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New Tax Year | What Does It Mean for Your Business

Tnew tax yearhis week the Chancellor gave us the Spring Budget, and with the new tax year fast approaching, here’s what it means for your business.

For information on how the new tax year affects you personally, please have a look at our blog post on this very subject.

We have also written a handy blog on the 5.5 Top Tax Tips to consider as we approach the end of this tax year.

 

 

1.  Corporation tax remains at 19%

The rate dropped in April 2017, and there is no higher rate.

2.  Annual investment allowance remains at £200,000

This means that you can spend up to £200,000 in this and the new tax year on eligible business assets, including plant and machinery, commercial vehicles etc.  This means that the full cost of any purchases up to £200,000 will reduce your taxable profits and your business tax.

For example if a limited company purchased a van for business use for £10,000, this will reduce it’s corporation tax by £1,900 (£10,000 x 19% corporation tax)

For many small and micro businesses this means that pretty much all eligible business assets purchased will reduce their taxable profits 🙂

3.  The VAT Registration Threshold remains at £85,000

Many people talked about a reduction to the VAT threshold.  Although this hasn’t happened, you could still see this as a reduction of sorts, as the threshold normally increases each year.

4.  Directors’ Salaries

In line with the rise in income tax and national insurance thresholds, directors can now receive a pay rise up to £11,850 (£987.50pm) or £8,424 (£702pm) if you did not want to pay NIC, but still be entitled to statutory benefits and state pension.

Top Tip: Have a look at our blog on What the New Tax Year Means for you Personally

 5.  National Living Wage for over 25’s increases to £7.83 on 1 April 2018

National Minimum Wage applies to under 25s as follows:

Aged 21 to 24 £7.38

Aged 18 to 20 £5.90

Under 18  £4.20

6.  Apprentice Rate rises to £3.70 on 1 April 2018

This applies to under 19s or those in their first year of apprenticeship, apart from over 25s, who are paid the national living wage.

7. R & D Rates remain unchanged

If you have less than 500 staff, and less than 100m euro turnover, you can claim SME R & D relief:

130% extra deducted from your taxable profits on your R & D costs

Or a tax credit if you’re making a loss.

Top Tip: Keep an eye on our blogs…upcoming R & D blog…

8.  Business rates will increase in line with CPI* instead of inflation

Small business rate relief still applies if your property’s rateable value is less than £15,000

*consumer prices index

9.  Making Tax Digital delayed until April 2019

This will only apply to VAT registered businesses, and means that you must file quarterly returns online.  This means filed online directly from online software, and uploading from manual records won’t count.

Top Tip: We work best with you and Xero Beautiful Accounting Software.  This will help you to manage your whole business onine, from wherever you are.

10.  Landlords and Mortgage Interest

From April 2017 HMRC are limiting mortgage interest claimed against rental income for higher rate tax payers.  This will be phased out completely by 2020/21.

Please see our 5.5 Top Tax Tips for more info on how HMRC are phasing this out, and what you can do about it.

Top Tip: On the plus side, as a landlord you can now claim mileage for journeys to and from your rental property, at 45p per mile.

 

I hope you found the above facts useful, as always do get in touch to discuss any of the points mentioned.  Please keep an eye on our blog page for more useful posts!

Thank you for reading!

 

Sharon

 

Awards_Practice-Winner-Client-Service-Firm

 

Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Security, Technology, Coaches and Speakers, Design and Indie Retailers.

@KinderPocock

01432 273400

Contact Us to see how we can help


HMRC PAYE Late Filing Penalties Come into Force 6 March 2015

Since the introduction of RTI (Real Time Information) filing for PAYE back in 2013, HMRC have been relaxed on introducing penalties.

However, these penalties are now in force for all Employers.

 

When Could You Get a Penalty?

 

When Don’t HMRC Charge a Penalty?

  • you’re a new employer and you sent your first FPS within 30 days of paying an employee

 

What Are the Penalties?

How much you’re charged depends on how many employees you have:

 

Number of employees Monthly penalty
1 to 9 £100
10 to 49 £200
50 to 249 £300
250 or more £400

 

If you’re over 3 months late you can be charged an additional penalty of 5% of the tax and National Insurance that you should have reported.

If you run more than one payroll, you will be charged penalties for EACH payroll.

Also be aware that HMRC are charging penalties quarterly, so the first time you get a penalty, it may be for up to 3 months!  AND they are not notifying us as your Accountants.

 

How to Ensure you Don’t Get a Penalty:

If we at Kinder Pocock are running your payroll, make sure you read every email you receive from us.  To ensure that we file the correct information with HMRC we do need your approval of your payroll figures before filing online on your behalf.

  • Always give us your payroll information in good time, and at least 2 days before your normal processing date.
  • Always let us know straight away of any employee changes, eg new staff or leavers, so that we can ensure that we include the correct information.
  • Once we have submitted to HMRC, we cannot resubmit.

 

Need More Info?

I hope this is helpful.  Please contact me, Sharon, or Rich Beale if you have any questions.

You can also refer to HMRC’s online guidance on penalties.

Sharon: sharon@kinderpocock.co.uk

Rich: rich@kinderpocock.co.uk