Government measures announced last year by the Chancellor to tackle tax avoidance schemes appear to be paying off.
A recent illustration of this is HMRC’s high profile win in the Supreme Court against Rangers FC and its use of Employee Benefit Trusts (EBTs) to pay staff.
More than £47m was paid to dozens of staff members and players in tax-free loans, however HMRC successfully argued that these weren’t loans, but taxable income.
If you, or your business, have used tax avoidance schemes in the past, you could soon be receiving an Accelerated Payment Notice (APN) from HMRC. So what should you do if you receive an APN? Continue…
Significant changes to UK salary sacrifice schemes have now been implemented. Affecting both employers and employees, these changes essentially remove the tax incentives of many of the benefits in kind (BiK) offered under salary sacrifice arrangements.
With, the new salary sacrifice rules reducing the tax benefits of salary sacrifice schemes, here’s what small businesses need to know about the changes and how they affect employers and employees. Continue…
When you’re trying to work out how well your business is doing, one of the most powerful tools in your financial arsenal is your profit and loss account (P&L).
This is a simple set of figures that will give you a summary of what your business has spent and sold, normally in a 12 month period.
Crucially, a P&L statement will tell you how much profit or loss your business has made so it’s useful to have a good grasp of it.
Here’s an overview of Profit & Loss Accounts for a small business owner.
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When you set up a limited company, your annual profits will be subject to Corporation Tax.
Dealing with your corporation tax issues is one of your accountant’s key tasks. However, it is ultimately the directors of a limited who are responsible for ensuring that a company’s tax affairs are in order.
As a director of a limited company, you therefore need to make sure that your company’s corporation tax liability is accurate, your corporation tax return (form CT600) is filed with HMRC on time, and that you pay the corporation tax to HMRC when it falls due.
If you are setting up a limited company for the first time, here is a handy overview of how to comply with the corporation tax rules for UK companies.
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Your business should register for VAT if your “taxable supplies” over the past 12 months has exceeded the VAT registration threshold.
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Just a week after the 2017 Spring Budget when Chancellor, Philip Hammond announced an increase in Class 4 National Insurance Contributions for the UK’s self employed workers, he has decided that the proposed tax increase isn’t a good idea after all!
Responding to wide criticism from Tory MPs and the perceived attack on millions of self employed workers, including the ‘white van man’, Hammond has written to MPs informing them of his decision to reverse the proposed NI hike.
His letter reads; Continue…
Is a Jaffa Cake a biscuit or a cake?
Now if you think this is some playground joke, think again. This is a real question that judges were asked to consider in a landmark VAT case.
The fact it took a court case to work out the answer to this question gives you an insight into just how complicated the UK’s VAT system has become. If HMRC, can’t answer such a simple question, what hope is there for busy small business owners?
With the complexity of the VAT laws it’s understandable that businesses make mistakes on their VAT returns. However, these mistakes can be very costly both in terms of paying the wrong amount of VAT and also triggering a VAT investigation.
To help you avoid making these expensive mistakes, we asked Jonathan Amponsah, founder of The Tax Guys, to reveal the 21 common mistakes small businesses make on VAT Returns. Continue…
Millions of small business owners will see the amount of tax they pay go up following the Spring 2017 Budget.
Chancellor Philip Hammond announced in his Budget speech, plans to increase the taxes paid by the self-employed and limited company directors.
Changes are coming to the way benefits in kind are taxed – employers and employees should prepare themselves for the future.
Millions of British employees receive ‘perks’ from their employers: ‘benefits in kind’ (BiK) which include anything from childcare vouchers and mobile phones, to medical insurance and company cars.
Whether administered in addition to an employee’s cash remuneration, or as part of a salary sacrifice arrangement, these benefits may or may not be taxed, and may exempt employers from their National Insurance Contribution obligations.
By saving on income tax and NIC for employees (and NIC for employers), salary sacrifice schemes have, until now, represented a ‘win-win’ arrangement for British businesses. However, things are about to change. Continue…
If you need to submit a Self-Assessment Tax Return (SATR) it’s imperative you get it in on time and free of any mistakes.
