In his Summer 2015 Budget the Chancellor announced significant changes to the way in which company dividends are to be taxed with effect from 6 April 2016.
The changes will affect both investors and the proprietors of owner managed businesses operated through limited companies.
As we know, a Members’ Voluntary Liquidation (MVL) can be a useful procedure for directors who wish to exit their business and make use of Entrepreneurs Relief, subject to certain conditions being met. The tax savings can often run into tens of thousands of pounds, against a relatively low cost for the actual winding-up procedure.
An MVL is used as a typical exit strategy where a business is sold or the directors are looking to retire. However, we also see it used for disincorporation purposes to gain a tax advantage. It has been long established that directors cannot benefit from Entrepreneurs Relief and start up a phoenix company the next day essentially doing the same trade. However, it is possible for the directors to continue as sole traders or within a partnership. This is likely to change!
1 January 2016
● Payment of corporation tax liabilities for accounting periods ended 31 March 2015 for small and medium-sized companies not liable to pay by instalments.
7 January 2016
● Due date for VAT returns and payment for 30 November 2015 quarter (electronic payment).
On 18th June a new consultation was opened on proposed changes to the new SORPs.
The new SORP (FRSSE) will be withdrawn for accounting periods commencing on or after 1st January 2016, after just one year of existence, due to the FRSSE itself being withdrawn from that date. The new consultation looks at what will happen as a result, with a final new version expected to be ready by March 2016.
Many charities are actively considering whether to convert their unincorporated charity to a Charitable Incorporated Organisation (“CIO”). For many, it is the incorporated status of the new entity which most appeals. A CIO is not a limited company; it is not registered at Companies House. It is a form of incorporated charity regulated solely by the Charity Commission (“CC”).
An unincorporated charity is not a legal entity, so the powers of holding property, liability exposure and similar rest with the Trustees; they are never passed onto the entity.
By forming a CIO the title of property can be held by the charitable entity, liability is limited within the confines of the CIO and it can enter into contracts in its own right.
As Chancellor George Osborne prepares to deliver his Autumn Statement the South West’s leading independent firm of accountants is holding a series of briefings for business owners covering important issues such as tax changes, cloud accounting and insolvency.
The free to attend Breakfast Business Briefings, which are being organised by Thomas Westcott Chartered Accountants, take place across Devon and will include detailed presentations and question and answer sessions.
Changes to the Gift Aid Declaration forms, sponsor form and guidance have been made by HM Revenue and Customs to make it easier for people to understand their tax obligations when they make donations to a charity or Community Amateur Sports Club. Please follow the link below for an update on the guidance.
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