RMT Tax Seminar Dec 2009

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Slides from RMT's Pre Budget Report briefing, 2009 - supported by CONNECT North East

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RMT Tax Seminar Dec 2009

  1. 1. Current Tax Issues John Richards Managing Partner Anthony Andreasen Tax Consultant
  2. 2. Personal Allowance 2009/10 £6475 2010/11 >£100000 >£112950 Abatement £1 for £2 NIL
  3. 3. Personal Tax Example
  4. 4. Personal Tax Example
  5. 5. Personal Tax 2009/10 2010/11 Basic Rate 20% Higher Rate Threshold >£37400 Higher Rate Dividend Higher (effective) Rate 40% Secondary Threshold 25% >£150000 Secondary Higher Rate Secondary Dividend 50% (effective) Rate 36.1%
  6. 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. 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. 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. 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
  10. 10. Alternative Suggestions •Income splitting •Loans to Shareholders •Corporate partner/member
  11. 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. 12. Tax Efficient Investments •Enterprise Investment Scheme •Venture Capital Trusts •Film Partnerships •Enterprise Zone Trusts •Green Energy Investments
  13. 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. 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
  15. 15. Enterprise Management Incentives •Income tax on discounted options •Corporation tax deduction •Employers NIC •Capital Gains Tax
  16. 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. 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. 18. Research & Development Tax Relief “advance overall knowledge/capability in the field of science or technology”
  19. 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. 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. 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

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