Income tax is exactly as it sounds, a ‘tax on your income’. However, not all income is taxable and even then you are only taxed when you earn above certain levels.
What is a taxable income?
Income tax applies to: earnings from employment, earnings from self-employment, receipts from most pension schemes (including state, company and personal), interest generated on most savings accounts, income from shares, rental income and income paid to you from a trust.
Essentially you can and will be taxed on almost everything you earn that is above your personal allowance.
How can we help?
At Barnes Roffe our team of tax accountants can help you to reduce the amount of income tax that is payable to the Government and keep your earnings where they belong – with you!
We are much more than your average accountancy firm. Through our commitment to providing you with the latest tax advice, support and industry knowledge, our tax consultants can ensure that you pay ONLY what you are liable for.
Contact our team today and let us help you to make understanding tax even simpler.
Losing a family member is never easy, and the last thing you will want to think about is whether or not you are liable for paying inheritance tax. However, it is essential that you check so that you are aware of your rights and can prepare your family for the future ahead.
What is inheritance tax?
Inheritance tax is a tax levied on the transfer of an individual’s estate on his/her death to non-exempt beneficiaries (subject to a nil rate band).
Inheritance Tax is usually paid on a property when somebody dies, although it is also sometimes payable on trusts and gifts which are made within 7 years of the individual’s death.
Most estates don’t have to pay inheritance tax, as they fall within the “nil rate band”. As long as your estate’s worth is not above £325,000 (gifts and trusts included) then you won’t have to pay 40% inheritance tax on any sums exceeding this threshold.
However, if you think your estate may be liable to inheritance tax on your death it is important to plan in advance so your tax liability will not be greater than it should be. There are many opportunities for tax efficient planning, if you put them in place in good time.
We can help you to alleviate the stress of worrying about the future and provide you with the tax advice you need.
VAT (Value Added Tax) is a tax that is charged on most business transactions in the UK.
There are different rates of VAT applicable to different types of transactions., the most common being:
- Standard – 20%
- Reduced – 5%
- Zero – 0%
VAT is charged on most goods/services, but if you wish to reclaim the VAT you spend, you need to become a VAT registered business.
Who must register?
If the goods/services you supply count as ‘taxable supplies’, you’ll need to become VAT registered, especially if your turnover for the last year has gone over the VAT threshold, or if you think your business will soon surpass this threshold.
If you are having problems determining whether or not to become a VAT registered business, Barnes Roffe can help. We offer VAT return preparation services, as well as VAT advice and guidance.
It’s not that simple…
VAT is perhaps the most complicated tax. From partial exemption calculations to reverse charge rules, cross-border trading to land and property transactions, the possible pitfalls and complexities are many. It is vital to get professional VAT advice as the cost can be great if you make the wrong decision. Advance planning is invaluable.
Our tax team and specialist VAT consultants can advise you on all areas of VAT.
We also offer a VAT Healthcheck service, giving you peace of mind over your VAT compliance.
At Barnes Roffe we are much more than your average tax accountants. Through our commitment to offer you the best quality tax advice, our tax consultants can help you to calculate all of your taxes as well as provide you with in-depth business strategies.
Contact our tax team today and we can help you understand how VAT affects your business.
What is Probate?
Probate is the official process of administering the estate of a person who has died and ensuring its distribution to those who will inherit, after discharging any debts and liabilities whilst also ensuring that relevant taxes are calculated and paid. Some estates can be very complicated, in which case having a probate specialist to advise you and make sure that all matters are resolved in accordance with the law, is essential.
How our specialists at Barnes Roffe can help you work through Probate
When a family member or close friend dies, it is not only upsetting but can often become even more stressful when trying to deal with all the complex legal and administrative issues that require urgent attention. Should the deceased’s personal representatives (executors or administrators) decide they do not want the burden of undertaking the administration of the probate process they will need to engage the services of a suitably qualified professional such as Barnes Roffe.
As probate and inheritance tax go hand in hand, as accountants, Barnes Roffe is fully qualified and has the specialist knowledge and experience needed to tie up all probate matters as efficiently and painlessly as possible, whilst also advising on how best to minimise the Estate’s liability to taxes.
To sum up, we can help remove the stress and make this complex process simpler for you by:
- Applying for the Grant of Representation
- Researching and assessing the value of the deceased’s Estate
- Preparing the estate accounts;
- Taking care of all the legal paperwork;
- Calculating the tax position to the date of death and for the period of administration of the estate;
- Completing inheritance tax calculations and agreeing the inheritance tax liability with HMRC;
- Obtaining grant of probate;
- Gathering assets and paying creditors and beneficiaries;
- Advising beneficiaries and executors of the tax implications connected with selling any assets;
- Preparing tax returns for personal representatives;
- Advising on the preparation of instruments of variation (to vary the terms of the will or intestacy).
What do we do when we are appointed act?
Once we are appointed to act our initial work will be to: -
- Review the will (and any codicils) and legacies to ensure they are valid and prepare any necessary affidavits;
- Ascertain who the beneficiaries are;
- Identify the composition of the estate* and ascertain whether a grant is needed;
- Send notification of death to financial institutions*; and,
- Value the estate. Where third parties are required, these will need to be commissioned. We are able to value assets such as private company shares.
The elements indicated * may be predominantly carried out by the executors in order to reduce costs.
