www.ebook3000.com Paying Less Tax 2006/2007 FOR DUMmIES ‰ by Tony Levene www.ebook3000.com Paying Less Tax 2006/2007 For Dummies® Published by John Wiley & Sons, Ltd The Atrium Southern Gate Chichester West Sussex PO19 8SQ England E-mail (for orders and customer service enquiries): cs-books@wiley.co.uk Visit our Home Page on www.wileyeurope.com Copyright © 2006 John Wiley & Sons, Ltd, Chichester, West Sussex, England Published by John Wiley & Sons, Ltd, Chichester, West Sussex All Rights Reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP, UK, without the permission in writing of the Publisher Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, England, or emailed to permreq@wiley.co.uk, or faxed to (44) 1243 770620 Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc and/or its affiliates in the United States and other countries, and may not be used without written permission All other trademarks are the property of their respective owners Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER, THE AUTHOR, AND ANYONE ELSE INVOLVED IN PREPARING THIS WORK MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books British Library Cataloguing in Publication Data: A catalogue record for this book is available from the British Library ISBN-13: 978-0-470-02860-5 (PB) ISBN-10: 0-470-02860-2 (PB) Printed and bound in Great Britain by TJ International, Padstow, Cornwall 10 www.ebook3000.com About the Author Tony Levene is a member of The Guardian Jobs & Money team, writing on issues including investment and consumer rights as well as on taxation He has been a financial journalist for nearly thirty years after a brief foray into teaching French to school children Over his journalistic career, Tony has worked for newspapers including The Sunday Times, Sunday Express, The Sun, Daily Star, Sunday Mirror, and Daily Express He has written eight previous books on money matters including Investing For Dummies Tony lives in London with his wife Claudia, ‘virtually grown up’ children Zoe and Oliver, and cats Plato, Pandora, and Pascal www.ebook3000.com www.ebook3000.com Dedication This book is dedicated to Claudia, who has shouldered many of the household tasks I should have done during the writing of this book – her unfailing good humour was 101 per cent necessary; to Zoe for her invaluable help in suggesting ideas; and to Oliver for making sure I kept to my deadlines I’d also like to thank my brother Stuart for keeping my computer working and for letting me use the peace and quiet of his home, where no one knew the phone number, for writing some of the chapters Author’s Acknowledgements I would like to thank everyone at Wiley for their help and patience In particular, Jason Dunne, who had the idea for this book and faith in me to ask me to write it; to Alison Yates, who guided me during the early stages; and to Daniel Mersey, my main editor, who has unfailingly responded to my blacker moments with light And an especial thank you to Kathleen, whose behind the scenes labouring turned my manuscript from a book about taxation into Paying Less Tax For Dummies I would also like to thank my colleagues at The Guardian for their patience and forebearance every time I mentioned ‘the tax book’ Most of all, however, I would like to thank all those who have helped me over the years in understanding the complications and convolutions of our tax system They have to remain anonymous but besides accountants, they also include those in the Inland Revenue that I have encountered both as a journalist and as a tax-payer www.ebook3000.com Publisher’s Acknowledgements We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/ Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Media