To most people, paying tax is an unavoidable fact of life. You pay tax, perhaps grudgingly, and forget about it. After all, there's not much you can do about it, is there?
In fact, there could be a way to reduce your tax bill and significantly improve your financial future!
Prescient Accounting provides expert advice to all who need it, whether they are business owners, individuals struggling with their tax affairs, or anyone who wants to explore ways of becoming more tax efficient.
Which aspects of UK tax do we cover?
Here's a general overview of our personal tax advice service to illustrate what's on offer to our valued customers.
Let us know what you need from your accountants, we’re happy to help.
We believe that the role of the accountant is much more than dealing with pure compliance. That’s why we’re offering a free video or telephone call with one of our team of chartered accountants, to give you straightforward and open dialogue about your tax and accounting affairs.
In UK tax laws, domicile refers to your permanent home or the place with which you have the closest and most enduring connection. It's distinct from residence, which simply means where you live.
Domicile plays a crucial role in determining how much tax you pay in the UK, particularly for:
However, for residents with a non-UK domicile, there are special rules:
We cover IHT in more detail during your review, but our inheritance tax accountants expand on this further down the page.
Determining domicile can be complex and involves factors like birthplace, family ties, length of stay, and intentions in the UK.
The deemed domicile rules can automatically classify you as UK-domiciled after 15 years of residence, even if you don't intend to stay permanently.
Seeking professional advice from a tax specialist is highly recommended for navigating the complexities of domicile and its impact on your tax situation. That's why we always include this topic in our reviews.
If you buy, own, rent or sell property in the UK or abroad, you may be subject to certain taxes, such as:
Stamp Duty Land Tax (SDLT) is a tax you might have to pay in England and Northern Ireland if you buy a property above a certain threshold. It's essentially a one-time tax levied on the purchase price of the property.
You only have to pay this tax if the purchase price of the property is more than £250,000 (the current rate).
Also, first-time buyers don't have to pay SDLT if the property price is £425,000 or less, and they pay a reduced rate for properties priced between £425,000 and £625,000.
Here's an example based on a property with a sale price of £300,000:
This is a simplified example, and the process isn't always as straightforward as it should be. Our specialist property accountant tax advisors will go through this with you during your tax review (if necessary) to explore any allowable methods of reducing the amount of Stamp Duty you pay.
Here are some of the strategies they may suggest:
Lowering the agreed-upon property price directly reduces the amount upon which SDLT is calculated, saving you money.
If you're open to shared ownership, buying a smaller portion of the property would mean a lower purchase price and potentially lower SDLT. However, this comes with shared ownership complexities and restrictions (we will discuss these with you).
If you're a first-time buyer, you benefit from higher thresholds and potentially reduced rates compared to second-time buyers or additional property purchases.
If purchasing with someone who qualifies for first-time buyer benefits on their share, it might reduce the overall SDLT depending on the specific ownership structure. However, the legal and financial implications of joint ownership require careful consideration.
If the seller is willing to sell certain fixtures and fittings separately from the property, you can potentially avoid including their value in the purchase price, lowering your SDLT liability. Seek professional advice on the legal and tax implications of such arrangements.
In specific circumstances, government schemes like the Help to Buy scheme might offer ways to reduce your upfront costs and, consequently, the SDLT amount.
We can also advise you on the following areas relating to tax on property:
In the context of UK tax laws, compliance refers to the obligation and responsibility of individuals and businesses to adhere to all relevant tax laws and regulations. It encompasses several key aspects:
Benefits of Compliance:
Consequences of Non-Compliance:
During your tax review, Prescient Accounting will discuss all possible areas of your personal taxes and ensure you are fully compliant.
Capital Gains Tax (CGT) is a levy you might encounter in the UK when you sell an asset for more than you bought it for. In simpler terms, it's a tax on the profit you make from disposing of certain assets, including property.
Important points to remember
Your main residence (the property you live in most of the time) usually qualifies for relief from CGT, meaning any gain is generally exempt from tax.
If you let out a property before selling it, you might be eligible for lettings relief, which can reduce your capital gain for tax purposes.
It's crucial to keep good records of your property purchase and selling costs to accurately calculate your gain and potential tax liability. Our capital gains tax accountants can clarify any further questions.
Businesses face several potential taxes, and it pays to get expert advice to ensure that you only pay the minimum amount required, as well as getting guidance on avoiding the pitfalls.
We can discuss all of the following points during a tax review:
Whether you're a sole trader or limited company, our specialists will explore all avenues of tax relief, allowable expenses, accounting periods, etc., relating to the above topics to determine your tax bill.
They will also assist you in completing online filing to ensure that everything is submitted on time.
