Smsfs

Smsfs

Smsfs: Auditing And Contraventions ? How To Keep Your Self Managed Super Fund Compliant
Self managed super fund (SMSF) audit and compliance strategies can help SMSF trustee(s) to meet their legal responsibilities, to reduce administrative burdens and to avoid unnecessary breaches of the superannuation law.
SMSF trustee(s) must know and understand their obligations to ensure their SMSFs are compliant.

Australian Tax Office (ATO) Compliance Program 2009-10

The ATO Compliance Program 2009-10 details the tax and superannuation compliance risks the ATO is most concerned about for SMSFs ? and explains what the ATO is doing to address those risks. You can access the program at the ATO.

The compliance program for 2009-10 concentrates on regulatory issues including:

? loans;
? in-house assets;
? borrowings; and
? non-arms' length transactions.

ATO tips for SMSF compliance

The ATO's key tips for SMSF compliance are:
? Trustee(s) and their advisors must treat the SMSF on the one hand, and the trustee(s) personal business assets on the other hand, as independent.
? Lodge income tax returns on time and pay the supervisory levy. Non-lodgement is seen as a contravention and an SMSF can be made non-complying as a result. If an SMSF does not lodge on time, then it immediately attracts the attention of the ATO which will then examine the SMSF's overall compliance.

? Avoid misreporting and calculation errors with SMSF annual returns.
? Ensure all assets are re-valued to their current market value before starting to pay a pension.
? Keep all documents used to prepare the SMSF's annual return. You need to keep documents that:
o explain how the SMSF's income has been generated;
o explain the SMSF's deductible expenses;
o are used to prepare the SMSF's returns, accounts and statements;
o are used to calculate the SMSF's income tax liability; and
o are used by an independent auditor to determine how the SMSF's has complied with super laws.

What are the most common reporting errors?

The most common reporting errors made by SMSFs relate to:
? Residency ? the SMSF must meet the criteria to be classified as an Australian super fund. See taxation ruling TR2008/09 and previous ClearLaw articles
o Compliance with SMSF residency rules ? recent case
o Changes to the SMSF residency trap
o SMSFs borrowing and residence "Into the red: non-compliance and leveraged SMSFs"
? Reporting of non-arm's length income ? often reported incorrectly due to misreporting and tax agent error i.e. incorrect trust codes;
? Insurance premium claims ? an SMSF may use a variety of life policies to provide super benefits on death or temporary or permanent disability of members. There is an allowable deduction of 30% of the premium if the policy is a whole-of-life policy.
? Capital Gains Tax (CGT) ? the CGT consequences of certain transactions must be considered;
? Illegitimate deductions for investment expenses ? due to either overstatement or incorrect claims on the annual return. The ATO has found the most common reason for misreporting was recording items that were capital in nature using the incorrect "label";
? In specie distributions ? failing to record the true market value of an asset in the accounts can lead to circumvention of the contribution caps and a transfer can lead to revenue risks including the avoidance of CGT; and
? Recording SMSF assets ? SMSF trustee(s) should appropriately record the assets of their SMSFs as being held on trust for the beneficiaries of the fund.

In certain states, the legislation may prevent trustee(s) from holding assets using the SMSF's name in the title. In this case, the ATO states that a caveat, instrument or declaration of trust must be executed for the asset. For example, this may include the trustee for the SMSF as the asset owner (i.e. John Smith as trustee for John Smith Super Fund).

How does the ATO deal with SMSF compliance breaches?

The ATO's stated approach in response to a breach is to further educate trustee(s) and tax agents so that they are aware of their responsibilities and obligations. The action the ATO then takes when an SMSF breaches the law depends on the individual circumstances.

When considering action taken by SMSF trustees, the ATO looks at:
? the seriousness of the breach;
? the behaviour of the trustee(s); and
? the tax consequences.
When non-compliance is established, the ATO will issue a non-compliance notice to the SMSF trustee(s).

