Income tax

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Published: Thursday, 26 March 2020 11:39

Written by Super User

The deferral for self-assessment income tax applies to the second payment on account for 2019/20 due on 31 July 2020 which is deferred until 31 January 2021.

Eligibility for the deferral is limited to the self-employed and does not apply to those that are in self assessment but are not self-employed. The Tax Faculty has sought clarification from HMRC, but the current understanding is that the deferral applies to any taxpayer who was self-employed in the 2018/19 tax year on which the payment on account is based. 

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COVID-19

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Published: Tuesday, 24 March 2020 09:39

Written by Super User

Starting your own business is one of the toughest decisions an individual will make. There are many decisions to make at the beginning and on a daily basis, but the Coronavirus pandemic across the globe is not one which would have been at the top of any business plan.

In the words of the Chancellor ‘The economic intervention that I’m announcing today is unprecedented in the history of the British state’ and the ‘planned economic response is one of the most comprehensive in the World’

The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

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The Budget 2020

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Published: Tuesday, 24 March 2020 09:35

Written by Super User

The Budget 2020 – The details you need to know

The vast majority of 2019 saw a concentrated effort in detailing with the economic future for the UK becoming independent of the European Union.

However, this has been overshadowed by the more recent and more immediate threat of the Covid-19 Coronavirus, which impacts each and everyone of us, in all business sectors across the country.

The newly appointed Chancellor, Rishi Sunak, made it clear that the UK Government would do ‘whatever it takes to support the significant impact on the UK economy’.

Below is a summary of the key points announced by the Chancellor in the 2020 Budget on Wednesday 11 March 2020.

Business Tax 

Corporation tax rates

The main rate of corporation tax is 19%. The Summer Budget of 2017 saw the announcement of a reduction in Corporation Tax rates to 17% for financial years commencing 1 April 2020. However, as detailed in the Prime Ministers pre-election speech, the Chancellor has announced a change, advising the rate will remain at 19%.

Research and Development (R&D) tax relief

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The Budget 2018: ''Austerity is coming to an End''

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Published: Monday, 29 October 2018 19:22

Written by Holly Masters

The Chancellor Philip Hammond has delivered his Autumn Budget 2018.

It was a budget which was not necessarily predicted to have any significant announcements in terms of taxation. Therefore as Mr Hammond or ‘Fiscal Phil’ continued through his speech this afternoon, the surprises started and continued.

This was a budget for the entrepreneurs, to keep Britain open for business, and with Brexit looming this budget was clearly aimed at small businesses. Furthermore, it was aimed at workers- with the unexpected increase in the personal allowance and higher rate tax threshold coming into effect earlier than expected.

Today, Spirare welcomed this budget.

We have summarized the key highlights as follows:

Personal Taxation

• Personal allowance, the rate at which people start paying income tax, to rise from £11,850 to £12,500 in April 2019- a year earlier than planned
• The higher rate income tax threshold to rise from £46,350 to £50,000 in April 2019- again a year earlier than planned
• After that, the two rates will rise in line with inflation
• National Living Wage increasing by 4.9%, from £7.83 to £8.21 an hour, from April 2019
• IR35 private sector- extension of changes to the way self-employment status is taxed, from the public sector to medium and large private companies, from April 2020

Businesses

• New digital services tax (2%) on UK revenues of big technology companies, from April 2020 (This will only apply to profitable companies with global sales of more than £500m) - Small tech start ups will not be subject to the new digital services sales tax
• Private finance initiative (PFI) contracts to be abolished in future
• Annual investment allowance to be increased from £200,000 to £1m for two years
• Contribution of small companies to apprenticeship levy to be reduced from 10% to 5%
• Business rates bill for companies with a rateable value of £51,000 or less to be cut by a third over two years. The measure is expected to benefit 90% of independent companies, cutting their bill by £8,000
• Refunds arising from research and development claims will be restricted to the PAYE paid by the company. This will restrict the benefit of R&D claims by companies that do not have employees
• VAT threshold of £85k turnover to remain the same for the next two years
• Entrepreneurs’ Relief: minimum qualifying period - from 6 April 2019 the minimum period throughout which the qualifying conditions for relief must be met will be extended from 12 months to 24 months
• Employment Allowance reform – From April 2020 the government will restrict access to employers with an employer National Insurance contributions (NICs) bill below £100,000 in their previous tax year. The EA provides businesses and charities with up to £3,000 off their employer NICs bill.
• Capital allowances special rate reduction (8% to 6%) – from April 2019, the capital allowances special rate for qualifying plant and machinery assets will be reduced from 8% to 6% to more closely match average accounts depreciation
• Corporate capital loss restriction –  the tax treatment of corporate capital losses will be brought into line with the treatment of income losses. From 1 April 2020, the government will restrict the proportion of annual capital gains that can be relieved by brought-forward capital losses to 50%. The measure will include an allowance that gives companies unrestricted use of up to £5 million capital or income losses each year, meaning that 99% of companies will be unaffected
• Intangible fixed assets regime – the government will seek to targeted relief for the cost of goodwill (the amount paid for a business that exceeds the fair value of its individual assets and liabilities) in the acquisition of businesses with eligible intellectual property from April 2019. With effect from 7 November 2018, the government will also reform the de-grouping charge rules, which apply when a group sells a company that owns intangibles, so that they more closely align with the equivalent rules elsewhere in the tax code

