Mar 7, 2019 | News
When enrolling yourself into Making Tax Digital for VAT you should consider the timing very carefully Once signed up, HMRC will expect all future VAT returns (and any current or previous returns outstanding) to be filed through Making Tax Digital software. There are further restrictions if you pay your vat by direct debit as it is currently taking around 15 days for the direct debit to be transferred to the new system.
As an example, if your first full vat quarter, falling on or after 1 April 2019 is for the period 1 April 2019 to 30 June 2019, then, if you have a direct debit, you should sign up on or after 15 May 2019. If you do not have a direct debit then you can sign up from 8 May 2019 i.e. after the VAT return for the previous quarter to 31 March 2019 has been filed.
Mar 7, 2019 | News
All VAT registered businesses with annual taxable turnover exceeding £85,000 must comply with the making tax digital (MTD) rules for VAT periods beginning on or after 1 April 2019. For example if your first quarter, after 1 April 2019, is for the period 1 May 2019 to 31 July 2019, then the first return that you must file, under MTD, will be for the quarter ended 31 July 2019.
There are two requirements for MTD: to keep your VAT records in a digital format and to submit VAT returns using MTD compatible software. This is neither as complicated nor as difficult as it sounds; if you already record transactions on a spreadsheet based system or some form of accounting software you are already meeting the first MTD requirement.
If you currently use a spreadsheet based system you will need to buy some new MTD software to read the relevant VAT totals from the spreadsheet and submit them to HMRC as your VAT return. This type of bridging software is not expensive.
Your VAT software does not have to be cloud based and you do not need to keep your entire VAT accounting system on one software program. If you are concerned by the extra cost, then do not be bamboozled into upgrading to the latest version of your accounting software to allow you to submit vat returns under MTD. Most accounting packages allow you to download the data into a spreadsheet format (CSV) which can be read by bridging software in order to submit the VAT return.
If you need any further help with MTD, then please get in touch.
Nov 2, 2018 | Budget, News
Our budget summary covers the key tax changes announced in the Chancellor’s speech and includes tables of the main rates and allowances. We will, of course, be happy to discuss with you any of the points covered and help you reassess your plans in the light of any legislative changes.
Budget summary
Mar 17, 2016 | Budget, News
Having previously announced increases in dividend tax rates for 2016/17, the Chancellor had some good news for small business owners in his Budget Speech. Business rates relief has been expanded and made permanent. In addition, £1,000 allowances are introduced for trading profits and rental income which will mean some people will not need to declare such income.
Click here for key points announced in the budget.
Jul 14, 2015 | News
From April 2017, the amount of income tax relief landlords can claim on residential property finance costs will be reduced. The income tax relief on mortgage interest will be restricted to 20%. This change will be introduced gradually over a 4 year period.
Wear and Tear Allowance
The Wear and Tear Allowance has been a valuable tax relief for those landlords that let fully furnished properties. From April 2016, this will be replaced by a new relief that allows landlords to deduct the actual costs of replacing furnishings.
Rent-a-Room Relief
The level of rent-a-room relief will be increased from £4,250 to £7,500 per annum.
Jul 14, 2015 | News
The new dividend allowance will represent a significant tax increase for owners of small companies who have for some years been able to extract profits from their business with a tax efficient mixture of salary and dividends.
Dividend Example
In 2015/16 Paul takes a dividend of £18,000 net (£20,000 gross) from his own company. His only other income is a small salary below the tax and national insurance limits. Currently he pays no tax on both the salary and dividends.
In 2016/17 Paul takes a dividend of £18,000 (gross, no tax credit) and a similar salary to 2015/16 above. He pays tax at 7.5% on £13,000 after deducting the dividend allowance of £5,000, resulting in a tax liability of £975.
Annual Investment Allowance
This allowance is the maximum amount a business can spend on equipment in one year and get full tax relief in that year. The allowance will be increased to £200,000 from 1 January 2016.
Corporation Tax
From 1 April 2015, the main rate of corporation tax is 20% and this will continue for the 2016/17 financial year. The main rate will then be reduced as follows;
- 19% for the financial years beginning 1 April 2017, 1 April 2018 and 1 April 2019
- 18% for the financial year beginning 1 April 2020.
Employment Allowance
From April 2016, the government will increase the National Insurance Employment Allowance from £2,000 to £3,000 a year. The increase will mean that businesses will be able to employ four workers full time on the new National Living Wage without paying any national insurance.
To ensure the Employment Allowance is focussed on businesses and charities that support employment, from April 2016, companies where the director is the sole employee will no longer be able to claim the Employment Allowance.
If you require any further information on how the budget affects you and your business please give us a call.
