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Tax Tip

Tax tips for 2015

We asked our resident Chartered tax Advisor (CTA) if he could provide us with a few tips for the 2015 tax year.

Peter Ham Chartered Tax Advisor at ABDS comments:
“Tax is a very complicated area, and with legislation changing at a rapid rate, the average small business director or owner finds it difficult to keep up to speed. But there are a few tax saving opportunities that are available, here are a few that should help.

1 60% tax
Due to the withdrawal of the personal tax allowance for income over £100,000, earnings of between £100,000 and £120,000 will be taxed at an effective rate of 60 per cent for 2014/15. However, there are ways to mitigate this but you need to seek advice before 5 April 2015

2 Research and Development (R&D)
You do not have to be in pharmaceuticals to earn R&D tax relief. Over 5,000 manufacturing companies claimed this last year, so regardless of your industry, talk to your tax advisor to see if any aspect of your business is eligible for this valuable source of relief.

3 Pension contributions
As an individual, sole trader or in a partnership, you will automatically receive basic rate tax relief on any pension contributions. If you are a higher tax rate payer, the relief can be even more. For example, if you earn between £100,000 and £120,000, then your pension plan could receive a pension contribution of £100 for a net outlay of only £40 by you.

4 Employer’s national insurance
HMRC gave most employers a discount of £2,000 off their employer national insurance bill for the year 2014/15. This has not only been extended for 2015/16 but there are also further discounts available where employers take on apprentices under 25 years and employees under 21 years of age. Again, if in doubt, ask your accountant.

5 Type of business
Make sure you are in the correct type of business to receive the most advantageous tax bills. A director operating a limited company with reducing profits may be better off by trading as a sole trader. The reverse could be true for a sole trader with increasing profits.

If you need any help and advice for your business on Corporation Tax or personal tax, contact Peter Ham, Lavinia Newman, Stuart Coleman or Liz Kennett to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients and
mindful of their long term strategic goals

Helping Your Business is Our Busines

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