Tax Refunds

Two Budget changes mean that if times are tough you may be able to secure bigger and faster tax refunds than any of us had previously expected.

If you have made a loss in your business we may now be able to secure a bigger and faster refund from the taxman than before the Budget announcement of extended loss reliefs.

Also if you have or have had a property across the channel in the EEA and it satisfies the rules as a ‘holiday let’, we may be able to get a tax refund. This would involve claiming tax relief for any excess of expenses (including interest) over the level of rents you have received.

£50,000 Annual Investment Allowance

You will be aware that when you buy ‘capital’ items you do not get tax relief for the costs in the same way as you do for other business expenses. The rules as to how much tax relief you can have when you first buy qualifying assets have varied almost every year in recent history.

The latest rule is that you can offset up to £50k of spending on qualifying ‘plant and machinery’ each year. It is generally best to do this just before the end of your accounting period rather than at the start of the next one.

If you are able to invest more than £50k the surplus will qualify for a 40% first year allowance – which means that 40% of the cost can be offset against profits.

Remember that you can claim tax relief for the full cost even if you have borrowed the money to buy the assets.

Spreading the cost of tax

If cash flow is an issue you may be able to secure a cheap funding facility from HMRC. You can now ask for time to pay VAT, NIC, PAYE, corporation tax and income tax – although the next payment under self assessment is not due until 31 July.

The Chancellor announced that the taxman is now under instructions to be even more generous in allowing you to take account of current year losses that would otherwise only reduce the tax owing at some later date.

Tax rebate scams

If you have received an email from the taxman telling you that you are due a refund please delete it and do not click on the links or reply to it. These are not official emails and many attempt to steal your User ID and passwords. If you still have such an email you are invited to forward it to the taxman: phishing@hmrc.gsi.gov.uk

Pregnancy grant

With effect from 6 April 2009, expectant mothers can claim a lump sum one off and tax free grant of £190 when they reach the 25th week of pregnancy. This grant comes from the taxman – and will be paid directly into a bank or building society account.

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