Every year around this time we get a wave of negative news in the media with large corporations issuing retail sales warnings, making excuses publicly about Brexit, the election, weather, online sales, anything really to distract from their own incompetence in the run up to Christmas and New Year 2019. In fact last year December 2018 it was the exact same excuses with only exception being the recent general election.

Always ignore the 'nay sayers' and pro-actively look at what positive steps can be taken to ensure your business sales and profits rise or at the very least stay level with previous years. To help with this we've compiled a short list based on our extensive experience and industry wide knowledge.

1. Go where the money is - try to be fluid and adaptable and look to see what is selling and sell more of that and stock less of what is in less demand. If its a different product or service that you don't offer consider adding this.
2. Give the customer what they want not what you want - try to listen to them and understand them properly and give them what they are looking for. Your customer will tell you how to keep things going in your business. Don't be shy to ask them, actively ask for feedback.
3. Make an offer they cant refuse - when things are difficult for a client make sure you have offers and special deals like supermarkets do. This may mean you have to offer something at a lower price with the plan to sell another product/service that compliments that item which will make more profit.
4. Keep an eye on competition - try to make sure your business is not lagging behind on the four P's of the marketing mix - Product, Price, Promotion, Place. All four need to be excellent to ensure growth in a slowing economy.
5. Give away stuff to entice people to keep visiting - This doesn't mean give everything away at a knock down price, but more specifically could mean a good chance to clear out old stock items and have more space by getting rid of it at cost price. The customers get a good deal and you keep the cash-flow coming in.
6. Don't use bad economic conditions as an excuse - try to stay focused and think positive, don't listen to negative sources of information, look at the positive sources as well. Many large retailers have a positive outlook, its just  that media outlets like to dwell on negativity as bad news sells better than good. Compare your business to the bigger companies and see what they are doing and what you can do as well. The Director /  CEO that thinks and plans positively is the one that drives their business forward.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting contractors and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

How do you save money on Capital Gains Tax? For an Accountant this is a question which is asked regularly. But as you can always find a way to save money. Below I give you a basic insight into how CGT (Capital Gains Tax) works, some tips, exceptions and how to avoid it completely:

How does it work?  

CGT is run through the tax year (6th April one year to 5th of April the following year). It is worked out on the total of your taxable profit from any capital assets that you hold. For instance, property, bonds and shares on the stock exchange. Furthermore, it is when the amount exceeds the purchase price of a property, bond and shares/stock. The amount that is exempt (tax free) annually is £10,900 for 2013 to 2014 (which increases to £11,000 for 2014 to 2015). At present there are two different types of CGT. The basic rate taxpayers pay is 18%, although the higher rate tax payers pay is 28% and if the capital gains goes over your threshold you will pay the higher tax.

Tips to save money       

Below are some tips to keep the CGT Low as possible:

• Keep receipts and records of all assets that might get CGT.

• If you are married or in a civil partnership each spouse has their own allowance to double the amount they can keep away from the tax man.

• Paintings, antiques and other collectibles are tax efficient investments because you can sell them off as a set or individually as well.

• Unmarried partners can recommend a different home as their main home to get tax relief on both.

• And many more

Exceptions

Any profit made on selling your home is tax exempt, unless you did one of the options below:

• Rent / Let part of your property

• If you used parts of it to run a business

You can also get away with not paying tax if you make a profit on selling a car, ISA’s, Peps, UK government gifts, savings certificate, premium bonds, personal belongings that are worth £6,000 or less when you come around to selling them. Furthermore there is a 10% tax rate with the entrepreneur’s allowance, which is aimed to help people that are selling their businesses they have built up. It has a lifetime limit of £5m.

Avoid it completely

If you want to avoid paying the higher threshold of 28% there are some suggestions below:

• Spreading you gain over a longer period of time. For Example, when you want sell some shares you should sell some before 6th April and then some after because you can take advantage of two years worth of allowances (£21,800.00).

• You can deduct your capital losses against you capital gains in order to arrive at your net gains. For Example, a profit of £25,000 minus a loss of £10,000 will produce a net gain to £15,000. As you can see this has reduced it considerably and has now placed it into the lower threshold of 18%.