Development Project Editor: Daniel Mersey Commissioning Editor: Alison Yates Executive Editor: Jason Dunne Executive Project Editor: Martin Tribe Cover Photo: © Image Source Cartoons: Ed McLachlan Composition Services Project Coordinator: Jennifer Theriot Layout and Graphics: Lynsey Osborn, Julie Trippetti Proofreader: Susan Moritz Indexer: Infodex Indexing Services Inc Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Joyce Pepple, Acquisitions Director, Consumer Dummies Kristin A Cocks, Product Development Director, Consumer Dummies Michael Spring, Vice President and Publisher, Travel Kelly Regan, Editorial Director, Travel Publishing for Technology Dummies Andy Cummings, Vice President and Publisher, Dummies Technology/ General User Composition Services Gerry Fahey, Vice President of Production Services Debbie Stailey, Director of Composition Services www.ebook3000.com Contents at a Glance Introduction .1 Part I: Tax Basics .7 Chapter 1: Understanding the Process and Your Role in It Chapter 2: Looking at the Players and the Process .19 Chapter 3: Organising Your Records 33 Part II: Tax, You, and Your Family 45 Chapter 4: Tying the Knot – Or Not 47 Chapter 5: Taxing from the Cradle to College .57 Chapter 6: Taxing Issues in Your Golden Years 73 Chapter 7: Preparing for the Inevitable: Death and Taxes 81 Part III: You Work Therefore You’re Taxed 97 Chapter 8: Working for Someone Else 99 Chapter 9: Paying on the Perks 113 Chapter 10: Sharing in Your Firm’s Fortunes 129 Chapter 11: Working for Yourself Can Be Less Taxing .141 Chapter 12: Considering Your Company’s Status .161 Part IV: Save on Your Savings and Investments 177 Chapter 13: Minimising Tax on Your Savings 179 Chapter 14: Taxing Investments 195 Chapter 15: Saving Tax with Bricks and Mortar 211 Chapter 16: Understanding Life Insurance and Tax 227 Chapter 17: Depending on Pensions for Your Retirement .243 Part V: Self Assessment and Getting Help 257 Chapter 18: Filling In and Filing Your Self Assessment Form 259 Chapter 19: Paying for Outside Help with Your Tax Affairs 275 Chapter 20: Dealing with an Investigation 285 Part VI: The Part of Tens .297 Chapter 21: Ten Top Tax-Saving Tips 299 Chapter 22: Ten Top Tips for Dealing with the Tax Inspector 305 Appendix: HMRC Helplines .311 Index 315 www.ebook3000.com www.ebook3000.com Table of Contents Introduction .1 About This Book Conventions Used in This Book .3 Foolish Assumptions How This Book Is Organised .4 Part I: Tax Basics Part II: Tax, You, and Your Family Part III: You Work Therefore You’re Taxed Part IV: Save on Your Savings and Investments Part V: Self Assessment and Getting Help .5 Part VI: The Part of Tens Icons Used in This Book Where to Go from Here .6 Part I: Tax Basics .7 Chapter 1: Understanding the Process and Your Role in It Filing Facts 10 Distinguishing between avoidance and evasion .11 Putting the brakes on avoidance schemes 12 Moving to One-Stop Tax and Benefits Shopping 12 Laying Out the Basics of the Tax System .13 Considering Tax and Your Family 14 Looking at How You Pay 16 Saving Smartly 16 Investing for tax savings .17 Treating your home as your tax castle 17 Chapter 2: Looking at the Players and the Process 19 Understanding the Inland Revenue’s Role 20 Administering and collecting .20 Imposing penalties 21 Coping as a Ratepayer 23 Getting help from the Inland Revenue 23 Tracking down your tax inspector 25 320 Paying Less Tax 2006/2007 For Dummies •I• I-E basis endowments, 231–232 ignorance as a defense, 26 IHT (Inheritance Tax) See Inheritance Tax immediate pension vesting, 254 incapacity benefit, 105 income dividends or shares, forms for, 28 