Property

• All shared equity purchases of up to £500,000 to be exempt from stamp duty
• Capital gains tax on the sale of let property –from April 2020 the government will reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be reduced from 18 months to 9 months. The government will consult on these changes. There will be no changes to the 36 months final period exemption available to disabled people or those in a care homes

Other Announcements

• £675m to rejuvenate high streets
• Beer, cider and spirits duties to be frozen
• Cost of a bottle of wine duty to rise by 8p, in line with inflation, in February
• Tobacco duty will continue to rise by inflation plus 2%
• A packet of 20 cigarettes will go by 33p at 18.00 GMT
• Fuel duty to be frozen for ninth year in a row
• Remote Gaming Duty to increase to 21% for online gambling on "games of chance" from 2019
• Structures and buildings allowance (SBA) – new non-residential structures and buildings will be eligible for a 2% capital allowance where all the contracts for the physical construction works are entered into on or after 29 October 2018
• Lifetime allowance for pensions – the lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000
• Starting rate for savings – the band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2019-20
• Taxation of self funded work related training- the government is launching the National Retraining Scheme and skills pilots to help those in work, including the self-employed, develop the skills they need to thrive
• New mandatory business rates relief for all lavatories made available for public use, whether publicly or privately owned
• An extra £1bn for armed forces, for cyber-capabilities and the UK's new nuclear submarine programme
• £10m for mental health care for veterans, to mark the centenary of World War One Armistice
• £1.7m in Holocaust education programmes to mark the 75th anniversary of the liberation of Bergen-Belsen concentration camp, in northern Germany
• Confirmation of an extra £20.5bn for the NHS over the next five years
• A new tax on non-recycled plastic packaging (on manufacture and import of plastic packaging that is 30% recyclable or less)
• No tax on takeaway coffee cups but this will be reconsidered if the industry doesn't make enough progress

Should you have any queries on the above, please do not hesitate to contact a member of the Spirare team.

Reminder for Second Payment On Account

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Published: Thursday, 26 July 2018 15:16

Written by spirare

How to pay your Payment On Account by 31 July 2018

As you are aware, the self-assessment second payment on account deadline of 31 July 2018 is fast approaching. Here are ways to pay before the deadline to ensure you avoid any unnecessary penalties. This is of course assuming you have not made a claim to reduce your payment on account due to a reduction in earnings.

By debit or credit card or by BACS

If you wish to pay via debit or credit card online or over the phone you will need your 10-digit unique taxpayer reference (UTR) followed by the letter ‘K’. This will be on your tax return and computation.

It is important to note HMRC will no longer accept payments from personal credit cards, so if you are paying with a credit card ensure it is a business account.

The debit or credit card link is as follows (you will incur a fee if you pay by credit card):

https://www.tax.service.gov.uk/pay-online/self-assessment

Alternatively, you can pay by BACS as follows (assuming your account is UK based)

Sort Code   Account Number     Account Name

083210            12001039                    HMRC Cumbernauld

OR

083210            12001020                    HMRC Shipley

Your bill should advise you which account to use, but if you are unsure, use HMRC Cumbernauld.

At your bank or building society

You can only pay at your branch by cash or cheque if you both:

·         still get paper statements from HM Revenue and Customs (HMRC)

·         have the paying-in slip HMRC sent you

Make your cheque payable to ‘HM Revenue and Customs only’ followed by your reference number - this is your Unique Taxpayer Reference (UTR). Followed by the letter ‘K’. You’ll find it on your paying-in slip.

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC).

HMRC 
Direct 
BX5 5BD 

Please allow 3 working days for your payment to reach HMRC.

In the envelope you should include:

A cheque payable to ‘HM Revenue and Customs only’, followed by your Unique Taxpayer Reference (UTR). You’ll find this on your paying-in slip.

Include the paying-in slip HMRC sent you (if you still get paper statements). Don’t fold the paying-in slip or cheque or fasten them together. If you don’t have a paying-in slip you can print a slip to use to pay by post. However, you won’t be able to use this at a bank.

If you still need assistance regarding your second payment on account, or you need to confirm the amount, please contact one of the team at Spirare.

National Minimum Wage Increases 1 April 2018

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Published: Tuesday, 03 April 2018 12:02

Written by Gemma Kerslake