Contents
Don't leave it to chance
Family tax planning
Tax payback - tax credits
Pay rise for the other half?
Jam today, or jam tomorrow?
Pension payments and tax relief
Employee pensions
Children's pensions?
Borrowings and tax
Investment limits
Employee cars and fuel
Give generously and save tax
Capital gains
Capital losses
Second homes
Company or trade?
Inheritance tax
Children's savings?
Business tax
Two jobs = too much NIC?
Should VAT be flat?
Mutiny and bounty
One careful owner
A matter of trust
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Child Tax Credits (CTC) and Working Tax Credits (WTC) were introduced in 2003, and suffered from serious teething trouble - and the need for filing a long and complicated form, which the claimants didn't like and the Revenue had trouble processing. The system is still struggling into its second year. The basic CTC (about £10 a week) is payable to a couple with a qualifying child and combined income of up to £50,000. Above that, it reduces to nothing by the time total income is about £58,000. The form may be longer and more complicated than seems reasonable (when a lot of the information is already provided to the Revenue on the tax return), but £545 a year probably pays for the effort. If both members of a couple work and therefore have significant childcare costs, WTC can make a substantial contribution, even on levels of income above £30,000. The rates are going up for 2005/06, particularly to support childcare costs. It's worth looking into, particularly if your income goes up and down, and is not predictable at the beginning of the year. To start with, a claim is based on last year's income - 2004/05 for the 2005/06 payment year - and it's then revised at the end of the year based on actual income. If you make a claim at the beginning of 2005/06 based on 2004/05 income of £100,000, your claim will be noted but you will receive nothing. If by the end of the year your income has fallen to £30,000 for some reason, you would get the higher level of payment - maybe £3,000 - backdated to the beginning of the year. If you only bother to claim at the end of the year when you know your income is low enough, you only qualify for payment from three months before you claim. This "protective claim" idea has added to the Revenue's burden - they have actually encouraged people to claim when they won't qualify immediately, in case they do so later. Until they change the rules, it makes sense to think about a claim even if your past income is above the limit.
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© Bayar Hughes & Co., 2010.