A report by Capita Registrars has found that shareholders in UK companies saw dividend payments cut by £10bn.  No surprises that those investing in the banking sector were hit the hardest. In fact UK company payments to investors in 2009 were 15% down on the previous year. The outlook for this year is not much better with dividends expected to grow but only by 5%.

So for those of you who pay your tax on account you may find you have overpaid. If you think this applies to you please call me on 01344 620495 to see how I can help.

With a record number of 9m taxpayers expected to file their tax return online - don’t delay. Tax returns and payment of tax must be with HM Revenue & Customs by midnight 31 Jan or you risk paying a penalty of £100. 

First timers need to remember it can take more than a week to register to file online and then you have to wait for an activation PIN.  Go to www.hmrc.gov.uk/sa  and click on register for self-assessment online.

If you need any assistance please contact me on 01344 620495 or mark.busby@dbsellek.co.uk

With the proposed hike in 50% income tax why not consider taking salary as dividends to minimise your tax bill. Shareholders in their own companies who take dividends instead of cash means you are taxed at 32.5% until 5 April, rising to 42.5% on 6 April.

For practical advice contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk

Rises in National Insurance and Income Tax for high earners mean it’s even more important to take advantage of tax breaks and look at other ways to minimise your tax bill. There are generally various planning techniques to avoid or defer these liabilities but action must be taken NOW if these plans are to be effective as of this April.

For practical Tax Saving solutions contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk

I was pleasantly surprised to see the Chancellor made no changes in his Pre-Budget Report to Capital Gains Tax which remains at 18%.

The absence of any change to CGT is seen by many commentators to be linked to the forthcoming election. So once this has passed changes to tax are anticipated. By acting now it is possible to fix your CGT rate to 18% even if you still want to keep possession of the asset.

Contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk for practical Tax Saving solutions.

High earners should make the most of pension contributions now. The Chancellor further tightened the Budget 2009 pension tax relief rules in December’s Pre-Budget Report. So now any pension benefit contributed by an employer or third party will be taken into account when calculating whether your income exceeds £150,000. This means more high earners being caught by the pension rules (perhaps unknowingly).

Also, the Chancellor extended the pension relief restrictions, which prevent individuals from making large irregular annual pension contributions before 6 April 2011, to include those earning £130,000 (where an employer’s contributions takes them above the £150,000 income level).

Contact Mark Busby on 01344 620495 or mark.busby@dbsellek.co.uk for ways to maximise pension relief and reduce income tax.

Businesses are having a tough time what with adjusting to the changes introduced at the beginning of the year i.e. the Standard Rate, Flat Rate and Cross-border rules. In addition, from 1 April all businesses with £100,000 or more turnover will be required to file their VAT Returns online. This will also affect all newly VAT registered businesses from this date.

This means you will need to register online as soon as possible. Find out more www.hmrc.gov.uk/vat/vat-online/index.htm

Need help with 1 Jan changes, filing online and your VAT Returns then contact Lindsay Gray on 01344 620495 or lindsay.gray@dbsellek.co.uk

The Chancellor’s Pre-Budget Report smacked of political cowardice. Full of attention grabbing headlines with little substance really except for high earners. Have a look at the Pre-Budget highlights below. If you would like to discuss how the Pre-Budget affects you or your business please call me on 01344 620405 or mark.busby@dbsellek.co.uk

Read Pre-Budget Report in detail

Personal Taxation

The big news (and one to shout from the roof tops) is there are no changes to Capital Gains Tax. So make the most of it. Call me for practical Tax Planning solutions;

The top rate of tax is rising to 50% from April 2010 for those earning £150,000 or more. Consider taking extra dividends before this date or putting dividends in your spouse’s name if they are a basic rate tax payer;

The special rules preventing individuals from making large additional contributions to their pensions before 6 April 2011, have been extended to those with incomes of £130,000 or more (from 9 December 2009). Consider Lifestyle Financial Planning for practical advice on saving for the future;

Inheritance tax is frozen at £325,000 but this is largely irrelevant as property values have taken a hit anyway in the downturn;

Those earning £100,000 or more lose their personal allowance from April 2011; Talk to me about practical Financial Planning solutions;

National insurance is rising by 1% from 6 April 2011, which means less take home pay (a sneaky way of taxing your pay packet without you really knowing). Not much you can do about this one;

Business Taxation

Business reliefs are modest with the £50,000 loss relief extended for another year. There’s an increase in Capital allowance expenditure in the year up to April 2010;

The standard rate of VAT returns to 17.5% which means applying this rate to all goods and services from 1 Jan 2010. This together with other NEW 2010 VAT Changes makes for a challenging time in the coming months.
Email lindsay.gray@dbsellek for ways we can help;

The deferment of Corporation Tax is welcome news for small businesses and remains at 21% for another year.

Watch this space for my Pre-Budget report highlights on Wed 9 Dec. Follow my Pre-Budget tweets on http://twitter.com/dbsellek. If you have any questions before then please call me 01344 620495 or mark.busby@dbsellek.co.uk

In the meantime, here are my top predictions:

1. A potential increase beyond 17.5% in standard rate VAT (but not before the election or 5 April 2010)
2. Possible changes to the current 18% Capital Gains Tax
3. Possible widening of the £150,000 threshold for 50% Income Tax rate
4. Potential abolition of higher rate tax relief for pension contributions
5. Further anti-avoidance measures aimed at high earners looking to mitigate high taxation
6. Controversial phasing out of childcare vouchers for high earners
7. More attacks on Employee Benefit Trusts
8. A potential small increase in the residential Stamp Duty Land Tax threshold, due to go back down to £125,000, on 1 Jan 2010
9. Revisit income splitting which was left under review

With an election around the corner the Pre-Budget report outcome is difficult to judge. We already know about increases in employer and employee National Insurance, restrictions on higher rate pension relief and the draconian 50% Income Tax rate for high earners from April 2010. Most worryingly for the UK Property Owner is what lays ahead for the future of Principle of Private Lettings Relief, which exempts gains on the family home, given the prominence this relief has received in recent press reports. Not to mention the 18% Capital Gains Tax which is a sitting target if ever there was one.

Difficult to second guess the Pre-Budget this year. What do you think?