Taxation is now a significant influence on personal and commercial financial decisions. Total UK taxes as a percentage of Gross Domestic Product are continuing to rise, with predictions of 37.5% of everything the UK generates going to the government. Business planning needs to include tax planning. The best option, ignoring taxes, may not be the best option after taxes.
There are many taxes to consider including such direct taxes as income tax, corporation tax, capital gains tax and of course, inheritance tax, which is effectively a tax on taxed income. National insurance is not a tax but contributes significantly to government tax revenues. Employees paid under PAYE are familiar with the 11% which is deducted from their gross pay for National Insurance contributions but few realise that their employer pays another 13.8% of their gross pay in addition to the employee National Insurance and tax deductions. The new pension arrangements under auto-enrolment are also not a tax but contributions are made by employees and employers.
After the taxes levied on incomes, personal expenditure suffers VAT, fuel tax, car tax, stamp duty land tax, council tax, business rates and many more. Relatively small companies or private investors can meet complex tax issues just with property investment. Commercial property may have an option to tax for VAT purposes. If the property is chargeable to VAT, tenants in common (two or more entities owning a specific share of a property), must register a partnership for VAT purposes even though no legal partnership exists. Stamp Duty Land Tax SDLT is now a significant factor in considering the cost of investment and there is increased complexity following changes to SDLT in recent years. There is the potential for capital gains tax (CGT) in the future if the property is sold and the CGT rate is different if held by individuals or a company. There are further tax considerations if the property is owned by an overseas entity.
Most importantly, HM Revenue and Customs do not offer advice or even interpretation of UK law. The risks associated with taxation continue to grow as the increasing complexity leads to ever more interpretations of one of the longest tax codes in the world, leaving taxpayers uncertain about their potential tax liabilities.
The hardest thing in the world to understand is the income tax
How we can help
We are ready to guide you through the processes which will be needed for you to execute your plan and consider both the commercial and tax aspects of any proposed venture. Whatever your plans, more than one tax is likely to be involved and we can assist with finding the best commercial and tax structure to meet your objectives. We advise on the tax implications for foreign companies coming to the UK and also where UK companies are setting up business abroad, including VAT on international transactions.
Tax is getting more complicated every year and there is simply more of it. There are wide ranging penalties for failing to comply with the law and even for late filing, including increasing use by HMRC of the powers contained in the Proceeds of Crime Act. It is virtually impossible to manage and expand a successful business without being fully tax compliant. Our tax services cover all types of tax returns for companies, partnerships, individuals, trusts and pension schemes. Tax return information is often taken from accounts and our accounts and tax compliance services are fully integrated.