interest, forms for, 27 property, forms for, 27 record keeping, 40 on self assessment forms, 264–265 income tax definition, 13 history of, 20 incorporation See also selfemployment Capital Gains Tax, 175 case studies, 169–172 definition, 162 dividends versus salary, 169 limited companies, 164–167 off-the-shelf companies, 164 paying yourself, 167–172 pension plans, 172–174 personal service companies, 165–166 pros and cons, 162–164 selling the business, 175 structuring the business, 169–172 for tax avoidance, 165–166 tax on death, 165 transferring money to family, 166–167 Web site, 164 indexation, 209 indexation allowances, 201–202 Individual Savings Account (ISA), 193, 204–205, 232 Inheritance Tax assets included in, 82 civil partnerships, 53, 91–92 converting capital to annuities, 93–94 definition, 14 discounting business assets, 84 exclusions, 82–84 exemptions for service personnel, 83 generation skipping, 85 gift exemption, 301 gifts, giving, 83, 87–93 home ownership, 224–225 home value, 87 insurance, 230–231 life expectancy, 85–86 between married couples, 53 nil rate band, 82–84 record keeping, 39 specific bequests, 95–96 taxable total, calculating, 84 tax-free slice, 91 tax-saving tips, 301 trusts, 95 wills, 94–96 Inland Revenue See also HMRC case study, 21–22 consolidation of services, 21 getting help from, 23–25 role in the tax process, 20–23 Web site, 24 Inland Revenue Commissioners vs Duke of Westminster, 11 insignificant usage, 118–119 insurance See also endowments; national insurance avoiding inheritance tax, 230–231 beneficiaries, 228 buy-to-let property, 215 case studies, 236 costs and commissions, 239 critical illness policies, 228, 229 GIBs (guaranteed income bonds), 240 history of, 229–230 against HMRC investigation, 281–282, 290 Index insurance-linked investment fund, 232 insured, 228 LAPR (life assurance premium relief), 235 lump-sum insurance bonds, 235–240 mortgage protection cover, 229 non-qualifying policies, 234 offshore investment, 240–241 pensions, 249 policies in trust, 230–231 premiums, 228 protection plans, 229 qualifying policies, 233–234 as savings plan, 232 single-premium investment contract, 235–240 surrender, 228 taking regular income, 236–238 tax hurdles, 234–235 taxation rules, 233–234 tax-free ISA (Individual Savings Account), 232 term, 228 term assurance plans, 229 tontines, 229–230 top slicing, 238–240 trust, 228 underlying value, 235 insurance-linked investment fund, 228, 232 insured, 228 interest information, record keeping, 38 interim tax installments, deadline, 30 Internal Guidance Manuals, 24 investigation by HMRC aspect inquiry, 289 common errors, 286–287 complaining about, 294–295 ending the investigation, 292–293 exchanging information, 291 full enquiry, 289 321 insurance against, 281–282, 289 letter of formal notice, 290–291 making excuses, 309 penalties, 293 rectifying errors, 287 request for compensation, 295 role of your accountant, 294 the self-employed, 288–289 suspicion of fraud, 292 time limits, 289 triggers, 287–289 investment trusts, 203–204 investments, on self assessment forms, 265–266 See also types of investments IR35 workers, PAYE, 108 ISA (Individual Savings Account), 193, 204–205, 232 IT contractors, PAYE, 108 •J• January 31, 31 jobs See self-employment; working for others jobseeker’s allowance, 105, 109 joint savings accounts, 184–185 July 5, 6, and 31, 30 •L• labour-only subcontractors, PAYE, 108 Land and Property (SA105) page, 268 LAPR (life assurance premium relief), 235 legal fees, 152, 216 LEL (lower earnings limit), 157 letter of formal notice, 290–291 life expectancy, 85–86 life insurance See insurance lifetime limits on pensions, 245, 255 322 Paying Less