We pride ourselves on delivering exceptional service, first time, everytime.

Why Us

The foundation of our practice rests on three core beliefs:

  • Service
  • Knowledge
  • Trust

We pride ourselves on delivering exceptional service, first time, everytime.
Our knowledge built upon combined decades of expert experience in tax and accountancy so you can rest assured that the most important of financial decisions are in the most competent hands.

Our objective is to become your most trusted adviser.

Our promises to you

To ensure that we can deliver this, we have set firmwide minimum service standards.

Accordingly, all Partners and Members of staff shall ensure that:

  • Expect to receive exceptional service at all times.
  • To provide unparalleled access to senior tax advisers when you need them.
  • All emails and phone calls will be responded to within 24 hours during normal business days. In the event we cannot answer your query, we will acknowledge receipt and provide a timetable for further action within the same timeframe.
  • A commitment to aim to be always available during business hours and, in emergency cases, out of office hours should you need us.
  • To offer services that provide efficient business management – placing the power of business planning into your hands.
  • You will have one point of contact, a dedicated Client Manager who will be solely responsible for your affairs.

Latest news & blogs…

No company profits? How to take cash out tax efficiently

Why Us Shipleys Tax Advisors

THE PANDEMIC has left many businesses struggling for cashflow who may not have enough profits to pay the usual dividends. So how should you extract cash from your company? In today’s short Shipleys Tax brief we look at some basic strategies to help you manage your cashflow tax efficiently.

If you operate through a limited company, for example as a personal or family company, you will need to extract funds from your company in order to use them to meet your personal bills. There are various ways of doing this. However, a popular and tax efficient strategy is to take a small salary which is at least equal to the lower earnings limit (set at £6,240 or 2021/22) to ensure that the year is a qualifying year for state pension and contributory benefits purposes, and to extract further profits as dividends.

If you operate through a limited company, for example as a personal or family company, you will need to extract funds from your company in order to use them to meet your personal bills

However, this strategy requires the company to have sufficient retained profits from which to pay a dividend. If the company has been adversely affected by the Covid-19 pandemic, it may have used up any reserves that it had. As dividends must be paid from ‘retained’ profits, if there are none, it is not possible to pay a dividend.

So what are there other options for extracting funds to meet living expenses?

Pay additional salary or bonus

Unlike a dividend, a salary or bonus can be paid even if doing so creates a loss – it does not have to be paid from profits. However, this will not be tax efficient once the salary exceeds the optimal level due to the National Insurance hit and the higher income tax rates applicable to salary payments.

Take a director’s loan

If it is expected that the company will return to profitability, taking a director’s loan can be an attractive option. Depending when in the accounting period a loan is taken, a director can benefit from a loan of up to £10,000 for up to 21 months free of tax and National Insurance. If the company has returned to profitability within nine months of the year end, a dividend can be declared to clear the loan in time to prevent a special company tax charge from arising. If the account is overdrawn at the corporation tax due date nine months and one day after the year end, the special tax charge of 32.5% of the outstanding amount must be paid by the company (although this will be repaid after the corporation tax due date for the accounting period in which the loan balance is cleared).

Depending when in the accounting period a loan is taken, a director can benefit from a loan of up to £10,000 for up to 21 months free of tax and National Insurance

Put personal bills through the director’s loan account

Another option is for the company to pay the bills on the director’s behalf and to charge them to the director’s loan account. Again, if the company has sufficient profits to clear the outstanding balance within nine months of the year end, a dividend can be declared to prevent a special tax charge from arising. A benefit in kind tax charge (and a Class 1A National Insurance liability on the company) will also arise if the outstanding balance is more than £10,000 at any point in the tax year.

Provide benefits in kind

Use can be made of various tax exemptions, such as those for trivial benefits and mobile phones, to provide certain benefits in kind in a tax-free fashion.

Pay rent

If the company is run from the director’s home, the company can pay rent to the director for the office space. This should be at a commercial rate, and the director will pay tax on the rental income. However, there is no National Insurance to worry about and the rent can be deducted in computing the company’s profits, even if this creates a loss.

As a bonus, if the extraction policy creates a loss, it may be possible to carry the loss back and set against previous profits of the company to generate a much-needed tax repayment.