The ATO's approach is to work with SMSF trustee(s) to help them rectify breaches largely caused by circumstances outside their control. However, if the trustee(s) make no effort to rectify the breach, then the SMSF may be classified as non-complying. As a consequence, its concessional tax treatment will be cancelled retrospectively.

What are the regulatory penalties?
Failure to comply with the Superannuation Industry (Supervision) Act 1993 and the Superannuation Industry (Supervision) Regulations 1994, can result in the ATO imposing a range of penalties.

The ATO may:
? Suspend or remove a trustee, or all of the trustees of a SMSF. If they are suspended, then the ATO must appoint a constitutional corporation or an individual as the 'acting trustee' during the period of suspension. The ATO may then direct the acting trustee to do any number of acts or things which may include winding up the SMSF or disqualifying the trustee(s);
? Disqualify a trustee (or a director of a trustee) for not being a fit and proper person;
? By written notice, direct a trustee (or a director of a trustee) not to dispose of or otherwise deal in a particular way, any of the assets of the SMSF until the notice is revoked;
? freeze an SMSF's assets; and
? impose fines and imprisonment. If a trustee (or a director of a trustee) is found guilty of either any civil or criminal offence under a civil penalty provisions, then the maximum penalties that may apply under Part 21 of the SIS Act are $220,000 (civil proceedings) or five years imprisonment (criminal proceedings) (or both).

Do any other types of penalties exist?

For less serious matters, the ATO may agree to allow trustee(s) to rectify the problem (without the ATO necessarily imposing regulatory sanctions).
Administrative income tax penalties may apply if the trustee(s) make a statement (or fail to lodge a statement) that results in the underpayment of tax. The penalty imposed depends on the conduct of the trustee(s).

A general interest charge is also applied to tax payments not received by the due date. The general interest daily charge rate is worked out by adding seven percentage points to the 90 day bond accepted bill rate for that day, and dividing that total number by the number of days in the calendar year.
Can SMSF trustee(s) appeal ATO decisions?

Trustee(s) can appeal an ATO decision by applying to the Administrative Appeals Tribunal to reverse the decision.

What information does the ATO make available on SMSFs?
The main types of ATO SMSF advice available are:

  1. SMSF public rulings, SMSF determinations and SMSF product rulings; and
  2. SMSF specific advice.
    Read about the differences between private and public rulings here under paragraph 1 of the Pre-Audit Strategy.

The requirement for SMSF product rulings and SMSF specific advice is that the ATO must be provided with all relevant facts in relation to the matters on which the SMSF advice is sought.

The ATO provides SMSF specific advice in writing to a specific transaction or arrangement that SMSF trustee(s) have entered into, or might, enter into. The ATO advice is based on the facts of the specific transaction or arrangement defined in the application for SMSF specific advice. While similar in form to a tax private ruling, SMSF specific advice is not binding on the ATO and does not have the same review rights as a private ruling.

Tips For Contractors Seeking Accountants


All Companies need to make sure that their financial affairs are life form dealt by specialist accountants. This kind of situation is also appropriate to all IT contractors and freelancers. Like all other business, they must also sign up with a reputable, specialist accountant that will grip their financial and accounting needs.Dealing with information and storage bin and payroll issue is not the job for an IT contractor and it is not part of their know-how. They may have the depth of information to deal with financial issue and document work but in its place of commerce with it, it is better to hire a of good standing accountant to do all this for them.Here are a number of of the instructions that contractor can think in looking for an accountant.First of all, create certain to hire specialist. Before seem at no matter which else, you require looking for a side of expert contractor accountants. Of route, you will most absolutely want to employ an accountant that understands tax issue concerned in a contracting business. You should look for firms who commerce with the contractor /freelance market.Second, look for extra armed forces that they present. Like any other business, accountants for contractors also offer letters to their clients.