Tax 2006/2007 For Dummies limited companies See incorporation loan notes, 203 losses, 154, 209 low coupon bonds, 205 lump-sum insurance bonds, 235–240 •M• maintenance, buy-to-let property, 215 maintenance payments, 54–55 management expenses, buy-to-let property, 215 March 1, 31 marriage See also civil partnerships; cohabitation; same-sex partnership and Capital Gains Tax, 201 Capital Gains Tax allowance, 52–53 Child Support Agency payments, 54 versus cohabitation, 53–54 common law, 53 divorce, 54–55 inheritance, 53 Inheritance Tax, 91–92 maintenance payments, 54–55 maximising benefits of, 50–53 MCA (married couple’s allowance), 49–50 pensions, 53 swapping assets, 52–53 tax consequences, 47–50 transferring assets, 91–92 trusts, 95 and work partnerships, 51 matching shares, 138 May 31, 30 MCA (married couple’s allowance), 49–50 mileage expenses, 117–118 mini-cash Individual Savings Accounts, 193 mobile phones, perks, 124 money purchase pension plans, 246 mortgage interest deduction, 215, 216 mortgage protection cover, 229 moving reimbursement, 124 •N• national insurance See also insurance benefits, 105–106 bereavement allowance, 105 definition, 13 identification number, 20 incapacity benefit, 105 jobseeker’s allowance, 105 minimum payment, 105 PAYE, 104–106 paying in, 104–105 self-employment, 155–157 state retirement pension, 105–106 taking out, 105–106 tax-saving tips, 303 Web site, 105 widowed parent’s allowance, 106 National Savings Certificates, 61 National Savings Children’s Bonus Bonds, 61 negligible value shares, 209 new shares, Stamp Duty, 197 nil rate band, 82–84 non-qualifying insurance policies, 234 Non-residence (SA109) page, 269 •O• October 5, 30 OEICs (open-ended investment companies), 203–204 Index OFEX (off-exchange) shares, 207 offshore investment, 60, 240–241 online filing, 272–273 Open Government information, 25 organizing your records See record keeping outgoing expenses, record keeping, 40 overlap, effects of, 146–147 •P• P9D forms, 30, 37 P11D benefits, 114 P11D forms, 30, 37 P45 forms, 37, 110 P60 forms, 30, 37 Paragraph 45,700, 217 parties for staff, 124 Partnership (SA104) page, 268 partnership shares, 137–138 partnerships, self-employment, 158 part-time businesses, record keeping, 42–43 PAYE (Pay As You Earn) agency workers, 107 benefits-in-kind, 102 building contractors, 108 casual workers, 108 codes, 99–102 contract workers, 108 deductions, 102–107 definition, 16 detecting errors, 106–107 former students, 107 IR35 workers, 108 IT contractors, 108 labour-only subcontractors, 108 married work partners, 51 national insurance, 104–106 for special jobs, 107–108 take-home pay, 103 tax code numbers, 100–101 323 payment dates, 273 payment schemes, for the selfemployed, 16 See also PAYE payments in lieu of notice (Pilons), 110–111 payments-in-kind, record keeping, 37–38 payoffs, 109–110 penalties and fines calculating, 274 late filing, 308 negotiating, 293 record-keeping errors, 35 pensions See also retirement annuities, 76–77, 245, 252–253 ASP (alternatively secured pension), 255 AVC (additional voluntary contributions), 247–248 for children, 249 civil partnerships, 53 collection age, 251–252 compulsory purchase annuities, 253 defined benefits plans, 246 defined contribution plans, 246 drawdown schemes, 254–255 final salary plans, 246 immediate vesting, 254 life insurance, 249 lifetime limits, 245, 255 marriage and, 53 matching payments, 247–248 money purchase plans, 246 owning your own company, 250–251 purchased life annuities, 253 salary sacrifice, 250–251 saving for, 246–248 for the self-employed, 152, 172–174, 250 simplification of, 245 SIPPs (self-invested personal pensions), 137, 245 324 Paying