Personal Allowance

This change from £10,600 to £11,000 is one to be celebrated for many. To add to the good news, a rise to £11,500 will come the following tax year. From 6^th April the amount of money an individual can earn before incurring Income Tax (aca the Personal Allowance) will rise to £11,500 in April 2017.

Income Tax Higher Rate Increase

Another small change to look at is the amount of money you earn before having to pay the high rate income tax of 40% increases from £42,385 to£43,000. And by April 2017 it will rise to £45,000.

Tax changes on Savings

Personal Savings Allowance is introduced for the 2016/17 tax year, so those who pay basic rate tax (earning less than £43,000 a year) will not have any tax charged on the first £1000 of savings interest. Higher rates payers are still entitled to the new scheme, but from them the threshold is £500.

Government link extensive explanation

The Chancellor also announced in 2016 Budget the new Lifetime ISAs that allow people under 40 years old to save up to £4,000 annually and receive a 25% on top from the Government.

Life time ISA

ISA limit will also rise to £20,000.

These announcements will go live in April 2017.

VAT Registration Threshold

Not new for 2017 but worth to mention VAT Registration threshold of £83,000 from April 1^st

Business relief from 1^st April 2017:

Small Business Rate Relief from 50% to 100%.

Business with property rateable up to £12,000 will receive 100% relief.

From £15,000 to £12,000 will receive tapered relief.

Increase threshold for the standard business rates multiplier to a rateable value of £51,000. This will reduce business rates for many small businesses.

Business tax road map

Employment Allowance

By claiming the Employment Allowance the employers can reduce their National Insurance Contributions increase to £3,000

More Employment Allowance info Here

National Insurance Contributions

Employees earning more from £155 to £825 a week and under Class 1 National Insurance Category letter A will pay 12% rate.

Contribution rates explained

New Increase in National Living Wage

The Government has increased the minimum wage to £7.20 for over 25’s and on April 2017 will rise to £7.50 per hour.

Minimum Wage rates 

Dividend tax allowance

A new dividend tax allowance will affect all individuals in receipt of dividends. Dividend tax credit rules is replaced with a tax free allowance. This tax changes entitles all individuals to the first £5,000 of income from dividends each year to be tax free. Dividends over £5,000 will be subject to taxation for basic rate taxpayers of 7.5% or 32.5% for higher rate taxpayers.

Tax Dividend extra explained

Tax free childcare scheme

It will be introduced early 2017. Working parents will be able to get up to £2,000 annual per child, in tax relief to help cover childcare costs. It replaces the “childcare vouchers” systems that enable to pay for childcare worth up to £243 a month.

If you are still using “childcare vouchers” systems, you don’t need to move to Tax free childcare. But if you move to new system, you can’t go back again

Childcare things that every parent should know

What to do if you want to be on top of tax advice and news?

To find out more: if you need more help with tax, or any other aspect of your finances, savings, accountancy, contact us to get individual help. Give us a call on 07478 645331 or send us an email to info@ataas.co.uk or if you prefer you can visit our office in Southall, London.

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We are giving you some help and advice for next upcoming tax return deadline on PAYE tax code online by 30 December.

Don’t be all your Christmas holidays stress out about your next month deadline. Contact us and we will worry about it will you are enjoying Christmas with your family and friends.

So, if you haven’t registered yet, don’t get hysteric, there is still time. But do it as soon as possible.

First questions first, who needs to complete a tax return? The list is quite long. But mostly, you will need to do a tax return if you are being working for yourself, earning over £100.000 or you have a property on rent.

Please check our who need to do self – assessment blog from more info about who has and hasn’t to do it.

Is this your first tax return?

Process is quite simple, need to go to HMRC website and register for self-assessment. You need to create an account with password. HMRC will provide you with a user ID. Please copy your ID somewhere safe. You will receive a letter from HMRC after 10 days approx. Requesting your tax return. This letter will give you another number, UTR number (10-digit Unique Taxpayer Reference number), keep this letter again safe!

What to do when you get a tax return?

If you have recieved a self-assessment tax return from HMRC, you are legally obligated to complete and submit it, file a tax return online or sending it by post.

What needs to be included?

You  need to include all the income received. Obviously, this is a vague answer and there are loads of conditions and specifications that may need a different approach. Although HMRC website is quite good giving you the steps to follow, remember to check the tax relieves if you got any, every little help. You can get tax reliefs from personal pension contributions, donations to charity, expenses of employment, professional subscriptions, etc…

What if I don’t think I need to file a tax return?

