The document discusses current UK tax issues and changes for the 2009/10 and 2010/11 tax years. It summarizes personal tax allowance amounts and tax rates, outlines strategies for advancing income to take advantage of lower tax rates in 2009/10, and explores options like income splitting and loans to shareholders. It also covers the offshore disclosure facility, tax efficient investments, enterprise management incentives, research and development tax relief, and company purchase of own shares. Contact information is provided for John Richards and Anthony Andreasen to discuss any of these tax issues further.
6. National Insurance
2009/10 2010/11 2011/12
Class 1 & 4 Basic 11% 11% 12%
Class 1 & 4 Higher 1% 1% 2%
Class 1 Employer 12.8% 12.8% 13.8%
Combined Higher
41% 51% 51.5%
Rate tax & NI
7. Other Tax Changes
•VAT goes back to 17.5% 1/1/2010
•Corporation Tax rate stays at 21% until 2011/12
•Capital Allowances – 40% FYA ceases 6/4/2010
•IHT threshold frozen £325,000
•Furnished holiday lettings beneficial treatment
ceases 5/4/2010
•Stamp Duty holiday on residential property below
£175,000 ceases 31/12/2009
8. Advancing Income into 2009/10
Earned Income
Earnings £120,000 pa
Move £20,000 to 2009/10 from 2010/11
Increase 2009/10 £8,000
Decrease 2010/11 £10,590
Saving £2,590
Earnings £200,000pa
Move £50,000 to 2009/10 from 2010/11
Increase 2009/10 £20,000
Decrease 2010/11 £25,000
Saving £5,000
9. Advancing Income by changing year
end
•Solicitor 30/4/2008 £120,000
30/4/2009 £150,000
30/4/2010 £180,000
31/4/2011 £150,000
Overlap relief brought forward £16,000
Change year end to 31 March 2010
2009/10 Tax Increase £61,090
2010/11 Tax Decrease £75,990
Saving £14,900
11. Offshore Disclosure Facility
•Notification of overseas bank accounts extended
until 4th January 2010
•Full disclosure by 12 March 2010
•Legislation to attack non disclosure
12. Tax Efficient Investments
•Enterprise Investment Scheme
•Venture Capital Trusts
•Film Partnerships
•Enterprise Zone Trusts
•Green Energy Investments
13. Enterprise Management Incentives
•Tax efficient employee incentivisation
•Key employees
•Company must qualify
•Trade must qualify
•Employee must qualify
•Options (and shares) must qualify
•Company can obtain advances assurance that it
qualifies under the scheme rules from HMRC
14. Enterprise Management Incentives
Tax Implications
•Options granted for exercise price equal to or
greater than MV
•No tax on grant or exercise
•Tax + NI Charge
•Option price is less than MV at date of grant
•Shares under the option are free
•Disqualifying event
16. Company Purchase of Own Shares
•Distributable Reserves
•Ordinarily treated as a distribution
•Capital Gains Treatment?
•Seek advance clearance
•Significant benefit to shareholder (10% or
18%)
17. Criteria to be met
•Articles of association do not prohibit
•Substantial reduction in share capital
•Ownership period
•Must not be connected
•Bona fide commercial reason
•Automatic treatment
18. Research & Development Tax Relief
“advance overall
knowledge/capability
in the field of science or
technology”
19. Research and Development Tax Relief
•Enhanced deduction of 175% on qualifying
expenditure (SME)
•Reduce taxable profits or increase allowable
loss
•Loss utilisation v tax credits
•Large company relief (130%)
•IP changes from Pre Budget Report
20. Research and Development Tax Relief
•Eligible expenditure
•Staffing costs
•Consumables
•Software
•Utility costs
•Funding
•Subcontractor costs
•Making the claim
•Briefing document
•Late claims
•Maintaining records in support of R&D claim
21. Thank you for listening
John Richards
Managing Partner
Tel 0191 2569500
john.richards@r-m-t.co.uk
Anthony Andreasen
Tax Consultant
Tel 0191 2569500
anthony.andreasen@r-m-t.co.uk