PROVIDING TAILORED TAXATION ADVICE TO CLIENTS THROUGHOUT MERSEYSIDE

There’s often nothing worse than an unexpected tax payment, especially for businesses that rely on a steady form of income. Luckily, we’re here to help in both Merseyside and London, as we are specialists in all kinds of taxation. From business tax to inheritance tax, there’s nothing we won’t discuss, as we aim to ensure that you are receiving great value for money, while also meeting your legal requirements.

Benefits In Kind

Benefits in kind are received by a great number of employees and directors, particularly those with company cars. The income tax implications of these benefits can be complicated, and so taxpayers need to understand the rules so that they can properly prepare their self-assessment tax returns and make decisions about their future remuneration package.


Specific areas in which we are typically asked to advise on include:

  • Understanding the mechanics of company car tax benefit in kind rules.
  • HMRC car and fuel benefit calculator.
  • Minimising the tax on company cars.
  • Receiving non-taxable benefits in kind.
  • PAYE coding implications of these benefits, including coding out underpayments.
  • Preparing forms P11d and calculating the resultant Class 1a NIC liability.

Agreeing the taxation on your benefits in kind with HM Revenue & Customs is principally achieved by completing the employment supplementary pages of a self-assessment tax return, in accordance with the form P11d issued by your employer. Clients who are fearful that these benefits may be investigated by HM Revenue & Customs may wish to consider taking out our fee protection insurance.


Understanding this complicated tax system and paying the correct amount of tax, at the correct time, through the correct mechanism, is what most clients seek. Speak to our tax experts and put your mind at ease. We may even be able to suggest ways to restructure your remuneration package and save tax.

Business Tax

With many different pieces of legislation and HMRC practice notes being relevant, businesses need to fully understand the statutory tax administration and payment requirements placed upon them. We advise on the following:

  • Corporation tax, if an incorporated business.
  • Income tax and classes 2 and 4 national insurance contributions, if an unincorporated business.
  • Value-added tax.
  • Payroll taxes (PAYE income tax and class 1 national insurance contributions),
  • Construction industry scheme (CIS) tax.
  • The possible applicability of IR35 tax rules on your payroll.
  • Tax treatment of Repairs v Capital (reflecting recent HMRC new guidance).
  • Stamp duty and stamp duty land tax.

Agreeing your business tax liabilities with HMRC is principally achieved by completing and submitting the relevant 'self-assessment' tax return.


Understanding this complicated business tax system and paying the correct (minimum) amount of tax, at the correct time, through the correct mechanism, is what most clients seek. Speak to our tax technicians and put your mind at ease. We will also seek to identify means to reduce your business tax liabilities.

Buy-to-Let Taxation

If you are considering purchasing a residential buy-to-let property, you may not be fully aware of the tax implications. Usually there will be two taxes that you may have to pay.

These are income tax, which is payable each year based on your profit from the property, and capital gains tax, which is payable when you sell the property. This is based on the sale proceeds of the property less the cost of the property, or other appropriate base value, less all available CGT relief/exemptions.

Income Tax

Usually there will be two types of income that you will receive from your tenants – rent and deposits. Rent is taxed each year based on the income that is due to you during a tax year rather than on the rent that you actually receive during the year. For example, if a tenant pays you in advance, only that part which falls within the tax year will be taxed in that year. The remainder will be taxed in the following tax year. Similarly, if a tenant is late paying you, that part which was payable in the earlier tax year will still be taxed in that year. 


The only exception to this is when a tenant defaults on a payment and you will not be able to recover the amount due. Deposits are not taxable whilst they are still repayable to the tenant, but once either part or all the deposit ceases to become repayable, i.e. because there has been damage to the property, then this will become taxable at this point.


There will be various expenses that you will incur on your property, those that you can offset against your rental income (allowable expenses) and those that you cannot offset against your rental income (disallowable expenses). The more usual items are listed below:

Allowable

  • Advertising the property for let.
  • Repairs to the property and general maintenance costs.
  • Cost of services provided to your tenants, such as utilities.
  • Managing agent fees.
  • Insuring the building and contents.
  • Interest paid on any mortgage taken out to buy the property. (In certain cases, relief is granted on other loans taken out since the property was purchased)

Disallowable

  • Renovation work and improvements made to the property, e.g. replacing an item with a one of a higher specification, installing central heating, carrying out any work which was accounted for by a reduced purchased price for the property.
  • Capital repaid on any loan taken out to buy the property.
  • Costs incurred whilst the property is not available for letting.
  • Costs of purchasing/selling the property.

These lists are not exhaustive, and we would therefore recommend that you seek advice regarding any expenditure incurred to ensure that you obtain any tax relief available. Where an expense is not allowed for income tax, you may be able to obtain tax relief for these expenses once you sell the property. This falls within “Capital Gains Tax”.


There are additional rules regarding furnished lettings, including furnished holiday lettings. These rules may result in you being able to claim additional expenses against your income. If your letting is furnished, please contact us so that we can discuss these additional rules with you to see if you can make additional claims.