There are penalties for not submitting your tax return on time and you may have to pay a fine if HMRC deem you have not taken enough care in completing it.
With regard to the deadlines, paper tax returns need to be filed with HMRC by 31 October and tax returns submitted online by 31 January. So, if you complete your tax return online, you get a few extra months.
This article explains how to get started with your tax return, and how to avoid common mistakes that people make on their self assessment tax return.
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If you are dealing with a new customer or supplier and want to check whether the VAT registration number (VRN) they have supplied is valid, there are two ways you can do so.
One method is to call the HMRC VAT Helpline, the other is to use the online VAT Information Exchange System (VIES) run by the European Commission.
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For millions of UK small businesses, ‘tax season’ represents a costly, time-consuming inconvenience. But Britain’s tax landscape is transforming: in March 2015, HMRC announced its plan to update the self assessment tax payment process – moving away from annual paper returns, and towards a digitized, online system.
The government’s new digital tax accounts system introduces a fundamental shift in the way small business owners – both those working as self employed and those operating as limited companies – report and pay their tax liabilities.
The introduction of digital tax accounts will, within a few years, make the annual self assessment tax return obsolete – so how exactly will the changes affect Britain’s small businesses? Continue…
If you are having problems paying HMRC your business taxes, you may be able to agree a Time to Pay arrangement so you can pay the tax over a longer period of time.
In this concise guide, we walk you through HMRC’s Time to Pay Arrangements, explain what you should understand before contacting HMRC, and share some practical tips on how to make the most of Time to Pay;
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Small business accounting software has changed massively in recent years. Thankfully, the advent of cloud computing has consigned the days of buying book-keeping software in a box and installing it on your own computer to history.
Nowadays, start-ups and small business can choose from a whole host of online accounts software packages. The technology helps to ease the pain of book-keeping and accounts for small business owners and provides a range of other benefits too.
But with so many different web-based accounting solutions out there, how do you choose the right system for you and your business?
That’s where this guide comes in. If you follow the advice, and ask these questions, you should be able to quickly narrow down the field, and ultimately choose the best online accounting software for your needs.
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To help small business owners and company directors stay up to date with all the various tax rates, thresholds and allowances that might be needed for tax calculations, here is ByteStart’s summary of the main tax rates, tax bands, and tax allowances for the tax year from 6 April 2015 to 5 April 2016.
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If you’re in the midst of starting a new business, then the bookkeeping requirements are unlikely to be at the forefront of your mind. At this stage there can be far more pressing things for you to think about.
However, once your business is taking shape, you will need to start thinking about keeping up-to-date and accurate accounting records of your income and expenses. More than just a legal requirement, basic bookkeeping is an essential part of your ability to manage your business effectively.
But what kind of details are you going to need? Continue…
For many small businesses, finding an accountant is both crucial and a bit daunting. It seems, at least from afar, that accountants are pretty much all the same and yet most small business owners know in their heart of hearts that is not the case.
While selecting an accountant can be a vexing process, especially if you are a new business startup, it can be made much simpler if you approach it systematically and ask the right questions.
So to help you find the right accountant for you and your business, here are the 15 questions you should ask before you hire an accountant;
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The area of tax for small businesses is not straightforward, in fact it can be a real minefield for the unwary. However, if you take a little time, and work with your accountant, it’s usually possible to find ways to save some tax.
To help you think about ways you and your business could pay less tax, we’ve asked Simon Cox of Forbes Watson Accountants to share 10 of the best ways small business owners can look to pay less tax. They are designed to make you stop and think. Are you doing everything you can do to save tax? Is your advisor helping you to do so?
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In this concise guide, we look at the taxes you will encounter if you start your own business as a sole trader, and other things you should bear in mind before taking the plunge and becoming self employed.
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National Insurance is a deduction from earnings, set up originally to fund various State benefits such as the NHS, the State pension and other welfare-related schemes.
In reality, it is just another tax. In fact, as standard income tax rates have remained constant for many years, NI rates have soared.
In this guide we look at how National Insurance works, and what your National Insurance Contributions (NICs) will be as a small business person. The guide has been updated with the NIC rates for the 2016/17 tax year. Continue…