This may comprise things such as conclusion of your annual self appraisal come back and IR35 contractual suggestion. If you are now about to start your agreement, your accountant can also help you with some issues in setting up your own company. They can help you list for VAT and any other armed forces that will need their know-how.Third, make sure the cost they are charging. More often than not, contractor accountants may give a total accountancy repair for a fixed journal fee. Though, you must fully examine the services that the packages comprise. Make sure that the quantity that you will pay will be equivalent to value of the repair that they will give. Usually, the monthly packages include dealings with the tax authorities, PAYE and NI calculation, conclusion of TAX income and year-end accounts.Fourth, you must provide some consideration to their information of tax legislation.

They must be knowledgeable of IR35, managed service companies and income shifting since each of these issues has a big result on the majority of contractors.Fifth, you must think the services that they give. Like what is mention previous, you must be conscious of the services that they give. You can contact several contractor accountants and find out about the services that they provide. You can compare the services that they provide including the fees that they incur and select the best contractor that will suit your requirements.I know one such kind of company which is very well known for Accountants and ir35 Accountants, known as KB Accountancy Group. For more information click on this link:

How To Find The Best Personal Injury Lawyers


If you've been injured in an accident, then you may be able to recover compensation. Remember that you must take legal advice from a quality personal injury lawyer as soon as possible after your accident to ensure that you receive the compensation you deserve. Get legal help for your injuries by finding an injury lawyer that has experience in your claim area and is confident they can help you.

If you consider asking a personal injury lawyer for legal assistance, you must not be discouraged by the sudden mesh of advertisements of various law firms and independent personal injury lawyers everywhere. For your information, there is an easier way to find the best legal counsel for your personal injury case ? learn how to find a lawyer through an online directory. By this, you?ll be able to save time, money and effort, and you?ll not be searching through databases of reliable, experienced and previously-screened attorneys in your geographic region.

In searching a personal injury attorney, you won't even have to pay him unless you win a settlement for your case. Upon using a good online lawyer directory, you?ll be able to know the particulars on your legal fees, your location will then be considered, and will then weigh highly in your list of responses. What?s truly important, however, is the history of your potential attorney in handling your type of case. Since the law can be complex and complicated, you must be sure that you?ll retain the best-trained personal injury lawyer possible.

In addition, you don?t only need a personal injury lawyer who excels in personal injury law. You also need someone who completely understands the jurisdiction of your region. Also, you must ask yourself this question before hiring a personal injury lawyer ? Are you comfortable with that lawyer and are you confident in his abilities? If the answer is anything other than a resounding "yes," you must keep looking. Your case is too important to entrust to someone who does not inspire your confidence.

When you start looking for personal injury lawyers in your area, don't randomly pick names from advertisements that stretch the truth. Take advantage of matching services and ensure that your needs are going to be met. When you find the best possible resource for personal injury lawyers, you will have a greater chance of turning a bad situation into one that you can cope with. Take just a little time and try using one of these services. You?ll never know, you may not have to go any further to find the most competent counsel for your legal needs!

Outsource Your Tax Service Instead of Increasing Your Hassles Level And Risking Your Health


CEOs have one of the most stressful jobs as they are the company's owner. Being the company leader, you should oversee the entire operations of your company. With the many responsibilities and grand expectations that come along with your job, a worry-free day may be rare for you. However, do not let this be the case! While your job may require a lot from you, you have to keep in mind that your health is as precious as your company. Running your business properly wouldn't be possible when you are unhealthy. So, instead of increasing your hassles level and risking your health, search for a company offering tax service. Currently, other enterprises are doing the same thing because this option is deemed more beneficial for businesses. Entrusting the preparation and filing of your taxes to a professional tax service provider is a good way of ensuring that your taxes are properly and accurately computed. This is because a professional company specialising in tax services is staffed with qualified and trained tax specialists.