Capital Gains Tax

Usually there will be two types of income that you will receive from your tenants – rent and deposits. Rent is taxed each year based on the income that is due to you during a tax year rather than on the rent that you actually receive during the year. For example, if a tenant pays you in advance, only that part which falls within the tax year will be taxed in that year. The remainder will be taxed in the following tax year. Similarly, if a tenant is late paying you, that part which was payable in the earlier tax year will still be taxed in that year.
The only exception to this is when a tenant defaults on a payment and you will not be able to recover the amount due. Deposits are not taxable whilst they are still repayable to the tenant, but once either part or all the deposit ceases to become repayable, i.e. because there has been damage to the property, then this will become taxable at this point.

There will be various expenses that you will incur on your property, those that you can offset against your rental income (allowable expenses) and those that you cannot offset against your rental income (disallowable expenses). The more usual items are listed below:

Administration

You are required to complete a personal tax return, including the relevant Property and Capital Gains supplementary pages, and pay your tax liability for each tax year once your letting has commenced, even if you do not already receive a return from HMRC. HMRC charges penalties where the Tax Return is submitted late and interest where the tax is paid late.

Capital Gains Tax

Along with inheritance tax, capital gains tax is often referred to as a voluntary tax. With careful capital gains tax advice, it is often possible for individuals and/or trusts to reduce, totally avoid and/or delay payment of capital gains tax.

Depending upon your circumstances, we will advise you on reducing or delaying the payment date for the capitals gains tax on your shares or property in the following ways:

  • Reducing the amount of capital gains tax assessable.
  • Claiming all valid tax deductions:
    • Professional fees.
    • Enhancement expenditure.
  • Claiming all eligible relief:
    • Entrepreneurs relief.
    • Principal private residence relief.
    • Lettings relief.
    • Set-off against current year or brought forward losses.
  • Reviewing whether any elections could benefit you, such as nominating your principal private residence, if you own and occupy more than one house.
  • Crystallising the paper loss on other assets liable to capital gains tax. This may be possible by submitting a negligible value election rather than through an actual sale.
  • Considering emigrating overseas and becoming non-domiciled, for UK capital gains tax purposes.
  • Maximising the use of your annual exemption.
  • Examining whether trusts or pension funds could be used as a capital gains tax planning device.
  • Considering changing the ownership of the asset, particularly if your spouse has unused annual exemptions or current year or brought forward capital losses.
  • Restructuring the asset held. This can be particularly useful within areas of corporate finance, where equities can be exchanged for loan notes, which can be redeemed over several years, taking advantage of more than one year's worth of annual exemption.
  • Careful Will planning, as death 'washes out' the pregnant capital gain in any asset.
  • Delaying when the capital gains tax is payable:
    • Influencing the timing of the sale, including considering whether the disposal can be spread over more than one tax year, to maximise available reliefs and exemptions.
  • Delaying payment of tax on the assessable capital gain by reinvesting the proceeds and claiming: 
    • Rollover relief.
    • Holdover relief.
    • EIS deferral relief.
  • For assets gifted or sold to another family member at undervalue, submitting a Gift Relief claim, to effectively delay payment of capital gains tax until when the asset is next disposed of.

The most popular capital gains tax service we offer is calculating your current exposure to this tax, then discussing your options for restructuring your affairs to reduce this tax.


Agreeing your capital gains tax liability with HMRC is principally achieved by completing the capital gains supplementary pages of a self-assessment personal tax return. Clients who are fearful that this gain may be investigated by HMRC may wish to consider taking out our fee protection insurance.


Seek our advice in structuring your financial affairs and rest assured that you will not be paying any more capital gains tax than you absolutely must. In addition, we shall complete all the necessary paperwork for you and communicate with HMRC, to agree the liability, on your behalf.

Corporate Tax

The corporate tax team provides tax compliance and advisory services to many UK and international groups. Our team has an in-depth understanding of the industries in which our clients operate and appreciates the issues currently affecting directors and shareholders. We provide proactive advice, looking at tax issues from all angles.
As businesses develop, so do tax liabilities. Islam & Co provides a realm of corporate tax services for every stage of a company’s life. We work with an assortment of companies - from large SMEs down to small owner-managed businesses.

Islam & Co recognises that all businesses are different. Our team has the technical expertise and specialist know-how to provide individual services and offer bespoke and discreet planning as-and-when the need arises.

We provide specialist tax advice related to:

  • International challenges with our global tax expertise.
  • Buying and selling a business, mergers, floatation, management buy-out and exit planning
  • Property.
  • Planning and due diligence.
  • Maximising tax relief research and development.
  • Pensions.
  • Partnership/profit sharing.
  • Methods of profit extraction, including dividend policy.
  • Corporate venturing.
  • Business/incorporation.
  • Corporate tax self-assessment.
  • VAT and PAYE planning.
  • Compliance with HM Revenue and Customs requirements.
  • Managing the impact of a tax enquiry or investigation.

