Husband and Wife Tax Planning

10th August 2015

Start-ups: Make use of your spouse’s tax allowances.
There are a lot of costs surrounding setting up your own business, so saving tax is a big concern for most clients. This can be done in a number of ways, through ensuring you are claiming all your business expenses. However there is also the consideration of utilising your tax free allowances. In the tax year ended 5 April 2016 you are entitled to receive £10,600 of income tax free. For a self-employed individual this would be their profits for the year plus any other income sources including salary from employment. Working for yourself may also give you the flexibility to utilise your partner’s allowances, by paying them a wage to assist you or you could consider going into a partnership. HMRC have also brought in a new marriage allowance for the tax year ended 5 April 2016. If yours or your husband, wife or civil partner’s income is less than £10,600 in year to 5 April 2016 you may be able to reduce your tax by up to £212 a year by transferring some of your personal allowances.

To some people this may not sound like much however with all the costs of starting a business this may be something to look into. Particularly if your profits are expected to be low in your first year of trading or perhaps your husband or wife does not currently utilise their allowances. In order to qualify both the Husband and Wife need to be basic rate tax payers.

Should you wish to discuss the many other ways you can structure your new business to save tax then please do contact us for a free initial consultation.



 
Other items in Blogs
 
Keith Day
7th February 2019 Businesses urged to prepare for post-Brexit Customs

HMRC is urging VAT-registered UK businesses which trade exclusively with the EU to be prepared for a no deal Brexit.   In a letter sent to 145,000 affected businesses, HMRC explains changes to Customs, Excise and VAT procedures in the ‘unlikely event’ that the UK leaves the EU without a Brexit deal.   HMRC’s letter…

Read More »

Adrian Mackenzie
7th February 2019 Beware of pension investment scams

The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and ‘negligent trustees’.   Research carried out by the Service found that criminals use a range of tactics to convince savers to part with their funds, including persuading individuals to access their pension and invest in unregulated schemes.  …

Read More »

Victor Courdelle
7th February 2019 MTD for VAT – pilot extended to all eligible businesses

  HMRC has extended its Making Tax Digital for VAT (MTDfV) pilot scheme to all eligible businesses. For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTDfV for some ‘more complex’ businesses has been deferred until 1 October 2019. This deferral applies to:…

Read More »

Stephen Malkin
1st February 2019 MTD for VAT: Which Bridging Software?

As we approach the 1 April 2019 deadline for the introduction of MTD compliant VAT submissions, many businesses will at last be focusing on what solution they should adopt.   If their current bookkeeping system does not already have an upgrade that automatically provides this new functionality, they will be considering adopting ‘bridging software’.   Looking through…

Read More »

Ian Piper
18th January 2019 CryptoCurrency Taxation: HMRC close loophole?

HMRC are not known for being ahead of the curve, so trying to find official guidance on how exchange gains from selling bitcoin, and other crypto currencies, is expected to be self-assessed and taxed, was always going to be ‘problematic’. At the time of first researching this, the latest HMRC guidance was published in 3…

Read More »

Peter Brown
13th January 2019 5 things you need to know about Making Tax Digital

  Making Tax Digital (MTD) is the hot topic this year. It’s one of the most fundamental changes to the UK tax system since the introduction of self-assessment. From April 2019, VAT registered businesses with a turnover of over £85,000 will be required to keep records using software approved by HMRC.  We have condensed the…

Read More »