Categories
Business

Types of insurances when hiring a removal business in the UK

You get exhilarated when about to move your house. No doubt it is an exciting moment but at the same time, you get worried about moving tragedies. Unfortunately, if your belongings are damaged or scratched or lost then who will be responsible for this and how can you get payback for this. 

When you are hiring a removal business you must know about its insurance policies.

Types of insurances you can get:

Most of the removal businesses are offering the following types of insurance:

  • Public liability insurance

While working as a removal business, their employees may interact with the public in different ways. During their work they may unintentionally and unfortunately cause damages or accidents. Public risk insurance or public liability insurance deals with bodily injury, property damage, or death in such situations covering minor and major accidents that may occur.

  • Personal injury

Within Public liability insurance the personal injury insurance specifically covers bodily injury, if somebody gets injured, the company will bear the expenses of treatment. It will help financially for buying medicines, the cost of visiting doctors and hiring equipment, etc. 

  • Property damage

Property is one of the most common things which can be damaged during a move. It is important to protect the properties on an individual level or business level.  While moving if property damage occurs to the public it is covered as part of the public liability insurance. However if it happens to the client when they hire a moving company it may also be covered under the Transport of Goods insurance

  • Transport of goods insurance 

During the transportation of goods from one point to another if any damage occurs it should be covered under the transport of goods insurance, this is one of the most important insurances that a home move company should have as it will cover any property damage during the transit of goods.

  • Furniture insurance

On the insurance market there is a form of insurance called furniture insurance which will cover the life time usage wear and tear of your furniture you should make sure that moving your furniture will not breach your insurance terms.

  • Cargo insurance

Cargo insurance is a type of transport insurance including the process of loading the products which rely on the value, route, and expiry time of the products. It provides insurance coverage for all sorts of materials used in transportation; this type of insurance should be considered when you are moving items abroad outside of the UK.

  • Land insurance

This type of insurance provides protection for liability against accidents which may happen on your land, it can include things such as slips and falls within the boundary of the land.

  • Marine insurance

Although not typical insurance you may encounter, marine insurance is a must for ship owners, it will cover the vessel against damage to items onboard a vessel and liabilities where cargo goods are lost or damage. This type of insurance is usually mandatory for ship owners; however it is good to know how you will be covered if a leg of your journey requires a ship.

Categories
Business Finance

Are There Any Tax Benefits on Business Loans in India?

A business loan in India comes with various tax exemptions and benefits under the Income Tax Act, 1961. Entrepreneurs who have secured any form of business credit can enjoy tax benefits and reduce the overall tax burden favourably. 

When a business services a loan, they repay the loan amount in monthly instalments or EMIs, which comprise of two main components. And are usually decided by the lender based on the creditworthiness of the borrower. 

EMI amount = Principal component + Interest component

Under the ITA, however, only the interest component of the EMI amount will be deducted as tax, not the principal bit. 

Moreover, to avail the business loan tax benefits, the total business income or revenue should not include any expenditure on –

  • Employee bonus
  • Office space rent
  • Office supply
  • Maintenance cost
  • Staff salary
  • Business advertisements

Taxable income

Any sum of money used to service the business debt does not comprise the total revenue, income, or profit for the company. And consequently, not included in the total taxable income of a business.

Gross or the total income of a business, typically constitutes the amount used to pay the interest on a loan. Because the company pays the interest amount over and above the borrowed amount; the expenditure is included in the total taxable income.

Further, borrowers only need to pay tax on the net business income earned in a financial year. As a result, the principal component, which does not comprise the total revenue earned by the business, is usually excluded from the total taxable income. 

Tax calculation

Any business entity can calculate the taxable income with the formula below:

Taxable income = Gross revenue/income – tax-deductible business expenses

Borrowers can write off any payment made towards the interest cost as a business expense and avail the tax exemptions. Mainly because the interest amount on the EMI is essentially the extra money you spend to avail the credit facility from a lender. So, the amount is taxable. 

Company owners can, therefore, use a business loan EMI calculator to compute the tax liability on the availed loan, for both fixed and variable interest rates. They need to subtract the fixed principal component from the total EMI amount to calculate the interest component, which will constitute the total taxable income. 

Businesses should also maintain updated, accurate records of the loan to ensure they can furnish essential documents and claim the tax benefits conveniently. 

Key takeaways 

  • All forms of business loans are tax-deductible under the Income Tax Act, 1961
  • Tax exemption only available on the interest component of the EMI amount 
  • Tax benefits on business loans can lower the overall tax burden
  • Tax exemptions are not available on the entire EMI amount
  • The principal component of the EMI amount is excluded from the taxable income