If you are affected by any of the issues above and would like more information, please call 0114 272 4984 or email info@shipleystax.com.

Please note that Shipleys Tax do not give free advice by email or telephone.

The Bitcoin Tax Bombshell

Why Us Shipleys Tax Advisors

THE RAPID GROWTH in cryptocurrency and distributed ledger technologies, such as Bitcoin and Ethereum, has seen a large spike in businesses, traders and investors entering the fray. Naturally, the unique characteristics of cryptoassets has attracted significant attention from HMRC and tax authorities worldwide in a bid to clamp down on those purportedly using cryptocurrencies to avoid tax and hide assets.

As a result, HMRC are increasingly enquiring into businesses, traders and investors using cryptocurrencies and other hidden “value transfer systems” to ensure that all individuals and businesses involved declare their fair share of tax.

In today Shipleys Tax brief we look at what cryptocurrency and “value transfer systems” are under scrutiny and why businesses, traders and investors need to ensure they understand the taxation implications of holding these assets and structure them properly in order to be tax efficient and remain HMRC compliant.

What types of assets are covered?

Surprisingly, it’s not only cryptoassets like Bitcoin and Ethereum  on the taxman’s watchlist, other wide ranging assets types include: 

  • assets in E-money wallets like PayPal.
  • assets in ‘value transfer’ systems, such as Black Market Pesos (a system reportedly used by drug cartels, which converts drug sale revenues in the US and Europe to local currencies without the money having to cross a border);
  • Hawala, a similar money transfer system common in the Middle East, Asia and Africa
  • “Committee” – a trust-based money transfer system commonly practised in the UK within some Asian communities.

Naturally, the unique characteristics of cryptoassets has attracted significant attention from HMRC and tax authorities worldwide in a bid to clamp down on those using cryptocurrencies to avoid tax and hide assets.

According to HMRC, although the majority of individuals and businesses pay the tax due, it suspects there are taxpayers using e-money, value transfer systems and cryptos to hide assets and commit tax evasion and avoidance. The fact that some of the systems mentioned above are rooted in cultural, societal or even religious traditions is perhaps lost in translation by HMRC. Unfortunately, misunderstanding and cultural insensitivity in some these cases can give rise to unfounded allegations of tax fraud and tax evasion.

How are Cryptoassets taxed?

Generally, cryptoassets are not considered to be currency or money (fiat) by key financial institutions. From a tax perspective, cryptoassets are treated as with other investment assets such as stocks and shares and is taxed accordingly.

In practice, tax follows the underlying activity in which cryptocurrency is being acquired or sold. As such, crypto investors and traders must consider the wide degree of transactions ranging from basic purchase and sell orders to hard forks, airdrops, and such like.

Cryptoassets are not considered to be currency or money by key financial institutions. From a tax perspective, cryptoassets are treated as with other assets such as stocks and shares and is taxed accordingly.

Income tax – this is generally applied to individuals who are buying and selling, or receiving cryptocurrency, as part of a trade. The most obvious would be the ‘day-trader’ who is actively buying and selling cryptoassets with the view to realising a short-term profit. However, there multiple hurdles to overcome before you can be treated as trader, so a person who trades on their own account alone is unlikely to meet the description of a “trader“  for income tax purposes

Capital Gains Tax – in most cases therefore, an individual buying, holding and selling cryptocurrency on their own account will be deemed to carry on an investment activity and subject to capital gains tax.

Non-UK Residents and Domicile

For those that are not UK tax resident or do not have a domicile in the UK, they could potentially benefit from favourable tax rules in relation to cryptoassets.

This revolves around the issue of location or “situs” of the cryptocurrency. The current HMRC view is that cryptoassets follows the residency of the individual.

As such, if a person is non-UK resident, then there will not generally be any tax exposure in the UK.

Furthermore, where a person is UK tax resident, but is not domiciled in the UK, they may elect for the remittance basis to apply. This generally allows a person to escape UK taxation on foreign income and gains until those foreign income and gains are remitted to the UK but would indefinitely avoid it otherwise.

However, this is a simplistic approach to a complex issue and there is currently little authority in favour of HMRCs interpretation. For example, there is no consensus as to the location of the cryptoassets. Is the location for example,

  • the exchange entity holding cryptoassets, or
  • the services which host the technology?

