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Spring Statement 2022

3/28/2022

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​This week the Chancellor delivered this year’s spring statement – this was initially intended to be a spending style announcement but following the price of energy increasing to high levels, it did include a little tax. 

​ Here is a summary of what to expect for the 2022/23 tax year – some of the things are not new but I thought it important to remind everyone!

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  • An increase in the National Insurance threshold to £12,570 from 6th July 
  • The planned increases in National Insurance will continue from 6th April
  • A planned increase in corporation tax from 2023 for some companies continues
  • New temporary loss reliefs for companies and the ‘super deduction’ for qualifying capital expenditure continue
  • The standard rate of Vat for hospitality resumes
  • No changes in tax allowances
  • Increased wages as previously published

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Christmas Party and Trivial Benefits – The Season to be Merry?

10/27/2021

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Normally I have clients looking forward to using their Christmas party allowance (not sole traders or partners) however this year might still be a bit different but I’ve come up with a plan to help if you don’t want to paint the town red!


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Autumn Budget 2021 - January Tax Bills

10/27/2021

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31 January Tax Bills

HMRC have a dedicated page to help you make an arrangement if you are unable to pay your income tax bill.  It’s important you give it 48 hours after your return is filed and then ring HMRC as soon as possible to discuss payment options.  Agents cannot do this and HMRC will want to speak to the taxpayer.  More information is available here https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments
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Autumn Budget 2021 - Personal Tax

10/27/2021

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It has already been announced that Employees NI, Employers NI and dividend tax will all rise by 1.25% to fund the new Social Care Levy. 

​As ever the detail is in the Treasury Papers and here are some things popped out when I had a look at them:



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Autumn Budget 2021 - Company Tax

10/27/2021

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The Autumn 2021 Budget is out and there's lots of information to look through.

The basics of the information you need to see on Company and Business tax can be put into the following four bullet points for you to digest.

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Autumn Budget 2021 - Employing People

10/27/2021

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  • The employment allowance whereby you can save on employers NI will remain at £4,000

  • The living wage will rise to £9.50 per hour

  • Employers National Insurance above £4,000 will rise by 1.25%
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Budget 2021 - Employing People

3/3/2021

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The employment allowance remains at £4,000 meaning small businesses only pay Employers NI after this point.  It is worth noting that the threshold at which Employers NI is due is lower than the employees NI threshold of £9,568 at £8,840.

​See what else by reading on below...
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Budget 2021 - VAT Threshold

3/3/2021

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The VAT threshold will continue at £85,000 and the lower rate on hospitality will continue at 5% to 30 September and then be subject to an interim rate of 12.5% until 31 March 2022. 

​Care will be needed on using software for VAT returns with Vat quarters that do not coincide with these dates
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Budget 2021 - Business Tax

3/3/2021

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​
Here we explain in bullet points how the 2021 Budget impacts upon  Business Tax .

​With all of the important points to take note of...

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Budget 2021 - Personal Allowances & National Insurance

3/3/2021

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The point at which people will pay income increases slightly at £12,570 for 2021/22 and remains frozen until 2026. 

​Spouses and civil partners may transfer £1,257 of their personal allowance to each other.


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31 January Tax Bills

11/30/2020

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At the start of the pandemic the Chancellor announced that the July 2020 payment towards the 31 January tax bill could be deferred until 31 January 2021.  For many people this leaves a rather large balancing payment just after a lockdown and Christmas.

Find out more below...

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Self Employment Grant 3

11/30/2020

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Version 3 of the Self-Employment Income Support Scheme (SEISS) launched 30 November and is paying out upto 80% of annual profits provided you meet certain criteria which are similar to the first 2 tranches.

​See what this means below...
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Christmas Party and Trivial Benefits – The Season to be Merry?

11/30/2020

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Normally I have clients looking forward to using their Christmas party allowance (not sole traders or partners) however this year might be a bit different but I’ve come up with a plan to help!

Why not save the allowance of £150 per person including VAT and 1 guest for when restaurants reopen and use it before the end of the tax year?  Instead have a think about trivial benefits for you and your employees?

A number of restaurants and take aways have become pretty clued up at home delivery service or indeed delivering restaurant meals for you to reheat.  Why not use a £50 trivial benefit to send something like this to an employee (or indeed yourself if you are an employee) – remember maximum 6 of these benefits per year and it must never exceed £50.  A well known restaurant chain is doing a menu where you can get food for 2 (sometimes with house wine) by mail order costing less than £50 including delivery!

If that doesn’t work for you or your employees a gift upto £50 for Christmas is perfectly allowable.  Don’t go over the allowance!  You can’t get the VAT back on the gift.
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Working from Home Help

6/1/2020

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HMRC has relaxed rules that usually restrict reimbursement for spending on office equipment for home workers for the rest of 2020/21 which will help avoid a nasty tax bill. ​

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Motorcycles

6/1/2020

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This is a subject I’ve not really written about but it occurred to me that the rules aren’t a strict as for cars powered by traditional fuels.  When we’re being asked to travel alone, it is actually an option worth considering. Here's why...

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Cycle to Work Scheme

6/1/2020

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Cycling to work isn't such new a concept, but of late, and with workplaces adapting to new ways of working, it has become a popular choice for many of us. So how might this relate to accounting and how might it affect you?

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Electric Cars

6/1/2020

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This is where it gets more interesting, for Company Director owners of businesses, I have been advising that the taxable benefit for a car is becoming prohibitive in many cases (and fuel is a definite no), however the latest draft legislation suggests the following benefit for electric only cars:



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Budget 2020 - What's in it?

