Leave your details and we'll call you back

News

Budget Blues for the business man....

Two weeks after the Budget, and a week after the publishing of the associated Finance Act, it is even more clear that there is little good news for family businesses trading within a limited company.

Yes, the corporation tax rate will reduce to 18% by 2020 but the benefit of this will be far outweighed by the new charges on dividends, and the “new” rules on goodwill.

The most tax efficient way of taking income out of a company has for several years been to take a nominal salary and then take dividends up to the higher rate tax threshold. This has meant that the only tax payable was corporation tax (and potentially VAT).

However, doing this from 6 April 2016 when the new rules come in means that there could be an additional income tax liability of around £2,000. The first payment will be due on 31 January 2018 and will actually be in the region of £3,000 as a “payment on account” of the next year’s liability will also be due; thereafter payments of around £1,000 will be due each January and July.

We will be talking to our clients about these changes as we finalise their next set of accounts, as there may be steps that can be taken to mitigate the extra tax charge.

As for goodwill, plus ça change, plus c’est le meme chose! For we are now back to how the corporate tax regime was before 2002, for transactions in goodwill after either 4 December 2014 or 8 July 2015:

- Goodwill is an asset to which the capital gains tax rules apply

- No tax relief is given for writing off goodwill within the accounts.

(Please note that this is an area where the tax treatment is different to the accounting treatment.)

There do remain advantages of transferring goodwill to a limited company, though, and, as ever, it is important that you talk to us at robinson+co before entering into any transactions involving goodwill so that we can help you to obtain the best tax result from the transaction.

Warning: as ever the comments above are general and the best way forward will depend on your specific circumstances. It is important that you talk to your usual robinson+co contact before taking any action.

News Archive

It's good to know that robinson+co fully understand the issues facing our industry.

Tyson H Burridge, Tyson H Burridge Ltd

After over two decades of outstanding service to my company, robinson+co continue to evolve as my own business has.

Mike Graham, G&M Supplies Ltd

When I became self employed, getting reliable personal and professional financial advice and accountancy help was so important. I have been fortunate to have had such good service from robinson+co over the last five years.

Alison Harker, Wigton

We would like to thank robinson+co for their outstanding service they provide us in dealing with our PAYE and CIS.We find that they are very professional and understanding to our needs.

Carole & Brian Atkinson, B&C Atkinson Ltd

We can't thank Christine Smith enough for all her patience and help in keeping us straight with our payroll etc., and not to forget Tracey Kennett for all our Sage help.

Modern Homes, Workington

robinson+co have acted as accountants for both me and my Limited Company for a number of years, and are without doubt the most reliable, professional and cost effective firm I have ever used.

Paul Blamire - Everhaven Data Solutions Limited

robinson+co is registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

robinson+co is a trading name of robinson+co (Gosforth) Limited registered in England & Wales 08088245. Registered office Oxford Chambers, New Oxford Street, Workington CA14 2LR. Regulated by the Institute of Chartered Accountants in England & Wales for a range of investment business activities.
robinson+co Financial Services Limited is registered in England & Wales 07272147. Registered office Oxford Chambers, New Oxford Street, Workington CA14 2LR. Authorised and regulated by the Financial Conduct Authority firm number 597189.

Professional indemnity insurance

The firm's professional indemnity insurance policy is provided by Liberty who may be contacted via Bluefin Professions at Castlemead, Lower Castle Street, Bristol BS1 3AG. The policy applies to claims wherever made outside the United States or Canada, based on acts, errors or omissions occurring anywhere in the world.

robinson+co Financial Services Limited's policy is provided by Collegiate Management Services Limited and can also be contacted via Bluefin Professions.

© 2012 accountancy@robinsonco.co.uk : Web Design & CMS by Fatmedia