In the current climate, we are getting a lot of questions from clients about obtaining tax relief on bad debts. Most of you are aware that you can write off a debt when it has gone bad but might not be aware that you can obtain tax relief even if it is only doubtful that it will be paid.

If we prepare a set of accounts for you and at the date of preparation certain debts from the year in question have not yet been settled and there is a certain amount of doubt about whether they are collectible then we can provide against these in your accounts. HM Revenue and Customs may want to see some evidence that it was reasonable to assume that they might go bad. If they are subsequently collected in the following year, the amount previously provided will be added back to the following year’s profit. Beware though that general provisions against bad debts are not allowable (they must be against specific customers) and also that such provisions will affect your Balance Sheet and therefore your credit-worthiness to potential suppliers or your bank.

If you feel that there are debts in your accounts that are doubtful please tell your client manager when you send us your records.

The recent Budget announced that a 20% cap is to be imposed on tax relief for pension contributions made starting from April 2011.

Between now and April 2011, individuals with high personal tax bills may be tempted to ‘increase’ their pension contributions and take advantage of the current regulations whilst they remain in place. This has however been anticipated by the government and measures have been introduced to prevent this.

The impact on those of you that might have considered doing that is that you may wish to re-consider what vehicle, your surplus cash or investments should be held inside. Apart from pensions, other options include your own name (obviously), a Limited Company, a trust or a hybrid limited liability partnership. Often the tax planning we do involves helping you decide on a sound investment strategy and our work with A4G Wealth Management LLP is crucial in this regard.

For a more detailed copy of this article please email nigel@a4gsolutions.co.uk or to speak to our Independent Financial Adviser about investments generally email roger@a4gwealthmanagement.co.uk 

At a time when interest rates are almost non existent and the FTSE 100 index is at a 5 year low, our latest morning seminar will have our sister company A4G Wealth Management showing how to invest securely with the chance of a return of over 7%

The seminar will take place on Thursday 11th June and will take place in our boardroom starting at 7.45 for 8am sharp with tea / coffee and bacon rolls provided with an aim to finish by 9am. Places are limited and can be booked by emailing Jenny@a4gsolutions.co.uk. To find out details of our other upcoming seminars please visit www.a4gsolutions.co.uk/weekly-seminars.

“Making the vision clear sparks people’s passion and productivity”.

JACK WELCH