3/11/2020

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Everything you need to know about the Spring Budget 2020

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Christmas Party and Trivial Benefits – Companies and Employees Only

12/16/2019

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As it’s that time of year don’t forget you can claim £150 for a company director and guest for your Christmas party (or parties) provided the total does not exceed £150 – exceeding it invalidates the relief.

A Christmas gift not exceeding £50 is also allowable – again exceed this amount and the relief is invalidated.  During the year a maximum of 6 such gifts are allowable.
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Going Green

12/16/2019

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Whilst we’re not clear what the next budget has in store, I’m pretty sure that tax incentives in some shape or form will be around for some time to come for green vehicles.  With electric (not hybrid) cars becoming more and more advanced and new models due in the new year, the following allowances might be useful:
Until 1 April (5 April 2021 for income tax) a low or zero emission car can qualify for a 100% first year allowance (FYA) if its CO2 emissions do not exceed 50g/km and the car is purchased new and unused.  A similar 100% FYA applies for zero emission vans, where the vehicle is purchased new and unused before 1 April 2021, or 5 April 2021 for income tax.  However, as all commercial vehicles qualify for 100% relief under the AIA, this special FYA for zero emission goods vehicles is not needed by the majority of businesses.
This is where it gets more interesting, for Company Director owners of businesses, I have been advising that the taxable benefit for a car is becoming prohibitive in many cases (and fuel is a definite no), however draft legislation (bearing in mind the forthcoming budget) suggest the following benefit for electric only cars:

  • The 2019/20 taxable benefit for a zero emissions car is 16%
  • From April 2020 cars with an emissions rating of 0 will reduce to 0% (draft legislation)

Charging points also qualify for Capital Allowances.

The planning point here is that your business can buy outright an electric car by April 2021, claim 100% first year allowance and the driver does not have a taxable benefit from April 2020.  Let’s see what the budget brings but it’s definitely worth considering going green!


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Letting Out Your Home

8/1/2019

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When you move house it’s sometimes not possible to sell your existing home in the timescales and some clients have elected to let out the property.  

In recent years there have been changes to the way in which mortgage interest is relieved in the calculation of let property profits and from 6thApril 2020 there will be changes to the Capital Gains Tax regime.

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IR35 New Rules For Some Contractors

8/1/2019

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There are some changes afoot in the contractor market.  

​Those of you who have heard the term IR35 will know it’s legislation dating back to the early 2000’s designed to prevent people on generally long term contracts from being ‘employed’ through their own companies and saving significant amounts of National Insurance and sometimes tax.  


The decision on whether to apply IR35 and pay the extra tax currently lies with the contractor.

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Making Tax Digital Update 2019

8/1/2019

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​For businesses trading above the VAT threshold, the ability to log onto HMRC and manually complete and submit a VAT return is progressively being removed.  

Believe it or not mid July HMRC were saying that only 25% of businesses that need to swap over have done to date!

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MTD – Preparing Your Business

3/27/2019

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For many businesses the ability to log onto HMRC and manually complete and submit a VAT return is being removed.  The following changes are taking place:


  • HMRC are changing servers and the functionality to submit VAT returns the old fashioned way will not be available to many businesses
  • Businesses and agents will need new gateway credentials to use the new server
  • You will be required to keep digital records of your VAT returns for 6 years
  • The only way to submit a Vat return for periods beginning on or after 1 April 2019will be to use compliant software and submit from that software  - if your next VAT return is April 19 then it will be fine to do it the old fashioned away and your July return will be the first one due under the new regime so there is a little time yet
Clients preparing their own VAT returns:

  1. You will need to check with your software supplier that they are MTD compliant – most of the major names are working on this but people using older Sage desktop versions should check for upgrades that are MTD compliant
  2. You may need to activate your software
  3. You will need to check your HMRC log in and ensure it is MTD ready
 
For clients who use book keepers and myself, we are in the process of setting up agent services accounts and securing additional software as we’re ready in good time.
 
So in reality a business filing a quarterly return from April to June 2019 is likely to be first affected by the change with the filing date of 7 August 2019 being unchanged.
 
HMRC have issued guidance on this link.

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Useful Reliefs – Tax return or Not?

3/27/2019

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As we approach the end of the tax year, It’s worth reminding you of some useful reliefs to enable you to consider if you owe any tax or indeed need to complete a tax return. 
 ​

  • Property Allowance – £1,000
  • Trading Allowance - £1,000
  • Rent a room relief - £7,500
 
Property and Trading Allowance - Where the £1,000 allowances cover allof the income (no expenses are ever allowed) then you don’t need to declare it.  In the case of these being your only other source of income it means you don’t need to do a tax return anymore.
 
So for example, you’re a teacher and you do some tuition earning £15 a week then previously you should have completed a tax return and provided you don’t have any income other that your PAYE salary then you probably don’t need to do a tax return.  There is quite a bit more to this particularly where people have a main sole trade and a ‘hobby business’ and the detail can be found on this link.
  
The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.  You can let out as much of your home as you want. If income falls below this limit (as with the above reliefs, you can’t deduct costs), then the relief is automatic and provided there is no other reason to complete a tax return, you don’t need to do one.
Follow this link for more information. 

As a reminder if you need to complete a tax return you must register by 5thOctober to be sure to avoid a penalty.  It’s important to note that if you do need to complete a tax return and fail to do one, HMRC ‘not sending you one’ is not considered a reasonable excuse if you are subject to a compliance check.
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© Nigel Gorski Consulting 2016, Nigel Gorski BA ACA (Sole Practitioner), c/o Infinitus Studios, North Vale Mill, Brighouse, HD6 4DJ
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