by Acuaccounts | Dec 21, 2022 | accounting, latest news, r&d credits, self assessment, selfemployed, tax return
The 2022 Autumn Statement by chancellor Jeremy Hunt reversed several policies introduced with the previous mini-budget by his predecessor Kwasi Kwarteng, as well as changing several thresholds that apply to businesses and the self-employed.
The autumn budget freezes the VAT threshold for businesses at £85,000, which with the current price rises will likely make VAT registration mandatory for more small businesses. Similarly, the personal tax allowance freeze at £12,570 was extended from 2026 to 2028, which with rising wages will move more people into higher tax brackets.
Reduced thresholds and allowances in 2023, 2024 and beyond
Two annual tax-free allowances that frequently apply to company owners and directors will be reduced in 2023-24: the dividend allowance and capital gains tax allowance.
The dividend allowance applies to directors paying themselves partially or entirely in dividends. The tax-free amount will be cut from £2,000 to £1,000 in 2023-24, then to £500 in 2024-25. The capital gains tax allowance, that applies for example, for sales of business assets will be cut from £12,300 to £6,000 in 2023-24, then to £3,000 in 2024-25.
Changes to business rates and energy bills for businesses
From 1 April 2023, business rates will be updated to reflect changes in property values since the previous evaluation in 2017. To support changes in business rates, the UK government has disclosed a targeted support package worth £13.6 billion over five years.
Furthermore, the Energy Bill Relief Scheme for businesses will remain in place until 31 March 2023. The government will introduce more targeted support on energy bills for the most vulnerable businesses from April 2023.
Increase in national living wage and reduction in research and development tax relief
The government has announced that the national living wage will increase from 1 April 2023, from the current rate of £9.50 per hour to £10.42 per hour for employees aged 23 and over. The UK minimum hourly wage for employees aged 21 to 22 will increase from £9.18 to £10.18, and the rate for employees aged 18 to 20 will increase from £6.83 to £7.49.
Research and development tax relief supports companies carrying out R&D projects related to their trade or business sector. However, in an effort to reduce fraud, the rate for small businesses will be reduced to 86 per cent, and the credit rate will be reduced to 10 per cent. The rate of the separate research and development expenditure credit will increase from 13 per cent to 20 per cent.
How to file your self-assessment correctly in 2023
With the self-assessment deadline less than a month and a half away, we review who needs to file for self-assessment and how it works.
You need to file for self-assessment in the UK in 2023 if any of the following apply:
- you have earned more than £1,000 from self-employment income
- you have earned from than £2,500 from renting property
- you have earned more than £2,500 in untaxed income like tips or commissions
- you have earned more than £10,000 from savings or investments
- you are a company director
- your taxable income was over £100,000
- you have earned income abroad that you need to pay tax on, or you live abroad but have an income in the UK
- you owe capital gains tax on profits from selling things like shares or a second home
- additional conditions as outlined on the government website
You can find the full list of conditions for self-assessment and check if you need to file a self-assessment tax return at https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return
To file a self-assessment tax return, you will need to gather the following information:
- your National Insurance Number and your ten-digit Unique Taxpayer Reference (UTR)
- detailed information about any untaxed income from the tax year, including your income from self-employment, dividends and interest on shares
- records of any expenses relating to your self-employment
- any contributions to charity or pensions eligible for tax relief
- your P60 or any other records showing any income you received and have already paid tax on
For any questions on how to prepare the information about your untaxed income, what can and cannot be expensed, or to book a full self-assessment service feel free to get in touch with our team at info@acuaccounts.com or on 0203 907 9027.
Keep track of your monthly and yearly tax and payment deadlines in 2023
In the UK, there are several important tax deadlines for businesses throughout the year.
Here are some of the key deadlines for the calendar year 2023:
- Self-Assessment Tax Return deadline: 31 January 2023 for the tax year that started on 6 April 2021 and ended on the 5 April 2022
- VAT Return deadline: Every 7th of the month following the end of the VAT period
- Corporation Tax Return deadline: 9 months and 1 day after the end of the company accounting period
- Payroll deadlines: Real Time Information (RTI) submissions must be made to HMRC on or before the date that payment is made to the employee
Review the monthly and quarterly tax deadlines in 2023:
Monthly Tax Deadlines
- On the 1st of the month: Corporation Tax payment for the tax year ending nine months prior (for example on January 1 2023 the Corporation Tax payment for tax year ending 31 March 2022 will be due)
- Every 7th of the month: VAT return submission and payment (online) if your business payment cycle is month-end
- Every 21st of the month: PAYE, NIC and CIS payment (electronic) for month-end 5 January 2022 and quarter-end 5 January 2022
Quarterly Tax Deadlines
- Due on the 21st of every three months: PAYE, NIC and CIS payment (electronic) if your company pays quarterly
Do you have questions about the recent updates and changes from the Autumn Statement? Any concerns about how to manage your taxes and business in 2023 or do you need help to submit your self assessment tax return?
