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Disincorporation relief close to extinction

Pecuniary liability

OTS warning over neglecting relief

Disincorporation relief was introduced as a temporary measure from 1st April 2013 following recommendations by the Office of Tax Simplification (OTS) to remove the tax barriers when the owners of small companies want to transfer the business to a sole trader or partnership.

The relief allows transfers of land and goodwill to be made at cost or written down…

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Get the shareholding details right

business expenses

Confusion as to who owns shares will prove costly

When establishing a company, it is important to identify who owns the shares and get the correct paperwork put in place. Failure to do so can result in an unexpected tax bill and worse, as proved to be the case in the First Tier Tax Tribunal case of Terence Raine v HMRC (2016).

Mr Raine, a 69-year…

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Simplifying corporation tax


OTS proposes changes to reduce tax burdens

The Office of Tax Simplification (OTS) has recently published its recommendations for making corporation tax (C.T) easier in its report, ‘Simplification of the corporation tax computation’.

To date, there has been little focus on making C.T operate more simply for the benefit of the vast majority of companies. To address this, the OTS has made some…

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Tax-free childcare

business expenses

Registration opens for new initiative

21st April saw the introduction of the Government’s Tax-Free Childcare scheme, available to parents of children under 4 and disabled children under 17. It will be gradually rolled out during this year by age of child, and by the end of 2017 all eligible parents will be able to receive support.

Tax-Free Childcare will be available to over two million households…

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Let it all out

HMRC penalties

Reminder of HMRC’s Let Property Campaign

Each one of our accounting packages gives our clients full, unlimited access to our in-house experts and an important part of their job is keeping our clients informed of the latest changes in tax. Below, we’ve shared a reminder of HMRC’s recently updated guidance for making a disclosure under the ongoing Let Property Campaign.

The Let Property…Read More

Gig economy review should consider tax

LITRG wants Taylor Review to look beyond employment issues

The Low Incomes Tax Reform Group (LITRG) has urged the Taylor Review to examine the relationship between taxation and the growth in non-standard work, such as people working in the ‘gig economy’. This relationship is something we are particularly concerned with, in our role as contractor accountants.

Commissioned in October 2016, the Taylor Review…

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Key to the tax door

key person insurance

Tax implications of key person insurance

Companies may sometimes take out a policy (key person insurance) insuring them against loss of profits resulting from the death, critical illness, sickness, accident or injury of an employee, director or other ‘key person’. This could be a life policy taken out on a main director/shareholder to cover repayment of borrowings in the event of that person’s death.

HMRC’s Business…

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Moving up a gear

self assessment

Single property landlords will be pushed into higher rate tax bracket

The restriction on the deduction of finance costs from 6th April 2017 has meant that single property landlords could easily find themselves becoming higher rate taxpayers because of the new rules. This is illustrated by the example of Imogen below.

Example: Imogen

Imogen is self-employed and works from home. Her annual business profits are…

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General election tax battleground

flat rate

Political pledges on tax that affect contractors

As general election campaigning intensifies, we look at what the three main parties are promising on tax in their manifestos and how this affects contractor accountancy.


Labour say that under their plans, 95% of taxpayers, ie those earning less than £80,000 p.a, will be guaranteed no increase in their Income Tax contributions, and everyone will…

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HMRC Writes to Flat Rate Scheme Traders

flat rate

Warning about the new limited trader rate

HMRC has started writing to all those currently using the flat rate scheme (FRS) due to the introduction of the new 16.5% VAT flat rate applicable to businesses with limited costs, such as labour-only businesses,

The legislation

A limited trader will be defined as one whose VAT inclusive expenditure on goods is either:

  • less than 2%…

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