Laura, Maldon

A SSAS is a type of pension scheme and stands for 'Small Self-Administered Scheme'. All of the Scheme members are usually shareholder-directors or key staff. They are formed by a trust deed and rules, and allow employers and members more control over the scheme’s assets.

For a small business a SSAS can represent the ideal pension’s vehicle, particularly as the scheme can make loans or borrow to purchase assets such as commercial property- subject to certain conditions set by HM Revenue & Customs summarised below:

• The loan should not exceed 50% of the net market value of the scheme's assets
• The loan should be secured against assets of an equal value by way of a first charge
• The loan's terms should be no longer than 5 years
• Interest of at least 1% above bank base rate should be charged on the loan

You should seek professional advice when considering pension planning. Your local TaxAssist Accountant would be happy to recommend a local financial advisor.

We provide tax and accountancy services in Maldon and throughout the UK - http://www.taxassist.co.uk

Furnish Holiday lets - a hot potato?I have a small portfolio of furnished holiday lets, and I am aware that the tax treatment of them is now far less favourable. Ought I consider selling them?

Elliot, Bolton

Let’s remind ourselves of the changes that have taken place with regards to Furnished Holiday Lettings (FHLs):

1. The treatment of properties in the European Economic Area (EEA)

From 2009/10, properties in the EEA in addition to the UK have qualified as FHLs. UK properties are treated as one ‘business’ and those in the EEA as another.

2. The period for which a property must be available for let and is actually let

• Availability test – during the tax year, the accommodation is available for let to the public for at least 140 days, but this will increase to 210 days from 2012/13
• Occupancy test - during the tax year, the accommodation is actually let to the public for at least 70 days, but this will increase to 105 days from 2012/13
• Pattern of occupancy – the property must not be let for periods of “longer term occupation” for more than 155 days during the tax year. A “longer term occupation” is a letting to the same person for longer than 31 consecutive days

3. The offset of losses

Any losses made may only be offset against profits from other properties in the same FHL business or carried forward to utilise against from the same FHL business. So you could not offset losses from the UK FHLs against profits from the EEA FHLs, because these are separate businesses. Prior to April 2011, you were able to utilise FHL losses against other income.

One of the main advantages of FHL status is the availability of the various business capital gains tax reliefs, in particular Entrepreneur’s Relief. If you are unlikely to achieve the new 105 day letting condition, then you may wish to consider selling your portfolio whilst the properties still qualify as FHLs. BUT, it should be noted that Entrepreneur’s Relief continues to be available against the disposal of the property within 36 months of the date that the trade ceased, so you should not need to make a decision immediately.

You would be advised to seek professional advice before making any decisions though, as the tax and impact on your income could be significant. Your local TaxAssist Accountant would be happy to discuss this with you.

We provide tax and accountancy services in Bolton and throughout the UK - http://www.taxassist.co.uk

SEIS - is it right for us?My brother and I have set up a company together and are the only director/ shareholders. The business is going really well- but our growth is restricted by our working capital. But with little experience between the two of us, we are struggling to obtain finance from the banks. I’ve heard about a scheme to encourage investment in small private companies- can you tell me more?

Seb, Sutton

The Chancellor announced the Seed Enterprise Investment Scheme (SEIS) in the last Autumn Statement. Its purpose is to encourage investment in ‘small’, UK, trading companies that are under two years old. ‘Small’ is defined as having 25 or less employees and gross assets of under £200,000.

The Scheme works by offering private investors tax relief of up to 50% on investments up to a maximum of £100,000 per annum, and there are also some capital gains tax concessions. The company is restricted to obtaining only £150,000 of investment via the Scheme.

The investment is made in exchange for shares that must be held for at least three years; otherwise there is a claw-back of the tax relief. The investor cannot be an employee of the company, unless they are a director. Furthermore, they cannot have an interest of more than 30% in the company.

SEIS may be right for you, but please note that the investors will be shareholders so you ought to think carefully about the impact on your degree of control of the company and your share of the dividends.

Your local TaxAssist Accountant would be happy to discuss this with you in more detail.

We provide tax and accountancy services in Sutton and throughout the UK - http://www.taxassist.co.uk

Timing of equipment purchasesMy business has not done very well this year, but I’ve just landed a big contract, so I think we’ll see bumper profits next year. I’m going to have to buy more equipment though, as I’ll have to take on extra staff. I think I’m right in saying that I’ll get tax relief for the equipment in the year that I buy it. So should I put off buying it until my bumper year, to keep profits down?

Tyler, Prestatyn

You are quite right- capital allowances (tax relief for equipment, vans, computers etc) are typically awarded in the year of purchase or the year the asset is brought into use.

You have a few options and they have very different consequences:

• Buy equipment in the poorer year and start using it – capital allowances awarded in poorer year
• Buy equipment in the poorer year and start using it – capital allowances awarded immediately, but you can opt to carry the expenditure over to the bumper year
• Buy equipment in the poorer year and do not use it until the bumper year – capital allowances awarded in the bumper year
• Buy equipment in the bumper year – capital allowances awarded in the bumper year

However, you should be aware that the maximum relief available on capital expenditure is dramatically reducing from £100,000 to just £25,000 from April 2012. Relief will still be available on expenditure above £25,000 but only at 18% per annum on a reducing balance basis; rather than the 100% you are expecting. Therefore, you must bear this in mind if you are planning to defer the expenditure and you are planning to spend over £25,000.

Your local TaxAssist Accountant would be happy to discuss this with you in more detail and calculate the estimated tax implications of the various options.