Furthermore, by working with a tax service provider, you don't have to worry about filing your taxes as the firm's going to do it for you. They ensure you that your tax returns are filed on time and you don't have to worry for the last moment searching CPAs to file your return. Basically, the greatest benefit of outsourcing the preparation of your corporate taxes is that you spare your company from having unnecessary expenditures because of government fines and sanctions arising erroneous tax computations or delayed payment. What's more is that you get expert service at a lower price as compared to forming your in-house accounting team. Outsourcing your tax return preparation services is helpful for companies as they don't have to appoint seasonal employees and they can save their overhead expenses. With the relatively affordable cost and the several benefits of outsourcing tax service, there is no reason for you to not prefer this. More and more CPAs and accounting firms are opting to outsource tax return to India to help minimize operating cost and maximize efficiency and gain competitive advantage. As a business owner your time is best spent doing what you do well - working with customers. Time spent on preparing tax returns add little or no value to your customer relationship. Remember that with this option, you don't just safeguard your health but also your company's welfare.

tax

Managing Migration Tax Australia


Managing the taxes in any new country can be a cumbersome task. If you are migrating to a new country you have to understand its rules and regulations very well so that your taxes can be managed properly. Those who are migrating to Australia will have to keep tab on the different taxes that will be levied on them. One such tax is the Migration Tax Australia. You can find about this tax from your tax consultant.It is advisable that you use the services of a tax consultant in Australia. It will relive you of the entire burden. The taxation policy of Australia is not easy to understand. It is best to hire a tax consultant so that you are not confused and end up paying extra tax. Australian businesses may be required to pay taxes to all levels of local, state and federal governments. In Australia, these taxes are used to pay for the delivery of public services such as the public hospital system and roads.If you are buying a property on Australia you need to pay tax for it. The Mortgagee specialist will guide you through the whole process and you will be able to understand Australian property tax without any problem. To solve the entire problems of Australian Property Finance and the complication of tax to be paid while buying or selling a property you can take the services of a consultant. Your entire headache will be gone and you will be totally free of stress with regard to tax matters. You can concentrate solely on your business after taking a consultant's services.

When you have been staying in this country for a few years you will be able to understand the policies, but in the initial stage of your stage it is very difficult to comprehend the various rules and regulations. The services of a tax consultant comes in very handy and you will be able relaxed regarding your tax affairs.The services provided by the companies can be taken by you according to your convenience. If you want to use any one service you can take that service only. It is advisable to select a company that will provide you the services that you want. There can be no doubt that it will be for your advantage if you use them.

Tax Mythbusters: The Top 5 Tax Tips To Amaze Your Friends And Family


Tax MythBusters: The Top 5 Tax Tips to Amaze your Friends and Family

I commonly find there are sooo many misconceptions about taxes out there. I have heard a lot of them so many times, they make me laugh. I would like to dispel some untruths about taxes and educate you just a little. Here is my top 5:

  1. "I cannot afford to earn any more money this year because I will jump into the next tax bracket." or "Boy, I would not want to win the lottery. It would cost me too much in taxes."
    Tax Brackets: In the US, our tax brackets are marginal. Only the next dollar that falls into that bracket will increase to the next higher rate. Even if you earn a $1,000,000, there is still a portion of income that is taxed in each bracket: 0%, 10%, 15%, 25%, 28%, 33% and 35%.
  2. "I will go ahead and give to charity since it is a tax write-off."
    Deductions: Remember that deductions are not a $1 for $1 reduction in tax. A $100 deduction will save about $15 in taxes for someone with $60,000 income. This does not mean that you should not give to charity, but use your money wisely and make sure it is put to good use.
  3. "My customer did not pay their bill. I would like to write it off."
    Bad debts can only be written off if they were claimed as income previously. In most cases, small business owners are cash basis tax payers and therefore, only pay taxes on the income when it is received. In this case if your customer did not pay you, you never have claimed it as income so you can not reduce your income further.
  4. "I don't want the IRS to come knock on my door to audit me."
    IRS Audits: Most audits are not face to face. They are letter audits based on notices for matching or numbers that are out of the normal range on tax returns. If you do have a face to face audit, you should be well prepared and represented by your CPA or a tax attorney. Worst of all, be prepared to write a check. The IRS does not do face to face audits to see if you seem to be a nice person, their purpose is to collect revenue.
  5. "I can deduct the cost of my vehicle since I have my business advertised on it, right?"
    Auto Deductions: Unless you want to be the one writing the big check to the IRS as discussed in item #4, the answer is "no." You cannot write off the cost of a vehicle for advertising. You can write off the cost of the magnetic signs or the painting to put your advertising on it, but you still must follow the same rules for deducting automobile expenses. Don't forget, unless the vehicle is 100% business use, you must keep track of your business and personal mileage for any deduction of your mileage. Remember, at 50.5 cents per mile for 2008, this can be a substantial deduction so it is worth while.

