Avanti reflect on busy September and look ahead to exciting October

As summer temperatures drop and the evenings become darker, the Avanti team are beginning another busy period as they look ahead to upcoming networking launches and the Franchise exhibition at Birmingham NEC.

The Avanti team launched the Avanti Networking Medway group in Tonbridge, Kent during September. The launch was a great success and further launches are planned in Dartford and Wolverhampton in November.

Avanti share their tips on inheritance and property tax:

As Benjamin Franklin said, “the only things certain in life are death and taxes” and inheritance tax (IHT) touches on both.

When you die, the Government assesses how much the assets of your estate is worth, then deducts your debts from this to give the value of your estate. Assets include:

• Investments
• Any property or business you own
• Cash in the bank
• Vehicles
• Any proceeds from life insurance policies

How much tax will you pay:

Your estate will owe tax over a set threshold when you die, excluding your ‘main residence’ allowance.  The allowance is only valid on your main residence and where the recipient of a home is a direct descendant.  For couples, when the first partner dies, their allowance is passed to the survivor, thus doubling the threshold before tax is due.

Avanti can provide help and advice on Inheritance Tax.

Property income and HMRC

If you purchase a property for rental, you will pay capital gains on the eventual profits from the sale, but this can be reduced by deducting allowance expenses such as:

• Legal fees for lets of a year or less, or for renewing a lease of less than 50 years
• Accountant’s fees
• Rents, ground rents and service charges
• Water rates, council tax, gas and electricity
• Contents insurance
• Costs of services, including the wages of gardeners and cleaners (as part of the rental agreement)
• Letting agents’ fees
• Certain travel expenses
• Direct costs such as phone calls, stationery and advertising for new tenants

If purchasing a property for rental, Capital Gains Tax will be paid on the eventual profit from sale. If renting the property, you will have to pay tax on the profits from the rental income.

Selling your main home 

When selling a main home (or only home) you don’t have to pay any CGT. However, there are some circumstances when you may have to pay some, for example:

• Part of your home is exclusively business premises
• The home includes a lot of land/additional buildings (1/2 hectare or more)
• You’ve sub-let part of it (but having one lodger doesn’t count)

You only have to pay CGT on gains that exceed your annual allowance, unless you are a property developer and this is your trade.

Brexit remains the word on everyone’s lips, and shows no sign of disappearing

Despite many declarations, the long-term effect that Brexit will have on the UK’s small to medium enterprise (SME) businesses is still largely unknown.

There will be challenges, but it can also create opportunities, however this has largely been ignored by commentators so far, who seem to prefer the gloomy outlook.

Research found that 30% of SMEs find raising finance to be the biggest obstacle to new business, with more than half of UK SMEs describing banks as being hostile to businesses.

The pounds depreciation may provide a solution by encouraging fresh investment, creating other avenues for growth and encouraging private equity firms to invest more in UK business.

The predicted employment crisis may be a little melodramatic, however, we’re likely to see a shortfall in workers once we leave the EU.

VAT is a major concern as it is not currently levied on trade within the EU; it is only charged when goods are sold to the end customer.  If the UK were to leave the EU VAT regime without agreement, businesses could be required to pay VAT upfront, for the first time. This change would create both cash flow and time burdens, which could be costly for SME’s

Service companies would need to become VAT-registered in each member state where they operate. At present, being registered in one-member state is sufficient to trade in all.

Avanti can help you by providing valuations

What to do if you need a valuation?

• Make sure you have at least 3 years of accounts available
• Get your paperwork in order, you never know, you may just get the offer you want straight away
• Ensure there are up-to-date accounts available, if not ask Avanti to prepare them urgently
• Be honest and open with your Accountant – they can’t help you if you are not
• Answer questions as quick as you can. The answers may lead to other questions, thereby delaying the final report
• Do not to worry about this.  In the end any business is worth what someone will pay for it, but at least you will have an idea

How can Avanti help you?

• By having a qualified/experienced accountant carrying out an informed valuation you get to know where you stand, even before you begin negotiations
• They can introduce you to other professionals such as commercial solicitors, business brokers, insurance agents and IFA’s
• At each stage they keep the client informed and nothing is done without their knowledge and approval
• They help by providing advice about the valuation and if applicable what are the next steps to take

For further information and proactive business advice call Avanti on (08000) 388 799  or visit their website.