Certax Accounting (St Albans District) Ltd

Answering our biggest questions- Coffee with Zee: Episode 9

In this episode of coffee with Zee, we answer those questions that we get asked all the time! And if you have a question you’d like answering, drop us a comment on the video and we’ll feature it in the next episode.

Video transcript:

Zee: Hi everyone welcome to episode nine of coffee with Zee and we’re going to be doing Q&A’s going forward, where people ask us questions and we give answers uh for the questions from the last week. So, we’ve got Alfie who’s gonna shout them out.

Alfie: Okay so question number one is “does your brand help you grow your business?”

Zee: How we’re going to set these up for the structure, we’re going to talk about business, tax, property and then some tax around property. So this is a business growth question. From my perspective, anyone who follows us on social media – it’s all about brand in my opinion. And it’s all opinions but if you don’t invest in your personal brand first and your business brand, how do you expect people to trust know, like, trust you and buy from you? And that’s what happens in the longer term because people start following yourself and they then say when you’ve got a problem, this is the person to go and see.

Alfie: Okay so great. Next question is “do you have to charge vat for a disbursement?” so we had this question recently so where we had a client who’s getting an expense incurring an expense on behalf of their client. They claim the VAT back on the accents provided I’ve got a vat receipt and then they wanted to charge the client. So they have to invoice the client and because they invoice the client there is VAT on there because they were VAT registered – because that is the normal way of doing this.

Alfie: Perfect. Okay, next question is “should I buy a second hand car through a limited company?”

Zee: This is a great question because I had a client who didn’t want to buy a brand new one, but they still had a significant cost to buy a second-hand one. I have to caveat this answer because we’re going to be focusing purely on corporation tax and what the impacts for corporation tax. So if you buy a second-hand car you can’t claim the actual value of the car even if you buy on HP against your corporation tax and therefore it also triggers off personal tax. So therefore it’s better in my opinion to buy it privately and charge your company mileage which is currently at 45 P per mile for the first 10 000 miles and 25p after that.

Alfie: Great. Okay so a question for property investors now is “if I’m buying a freehold block of flats how should I structure this?”

Zee: Really detailed question and we’ll probably do a bigger answer on this but I’ll give you an overview. For me, if you’re buying a freehold and you’re going to do a title split, I create leases I will buy in a group structure one subsidiary buys the Freehold initially and then you do the title split and assign the leases to a another subsidiary within the group. And, if you do it tax efficiently, or properly I should say, with the right advice you won’t end up paying stamp Duty land tax, no corporation tax and potentially minimizing or avoiding VAT if it’s a property that’s elected to tax.

Alfie: Awesome. And the last question is from a developer and it’s if “I’m a property developer can I claim entrepreneurs relief?”

Zee: So property developer. Really important – great question. I get these asked a lot. Property developers are people who buy property with the whole point of selling them once they’ve added value, and therefore they tend to be recorded as stock. And that’s what you become a property developer. Yes, provided it’s a trading business – which this will be – and you’ve got it for at least two years and you meet the shareholding and director requirements, you can then claim entrepreneurs relief. Which is now known as business asset disposal relief. Tongue twister! And therefore you only get charged 10 personal tax not 20 when you uh, dispose of the shares.

Alfie: Amazing. I think that’s just about it then for this week.

Zee: Perfect. If you have any more questions or comments please do comment below or ask them and my team will pick those up and we’ll put them in the next episode with coffee with Zee. Thank you so much.

Check out all the other episodes and more here: Certax Accounting St Albans District LTD – YouTube

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