreement states that the company has non-exclusive use of the room.
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Tax deductible expenses

hrbs.biz guide to tax deductible expenses Tax deductible expensesThere is a great deal of confusion as to what you can and what you can’t deduct from your profit for tax purposes.

This tip gives a brief list of the types of expenditure you can claim, some of which you may already be deducting, some may be new to you and applicable to your business.

In general, costs enabling you to run the business and are incurred wholly and exclusively for business purposes are tax deductible.
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Maximise use of your basic rate tax band

hrbs.biz guide to maximising the use of your basic rate band Maximise use of your basic rate tax bandI originally posted this article on the a4uforum in March 2007, and have updated it for the current (2019/20) tax thresholds.

I recommend to all director/shareholder clients that due to the tax changes in recent years they maximise the use of their basic rate band where possible. This can be done by declaring interim dividends to take total taxable income up to the maximum at which the basic rate will still apply. If they do not need the funds, they can loan the dividend back to the company as explained later in this article.

The current (2019/20) tax rates on dividends are:
0% on first £2,000
7.5% for basic rate tax payers
32.5% for higher rate tax payers
38.1% for additional rate tax payers

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