• The easiest, quickest and the most popular way of not paying any type of tax ( which includes CGT)is to open an ISA  as every person has a yearly allowance of £11,280 (£5,640.00 can be cash). Over 19 million of the British Public has an ISA because it keeps your income and investments away from the taxman’s grasp.  Furthermore, many investors have built up six figure sums inside ISA’s, which is all protected from HMRC.

• Make extra contributions to your pension schemes because if you add more to pensions the less income you have available to get taxed, which would come available after retirement.

• One option is for parents who have children under the age of 15 can bring down there taxable income by purchasing childcare vouchers. Every parent can sacrifice up to £243 a month of their salary for tax free childcare vouchers.

• And many more

You can defer your CGT by reinvesting it into the Enterprise Investment Scheme (EIS). You would have a limit of £200,000. Furthermore, any profit made will be exempt if you meet the qualifying standards.

Finally, while tax avoidance is legal, tax evasion is illegal. So do not be tempted to sell assets without declaring any profit to HMRC. Defrauding the tax man can land you with a large fine or even a prison sentence.

But the advice and support of an experienced tax accountant and some sound forward tax planning can save you thousands of pounds.

By Tahir Malik at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they are considered in the Finance Industry to be the experts in all types of Tax including Capital Gains Tax. Helping and supporting businesses and individuals throughout the UK, they regularly help people with their CGT tax issues.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

Properties have always been a relatively safe and sound option for investment. As a landlord, renting out your property can offer an alternative source of income in the form of rent and potentially give a good return on the initial investment through capital appreciation. However, if you’re looking for huge returns over a few days then property investment is unlikely to be your preferred choice. Nonetheless properties have historically been a low risk investment and have provided modest returns over the long term. Here are a few things to consider if you wish to maximise your rental income:

Deducting Allowable Expenses

You can reduce the amount of rental income that is taxable by taking advantage deducting allowable expenses. There more common expenses you can deduct are:

• Utility Bills and Council Tax
• Maintenance and repairs to the property (excluding additions and improvements)
• Interest on the mortgage to buy the property
• Cost of labour/services (Wages for cleaners, gardeners etc.)
• Letting Agent’s Fees
• Accountancy Fees
• Service Charges
• Direct Costs (Advertisement cost, fuel costs incurred in the journey to the property, phone calls etc.)
• Contents Insurance

The costs should be wholly and exclusively incurred as a result of renting out the property. If a part of the expense meets this condition then that part can be deducted from income.

Cost comparisons

Saving costs can only have a positive effect as expenses are the only thing eating into your rental income. Try reviewing your costs on an occasional basis (once a quarter) and you may witness bargains that could help you save a lot of money. Service providers tend to offer sizeable discounts to new customers but only have stagnant prices for existing customers. Getting quotes from different companies that offer the same service can sometimes amaze you at how wide the price range can be. Just be sure you don’t jeopardise the quality of services just to save a few pennies.

Annual Investment Allowance

Expenses of a capital nature are not deductible. You cannot deduct from income the cost of the property you are renting out, expenditure that adds to or improves the property or the cost of renovating a property from a state that cannot be rented out.

However, capital spending can be deducted using the Annual Investment Allowance. From 1st January 2013 (until 1st January 2015), you can deduct up to £250,000 a year for many types of capital spending using the Annual Investment Allowance, such as commercial vehicles, business furniture, computers, machinery and tools. It would be beneficial to take advantage of the temporary rise in the Annual Investment Allowance as it is likely to revert back to around the limit of 2012/13 (£25,000) after January 2015.

Landlord’s Energy Savings Allowance (LESA)

Until April 2015, an allowance of up to £1,500 per let residential property can be claimed for the cost of loft, wall and floor insulation, draft proofing and hot water system insulation. The LESA was introduced to encourage landlords to improve the energy efficiency of let residential properties. These expenditures are usually not deductible from taxable income and are not eligible for capital allowances.

Wear and Tear Allowance or Renewals Allowance

For fully furnished properties, a wear and tear allowance can be claimed for furnishings such as beds, carpets and appliances. The allowance is 10% of the net rental income (gross rent minus utility bills, service charges and council tax) you receive from these properties.