Less Tax 2006/2007 For Dummies pensions (continued) Stakeholder Pension plan, 248–249 state retirement, 105–106 tax-free lump sums, 75–76, 252–253 tax-saving tips, 302 trivial commutation, 255 unsecured, 254–255 perks See also benefits-in-kind; expenses categories of, 113–115 childcare, 122–123 company car, 115–119 emoluments, 114 eye care, 125 financial advice, 125 Home Computing Initiative, 125 housing, 122 mobile phones, 124 moving reimbursement, 124 P11D benefits, 114 service awards, 124 sports and social facilities, 123 staff parties, 124 staff restaurant, 123 suggestion awards, 124 taxable, 114 taxation history, 115 personal record keeping, 34–40 personal service companies, 165–166 petrol allowance, 118 PETs (Potentially Exempt Transfers), 92–93 Pilons (payments in lieu of notice), 110–111 plant and machinery costs, selfemployment, 153 policies in trust, 230–231 posting self assessment forms, 272 premium bonds, 61–62, 194 premiums, 228 press releases, 24 professional help See tax agents property See also buy-to-let property; Council Tax; home ownership; Stamp Duty protection plans, 229 purchased annuities, 76 purchased life annuities, 253 •Q• qualifying insurance policies, 233–234 •R• R40 forms, 189–190 R85 forms, 188–189 Ramsey vs Inland Revenue Commissioners, 12 rebate firms, 276 rebates See tax rebates receipts, record keeping, 40–41 record keeping bank records, 38 business records, 40–43 Capital Gains Tax, 39 employment-related records, 37 fines for failure, 35 foreign travel, 37–38 gifts, 37–38 identifying the need for, 35–36 income, 40 Inheritance Tax, 39 interest information, 38 managing, 42–43 organizing your paperwork, 305–306 outgoing expenses, 40 P9D forms, 37 P11D forms, 37 P45 forms, 37 P60 forms, 37 part-time businesses, 42–43 payments-in-kind, 37–38 Index personal records, 34–40 receipts, 40–41 retention period, 38–40, 41–42 self assessment forms, 263 in the tax process, 33–34 what to keep, 36–38 work-related travel, 39, 40 recovering overpayments, 279 reduction in payments, requesting, 273–274 redundancy, 109–110 refunds See tax refunds rental property See buy-to-let property renting holiday homes, 218–220 rooms, 218–221 over a shop, 219 Renting Out Your Property For Dummies, 217 repairs, buy-to-let property, 215 responsibility for returns, 26, 277–278, 309–310 retention period, tax records, 38–40, 41–42 retirement See also pensions age at, 74 age-allowance trap, 78–80 age-related allowances, 77–80 tax avoidance, 79–80 working past, 74–75 Retiring Wealthy For Dummies, 244 •S• SA101 (Employment) page, 267 SA102 (Share Schemes) page, 267 SA103 (self-employment) page, 268 SA104 (Partnership) page, 268 SA105 (Land and Property) page, 268 SA106 (Foreign Income) page, 268 SA107 (Trusts) page, 268 325 SA108 (Capital Gains) page, 269 SA109 (Non-residence) page, 269 salary sacrifice, 250–251 same-sex partnership, 53–54 See also civil partnerships; cohabitation; marriage savings through insurance, 232 for pensions, 246–248 self assessment forms, 265–266 tax avoidance, 79–80 taxable 10 per cent band, 185–186 automatic tax payments, 180–181 for children, 190–193 joint accounts, 184–185 rate calculation, 181–184 shared savings, 184–185 special savings rate, 181 tax rebates, 186–190 tax-free for children, 61 choosing a plan, 193 mini-cash Individual Savings Accounts, 193 premium bonds, 194 Tessa, 193 Toisa (Tessa Only Isa), 193 SAYE (Save As You Earn), 132–135 Schedule A, 27 Schedule B, 28 Schedule C, 28 Schedule D, 27, 150–151 Schedule E, 27–28 Schedule F, 28 schedules, 27–28 SDLT (Stamp Duty Land Tax) See Stamp Duty self assessment forms calculating your tax, 270–271 Capital Gains (SA108) page, 269 common