TAx solutions for the business owner

As a owner of a business there are specific areas of tax that you should be familiar with. Below we have listed the key areas where we can support you.


Capital Allowances

Capital allowances are a way of obtaining tax relief on capital expenditure. This is valuable to your business since accounts depreciation is not tax deductible.

The allowances are treated as a tax-deductible expense and thus reduce taxable profits.

Capital allowances are not just available against capital expenditure incurred from the date your business starts. Capital expenditure incurred prior to your business starting may also qualify for tax relief.

 

Capital allowances are typically available for: 

  • equipment (e.g. computers, telecommunications, printers)
  • integral features (e.g. air conditioning, electrical wiring)
  • furniture
  • machinery
  • vehicles

But are also available on a range of other items and features which are often overlooked by business and their advisers when identifying capital allowances.

OUR OFFER IS SIMPLE AND REWARDING. 

Capital allowances offer very significant tax savings, but the process is complex and technical. We make your life easy by managing your case from start to finish. We apply our expertise to ensure you obtain the maximum tax relief available on your capital expenditure.

Our specialists routinely save our clients thousands of pounds on their tax bill that they were previously unaware of.

FOR EXAMPLE...

A client purchased an office building five years ago for £1 million, and had one of the top 10 UK tax practice as his tax advisors. 

Signature Tax contacted this client as part of a free tax health check to confirm that the client was paying the correct amount of tax. After carrying out a due diligence report into the property history, we determined that the client was eligible to make a capital allowances claim. 

We prepared a report suitable for submission to HMRC and worked closely with the client’s accountants to identify £310,000 of capital allowances, which generated a tax repayment for the client. 

The well-established tax advisers had missed this opportunity and Signature Tax saved the client - a higher rate taxpayer (at the 40% rate) - in excess of £120,000.


Incorporation Relief for Property businesses

Thinking about transferring your business to a company?  

Transferring business assets including goodwill from your personal ownership to a company would ordinarily result in the realisation of a taxable gain.  There are rules however which mean, provided a transfer is structured correctly and certain conditions are met, taxable gains are avoided.  This is called Incorporation Relief.

This relief is particularly pertinent for property investors who may be looking to reorganise their portfolio.....

Signature Tax can help you decide on whether this is the right course of action, how to plan and implement correctly.

 

FOR EXAMPLE...

An individual or a married couple currently holding a portfolio of rental properties wish to streamline their portfolio into a company for commercial purposes.

Without any reliefs, the transfer of these properties to a company would trigger a capital gains tax liability for the individuals. However, the decision to incorporate presents many options for the individuals that will avoid this charge, or at least reduce it.

For example incorporation relief would delay any tax to pay until the company is sold at a later date. A careful assessment of the rental activity and management will be required to ensure that the rental activity constitutes a business for the purpose of obtaining this relief.

But even if incorporation relief isn’t available or is not the most efficient strategy, other solutions could be explored. The exposure to stamp duty would also have to be considered in concluding the best option.


Capital Gains Tax 

An understanding of Capital Gains Tax is crucial to ensuring you minimise the amount of tax you may have to pay on any increase on the amount your assets may be worth, when you sell or 'dispose' of them.

Capital Gains Tax applies to property, investments, selling a business and much more. Furthermore the rate of tax varies depending on the type of capital gain.

We provide our clients with guidance that synchronises with their investment strategy to give them a clear and full picture of what they will taxed, following any gains on their assets and investments.

 

 

FOR EXAMPLE...

Anthony has been in business as a sole trader for many years manufacturing widget display boxes.

In May 2014, he accepts an offer and sells the entire business undertaking realising a £2 million capital gain. In order to establish whether entrepreneurs’ relief is due, there are many facts to consider such as the length of time the business has traded, whether the disposal is sufficiently material and the amount of the gain.

If the gain does qualify for entrepreneurs’ relief, in this case, the whole amount will be taxed at 10% as opposed to 28%.


MAKE AN APPOINTMENT

If you are interested in finding out more, and would like to make a consultation with one of our specialists, please complete the below form, or call us on 0161 850 0648. 

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