Here are a few of the questions that we’ve been asked this month.
Q – Should I issue alphabet shares to pay all or most of my employees’ wages as dividends so they avoid tax implications?
A – This is called ‘alphabet soup’ and recent legislation has limited their use in providing employees with a source of national insurance free income. Our advice would be instead of issuing alphabet shares pay your employees through the payroll and make full use of the tax-free benefits, including contributing into their pensions and giving them a mobile phone.
Q – What’s happening with Making Tax Digital?
A – MTD comes into effect on 1 April 2019 for companies who are above the VAT threshold which is £83,000. You will need to keep digital records and send information quarterly to HMRC using software such as Xero or Sage. You’ve still got time, so our advice would be to come along to one of our drop in days and we can take it from there.
Q – Do I get any tax breaks if I invest in another company?
A- There are several schemes that the government has introduced to encourage people to invest in businesses, and to help businesses make themselves more attractive to outside investors. One of the most common schemes is known as the ‘Enterprise Investment Scheme’, but there are several qualifying conditions that need to be met. Here is a copy of our factsheet with more details click here