Due to the complexity involved, any such position taken should be well thought out and disclosed accordingly with the potential for HMRC to query and/or challenge any claim.

Cryptoassets Planning

With that said, it would not be an unreasonable approach to properly structure cryptoassets such that income tax or capital gains tax can be mitigated, subject of course to the appropriate disclosure and filings.

At Shipleys Tax we can help you ensure that your cryptoassets are structured properly. We can assist in calculating your taxable gains or losses on your cryptocurrency transactions, and deal with your HMRC filing obligations thus ensuring you are fully compliant. We can also advise on the structure of holding cryptoassets to minimise UK taxation. We can also assist those who are non-UK domiciled and who may have specific tax needs relating to this area.

If you are affected by any of the issues above and would like more information, please call 0114 272 4984 or email info@shipleystax.com.

Buying Property in Joint names – simple tax saving tips

Why Us Shipleys Tax Advisors

AS THE RESIDENTIAL property market spikes due the lockdown easing and the stamp duty threshold increase, many property buyers are missing a simple trick which can save them tax in the right circumstances. If you’re buying a property with a friend or partner you should know the difference between two types of joint ownership.

In today’s Shipleys Tax brief we look at the the basic tax implications of jointly owning residential property and how using a few simple methods at the outset can potentially save you tax.

Basic position

Under English law, there are basically two ways in which property can be owned jointly: tenants in common or as joint tenants. The way in which the property is owned can affect the overall tax position.

Tenants in common

Where a property is purchased as “tenants in common”, each owner owns a specified share of the property. There is no requirement that the ownership shares are equal. Each person’s share will normally reflect their contribution to the purchase price of the property. As tenants in common own a specified share of a property, they can sell their share independently. On death, their share passes to their estate to be distributed in accordance with the terms of their will.

…there are basically two ways in which property can be owned jointly: tenants in common or as joint tenants. The way in which the property is owned can affect the overall tax position.

Where property is owned jointly by unrelated persons, it is often owned as tenants in common. However, it may also be beneficial for married couples and civil partners to hold property in this way, particularly if the property is let.

Joint tenants

Where a property is owned as “joint tenants”, the owners together own all of the property equally. Any transfer of ownership needs to be signed by all parties, and as all parties have an equal interest in the property. Any sale proceeds are split equally. Under the survivorship rules, should one joint tenant die, the property passes automatically to the surviving tenant(s), and becomes wholly owned by them.

Basic Tax considerations

If the property is let out, the income split for tax purposes depends on whether the joint owners are married or in a civil partnership or not. Where they are not, the income is usually split in accordance with their underlying shares, but the joint owners have the option to agree any income split among themselves.

However, where the property is owned by spouses or civil partners, each is taxed on 50% of the income, regardless of how it is owned. If this is not beneficial and the property is owned as tenants in common in unequal shares, the couple can make an HMRC election for the income to be taxed in accordance with their actual ownership shares. These can be changed by taking advantage of the no gain/no loss capital gains tax rules to effect a more beneficial income split, for example to a lower tax paying spouse. However, where the property is owned as joint tenants, the only permissible income split is 50:50. Thus, where a 50:50 split does not give the best result, you would look to consider owning the property as tenants in common.

For capital gains tax purposes, where the property is owned as joint tenants, the gain will be split equally between the joint tenants. However, any gain arising on a property owned as tenants in common will be allocated and taxed in accordance with each owner’s share. Each tenant in common can also sell their share independently of a sale of the property as a whole.

… (you) can make an HMRC election for the income to be taxed in accordance with their actual ownership shares. These can be changed by taking advantage of the no gain/no loss capital gains tax rules to effect a more beneficial income split, for example to a lower tax paying spouse.

On death, where a joint tenant dies, the property automatically passes to the surviving tenant(s). However, where a property is owned as tenants in common, each owner can pass on their own share – it does not go to the other automatically. Their share forms part of their estate.

Plan ahead

So when buying a property, it is worthwhile considering the tax implications when deciding whether to own a property as joint tenants or tenants in common. In some circumstances, transferring part ownership to a low tax paying partner could result in a lower tax bill overall.

If you are affected by any of the issues above and would like more information, please call 0114 272 4984 or email info@shipleystax.com.

Please note that Shipleys Tax do not give free advice by email or telephone.

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