Are limited companies in line for a Class 1A NIC refund?

CCH has suggested that business owners who buy holiday homes abroad through a limited company could be able to claim a refund of Class 1A National Insurance.

The accounting software provider explained that a lot of people buy their foreign holiday home through a limited company. Usually this is because of local property law rather than tax law. Before legislation changed in 2008, this could be seen as a benefit in kind to the director or shareholder and would mean the company was liable for class 1A NICs.

On March 17th this year, there was an amendment to the Social Security Regulations 2011. This amendment was designed to bring National Insurance and income tax regulations into line and could lead to owners of foreign holiday homes claiming back class 1A contributions.

Business owners who feel they may be entitled to a refund may want to contact a specialist tax accountant for advice.

Meanwhile, small businesses do not believe the burden of taxation has improved since the coalition came into power, according to a new report from the Institute of Directors.

The research, entitled Tax – The Weighty Burden, reveals that the burden is much larger than the rates of corporation tax suggest. In fact, the IoD says the true tax burden on smaller businesses is between 32% and 43%.

IoD head of taxation, Richard Baron, said the government expects the private sector to drive the economic recovery but the burden of taxation is holding it back. It is not feasible to make radical cuts immediately but the coalition should make plans for a sharp reduction in the medium term.

He went on to say that we need more ambitious plans to reduce corporation tax and employers national insurance contributions should also be reduced.

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