Simplification Made Simple
Tax and Business Agents
www.c-o-t-m.com

Intellectual Property

9 March 2010

Intellectual Property

Have you invented something and are not sure whether it can be patented or treade marked or copy righted? We can do research for you to advise you of a similar patent already registered or not and, if feasible, help you register your IP.

We have done this for several inventors in the UK.


Wednesday, 28 October 2009

"The total tax revenue in 2008/09 was £435.7 billion, a decrease of £21.7 billion (4.7%) on 2007/08 of £457.4 billon.

Income Tax actual and accrued revenue was £149.6 billion (2007/08 £155.1 billion).

National Insurance actual and accrued revenue was £98.0 billion (2007/08 £98.2 billion).

Value Added Tax actual and accrued revenue was £78.5 billion (2007/08 £84.9 billion).

As a percentage of the total tax take, the above three taxes accounted for the largest share of the total tax cake as below:

Income Tax 2008/09: 34% of total tax cake (2007/08: 34%).
National Insurance 2008/09: 22.5% of total tax cake (2007/08: 21.5%).
Value Added Tax 2008/09: 18% of total tax cake (2007/08: 18.5%).

The above THREE TAXES TOGETHER amounted to ££326.1 billion and accounted for 74.5% of the 2008/09 total tax cake of £435.7 billion.

(The same three taxes amounted to £338.2 billon and accounted for 74% of the total of £457.4 billion in 2007/08).

In 2008/09 there was a 52% increase in the number of Self Assessment returns completed online. A total of 5.8 million returns were filed online by 31 Januray 2009, compared to 3.8 million returns on 31 January 2008."

Source: H M Revenue & Customs 2008-09 Accounts HC 464 ISBN 9780102959154.

New Penalties System for Incorrect Tax, VAT, PAYE, Corp Tax Returns

Thursday, 5 November 2009

HM Revenue and Customs have announced a second disclosure 'initiative' call New Disclosure Opportunity ("NDO").

If you urgently notify HM Revenue & Customs that you wish to take advantage of this "NDO" announcement and file an initial notification of your intention to delcare undeclared tax or VAT or other PAYE or Corporation Tax liabilities before 30 November 2009, then you can make full disclosure in detail in paper form by 31 January 2010; and online by 12 March 2010.

In that case, the penalty you will pay is only 10% of the tax etc. that is due. Otherwise, tax penalties can be very high as explained below:

If you do not take 'reasonable care' when preparing your Income Tax, or PAYE, or Sub-contractor, or VAT, or Corporation Tax self-assessment return after 31 March 2009, then HM Revenue & Customs can charge you a penalty as a per centage of the tax due as extra tax to pay. These per centages are:

1. Careless action: Penalty 30% extra on tax or VAT or PAYE etc. due.
2. Deliberate but not concealed: Penalty 70% extra.
3. Delibeate and concealed: Penalty: 100% extra.

The above penalties can be reduced quite substantially if you voluntarily approach HM Revenue and Customs without being investigated by them.

The above penalties can also be reduced not so much but somewhat even if you are being investigaged if you cooperate fully and help in disclosing all errors and ommissions, etc.

Capital Gains Tax on part owner occupied and part let property

17 November 2009

When you are thinking of buying a second property to save for your retirement instead of say putting your savings into a penison scheme, you should remember that even if you do not live in the second property, depending on how and when you see the property values changing, you can elect to change your Principal Private Residence to be the let property instead of the owner occupied property, depending on which property saves you most tax at the time of disposal.

The following illustration explains how the tax rules are applied when you sell a part occupied and part let property.

Basically the gain accrues over the entire period of ownership. The portion of gain applicable to the owner occupation period is exempt from tax. The portion of gain attributable to the let period is taxable. There are also other exemptions and reliefs as below.

The calculations are made in number of months. The exemption from tax not only covers the actual owner occupation months, but also the deemed occupation months.

The deemed occupation months are:

1. When you buy a new property, you may renovate it for a few months or a year before moving into it. This period is exempt from tax.
2. If you go abroad inbetween owner occupation so that you employed abroad with no duties carried out in the UK. This is called sandwich relief and again this period is exempt.
3. Periods of up to 4 years where the owner or his spouse is required to work elsewhere because of his employment.
4. Periods totalling up to 3 years for any reason are also exempt.

Example:

House costs £415,000 in June 2004 including legal fees, etc. It is owner occupied until December 2006. Owner works abroad in 2007. Owner moves back in January 2008. Owner lets the property in July 2010. He sells it in May 2015 for £780,000. The taxable gain would be:

Proceeds May 2015 : £780,000. Cost June 2004: £415,000. Gain: £365,000.

(1)Owner ocupied : 30 months;(2)Deemed occupation : 12 months; (3) Ownder occupation:30 months; (4) Let: 59 months including last 36 months deemed occupation. Therefore let period is only 23 months, while owner occuped period and deemed occupied period is 108 months.

Total Capital Gain £365,000. Taxable Gain £365,000 x 23/131 = £64,000. If the property is let as a residential letting, then, the gain attribuatable to the period of letting is only chargeable if it exceeds the lower of : £40,000 or the amount of gain attributable to ownner occupation. As £64,000 exceeds £40,000, the excess of £24,000 is taxable at 18%. That is a tax of £4,320 is payable. Even it the entire taxable gain was £64,000, at 18%, capital gains tax payable is £11520.