Tag Archive for Tax returns

Hot Business News Today

Make December 31 end of tax year, says small business

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Small business owners are overwhelmingly in favour of changing the tax year to the end of December to simplify the system.

In a survey of 500 small and medium-sized businesses, 91 per cent supported moving the date for filing tax affairs, according to accountancy firm BDO.

Companies said that the transition would have to be planned carefully, with longer deadlines to accommodate the change, but they supported the inevitable short-term disruption as it would make the UK tax system fit for the 21st century.

>See also: Nearly 300,000 sole traders face increased tax bills

The British Chambers of Commerce (BCC) told the Financial Times that moving the small business tax year could simplify the accounting process, but cautioned that care should be taken to ensure the adjustment did not encumber companies with extra bureaucracy.

Paul Falvey, a tax partner at BDO, told the Times: “Businesses are hoping that a rethink of the tax system can help them to flourish following the challenges of Brexit and Covid-19. Changing the tax year to December 31 is supported by businesses of all sizes and will be particularly helpful for those with international connections.”

The

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Hot Business News Today

Make December 31 end of tax year, says small business

by  •  • 0 Comments

By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Small business owners are overwhelmingly in favour of changing the tax year to the end of December to simplify the system.

In a survey of 500 small and medium-sized businesses, 91 per cent supported moving the date for filing tax affairs, according to accountancy firm BDO.

Companies said that the transition would have to be planned carefully, with longer deadlines to accommodate the change, but they supported the inevitable short-term disruption as it would make the UK tax system fit for the 21st century.

>See also: Nearly 300,000 sole traders face increased tax bills

The British Chambers of Commerce (BCC) told the Financial Times that moving the small business tax year could simplify the accounting process, but cautioned that care should be taken to ensure the adjustment did not encumber companies with extra bureaucracy.

Paul Falvey, a tax partner at BDO, told the Times: “Businesses are hoping that a rethink of the tax system can help them to flourish following the challenges of Brexit and Covid-19. Changing the tax year to December 31 is supported by businesses of all sizes and will be particularly helpful for those with international connections.”

The

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Hot Business News Today

Nearly 300,000 sole traders face increased tax bills

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Nearly 300,000 sole traders face bigger tax bills than expected next year, following the government’s proposal to change the date small businesses report profits.

The move, which also affects partners in accountancy and law firms, would generate billions of pounds for the Treasury years before it would otherwise have received the money.

The changes to tax bills will also eat into the amount of working capital sole traders have for five years as they now have to pay more tax earlier.

>See also: Why the Government’s new insolvency bill is bad news for sole traders

A consultation and draft tax bills legislation published last month revealed plans to alter the 12-month period sole traders use to calculate profits, to bring everyone in line with either March 31 or the end of the tax year on April 5.

What this means is that the date sole traders have to pay their tax bills – which small businesses are currently able to defer by having a later date for their end-of-accounting year – will be brought forward.

According to the Financial Times, the measure is expected to affect 280,000 sole traders, based on

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Hot Business News Today

Claiming back childcare costs

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By Jo White on Small Business – Advice and Ideas for UK Small Businesses and SMEs
Childcare costs can’t be offset against business expenses but there are a couple of options available for help.
For both the self-employed and those in employment, individuals can receive 20 per cent of the costs towards childcare from the government. To qualify you need to open an account – go to www.childcarechoices.gov.uk to find out more.
The scheme is open to those earning under £100,000 and at least £142 per week who are not receiving Tax Credits, Universal Credit or childcare vouchers. Your children must be aged 0-11 or 0-16 if they are disabled. You, family members or employers can contribute to the account and for every £8 paid in, the government tops it up by £2. This means that, over the course of a year, you could receive up to £2,000 per child. Payments over the £10,000 threshold do not receive the additional government top up.
All families in England, regardless of income, receive 15 hours of free childcare or early years education for 38 weeks each year for children aged two. Some childcare providers will allow these hours to be used over 52 weeks so speak

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All small businesses to go Making Tax Digital by 2024, Treasury suggests

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Originally written by Timothy Adler on Small Business
Millions of self-employed and small businesses face having to pay income and corporate tax bills much earlier, as the Treasury seeks to fill its £31bn tax gap.
The £31bn is the money HMRC should be collecting but falls through the gaps in the current tax system.
And small businesses, including freelancers, are the worst miscreants for this, accounting for £13.4bn of this tax gap.
>See also: 1m self-employed face having to pay tax bill larger than what they earnt
As part of a raft of 30 consultations and updates, the Treasury has proposed bringing forward the payment of income tax self-assessment and corporation tax for small companies. The Treasury suggested accelerating all tax payments after 2024 to fulfil its “vision [for] a tax system that works closer to real time”.
The consultation suggested using the rollout of the requirements on digital filing of tax returns under Making Tax Digital over the next two years to use up-to-date data to “bring the calculation and payment of tax closer to the point where the income or profit arises”.
Jesse Norman, financial secretary to the Treasury, said the government recognised the plan would be a significant change and, as a result, “has