errors, 263–264 326 Paying Less Tax 2006/2007 For Dummies self assessment forms (continued) computer programs for, 271 credits, 264–265 deadline for filing, 30–31 depreciation, 269–270 electronic filing, 272–273 Employment (SA101) page, 267 employment pages, 269 estimates, listing, 267 exemption from, 262–263 filing, 271–272 filling in, 263–270 Foreign Income (SA106) page, 268 income, 264–265 investments, 265–266 Land and Property (SA105) page, 268 Non-residence (SA109) page, 269 online filing, 272–273 Partnership (SA104) page, 268 payment dates, 273 penalties, calculating, 274 penalty for late filing, 308 posting, 272 record keeping, 263 reduction in payments, requesting, 273–274 savings, 265–266 self-employment (SA103) page, 268 self-employment pages, 269–270 Share Schemes (SA102) page, 267 sources for, 260–262 supplementary pages, 267–270 Tax Calculation Guide, 261 tax return, 261 Tax Return Guide, 261, 264 Trusts (SA107) page, 268 Web site for, 261 self-employment (SA103) page, 268 self-employment See also incorporation; working for others accountancy, 150–154 choosing your tax year, 145–147 family employees, 157–158 forms for, 27 giving up, 159 hiring help, 157–159 HMRC investigation, 288–289 HMRC standards, 142–143 national insurance, 155–157 overlap, effects of, 146–147 partnerships, 158 paying employees, 159 payment schemes, 16 pensions, 250 registering with HMRC, 144–145 sole trader, 141–144 VAT (Value Added Tax), 147–149 your first two returns, 145–146 self-employment pages, 269–270 self-invested personal pensions (SIPPs), 137, 245 selling your home, 222–223 September 30, 30 service awards, 124 settlers of trusts, 63 seven-year limit on gift giving, 92–93 share schemes See also stock market investment availability, 130 CSOPs (company share option plans), 139 definition, 129–130 EMIs (enterprise management incentives), 139 not approved by HMRC, 138–139 SAYE (Save As You Earn), 132–135 SIPs (share incentive plans), 135–138 tax savings, 130–131 types of, 131 Share Schemes (SA102) page, 267 shared savings accounts, 184–185 single-premium investment contract, 235–240 SIPPs (self-invested personal pensions), 137, 245 Index SIPs (share incentive plans), 135–138 small amount exemption, 59–61 small gift exemption, 90 software for self assessment forms, 271 sole trader, 141–144 special savings rate, 181 specific bequests, 95–96 sports and social facilities, 123 spread bets, Stamp Duty, 197 staff restaurant, 123 stage and cinema investments, 206 Stakeholder Pension plan, 248–249 Stamp Duty, 14, 196–197, 212–213 See also Council Tax Starting a Business For Dummies, 158 startup costs, self-employment, 153 state retirement pension, 105–106 stock market investment See also share schemes AIM (alternative investment market), 207 bonds, 204–205 Capital Gains Tax, 199–202 dividends, 197–198 EIS (Enterprise Investment Scheme), 208–209 indexation, 209 investment trusts, 203–204 ISA (Individual Savings Account), 204–205 loan notes, 203 losses, 209 negligible value shares, 209 OEICs (open-ended investment companies), 203–204 OFEX (off-exchange) shares, 207 risks and rewards, 206–209 share transfers, Stamp Duty, 197 sheltering gains, 208–209 stage and cinema investments, 206 Stamp Duty, 196–197 tax implications, 203–209 327 unit trusts, 203–204 unquoted shares, 207 VCTs (venture capital trusts), 207–208 worthless shares, 209 subscriptions to professional organizations, 127–128 suggestion awards, 124 supplementary pages, 267–270 surrendering insurance policies, 228 swapping assets, 52–53 •T• take-home pay, PAYE, 103 taper, 201–202 taper relief, 92–93 tax advisers See accountancy services tax agents banks, 277 building societies, 277 