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HMRC guidelines say you need to send a tax return if, in the last tax year:

• you were self-employed – you can deduct allowable expenses;
• you got £2,500 or more in untaxed income, for example from tips or renting out a property – contact the helpline if it was less than £2,500;
• your income from savings or investments was £10,000 or more before tax;
• your income from dividends from shares was £10,000 or more before tax;
• you made profits from selling things like shares, a second home, or other chargeable assets and need to pay Capital Gains Tax;
• you were a company director;
• your income (or your partner’) was over £50,000 and one of you claimed Child Benefit;
• you had income from abroad that you needed to pay tax on;
• you lived abroad and had a UK income;
• your income was over £100,000;
• you were a trustee of a trust or registered pension scheme;
• you had a P800 from HMRC saying you didn’t pay enough tax last year – and you didn’t pay what you owe through your tax code or with a voluntary payment.

We can plan your dividends for the tax year. This depends on your spending requirements and the money you need on a regular basis. As part of our self-assessment procedure, we offer our clients an assessment of future tax liability based on our own estimates. We can then calculate how much tax you are likely to pay and the POA based on this figure. If you have a limited company then the tax department at Rodliffe will liaise with your account manager to calculate the amount you can take which will help you to defer the extra payment of tax. We can reduce this to any amount depending on your cash flow circumstances.

Please note that if later you decide to take more dividends than suggested, this will attract more tax. If you are not one of our limited company clients or don’t have a limited company, we can still do an estimated calculation for you. A claim can be made to reduce the tax to nil, or to a fixed amount.

Any such claim must state the taxpayer’s belief that there will be no income tax liability for the current tax year or that any such liability will be covered by income tax deducted at source, or the amount due for the current year, after taking into account tax deducted at source, will be a certain amount which is less than the amount of payments on account based on the preceding year, or the claim must include the grounds for that belief. If the claim does not include these details then HMRC could challenge that the claim was fraudulent.

Generally, for a small business, where the trading address is the home address then property costs are not allowed by HMRC. Instead, the director can claim rent non-vatable (see the section below). For a small business, however, with a separate business property then the following rules apply:

Council Tax 

Council tax is classed by HMRC as a personal tax and therefore should not be claimed

Insurance buildings

Insurance costs can be claimed

Rates

Business rates can be claimed. Remember rates are paid over 10 months so make sure that any recurring postings take this into account

Rent

Rent is usually paid 3 months in advance and is allowable.

Repairs

For all equipment owned by the business, this is an allowable business expense.

Utilities

Electric, gas, water, oil, etc… are all allowable

Duplication of rent – (contractors)

There are generally two scenarios where duplication of rent occurs:-

• Where the contractor is relocated to take on a new contract. This in turn means extra rent/accommodation costs are incurred.
• Where a contractor chooses to rent accommodation rather than incurring hotel costs because this is more economical.

HMRC sometimes argues that neither of these costs is allowable. Our policy is that we would not suggest you claim these costs. However, if you are prepared to argue with HMRC that the costs associated with either of the two scenarios above are less than the alternatives you have investigated then HMRC may agree. We suggest clients use their own judgment based on our interpretation above.