Have a look at our services and feel free to get in touch with us. You can book a consultation at info@acuaccounts.com or call us directly on 0203 907 9027.
by Acuaccounts | Dec 7, 2020 | accounting, self assessment, selfemployed, tax, tax return
Self assessment is how HM Revenue and Customs (HMRC) collects income tax not automatically deducted from wages, pensions and savings. People and businesses with other income must report it in a tax return.
Company directors, self-employed or members of partnerships need to file for self assessment. Likewise, if you have made additional untaxed income of more than £2,500 for example by renting out property, you will also have to file for self assessment.
When is the 2019/2020 self assessment due?
Your self assessment tax return for the tax year which started on 6 April 2019 and ended on 5 April 2020 is due by Midnight January 31st 2021 if you file online. The deadline for filing a paper return was October 31st 2020. Furthermore, the tax you owe will also be due on January 31st 2021.
If you have never submitted a return before, you will first need to register for Self Assessment. It can take up to 20 working days for receiving your Unique Taxpayer Reference (UTR) in the post.
There are different ways to register if you’re self-employed, not self-employed but need to declare income, or if you’re in a partnership. The registration for 2019/2020 should have happened by 5th October 2020. To register you need your National Insurance (NI) number and personal and business details.
Who needs to file for self assessment?
You will need to file for self assessment in the following cases:
- your self-employment income was more than £1,000
- you are a director of a company (unless it was a non-profit organisation, such as a charity)
- your income from renting property exceeded £2,500
- you earned more than £2,500 in untaxed income, for example from tips or commissions
- your income from savings or investments was £10,000 or more before tax.
- you need to pay Capital Gains Tax on profits from selling things like shares
- you or your partner’s, income was over £50,000 and you’re claiming Child Benefit
- you have income from abroad you need to pay tax on, or you live abroad but have an income in the UK.
- your taxable income was over £100,000
- if you earn over £50,001 in the 2019/20 tax year (£50,001 for 2020/21) and make pension contributions you may have to complete an assessment to claim back the extra tax relief you’re owed
- you are a trustee of a trust or registered pension scheme
- your State Pension was more than your personal allowance and was your only source of income
- you received a P800 from HMRC saying you did not pay enough tax last year.
You can check if you need to file a self assessment using the government website at https://www.gov.uk/check-if-you-need-tax-return
At AcuAccounts we work to integrate the information from your company or sole trader accounts into your tax self assessment return. We will also factor in income from other investments, land or property and overseas assets if applicable.
What documents do you need to file for a personal tax return?
In order to file for self assessment online you will need to prepare the following documentation:
- your 10-digit Unique Taxpayer Reference (UTR)
- your National Insurance (NI) number
- Details of all your untaxed income from the tax year, including income from self-employment, dividends and interest on shares
- records of any expenses relating to self-employment
- any contributions to charity or pensions which might be eligible for tax relief
- P60 or other records showing how much income you received which you’ve already paid tax on
Self assessments can be filed either by yourself or by an authorised agent on your behalf, like AcuAccounts.
What is the difference between a personal tax return for self-employed and company directors?
As self-employed, you complete a self-assessment tax return and tell HMRC what profit you have made during that tax year and then you pay tax on this profit. Self-employed record expenses via the self-assessment and are taxed on profits.
In a similar fashion, limited company directors will run expenses through their limited company. A Limited Company pays tax from the moment it makes £1 in profit. However, directors can extract personal income from the Limited Company in the form of salary and dividends. This will be included in the limited company director self assessment, where the personal allowance applies.
How much tax can I expect to pay as a self-employed?
HMRC calculates Income tax for the self-employed on profits plus any other income. As self-employed you pay tax on any earnings that exceed the personal allowance. Business expenses from your self-employed work can be offset against your income from self-employment, reducing your tax bill.
The standard personal allowance for 2019/2020 was set at £12,500, which is the amount of income a person can get before they pay tax.
Can self assessment tax be paid in instalments?