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Hot Business News Today

All small businesses to go Making Tax Digital by 2024, Treasury suggests

by  •  • 0 Comments

Originally written by Timothy Adler on Small Business
Millions of self-employed and small businesses face having to pay income and corporate tax bills much earlier, as the Treasury seeks to fill its £31bn tax gap.
The £31bn is the money HMRC should be collecting but falls through the gaps in the current tax system.
And small businesses, including freelancers, are the worst miscreants for this, accounting for £13.4bn of this tax gap.
>See also: 1m self-employed face having to pay tax bill larger than what they earnt
As part of a raft of 30 consultations and updates, the Treasury has proposed bringing forward the payment of income tax self-assessment and corporation tax for small companies. The Treasury suggested accelerating all tax payments after 2024 to fulfil its “vision [for] a tax system that works closer to real time”.
The consultation suggested using the rollout of the requirements on digital filing of tax returns under Making Tax Digital over the next two years to use up-to-date data to “bring the calculation and payment of tax closer to the point where the income or profit arises”.
Jesse Norman, financial secretary to the Treasury, said the government recognised the plan would be a significant change and, as a result, “has

Read more...

Hot Business News Today

7 tax myths for small business owner/managers exploded

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Originally written by Stuart Clark on Small Business
As we head towards a new tax year, it always surprises me how many tax myths small business owners believe, when knowing the truth could actually put more money in your pocket.
Did you know for example that (depending on your circumstances) you could potentially extract over £25,000 tax free from your company (in fact better than tax free as the company can get corporation tax relief so the cost is less than £21,500).
This often means speaking with professionals (your accountant and/or IFA) but here are some quick small business tax myths and tips:
#1 – There is no difference between taking salary and a dividend
Some while ago I did a video that demonstrated increased cash in hand for the business owner of almost £6,000 on profits of £50,000 (based on 2019/20 tax rates). What would an extra £500 a month allow you to do?
#2 – I can just take money out the company when I want, and the accountant will sort my dividends out when I do my year end accounts
This could be illegal and open the company up to PAYE liabilities. Backdating dividends is illegal. It is vital that tax planning is done

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Hot Business News Today

7 tax myths for small business owner/managers exploded

by  •  • 0 Comments

Originally written by Stuart Clark on Small Business
As we head towards a new tax year, it always surprises me how many tax myths small business owners believe, when knowing the truth could actually put more money in your pocket.
Did you know for example that (depending on your circumstances) you could potentially extract over £25,000 tax free from your company (in fact better than tax free as the company can get corporation tax relief so the cost is less than £21,500).
This often means speaking with professionals (your accountant and/or IFA) but here are some quick small business tax myths and tips:
#1 – There is no difference between taking salary and a dividend
Some while ago I did a video that demonstrated increased cash in hand for the business owner of almost £6,000 on profits of £50,000 (based on 2019/20 tax rates). What would an extra £500 a month allow you to do?
#2 – I can just take money out the company when I want, and the accountant will sort my dividends out when I do my year end accounts
This could be illegal and open the company up to PAYE liabilities. Backdating dividends is illegal. It is vital that tax planning is done

Read more...

Hot Business News Today

Taxman gives self-employed more time to file your tax return

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Originally written by Timothy Adler on Small Business
HMRC is giving the self-employed more time to file their tax return if they give Covid as an excuse for late filing.
This year, almost 12m self-employed people, those with second forms of income and landlords are due to file a personal tax return by the end of January.
Almost 5.5m of those 12m self-assessment taxpayers are yet to submit returns, with weeks to go before the deadline.
>See also: Prospect union calls for emergency help for excluded self-employed
However, the taxman is developing a simplified “Covid excuse” form that will allow the self-employed to miss the January 31 deadline for filing and paying tax.
It will allow those who say they have a reason for late filing due to the pandemic to avoid stiff penalties, with the Sunday Times quoting sources that HMRC is planning a “very lenient” attitude.
The decision will be a boost for millions of self-employed people who put money aside to pay income tax at the end of the year but have had to use their savings to stay afloat.
Freelancers’ incomes fell 30 per cent to record lows last year, according to the freelancer body IPSE. One in five self-employed people will have to

Read more...

Hot Business News Today

Taxman gives self-employed more time to file your tax return

by  •  • 0 Comments

Originally written by Timothy Adler on Small Business
HMRC is giving the self-employed more time to file their tax return if they give Covid as an excuse for late filing.
This year, almost 12m self-employed people, those with second forms of income and landlords are due to file a personal tax return by the end of January.
Almost 5.5m of those 12m self-assessment taxpayers are yet to submit returns, with weeks to go before the deadline.
>See also: Prospect union calls for emergency help for excluded self-employed
However, the taxman is developing a simplified “Covid excuse” form that will allow the self-employed to miss the January 31 deadline for filing and paying tax.
It will allow those who say they have a reason for late filing due to the pandemic to avoid stiff penalties, with the Sunday Times quoting sources that HMRC is planning a “very lenient” attitude.
The decision will be a boost for millions of self-employed people who put money aside to pay income tax at the end of the year but have had to use their savings to stay afloat.
Freelancers’ incomes fell 30 per cent to record lows last year, according to the freelancer body IPSE. One in five self-employed people will have to

Read more...