However, the first step is your review, during which your dedicated accountant will take note of any areas that require particular attention.
One of the biggest worries regarding personal tax affairs is what happens to your wealth after you have gone. Understandably, you want to leave as much as possible to your loved ones without losing a huge chunk to HMRC.
Dealing with inheritance tax (IHT) can be a time-consuming and complex task, adding stress to an already difficult time. As part of your personal review, Prescient Accounting's specialists can explore your IHT obligations.
Our expertise includes:
By taking care of these administrative burdens, we aim to:
Collaborating with legal professionals is crucial to ensure your will is structured with IHT efficiency in mind. Prescient Accounting can work seamlessly alongside your chosen solicitor or legal advisor by:
By working together, we aim to:
Dealing with inheritance tax can be a significant source of stress. Our aim is to alleviate this burden and provide you with peace of mind in several ways:
Ultimately, our goal is to ensure your legacy is preserved by giving your loved ones the financial security and support you envisioned, while also minimising the impact of inheritance tax
Our comprehensive tax review service also covers the following subjects:
The dividend allowance in UK tax law refers to the annual amount of dividend income you can receive tax-free. This means you don't have to pay any income tax on that portion of your dividends.
Current Situation (as of March 4, 2024):
Important Change:
Additional Points:
The dividend allowance applies to all dividend income, regardless of the source (e.g., UK or overseas companies).
The dividend allowance is separate from your personal allowance, which is the total amount of income you can earn tax-free each year (currently £12,570 for the 2023/24 tax year).
Once you've used up your dividend allowance and personal allowance, any additional dividend income will be subject to income tax at the applicable rates:
A tax review will highlight any areas that need attention and ensure that
Pensions are, alarmingly, neglected by around 50% of the UK population.
You can easily check your state pension by logging into your personal tax account at the government portal, and this will let you know whether you'll get the full amount or not.
However, this is rarely enough for most pensioners to survive on, and it's wise to act now in order to boost your pension contributions.
Your Prescient Accounting personal tax expert will show you the best methods of doing this during your review.
It often comes as a shock when a letter arrives from HMRC advising you that they are conducting an investigation of your tax affairs.
Few taxpayers realise this can happen anytime and to anyone, even if they have been fully compliant.
The process can cause a great deal of anxiety, adding to your stress and workload.
The duration can vary significantly depending on several factors, including:
Here's a general breakdown of potential time frames:
It's important to note that these are just estimates, and the actual duration can be shorter or longer, depending on your specific situation. If you are subject to an HMRC investigation, our dedicated team will guide you through the process to ensure that all the relevant forms are completed and data provided.
We will contact HMRC and liaise with them on your behalf, as this usually speeds things up considerably.
Even if you are not currently undergoing an investigation, we can discuss this possibility during a personal review to prepare you for this eventuality.
Prescient Accounting understands the intricacies of UK tax law and the potential concerns surrounding tax compliance.
While the subject of tax can be complicated and frustrating, our comprehensive tax review service is designed to eliminate the stress and streamline your tax affairs.
Our expert team explores every method available and helps you by...
Contact Prescient Accounting today for a no-obligation consultation and discover how our tax review service can help you take on the UK tax system with confidence.
Whether for business or personal tax, you could boost your financial situation significantly, both now and in the future.
A Personal Tax Review is a thorough assessment of your tax situation, aimed at identifying ways to optimise your tax liabilities and uncover potential savings. It benefits you by ensuring you're compliant while minimising your tax burden.
If you're unsure about your tax liabilities, have had significant life changes, or want to ensure you're making the most of tax-saving opportunities, a Personal Tax Review could be beneficial.
For a Personal Tax Review, you'll need to provide financial documents such as your P60, P45, bank statements, investment statements, and any records of deductions or tax reliefs claimed.
Yes, a Personal Tax Review can help identify areas where you may reduce your tax liabilities through allowances, reliefs, and tax-efficient investments, potentially leading to significant savings.
Conducting a Personal Tax Review annually or whenever you experience major financial changes is advisable to ensure your tax strategy remains aligned with your current financial situation.
A Personal Tax Review is an in-depth analysis of your tax position to uncover saving opportunities, whereas filing your tax return is the process of reporting your taxable income and claiming allowable deductions to HMRC.
We believe that the role of the accountant is much more than dealing with pure compliance. That’s why we’re offering a free video or telephone call with one of our team of chartered accountants, to give you straightforward and open dialogue about your tax and accounting affairs.
We are chartered accountants and tax advisers, working with individuals and small and medium-sized businesses. We're a full-service firm, helping people and businesses with all of their tax and accounting needs. About us
