More ideas and strategies for making tax work for you.
Something for nothing
The forecasts continue to be reasonably bleak (with perhaps the exception of Halifax's higher mathematics that showed an increase in house prices in January). Most sectors are predicting losses, actual and anticipated.
Any discussion of losses will be particularly galling for those now dealing with corporate tax returns, still reflecting the (relatively) heady days of 2007 and early 2008, when profits were still flowing. Paying tax now on those profits can seem a painful exercise when the present profit & loss account (and cashflow) may not be quite as healthy.
Tax is all about the art of the possible – within the realms of the practical. One possible, and practical, point to remember is that trading losses can be carried back, as well as forwards. The tax on the profits of 2008 can be reduced - or eliminated - by losses in 2009. In a moment of generosity, the Treasury has also made it possible for 2009 losses to be carried back further, to reduce profits in 2006 and 2007, as well as 2008.
There are - of course - limits to this generosity. Some planning now to look at what losses may be available and how soon they can be accessed could pay off faster than you might expect.
And your dividends for free
Any company with overseas subsidiaries should note that this year's Budget will introduce a pleasant change - the Treasury is planning to exempt most foreign dividends received by UK companies from corporation tax (dividends from UK companies to other UK companies are already exempt from tax).
The exemption is likely to take a few months to actually come into effect. If you're expecting to receive foreign dividends from a subsidiary it'll be worth considering whether you really need to receive those dividends now (and perhaps pay tax on them to some extent) or wait until they won't reduce losses which you could carry back (or require tax to be paid on them).
The price for tax-free foreign dividends will be a restriction on tax deductions on interest paid to group companies for UK companies. Before these restrictions come into force, you need to consider the impact that they will have on the group and consider what steps can be taken to reduce these new tax costs.