Once we have been able to ascertain and schedule the various elements of the estate, we move to the application process.
There are 2 stages to the application process with which we can assist you:
- Complete an inheritance tax form – The IHT “Account” will schedule how much the estate is worth including property, shares, goods and chattels etc. The outcome of this valuation decides how much tax is liable to be paid on the estate. At this stage it is important to identify all the exemptions and relief that are available to the estate. The tax owed must be paid before you can apply for the Grant of Representation.
- Complete the Probate Application Form and file the application online. As HMRC has to confirm the value of the estate for IHT purposes there is usually around a six -week delay between the start of the first stage and the submission of the Probate Application. How long it takes to get a grant after application varies with the waiting times in the Probate office but on average takes 6 to 10 weeks.
Administering the Estate – What happens now?
Once the Grant of Representation has been granted our involvement can cease if the executors wish to collect in and distribute the estate themselves. If we are appointed to carry out the administration of the estate we will send a copy to the deceased’s asset holders, such as banks and building societies etc. and we can assist the executors in liquidating the deceased’s assets. This will provide funds to clear debts and pay any additional inheritance tax, income tax, or capital gains tax arising from the estate.
It is also important to give notice to potential creditors by placing an advert in the deceased’s local paper and in the London Gazette after which any further potential claimants have a fixed time of 2 months and one day to make a claim.
Preparing Estate Accounts – who gets what!
Once all claims on the estate have been investigated and all debts and taxes have been paid, we will help you distribute the estate assets to the beneficiaries as identified in the will, or by state of the law if there isn’t a will. All beneficiaries should sign a discharge form to confirm receipt of their assets or funds. Residuary beneficiaries will normally sign the estate accounts, that we will prepare for you, to confirm that they are happy to accept the amount left to them once all other payments have been made and confirm that they have no further call on the estate.
Why Choose Barnes Roffe rather than a Probate Solicitor?
- For Existing Clients – a lot of the work is already done!
We will already know a considerable amount about our client’s financial circumstances. For instance, we may have prepared their annual accounts and/or tax returns; be aware of their business and financial affairs and have a good understanding of the family situation. All of this helps the probate process enormously.
Most importantly, we will already have details of some, if not all, of their finances, assets and business dealings. This will save lots of time and money when it comes to preparing the necessary paperwork for the Probate office and HMRC.
Probate and estate administration is essentially an accounting and taxation exercise and as accountants experienced in probate, we have all the expertise to tie up all probate matters as efficiently and painlessly as possible, whilst also advising on ways to minimize the Estate’s liability to taxes. Whilst a probate solicitor would normally still need to utilise the services of an accountant.
Traditionally solicitors and banks charge a percentage of the value of the estate to carry out any probate work. This can be as high as 4%. Furthermore, the time it takes them to gather all the necessary financial and tax related information can prolong the process.
At Barnes Roffe we have the specialist financial knowledge which means that we can carry out probate quickly and succinctly, keeping costs down.
It is difficult to estimate fees in abstract but as an indication: -
- If we were simply preparing IHT returns and a probate application for an estate of around £2M based on complete information from executors and the estate is not overly complex or fees are likely to be in the order of £2,500 plus VAT. In addition, the probate office fees would be disbursed and would be recoverable from the estate. It would likely take around a month to prepare the return and the application and the time from appointment to grant is likely to be four to five months taking account time for HMRC and the Probate Office to process the submissions to them.
- In the same case if we were to write to financial institutions for information and perhaps obtain a property valuation in order to value the estate this would likely take around a further three months and cost a further £2,500 plus VAT. In addition, we may have to pay for third party valuations which would be a disbursement and recoverable from the estate.
- In the same case if once we have a grant of probate, we then collect in the estate assets and hold them on client account until they are paid out to the beneficiaries after the creditors are paid. We will prepare tax returns for the estate as necessary and accounts for the estate showing the collection and payment out of the assets of the estate. This stage will take around three months (subject to the completion of the sale of any property assets) and is likely to cost around £3,000 plus VAT.
The foregoing is an indicative example and before commencing work on any appointment we will be able to provide both fee and time estimates based on the size and complexity of the estate. We will keep you up to date through our work both as to fees and the likely timescales.
At Barnes Roffe we specialise in tax, so you can be confident that you will pay only the minimum amount of tax that needs to be paid from the estate. We will look into the inheritance tax, income tax and capital taxes, calculate the overall tax liabilities of the estate and we can also work with the beneficiaries to set in place plans to minimise their future tax burdens.
- We offer a personal, confidential service
We understand what a difficult time this is for family and loved ones. You can be confident that we will be discreet and understanding and that you can trust us to take away the administrative burden from you as much as we can and complete the probate process as quickly and painlessly as possible.
- ICAEW Compensation fund Complaints
Whenever we engage with a client, we specify a partner to whom you are able to complain if you are not satisfied in any way with our work. In addition, you can complain to the ICAEW How to make a complaint | ICAEW or to the legal ombudsman Bring your complaint to us | Legal Ombudsman . Our engagement letter will set out further details.
As with all our work we have professional indemnity insurance and in the event that you have a claim against the firm and the ICAEW has a compensation scheme in respect of probate work ICAEW Probate Compensation Scheme arrangements | ICAEW
For a free probate consultation, please call the office most convenient for you, or fill in the contact form and we will call you to discuss how best we can help.