We hope we have given you the ammunition to join in the conversation with your friends to tell them about the tax mythbusters listed here. Keep in mind that you would not let your "friends" do your root canal, so you probably should not depend on your "friends" for authoritative tax advice. Ask your CPA!

Required US Dept of Treasury Circular 230 Disclosure: Any written advice concerning one or more federal tax issues arising from any entity, plan or arrangement that concludes at a confidence level of "more likely than not (i.e., a greater than 50% likelihood) that the subject manner of the advice would be resolved in the taxpayer's favor if challenged by the IRS, and the principal or significant purpose of the subject matter is the avoidance or evasion of any tax imposed by the Internal Revenue Code (IRC). The advice provided in this email is not intended or written to be used, and cannot be used by you or any other person or entity for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or any applicable state or local tax law.

7 Most Commonly Overlooked Sources Of Taxable Income

7 Most Commonly Overlooked Sources Of Taxable Income

  1. Social Security Income
    Social Security benefits may be non-taxable, or partially taxable. It depends on your total income from other sources. If your sole source of income during the tax year was Social Security, your benefits are probably not taxable. But, if you have other forms of income, including tax-exempt income, it could make your Social Security benefits taxable. If you add half the amount of your Social Security Benefits to all other forms of income, and the total exceeds a ?base? amount, then a portion of your benefits will be taxable. In 2008, the base amount is $25,000 if single, married filing single, or head of household, and $32,000 if married filing jointly.
  2. Unemployment Compensation
    People are always surprised that unemployment compensation is taxable income. This includes any amounts you received under federal or state unemployment compensation laws, state unemployment insurance paid by a state (or District of Columbia) from the Federal Unemployment Trust Fund. If you received unemployment compensation during the year, you should receive IRS Form 1099-G, showing the amount you were paid, and if any taxes were already withheld. If your unemployment benefit payments were made from a private, non-union fund to which you voluntarily contribute are only taxable if you received more money than you put into the fund.

Please note that as a result of passing the American Recovery and Reinvestment Act (ARRA), starting in 2009, the first $2,400 earned in unemployment compensation is excludable as taxable income.

  1. Gambling Winnings
    Gambling winnings are fully taxable and must be reported on your tax return. Gambling winnings include any winnings from lotteries, raffles, horse races, or casinos. Both cash winnings and the fair market value of prizes such as cars and trips are counted as taxable income. If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must also include it in your income. A payer (such as the casino or track, etc.) is required to issue you an IRS Form W-2G if you receive certain gambling winnings or if your gambling winnings are subject to Federal income tax withholding. All gambling winnings must be reported no matter if any portion is subject to withholding or not.

Please note that you may deduct gambling losses only if you itemize deductions. You may claim your gambling losses as a miscellaneous deduction, however, the amount of losses you deduct may not be more than the amount of gambling income you have reported on your return.