We provide tax and accountancy services in Prestatyn and throughout the UK - http://www.taxassist.co.uk

Should the business pay us rent?My wife and I own a commercial property personally, but our company operates from it. Is there any tax advantage in the company paying us rent?

George, Sidcup

However, you are likely to forego some of your Entrepreneur’s Relief on the sale of the property. Entrepreneur’s Relief reduces the rate of Capital Gains Tax payable from 28% to just 10% on gains arising on the sale of business assets- provided certain criteria are met.

You would be advised to seek professional advice before charging the company rent, as the long-term implications on your capital gains tax position could be significant. Your local TaxAssist Accountant would be happy to discuss this with you further.

We provide tax and accountancy services in Sidcup and throughout the UK - http://www.taxassist.co.uk

Business property renovationAn old factory in my area has been on the market for ages now and the price is now on the floor, so I’ve thought about buying it. I thought I’d read somewhere that there was some specific tax relief available for doing-up rundown buildings- can you tell me more?

Peter, Wallasey

Business Property Renovation Allowance (BPRA) provides a 100% capital allowance to property owners for qualifying capital expenditure incurred on or in connection with the conversion or renovation of a qualifying commercial property.

A property qualifies if it:

• Is located in a designated development area;
• Has been unused for at least 12 months before works begin;
• Has not been used for private residential purposes;
• Has been used most recently for the purposes of a trade, profession, or as an office; and
• Is available for letting for use as qualifying business premises once conversion is completed.

HM Revenue & Customs may claw back any BPRA if the building is sold, demolished or ceases to be used for a qualified business purpose within 7 years of first being used after renovation.

But the expenditure must be incurred before 11 April 2012 to qualify, so you don’t have long! If you would like to discuss this further, please feel free to contact your local TaxAssist Accountant.

We provide tax and accountancy services in Wallasey and throughout the UK - http://www.taxassist.co.uk

Overdraft interestI have my own company but it’s got a few cashflow issues so I’ve been paying for business expenses using my own account. However, my bank account is now overdrawn as a result. Am I able to recharge the company some of the interest I’ve incurred?

Jacob, Otley 

No, I’m afraid legislation specifically excludes a tax deduction for overdraft or credit card interest. Directors’ earnings are employment income and so no deduction is due.

Had you been operating as a sole trade or partnership, this may have been possible.

If your business is experiencing cashflow problems, you may benefit from meeting with your local TaxAssist Accountant that could give you tips and budgets to help you manage the peaks and troughs in your business.

We provide tax and accountancy services in Otley and throughout the UK - http://www.taxassist.co.uk

Multiple part-time jobsI am working part-time in a hotel, corner shop and shoe shop, because I’ve struggled to find full-time work. I don’t earn more than £100 per week from each job though and I’ve recently noticed I’m not paying any National Insurance- does that mean I won’t be entitled to the state benefits?

Lisa, Redditch 

Yes, your entitlement to certain state benefits depends on your National Insurance contributions record.

Unlike tax, National Insurance does not take into account your total cumulative income, and therefore, it is possible to end up with a situation like yours where your total income is fairly good, but you do not trigger any National Insurance.

You are not obliged to pay any National Insurance in your case; however, if you are concerned about your state benefits entitlement, you may wish to pay voluntary contributions – Class 3 National Insurance. Class 3 is £13.25 per week for 2012/13.

Complete form CA5603 if you would like to apply to pay Class 3, which is available on HM Revenue & Customs’ website www.hmrc.gov.uk.

We provide tax and accountancy services in Redditch and throughout the UK - http://www.taxassist.co.uk

Starting outI have just started my own business and have invested quite heavily in new equipment and vans. Can you tell me what tax relief I can get on my capital spend please? I think the business will generate a loss this year, but I’m hoping to turn a profit next year.

David, Uxbridge

From the details you have given, it sounds as if your capital expenditure will be eligible for the Annual Investment Allowance (AIA). This means that subject to the AIA in operation during your year end, you may get up to 100% tax relief in the year of purchase on qualifying assets.

However, in your circumstances it may be beneficial not to claim your full AIA entitlement this year. Instead, you could opt to restrict your AIA claim, and claim allowances against the surplus in the following year.

This way, you can manipulate your loss and AIA claim in such a way that you utilise them against your income being taxed at the higher rates.

Starting out in business can be daunting, so feel free to meet with your local TaxAssist Accountant to talk this through.

We provide tax and accountancy services in Uxbridge and throughout the UK - http://www.taxassist.co.uk

Van Benefits in KindOur employees use our fleet of company vans, will they have a benefit in kind?

George, Stockport

A van benefit in kind arises where a van is ‘made available’ for private use by an employee. Private use includes commuting and you should also be aware that they do not necessarily have to make use of the van- it can just be at their disposal.

However, the definition of ‘private use’ for company van benefits is more relaxed than for cars, and you may be able to avoid a charge altogether if private use is ‘insignificant’. Insignificant is defined as:

• insignificant in quantity in the tax year as a whole (that is, a few days at most)
• insignificant in quality (for example, a week’s exclusive private use is clearly not insignificant)
• intermittent and irregular
• very much the exception in terms of the pattern of use of that van by that employee (or their family or household) in that tax year.

You may also be able to avoid a charge if the vehicles meet the definition of a ‘pool car’.

The structure of your vehicles and the associated motor expenses can have significant tax implications, so please feel free to contact your local TaxAssist Accountant if you would like to discuss this further.

We provide tax and accountancy services in Stockport and throughout the UK - http://www.taxassist.co.uk