Entries from March 2006 ↓

Many people are still waiting for their £250 from the tax man for filing last year’s PAYE forms online. We have heard that many P35’s submitted have been erroneously labelled as not due (L35’s) and hence no £250 is allocated to you.

Phone up your PAYE tax office and make sure you’re not one of them.

UK taxpayers are paying £7.6bn more tax than they need to, a new report has found.

So, before you moan about having to pay so much tax, make sure you’re claiming everything you’re entitled to. For example, do you know if you’re eligible for tax credits, could you claim back tax paid on bank interest, or have you claimed Gift Aid on charitable donations that you have made?

The Daily Express has started a campaign to end inheritance tax (IHT).

The paper’s Saturday magazine includes a free car sticker that readers can use to display their opposition to Gordon Brown’s IHT plans.

The newspaper claims 200,000 of its readers are opposed to the so-called death tax, which hits thousands of families every year.

More and more people are facing an inheritance tax hit due to rising house prices which have climbed at a far higher rate than increases in the IHT threshold.

The IHT threshold currently stands at £275,000.

Inheritance tax (IHT) is probably the least considered tax when it comes to planning. And yet it has a relatively high rate of 40%. As with all tax planning, the sooner you do something about it the more tax you can save. One IHT scheme we have seen grow in popularity recently is the ‘discounted gift scheme’.

The discounted gift scheme is aimed at people aged 50-70 (but other ages are also eligible) who have large surplus cash balances. The individual gifts away the capital, say to their children, so that it is outside of their estate for inheritance tax purposes and thus saves the dreaded 40% charge when they pass away.

However, they can still elect to receive 5% of the balance per year if they need some spending money. As this probably equates to the return that the money is earning, the lump sum will not actually be being eroded away by these withdrawals.

We recommend you ask your accountant or financial adviser about this discounted gift scheme.

We all know that in an effort to be seen as ‘green’, the government have increased the tax payable on company cars to such an extent that it is really not worth having one now.

However, there are few instances when you can get a ‘cheaply taxed’ company car:

Classic cars
If the car is more than 15 years old and valued at less than £15k, the tax bill is calculated on its list price when originally new (probably about £1,000 for a Jaguar rather than £50,000 for the modern day equivalent) which will save you £’000s.

Vans
We’ve all seen the sort of thing, 4×4s which look like a car from the inside, have four seats but could also carry a load of scaffolding should you need to. Again, these can be taxed at much lower rates than the equivalent car.

Green cars
If the CO2 emissions of the car are less than 140g/km they will fall in the lowest 15% tax bracket and if below 120g/km the whole cost of the car can be written off against tax on day one.

Ferraris
The maximum list price that your tax bill is based on is £80,000 so buying that Ferrari or Rolls Royce will effectively be saving you tax!