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

September 2008

  • Partying responsibly
    Even the smallest business can host an annual tax-free social function for all its staff (including the directors and their partners) as long as the cost per head is less then £150. The employees are not taxed for having a good time and the company gets full relief for the expense.
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  • Make the move easier
    When recruiting a new member of staff you can offer to reimburse up to £8,000 of their moving costs on a tax-free basis if they have to relocate to take up the job. If you reimburse more than this amount the excess is taxed as part of the employee's salary. This tax relief only applies if the new employee does not already live within a reasonable daily travelling distance of their new place of work.
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  • Move to let
    When it's time to move, instead of selling your old house why not let it out to create a useful income stream to cover the mortgage interest and other expenses? But when you do come to sell, the increase in value while you occupied it as your main home will be exempt from tax. In addition, the last three years of gain will also be tax free, and you can claim a further tax exemption of up to £40,000 because the property has been let. You may find that the profits you made on selling this property will be completely free of tax.
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  • Dividends reduce tax code
    Have you checked your PAYE tax code? It's worth doing so because up to 25% are incorrect when first issued. The Taxman may have included an estimate of your unearned income from 2006/7, e.g. rents or bank interest, which means you will pay tax on it far earlier than you would otherwise through your self assessment tax return. You can ask the Taxman to remove this estimated income and correct any other errors he's made.
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  • The 2008/9 tax-free company car
    Choosing the right car can reduce your tax bill. Did you know that you can set the full cost of a new company car against your profits this year, if you purchase a model which has the right official CO2 emissions rating. The company car driver will also benefit from a lower tax charge.
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Tax Breaks Directory

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