Archives for Company Tax

Making Tax Digital for VAT

The government have issued information on how Making Tax Digital for Business (MTDfB) is expected to work for VAT once the rules are introduced in April 2019. Under the proposed rules, which have been issued subject to consultation, VAT registered businesses with turnover over the VAT registration threshold will be required to submit their VAT return digitally using software. Businesses with a turnover above the VAT threshold (currently £85,000) will have to: Keep their records digitally (for VAT purposes only) and Provide their VAT return information to HMRC through Making Tax Digital (MTD) functional compatible software. This software will either
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HMRC genuine and phishing/bogus emails and calls

HMRC have issued an update of their guidance on how to recognise genuine HMRC contact be it via email or text. HMRC also provide advice on what to do if you have received a phishing/bogus email related to HMRC, or you are not sure if it is genuine, you can read about how to report internet scams and phishing to HMRC. We are receiving concerning contacts from clients where voicemails are being left stating it is HMRC and unless a debt is going to be paid they will be sued.  The call back number given starts with the dialing code
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New timetable for Making Tax Digital

The government has announced a new timetable for Making Tax Digital for Business (MTDfB) with new dates for the introduction of this scheme. MTDfB introduces extensive changes to how taxpayers record and report income to HMRC. Unincorporated businesses, including landlords, were expected to be the first to see significant changes in the recording and submission of business transactions but the government has announced a delay to the implementation of the new rules and some exceptions for smaller businesses. The government had decided how the general principles of MTDfB will operate after receiving responses to their original ideas first published in August
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Reduction in the Dividend Allowance

To reiterate it was announced in the Budget that the Dividend Allowance will be reduced from £5,000 to £2,000 from April 2018. Dividends received by an individual are subject to special tax rates. The first £5,000 of dividends are charged to tax at 0% (the Dividend Allowance). Dividends received above the allowance are taxed at the following rates: 7.5% for basic rate taxpayers 32.5% for higher rate taxpayers 38.1% for additional rate taxpayers. Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the
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Making Tax Digital for Business update

Extensive changes to how taxpayers record and report income to HMRC are being introduced under a project entitled Making Tax Digital for Business (MTDfB) . MTDfB is to be introduced in stages and the government has confirmed in the Budget the deferral of some of the obligations for one year. The result of this announcement is that unincorporated businesses and unincorporated landlords with annual turnover: above the VAT threshold (currently £85,000) will need to comply with the requirements of MTDfB from the start of accounting periods which begin after 5 April 2018 at or below the VAT threshold but above £10,000
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Class 4 National Insurance U-turn

One of the significant announcements Chancellor Philip Hammond made on Budget Day was the proposed increases to the main rate of Class 4 National Insurance Contributions (NICs) paid by self-employed individuals from 9% to 10% from April 2018 with a further increase planned from 10% to 11% from April 2019. The Chancellor subsequently announced that the government will not now proceed with the proposed increase in Class 4 NICs rates . Self-employed individuals currently pay Class 2 and Class 4 NICs. Class 2 NICs are to be abolished from April 2018.
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Budget – March 2017 – Business Tax

Making Tax Digital for Business (MTDfB) Extensive changes to how taxpayers record and report income to HMRC are being introduced under a project entitled Making Tax Digital for Business. The government has decided how the general principles of MTDfB will operate. Draft legislation has been issued on some aspects and more will be published in Finance Bill 2017. Under MTDfB, businesses, self-employed people and landlords will be required to: Maintain their records digitally, through software or apps. Report summary information to HMRC quarterly through their ‘digital tax accounts’ (DTAs). Make an ‘End of Year’ declaration through their DTAs. DTAs are
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Construction Industry – Subcontractor verifications

HMRC have confirmed in the latest Employer Bulletin that changes will be made to the verification of subcontractors in the Construction Industry Scheme (CIS) from 6 April 2017. From 6 April 2017, contractors must use an approved method of electronic communication to verify their subcontractors. So from 6 April 2017 HMRC will no longer accept any telephone calls to verify subcontractors and from then contractors must verify subcontractors using: The free HMRC CIS online service, or Commercial CIS software. This change is one of a series made to CIS to increase HMRC efficiency and accuracy, and to reduce administration. HMRC
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Making Tax Digital: consultation responses

The government published their responses to the six consultations on making tax digital (MTD). In response to the consultations the government have decided the following: Businesses will be able to continue to use spreadsheets for record keeping, but they must ensure that their spreadsheet meets the necessary requirements of Making Tax Digital for Business (MTDfB). This is likely to involve combining the spreadsheet with software. Businesses eligible for three line accounts will be able to submit a quarterly update with only three lines of data (income, expenses and profit). Free software will be available to businesses with the most straightforward
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Making Tax Digital update

Over the summer HMRC published six consultation documents on Making Tax Digital. The six consultations set out detailed plans on how HMRC propose to fundamentally change the method by which taxpayers, particularly the self-employed and landlords, send information to HMRC. Two key changes proposed are: From April 2018, self-employed taxpayers and landlords will be required to keep their business records digitally and submit information to HMRC on a quarterly basis and submit an End of Year declaration within nine months of the end of an accounting period (accounting periods are typically 12 months long). HMRC will make better use of the
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