Tax Breaks
Five powerful Tax Breaks every month. See how much they could save you

July 2008

  • Get shifting!
    If you run a business through a company in which you both own shares, you and your spouse will make joint decisions about which contracts to take, or dividends to pay. In this case you should both be directors of that company, so you have equal status in the eyes of the law. The Taxman will then be less able to argue that one of you is working and declaring dividends just to put money in the (lower taxed) pockets of the other spouse. Payments of dividends to the lower earning spouse continues to be tax efficient.
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  • Start 'em young

    Have you ever thought how much your teenager's pocket money costs you? Why not employ your teenager in your business on a Saturday and pay them through the payroll. The business will get a full tax deduction and you won't have to find the cash out of your taxed income. If the task is safe and doesn't require heavy lifting, it's perfectly legal to employ children aged 13 and over, as long as the hours worked do not take up school time and are not before 7am and after 7pm.

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  • Winning on the horses

    Complete and accurate business records can reduce the risk of paying extra tax and penalties on an enquiry. The Tax inspector's favourite question is "where did that money come from?". What answers are acceptable to the Taxman and which ones aren't? What simple records can you keep now to avoid having a tax problem later.

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  • Deduction for a website

    Let's say you've paid a designer to prepare a website advertising your business's goods and services. There has been a one-off cost for the original design and you are now paying a monthly fee to have the site maintained and updated. Does any tax relief attach to these expenses?

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  • Phased share buy-back twist

    When you retire from your own company you would like to receive cash in return for your shares, but the next generation can't afford to buy you out. A solution is for the company itself to repurchase and cancel your shares, leaving the control of the company in the hands of the remaining shareholders. If the transaction can be shown to be the best solution for your company, your cash receipt should be taxed as a capital gain at only 18%.

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Tax Breaks Directory

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