If you think you don’t need to submit a tax return and you received in the form of Tax Return, or a notice to file your tax return online, you can call the HMRC on 0300 200 3310 and ask for your Tax return to be withdrawn. HMRC will review your situation, and if they agree, you will no longer have to file a tax return.

If you believe you are due a tax refund, and you haven’t submitted yet any tax return, you might be interested to claim for repayment.

What to do if I need more help?

To find out more: if you need more help with tax, or any other aspect of your finances, savings, accountancy, contact us to get individual help. Give us a call on 07478 645331 or send us an email to info@ataas.co.uk

The post Do i need to file a Tax Return? appeared first on Accountants in Southall, Ealing & Uxbridge.

HMRC Payroll Requirements

HMRC have a Real Time Information (RTI) requirement in place.  This means that businesses must submit employee PAYE, NIC and Student Loans information to HMRC at the time of issuing actual employee payments (and not at the tax year end, as previously required).  Failure to do so may result in monetary fines.

Employers’ National Insurance Contribution Allowance

Employers and charities can claim back £3,000 per annum on Class 1 employee NIC payments.

Abolition of Class 1 Secondary National Insurance Contributions for Employees Under 21 Years of Age

Employers do not pay Class 1 Secondary NIC for employees under 21 years of age, where payments are below the upper secondary threshold.

This abolition however does not apply to Class 1A or Class 1B, employees receiving payment above the upper secondary threshold and employees 21 years of age or over.

The Married Couple Allowance

If an employee earns less than £11,000 per annum yet their marriage or civil partner earns more than £11,000, then the employee can transfer £1,100 of their annual personal allowance to their partner’s pay or income.  The couple must apply for this allowance by themselves via the HMRC website.  HMRC then updates the employee’s tax code (the new tax code will end with an ’N’) or alternatively applies it to their self assessment tax return (if they are self employed).

Shared Paternal Leave

Employees may request Shared Parental Leave and Statutory Shared Parental Pay if they have a baby or have adopted a baby.   This is where some or all of the paternal leave can be given to the female parent, provided that the female parent has not claimed her full entitlement to maternity leave or maternity pay.  She may then receive enough of the paternal entitlement to make up for her unclaimed maternity leave or maternity pay entitlement.

As an employer you must keep specific records for HMRC regarding any claims on this scheme.  This includes the proof that the employee has provided you with to show that they are eligible for Statutory Shared Parental Pay, the date that the payments began, all of the consequent payment dates, the payments that you’ve reclaimed and information on any weeks where you didn’t pay, along with the reason for non-payment.  These records must be retained for at least 3 years from the end of the tax year in which the payments occurred.

If you would like further information or guidance, you are welcome to contact us.

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As part of the scheme you charge your customers the normal VAT rate (20%) but pay a lower VAT rate on those same sales back to HMRC.

(Note that the lower VAT rate is applied to a business’s gross income, rather than its individual sales). Your company keeps the difference.

Benefits of using Vat flat rate scheme

The result should be improved cash flow and easier record keeping, since the amount you pay is based on gross income and therefore less detailed records are required for VAT payment purposes.  However if your customers are also VAT registered, you will need to issue VAT invoices in the normal way.

If you use this flat rate scheme, you cannot reclaim any VAT on purchases, except for on single purchases of capital assets that exceed £2000.

Other things to be considered include the nature and setup of your current business.  The VAT Flat rate scheme is not compatible with the Cash, Retail and Margin for Second Hand Goods Schemes, however it is compatible with the Annual Accounting Scheme.  Also, you cannot usually claim Input Tax on the scheme (except for individual purchases of capital that exceed £2000).

And if you buy or sell outside the UK, there are further considerations and adjustments to be made in calculations.  HMRC also requires income forecasts to apply for the scheme, and for these to be made on reasonable grounds, else they could withdraw your company’s eligibility for the scheme.  And your company must not be part of a VAT group, nor be an “associated” company.  There are also certain conditions under which a business must leave the scheme, for example when its profits exceed a certain level.

A company in its first year of VAT registration is also eligible for a further 1% reduction on its lower tax rate, but for the first year only.

For more information you are welcome to contact us.

Written by Ranjit S. Dhaliwal, Trainee Accountant at Advantax Accountants.

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