Are you a sole trader? Company director?
Have you sorted out your self-assessment tax return yet?
31 Jan 2018 is the deadline for 2016/2017, but please take pity on your poor beleaguered accountant and prepare your records before Jan 30! 🙂
I have several clients who are pensioners with a small amount of taxable income – whether or not they pay tax on it, depending on the amount – who are still being asked for a self-assessment return. I think this new initiative from HMRC may cover that more satisfactorily in future, though I’m cautious if (i) it would override any actual tax calculation, and (ii) it means a return to paper communication.
As yet there is still no detailed guidance available on gov.uk concerning simple assessments, but we expect some guidance to appear in the next two weeks.
The policy paper for simple assessments suggests that this new procedure will be used where the taxpayer’s main source of income is taxed under PAYE, but he or she also has up to £10,000 of other taxable income or gains. This income threshold has not been included in the legislation.
Don’t be alarmed or startled if you receive a message like this in your inbox this/last month! It’s from HMRC, and if you’re paying tax under Self Assessment, almost certainly about the fact that another tax year has passed and so you’ll need to file another, annual tax return.
VAT is changing, if you’re on the Flat Rate Scheme.
Briefly, this is an existing, simplified scheme for smaller VAT-registered businesses (up to £150,000 turnover) who don’t have many transactions – or not many types of transactions – to make it easier for them to maintain VAT-compliant records.
Instead of totting up each quarter what you’ve sold vs what you’ve bought, and calculating the VAT on the balance – bearing in mind you may have some transactions at differing rates of VAT – you can just take a flat percentage of the sales and pay that over.
This flat rate depends on what kind of business you are, and is lower than the standard rate of 20%. In other words, HMRC will receive (say) a flat rate 14% of your gross sales, instead of you calculating VAT on net sales at 20% then deducting VAT on net purchases at ranges of VAT between 0% and 20%.
There has been much talk in the press recently of upcoming changes to the way businesses and individuals are going to need to report details of their tax affairs to HMRC, this is called ‘making tax digital’.
Below is a brief guide of what we currently know about HMRC’s plans to implement the making tax digital’ regime.
This is very much at an early stage and the proposals and/or timetables are likely to change so this article represents a brief summary of the key known details at the date of publication, being 8th February 2017.
Remember the problems when VATMOSS was first introduced for digital goods – e.g. ebooks – and VAT had to be charged according to the customer’s country?
Many small independent e-bookstores closed, as it was too much administration cost and work, compared to the direct sales they made.
But now there’s Good News!
From the EU VAT Action Campaign Team
HOT OFF THE PRESS:
Just announced by Pierre Moscovici of the European Commission: proposed EU VAT threshold of €10k cross-border sales and the €100k simplifications we have all been campaigning for since December 2014.
“I run my own Limited company and spend most of my time using a computer. My eyesight has worsened and I will need to get a sight check and new glasses. Can I put these through my company?”
There are very specific rules surrounding glasses and whether they are allowable for corporation tax and personal tax for directors or employees of a company.
If you are a limited company, your decision is made. You need a business bank account.
Your business is a separate legal entity to you and it needs its own bank account. You don’t need to worry if you have used your personal bank account so far, for a new business that’s normal. Your accountant can sort all that out for you.
What’s important now is that you open a business bank account.
If you don’t have an accountant already, you need one.
Cast an eye over our 9 telltale signs and see if they sound familiar to you…
From April 2016 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance.
The Dividend Allowance means that you won’t have to pay tax on the first £5,000 of your dividend income, no matter what non-dividend income you have.
The allowance is available to anyone who has dividend income.
Headline rates of dividend tax are also changing.