Income Tax

Income tax is arguably the most understood of all the taxes, as most of the population pay it in a very visible way. Since the introduction of self-assessment, all taxpayers should understand these rules, to minimise their overall income tax exposure, to ensure that they do not receive penalties and to protect against becoming subject to a tax enquiry.

If you are selected by HMRC to fill in a self-assessment tax return, because you are self-employed, a higher rate income taxpayer, a director, a property investor, or another reason, you need to make sure than this return correctly discloses all taxable income sources. You will also wish to make sure that it claims all valid tax deductions. Specific areas which we are typically asked to advise on include:

  • Taxation on buy-to-let residential properties.
  • Disclosure and taxation of benefits in kind.
  • Income tax on pension and investment income.
  • Utilising both spouses' basic rate income tax bands.
  • Claiming maximum relief for contributions into pension.

Disclosing and then agreeing your income tax liability with HM Revenue & Customs is principally achieved by the completing and filing of a self-assessment tax return.


Understanding this complicated tax system and paying the correct (minimum) amount of income tax, at the correct time, through the correct mechanism, is what most clients seek. Speak to our tax experts and put your mind at ease. We may even be able to suggest ways to restructure your affairs to save further tax.

Indirect Tax

Complying with the wide range of indirect taxes, from VAT to stamp duty and excise/customs duty, often requires quick thinking and immediate action. Islam & Co provides support to help you understand what you need to do to meet your tax obligations.


VAT is an immediate tax. That is, it's transaction driven and kicks in as soon as you take any action. VAT is increasingly complex and can impact directly on your bottom line, incurring hefty penalties if you get it wrong.


Islam & Co helps businesses plan for VAT before setting out on a new venture - from setting up overseas, buying or selling a property, or raising finances. Our experienced team addresses compliance issues proactively to help you avoid penalties, as well as the impact of transactions on other areas of the business-like audit and tax. 

Islam & Co helps with:

  • Implementing VAT structures in your business.
  • International tax.
  • Land / Property.
  • Expert Advice for specific tax solutions.
  • Acquisitions and disposals. 
  • Compliance: Penalties and interest, returns and payments, registration and audits.
  • Compliance with HM Revenue and Customs requirements.
  • Managing the impact of a tax enquiry or investigation.
  • Investigations.


Inheritance Tax

Before commencing any detailed IHT review or planning, it is important to determine what your overall IHT aim is, which will usually fall into one of the following model tax strategies:

Along with capital gains tax, inheritance tax (IHT) is often referred to as a voluntary tax. With careful planning, it is often possible to mitigate or totally remove this tax cost. When advising you in this respect, we shall also fully explain to you the potential implications of such planning on your access to income and capital during your later years:

  • Maintain wealth in the form most convenient to you and do not worry about IHT.
  • Give everything away (except perhaps the IHT nil rate band(s)) and survive for 7 years.
  • Take out life insurance to fund the expected IHT liability.
  • Follow a balanced approach, combining re-structuring of affairs to maximise eligibility to IHT reliefs, gifting assets that do not produce income to the next generation and taking out life cover for the residual IHT liability.

Depending on the circumstances, there are numerous ways to mitigate this tax:

  • Creating life time trusts.
  • Making life time gifts of chargeable assets and surviving 7 years.
  • Tax efficient writing of Wills.
  • Making a post death deed of family arrangement.
  • Restructuring your overall investment portfolio to hold assets that will be eligible for Business Property Relief and Agricultural Property Relief.

The most popular inheritance tax service we offer is valuing your current estate, before reviewing the intestacy rules and your current Will, then calculating your current inheritance tax exposure. We shall then discuss your options for restructuring your affairs and rewriting your Will, to reduce this tax. We shall also discuss with you whether you should take out life cover, to insure against the residual liability.


Most people consider inheritance tax as an unwelcome reduction in the inheritance passed on to the next generation. As well as seeking to reduce this tax, our tax technicians will prepare all the necessary paperwork and communicate with your Solicitor, so that you have peace of mind that your final tax affairs will be dealt with in a professional manner that you have come to expect.

Tax Planning

Traditionally, tax planning is the service clients most like to receive, and the most satisfying for us to deliver. Typical areas where a little prior tax planning can result in minimising your overall tax leakage are:

  • Inheritance Tax:
    • Will writing.
    • Gifts.
    • Transferring assets into trust.
  • Capital Gains Tax:
    • Elections on second homes.
    • Business exit planning.
    • Negligible value claims.
  • Income Tax/NIC:
    • Remuneration planning for the SME owner manager.
    • Holding investments in tax efficient 'wrappers'.
    • Business use of vehicles.
    • Pensions and retirement.
  • Business Tax:
    • Trading through the most tax efficient medium.
    • Pre-year end planning.
    • Short life asset elections.
  • VAT:
    • Transaction structuring.
    • Delaying VAT payment to HMRC.

The best tax planning advice involves paying the correct (minimum) amount of tax, at the correct time, disclosed through the correct mechanism. Instruct our tax specialists to act in your best interests and ensure that you could not be structuring your affairs in a more tax-efficient manner.

Contact our specialists, in Merseyside, to receive advice on all aspects of taxation.