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Effective tax planning is essential if you are to minimise your tax bills. Simple tax planning can significantly reduce your tax liabilities.
The self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have complicated income tax affairs.
Corporation tax is charged on a company's profits. If you trade as a limited company, ensure that paying this tax is as painless as possible.
National Insurance Contributions (NICs) are payable whether you are self-employed or employed by your own company, although different rates apply.
As well as your legal obligations, you’ll want to ensure that payroll is painless and that you use any opportunities to improve your tax-efficiency.
Effective VAT planning aims to ensure that VAT is relatively painless, and that you are reclaiming as much as possible of the VAT you pay.
Capital gains are made when you sell something for more money than you paid for it. As a result, you can be subject to tax. Take professional advice.
Business property taxes apply to businesses with commercial premises.There are two commercial property taxes: business rates and stamp duty land tax.
If you have tax problems or face a tax investigation, it pays to seek professional advice and you must act rather than just hoping for the best.
Business property taxes are likely to apply to businesses with commercial premises. There are two key commercial property taxes: business rates and stamp duty land tax. You also need to understand how VAT applies to business premises. Understanding business property taxes can help ensure that you take advantage of any available tax reliefs and that you aren't caught out by unexpected commercial property tax charges.
Ask your accountant for help and for advice on how to reduce the total business property tax (and other taxes) you pay.
Business rates are charged on most commercial properties. The tax payable is calculated using the rateable value of the premises and the business rate multiplier. There can be scope to appeal against your rates if you think the rateable value was wrongly assessed or there has been a substantial change to your commercial property.
If you own a commercial property, you are liable for the business rates. If you rent a business property, the terms of your lease or rental agreement should make it clear whether you or your landlord is responsible for paying the business rates. Complications may arise if you use part of your home for business. Depending on the circumstances, you may become liable for business rates.
Business rates are largely inevitable, though there are a few exemptions for certain types of business property, such as agricultural buildings. There are also reliefs for small businesses and businesses whose rateable value has increased substantially. Empty business property tax relief is given for three months (or longer in some cases).
Business property taxes can also apply when you purchase commercial premises - either freehold or with a lease. This takes the form of stamp duty land tax (SDLT).
The amount of this commercial property tax depends on the value of the transaction price. No stamp duty is payable on purchases costing less than £150,000. Amounts paid over the initial stamp duty-free band are calculated on the amount of purchase price falling within each tax band. An additional 1% may apply to the total value of the rent payable over the life of a lease.
The Annual Tax on Enveloped Dwellings (ATED) applies to some residential properties (dwellings). Most residential properties are owned by individuals and so are not subject to ATED. However, some residential properties are owned completely or partly by corporate bodies and are said to be 'enveloped' because ownership of the property is held within the company.
ATED is payable if:
If the property meets all three criteria, you will need to complete a tax return and pay ATED. The amount of ATED payable depends on the value of the property.
Properties that have attracted ATED will also be liable to capital gains tax when they are disposed of (sold).
Commercial property is normally exempt from VAT (although freehold sales of new commercial buildings do attract VAT). So, for example, a landlord will not charge VAT on the rent - but nor will the landlord be able to recover any VAT paid out on expenses.
The owner of land and buildings can 'opt to tax', asking HM Revenue & Customs to remove the exemption so that VAT applies. For example, this might suit a landlord whose tenants are VAT-registered (and so can recover the VAT they are charged), allowing the landlord to recover VAT on expenses.
The rules are complicated, but it's essential to understand the VAT status of any commercial property you own, occupy or are planning to buy or rent. Otherwise you may find yourself with a large commercial property tax bill that you cannot recover.