  1. Bonuses
    Bonuses or awards from your employer based on work performance are included as taxable income. Money, gift cards, property, or prizes such as a vacation trip all count as ?bonuses?. If the award you receive is a good or service, then you need to include the fair market value in your income. Even holiday bonuses count if your employer gives you cash, a gift certificate, or a similar item that you easily can exchange for cash.

Please note that if you receive personal property (e.g. something other than cash, gift card, or its equivalent) as an award for length of service exceeding five years, the fair market value of the award is less than $1,600, and the award is presented as part of a meaningful presentation, it can generally be excluded as income.

  1. Punitive Damages
    If you were awarded damages for actual monetary losses (due to property damage or medical care for injuries) the funds are generally not taxable. However, if any damages were awarded beyond compensating you for monetary losses, like punitive damages, (usually to punish or make an example of a defendant based on outrageous conduct), interest, emotional distress, injury to reputation etc these are all taxable income.
  2. Reimbursed Business Expenses
    Reimbursed business expenses may be considered taxable income, depending upon whether your employer meets the requirements for an Accountable Plan. To be considered an Accountable Plan, your employer?s reimbursement or allowance arrangement must meet all of the following rules:

Employee paid or incurred expenses that are deductible while performing services as an employee.

Employee adequately accounts for these expenses to employer within a reasonable time period.

Employee returns any excess reimbursement or allowance within a reasonable time period.

If your employer?s reimbursement arrangement does not meet all three requirements, the reimbursements you receive for business expenses should be shown on your W-2, and the payments should be reported as income. You can get this income back by itemizing your deductions and completing IRS Form 2106 with your return.

  1. Severance Pay
    Any type of severance pay or payment on the cancellation of your employment contract is taxable income. This includes a lump-sum payment for accrued vacation or leave time, or back pay awards as the result of a judgment or settlement. If you choose a reduced severance payment in exchanged for your former employer paying for an outplacement service or employment agency, you must include the unreduced severance pay as income.

Tax Credit Amount For Lexus Gs 450 Hybrid Issued By Irs


Prior to January 1, 2006, you were restricted to claiming a $2,000 tax deduction if you purchased a hybrid car. Now you can claim a tax credit, which is much more valuable.

Tax Credit Amount for Lexus GS 450 Hybrid Issued By IRS

Conspiracy theorists often offer rather exotic arguments about how the government tries to control us. When it comes to taxes, they are absolutely correct. Both federal and state governments try to influence our behavior by levying or reducing taxes. If the government wants to promote something, it gives you tax breaks if you do it. If the government wants to discourage something, it loads the product or service up with taxes.

If you have filled up your car at the pump in the last week, you know gas prices are out of control. Despite our wailing, they politicians really cannot do that much since we are dependent on foreign oil sources. They have, however, taken one long-term approach by promoting the purchase of hybrid vehicles.

Prior to 2006, the government provided all taxpayers that purchased a new hybrid with a healthy $2,000 tax deduction. With the recent passage of the Bush Energy Act, the government has made it foolish NOT to purchase a hybrid. It did this by changing the tax deduction into a tax credit.

The IRS is now allowed to set tax credit amounts applicable to hybrid purchases so long as the amount does not exceed $3,400. In regard to the 2007 Lexus GS 450 hybrid, it has just done so. If you purchase a new 2007 Lexus GS 450 hybrid after January 1, 2006, you can claim a tax credit of $1,550.

You may think $1,550 is nice, but not overly impressive. How wrong you are! Unlike a tax deduction, a tax credit is applied directly to the amount of taxes you owe. Assume you determine you owe $6,500 when you prepare your 2006 taxes next year. Instead of writing a check to the IRS, you will first deduct your tax credit from the amount you owe giving you a bill of 4,950. This dollar for dollar reduction in your tax liability is what makes tax credits so great.

As with all hybrid tax credits, they scale down as more cars are sold. Make sure to ask your accountant or dealer the current tax credit amount when you make your purchase.

tax

Taxbrain Review


I decided to write this TaxBrain review after having the opportunity to see what exactly it could do. Hopefully, after reading this short review, you?ll have a better understanding of what TaxBrain is and if it is a tool you should use when the next tax season comes rolling around.