With the renewals allowance, you can claim expenses of any furniture as you replace them. Any money you make from the disposal of the asset must be deducted and the cost of any improvements (e.g. an upgrade from a washing machine to a washer-dryer)

Note that you can only claim either the Wear and Tear Allowance or the Renewals Allowance but not both.

By Wilson Law at Tax Affinity.

Tax Affinity Accountants are considered in the market to be experts in Tax and Accountancy in the UK. Based in Kingston upon Thames they have clients right across the UK as well as Europe, Middle East and North America.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

Buy-to-let properties have attracted thousands of investors. But before you take the plunge, it's important to consider the tax implications.

Taxes on buy-to-let properties: Britain's landlords are required to pay tax on rent and capital gains tax, but there are ways to minimise this.

Rental Income

Rent income will be treated as income and taxed in line with your basic or higher-rate tax bands.

You can, however, be able to offset mortgage interest payments, letting agency costs and maintenance expenses against the taxable rental income.

This can make it more tax-efficient to have a mortgage on your investment property rather than your main home where you can no longer get tax relief on your mortgage.

Rental incomes should be declared on an annual self-assessment tax return, it may be worth seeking an accountant to ensure all tax breaks are taken advantage of.

Tax on the property price rise

Capital Gains Tax (CGT) comes in when you sell a buy-to-let property at a profit.

From April 2008, capital gains tax was changed to a flat rate of 18%. Any gains above the annaul £10,100 (2009/20) personal threshold will attract CGT.

Before CGT as charged at up to 40% and taper relief cut this, if a property had been owned for more than three years. This no longer applies.

Capital gains tax applies to any property which is not your main home, known as the Principal Private Residence. If you only have one property and it is considered your PPR, then you do not have to pay CGT, however, the taxman may want evidence that you were actually living there.

CGT liabilities should be declared annually on your tax return and anyone making a substantial sum from selling a property should seek out a good accountant, who can take advantage of all available breaks.

Stamp duties

Stamp duty tax is payable on buy-to-let properties by the purchaser, as all other residential properties. The current rates are 1% above £125,000, 3% above £250,000 and 4% above £500,000. A stamp duty holiday currently applies until the end of the year on all properties under £175,000.

Decreasing tax

Most people think that one way to dodge tax - and are often advised by accountants - is to put a second home in the name of their partner. When they come to sell, they claim their partner has been living in the property thereby making it exempt from CGT.

This choice is easier for people who have done let-to-buy: they keep the mortgage on the first home which they lived in - and then take a second traditional mortgage with another lender on an additional home where they live.

In this way you can bypass the need for a proper buy-to-let mortgage on the first property, which would alert the taxman. However, it breaches the lender's rules, which means they could call in the loan without notice. More importantly, evading CGT in this way would be treated as illegal and result in fines or even imprisonment.

However, there are more complicated ways of mitigating tax on buy-to-let, including setting up a company to own the properties. For the average amateur investor this is not worthwhile as it is expensive, complicated and can limit access to mortgage finance.

Cutting down on capital gains tax

Typically, buy-to-let owners and those with second homes can slash tax bills if they have ever lived there as their principal private residence and through lettings relief

And everyone's main home - or principal private residence as the taxman catchily names it - is exempt from capital gains tax when sold, but any other properties they own attract CGT at their highest rate when sold.

For example - an unmarried couple may each own a home that qualifies as their principal residence but a married couple may only nominate one property and must elect jointly.

And it is possible to cut capital gains bills by living in the second property for a period of time. Special rules apply to properties that have been a main residence. The period when it was the main residence is exempt, plus the last 36 months of ownership.

As for those who have previously rented out their main residences there is the added benefit of being able to claim up to £40,000 letting relief. This is available to anyone with a share in the property - giving a couple, even if married, up to £80,000 between them.

Finally, the amount of private letting relief that can be claimed cannot be greater than £40,000 and must be the lower of that sum, the amount of principal private residence relief being claimed, or the capital gains made during the letting period.

The best advice however that the wisest of investors make sure to have is to use a clever tax accountant to handle your affairs. The tax saved will be much greater than the fees they will ever charge. 

Tax Affinity Accountants based in Kingston Upon Thames, are experts in tax and accounting. Visit www.taxaffinity.com for more interesting articles. Please feel free to comment and share this article with your friends.