You might be able to pay the bill in instalments, depending on whether you need to make payments against your latest bill or want to make advance payments against your next bill.
According to information on the HMRC website, you can set up a payment plan to spread the cost of your latest Self Assessment bill should you owe £30,000 or less or do not have any other payment plans or debts with HMRC.
It must be remembered that in case you don’t keep up with your repayments, HM Revenue and Customs (HMRC) can ask you to pay everything you owe. Not to mention you can set up a budget payment plan if you want to put aside money to cover your next Self Assessment tax bill ahead of time.
What is next?
You can file your tax return online on the HMRC website or get in touch with us to book a self-assessment consultation at info@acuaccounts.com or by calling us directly on 0203 907 9027.
by Acuaccounts | Nov 6, 2020 | accounting, Loans, tax
As England goes back into a national lockdown this November the chancellor has announced a new series of measures increasing the support previously announced with the Winter Economic Plan which included the following highlights:
- Extension of the Coronavirus Job Retention Scheme further (the furlough scheme), until the end of March
- Job Retention Bonus of £1,000 per retained employee will not be paid in February but instead redeployed a retention incentive at the right time
- Increase the third self-employed grant, covering November to January, from 55% to 80% of trading profits.
Extension of the Coronavirus Jobs Retention Scheme (CJRS): Furlough again at 80%
- The government is extending the CJRS until the end of March for all parts of the UK. To be reviewed in January to decide whether economic circumstances are improving enough to ask employers to contribute more. The Job Support Scheme is postponed.
- Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
- Employer flexibility: Businesses will have the flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing employees full-time.
- Employer contribution: There will be NO employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
- Payment: The extended CJRS will operate as the previous Scheme did, with businesses being able to claim either shortly before, during, or after running payroll. Claims can be made from 8 am Wednesday 11 November. Claims made for November must be submitted to HMRC by no later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
- Employee eligibility: Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS (if other eligibility criteria are met). An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- Employees that are re-employed: Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
More support announced for the self-employed at 80% of trading profits capped at £2,500/month
- The government has recently announced an extension of the Self-Employment Income Support Scheme to support self-employed individuals which will be returned the overall level of the grant to 80% of trading profits covering November to January for all parts of the UK. This provides equivalent support to the self-employed as we are providing to employees through the government contribution in the CJRS. It is calculated based on 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500.
- Timing: HMRC will pay this more generous grant sooner than planned and in time for Christmas – the window for claiming a grant will open on 30 November, two weeks earlier than previously announced.
- The Government has already announced that there will be a fourth SEISS grant covering February to April. The Government will set out further details, including the level, of the fourth grant in due course.
More financial support for local businesses in England and extension of loan schemes including BBL
- Businesses in England that are forced to close due to national or local restrictions will receive up to £3,000 per month. This will benefit over 600,000 business premises.
- 90% of small and medium-sized business premises in the closed Retail, Hospitality, and Leisure sectors should broadly have their monthly rent covered by these grants (based on VOA data on Rateable Values as the best proxy we have for rent).
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The application deadline for loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – has been extended to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30 November).
- The Bounce Back Loan Scheme rules will be adjusted to allow those businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once. Some businesses might not have anticipated the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.
To find out what the recent announcement means for your business get in touch via email or phone.
For more information about what has been outlined above the full updates are at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932977/ECONOMIC_SUPPORT_FACTSHEET_5_November.pdf
#Employer #Employee #Salary #Wages #PAYE #business #update #coronavirus #covid19 #income #support #SEISS
by Acuaccounts | Oct 8, 2020 | latest news, tax
Please see our latest blog article for the more recent updates from the chancellor’s statement on November 5th, 2020
The chancellor announced on September 24th 2020 a series of measures as part of the Winter economic plan with the aim to protect jobs and support businesses over the coming winter months. Central to the plan is a new Job Support Scheme, the extension of the Self Employment Income Support Scheme SEISS and more flexibilities for businesses to help pay back loans.
We have outlined what you need to know as a business owner or self-employed and invite you to reach if you need further clarification or support in implementing these measures for yourself and your business.
The new Job support scheme starts November 1st 2020
- The Job support scheme takes the place of the current furlough scheme, due to end October 31
- Employees must be working at least 33% of their usual hours
- The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
- The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
- Currently confirmed to be available for six months ending 30 April 2021
- Less generous than the current Job Retention Scheme but highly flexible with employees being able to cycle on and off the scheme without the need to keep the same pattern each month. Each short-time working arrangement must cover a minimum period of seven days.