certified accountants, 276 chartered accountants, 276 deducting cost of, 277 fees, 278–279 financial advisors, 280–281 form checkers, 276, 278–279 HMRC helplines, 282–284, 311–313 insurance against HMRC investigation, 281–282 online advice, 306 rebate firms, 276 recovering overpayments, 279 responsibility, 277–278 tax technicians, 276 TaxAid, 280 tax avoidance, 11–12, 79–80 tax breaks, 115 Tax Bulletin, 24 Tax Calculation Guide, 261 tax code numbers, PAYE, 100–101 tax credit application deadline, 30 328 Paying Less Tax 2006/2007 For Dummies tax credits for children, 302 tax evasion, 11–12, 308–309 tax inspector, 25–26 tax installments, deadline, 30 tax rebates, 186–190 See also tax refunds tax refunds, 279 See also tax rebates tax return, 261 See also self assessment forms Tax Return Guide, 261, 264 tax rules, annual changes, 307 tax technicians, 276 tax year dates and deadlines, 28–31, 271 self-employment, choosing, 145–147 taxable charge, perks, 114 TaxAid, 280 tax-free Individual Savings Accounts, 232 tax-free savings for children, 61 tax-free slice, 91 taxpayers ignorance as a defense, 26 responsibility for returns, 26 right of election, 222 role in the tax process, 26–28 telephone helplines, 282–284, 311–313 10 per cent band, 185–186 tenants over a shop, 219 term assurance plans, 229 term insurance, 228 termination payments, 109–110 Tessa, 193 Toisa (Tessa Only Isa), 193 tontines, 229–230 top slicing, 238–240 traded options, Stamp Duty, 197 transportation, environmentally clean See green transportation travel, work-related, 39, 40 triangular travel expenses, 117–118 trivial commutation, 255 trustees, 63 trusters, 63 trusts accumulation and maintenance, 64 administrators, 63 bare, 64 beneficiaries, 63 Child Trust Fund, 70–71 for children, 62–65, 70–71 civil partnerships, 95 discretionary, 64–65 granters, 63 Inheritance Tax, 95 insurance, 228 investment, 203–204 settlers, 63 trustees, 63 trusters, 63 types of, 64–65 unit, 203–204 Trusts (SA107) page, 268 •U• unemployment, 105, 109–111 unit trusts, 203–204 unquoted shares, 207 unsecured pensions, 254–255 •V• VAT (Value Added Tax), 14, 147–149 VCTs (venture capital trusts), 207–208 vintage cars, value assessment, 116 •W• warrants, Stamp Duty, 197 ‘wholly, exclusively, and necessarily’ rule, 126–128 widowed parent’s allowance, 106 wills, 94–96 Index working for others See also benefits-in-kind; expenses; PAYE; self-employment; share schemes golden hellos, 111 national insurance, 104–106 perks categories of, 113–115 childcare, 122–123 company car, 115–119 emoluments, 114 eye care, 125 financial advice, 125 Home Computing Initiative, 125 housing, 122 mobile phones, 124 329 moving reimbursement, 124 P11D benefits, 114 service awards, 124 sports and social facilities, 123 staff parties, 124 staff restaurant, 123 suggestion awards, 124 taxable, 114 taxation history, 115 unemployment, 105, 109–111 Working Tax Credit, 71 worthless shares, 209 •Z• zero rating VAT, 147–148 Notes Do Anything Just Add Dummies UK editions HOME Other UK editions now available: 0-7645-7027-7 0-7645-7016-1 0-7645-7054-4 0-470-02632-4 0-7645-7039-0 0-7645-7025-0 0-7645-7026-9 PERSONAL FINANCE 0-7645-7023-4 BUSINESS 8443_p1 0-7645-7018-8 Building Confidence For Dummies (0-470-01669-8) Buying a Home on a Budget For Dummies (0-7645-7035-8) CVs For Dummies (0-7645-7017-X) eBay.co.uk For Dummies (0-7645-7059-5) Golf For Dummies (0-470-01811-9) Kakuro For Dummies (0-470-02822-X) Marketing For Dummies (0-7645-7056-0) Neuro-Linguistic Programming For Dummies (0-7645-7028-5) Small Business Employment Law For Dummies (0-7645-7052-8) Starting a Business on 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