I think we?ve all been in the situation where we?ve depended on our tax return from the IRS, and we all know the agony of waiting for it. Maybe the money was going to be spent on a vacation or towards a new roof, or maybe to cover bank fees as a result of your checking account being $471 overdrawn. Whatever the reason is for you counting on the money, TaxBrain understands and works hard to get your refund to you as fast as possible.

In fact, TaxBrain works so fast refunds can be paid in as little as 24 hours. Supported on both the State and Federal levels in all 50 states, TaxBrain even has an accuracy guarantee. If they incorrectly prepare your tax return, they will pay the interest and penalties. What?s not to like about a company that is that confident in their services?

Worried about downloading yet another program onto your computer? Not a problem. TaxBrain is web-based, not program based. Just go to the web site and in less than an hour your taxes will be done, and done right. Best yet, you can do it from the comfort of your home, in your pajamas if you?d like!

Obviously, TaxBrain is the way to go in terms of tax preparation. It?s fast, easy and way more affordable than an accountant. Still, it?s just as accurate (if not more so!) than the expensive CPA. I highly recommend TaxBrain for all of your Federal and State tax filing.

10 Tips Employees Can Use To Reduce Your Tax Bill

10 Tips Employees Can Use To Reduce Your Tax Bill

  1. Use your tax allowances. If you have the cash available, use your ISA savings allowance ?7,200 for 2008/09of which ?3,600 can be in cash deposits.
  2. Make pension contributions. The amount you can pay and get tax relief is as much as your annual earnings, with an upper limit of ?235,000 for 2008/09.
  3. Get a 'green' car Employers can get 100% tax relief in the year they purchase a small 'green' car, and the benefits for the employee are much lower then for a normal car.
  4. Salary sacrifice - employers can offer to contribute to a pension (instead of the employee paying) and the employee agrees to forego some salary in return. This is 'acceptable' tax planning providing the correct paperwork is used, and it can save significant amounts in national insurance contributions.
  5. Use childcare vouchers - All employers can offer child care vouchers as part of their remuneration package. For those with young children these vouchers can create very worthwhile savings.
  6. Don't overlook expenses - employees can claim for expenses they incur "in the performance of the duties of the office or employment" which are not reimbursed. There is a table of agreed rates for various trades, and these allowances are often given via an adjustment to the employees tax code. If you don't receive a tax return, use form P87 to reclaim the tax on expenses.
  7. Tax-free round sum incidental overnight expenses * Employers may reimburse employees for incidental expenses when they stay overnight for work purposes (s240 and 241 ITEPA 2003) E.g. For newspapers, laundry or phonecalls home. For the employee, these expenses are not incurred necessarily in performing the duties of the employment, and so do not qualify for tax relief, however employers may nevertheless reimburse such incidental expenses, free of tax and NICs as follows:?5 per night for overnight stays in the UK * ?10 per night for overnight stays outside the UK (but see new guidance below)
  8. Happy families - a family can reduce the overall tax payable, if a higher taxpaying spouse transfers investments or savings to a spouse with a lower or no income.
  9. More family planning - children are entitled to the same annual personal tax allowance as adults. They can earn money working, and receive investment income free of tax, for example on a gift from Grandparents. However on a gift from parents if the income generated exceeds ?100 then the income is assessed upon the parent.
  10. It is almost never worth having 'fuel for private use' as a benefit. You have to do a huge private mileage for the extra tax to be less than even the cost of the fuel actually used for private motoring. It is very often better also for the individual to provide a car and be paid mileage for business use, and to be compensated with additional salary. The maximum mileage rates are 40p for the first 10,000 miles and 25p thereafter. If the actual reimbursement is below these rates, the difference can be claimed as an 'expense' on the tax return or a P87 form.