What is the marginal rate of tax?

The marginal rate of tax paid is “the percentage of tax paid on earnings for the next pound earned.” What that means is that if you earn £50,270 your marginal rate of tax is 40% because for the next pound that you earn, you will be paying tax at 40%.  Below are the...

Can paying dividends reduce your Company’s tax bill?

No it can’t.  A Company pays Corporation Tax on its profits before dividends are paid out.  Consequently, shareholders are treated as having already paid some tax on their dividends but they still have 7.5% dividend tax to pay (on dividends above £2,000) – and...

How do I register for CIS (the Construction Industry Scheme)?

The Construction Industry Scheme is a scheme that applies to payments to self-employed workers and businesses in the Construction Industry.  Under the scheme tax is deducted from payments and paid over to HMRC. There are two sorts of people that need to register with...

What lawyers can miss when handling taxes on sales of property.

Although, generally, property lawyers know about taxes associated with transfers and disposals (sales) of property, I have come across a couple of instances where they have not fully advised their clients. When a property is owned by a couple (married or civil...

New Capital Gains Tax rules on sale of Residential Properties

If you are a UK resident and you are selling your residential property on or after 6th April 2020, any Capital Gains Tax due will have to be calculated and paid to HMRC within 30 days of the sale. For the vast majority of sales, no Capital Gains Tax (CGT) will be due...

What does the ‘Personal Tax Allowance’ mean?

Every person who is resident in the UK is given a personal allowance each tax year. It operates as follows: The personal allowance is the amount of income you can receive before paying tax – and it generally increases each tax year.  For the 2021/22 tax year, it is...