- Can be combined with the Jobs Retention Bonus (£1,000 one-off payment to employers for every furloughed employee who remains continuously employed through to 31 January 2021)
- The scheme applies to all employees, whether they have been previously furloughed or actively working. Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee
Here is an example of how the Job support scheme works:
To help you navigate the complexities and calculate how the scheme could best work for your business get in touch via email or phone.
Tax cuts and deferrals for businesses and self-employed
- 15% VAT cut for the tourism and hospitality sectors is extended to the end of March 2021
- If your business has deferred their VAT bills the New Payment Scheme gives you the option to pay back in smaller instalments where rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
- 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Some good news and not so good news for the self-employed
- The Self Employment Income Support Scheme Grant (SEISS) has been extended to cover three months’ worth of profits for the period from November to the end of January next year.
- However, the grant will cover only 20% of average monthly profits, up to a total of £1,875.
- The taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.
If you have any questions around taxable grants or your next self-assessment tax return due to January 2021 book a call or send us an email
Bounce back loans have been extended
- More than 1.17 million ‘bounce back loans’ have been issued since the scheme launched in May and applications have been extended to the end of November
- Your business can borrow between £2,000 and £50,000 capped at 25% of your total turnover
- No interest will be charged and no repayments will need to be made in the first 12 months and after 12 months, all banks will charge a fixed 2.5% annual interest.
- Bounce back loans may be extended from six years terms to ten, which will cut monthly repayments by nearly half.
- Interest-only periods of up to six months and payment holidays will be available
If you are interested in applying for a Bounce Back Loan from £2,000 – £50,000 or have already taken out a loan and want to verify how these updates affect your cash-flow get in touch to book a financial assessment call.
Kickstart scheme to support employment for young people
- You can create 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment
- And organisation regardless of size can apply for funding. If you have fewer than 30 job placements to offer we can put you in touch with an organisation that can apply on your behalf
- Funding available for each job will cover the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
- The job placements created with Kickstart funding must be new jobs. They must not replace existing or planned vacancies or cause existing employees or contractors to lose or reduce their employment
- The roles you are applying for must be: a minimum of 25 hours per week, for 6 months and paid at least the National Minimum Wage for their age group. Roles should not require people to undertake extensive training before they begin the job placement
- The government will initially prioritise young people aged between 16 and 24 who are ready for an opportunity will be supported by their Jobcentre Plus work coach to enrol in the scheme.
To find out what the Winter Economic Plan means for your business get in touch via email or phone.
#Employer #Employee #Salary #Wages #PAYE #business #update #coronavirus #covid19 #income #support #SEISS
by Acuaccounts | Mar 13, 2019 | latest news, tax
Under Making Tax Digital (MTD) for VAT, which is coming into effect from 1st April 2019, these records must now be kept digitally within functional compatible software. See the following outline as a guide to what HM Revenue & Customs (HMRC) are looking for:
Essential Details
- Your Business Name
- The address of your principal place of business
- Your VAT registration number
- A record of any VAT accounting schemes that you use
For each Supply you Make you must record:
– The date
– The value
– The rate of VAT charged. Where no VAT is charged, you must record whether the supply is zero rated, exempt or outside the scope of VAT.
If you account for VAT using a retail scheme you are not required to keep a separate record of the supplies that make up your Gross Daily Takings (GDT) within functional compatible software.
Values – OUTPUT (SALES)
To show the link between the output tax in your records and the output tax on the return, you must
have a record of:
- The output tax you owe on sales
- The output tax you owe on acquisitions from other EU member states
- The tax you are required to pay on behalf of your supplier under a reverse charge procedure
- The tax that needs to be paid following a correction or error adjustment
- Any other adjustment required by VAT rules
For each supply you Receive you must record:
To show the link between the input tax in your records and the input tax on your return you must
have a record of:
– The date
– The value
– The amount of input tax that you will claim
Values – INPUT (PURCHASES)
To show the link between the input tax in your records and the input tax on your return you must
have a record of:
- The input tax you are entitled to claim from business purchases
- The input tax allowable on acquisitions from other EU member states
- The tax that you are entitled to reclaim following a correction or error adjustment
- Any other necessary adjustments
The complete set of digital records to meet MTD requirements do not all have to be in one piece of software. It there is a digital link between the pieces of software, records can be kept in a range of compatible digital formats.
To ensure your records are prepared according to the upcoming changes speak to one of our VAT experts.
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