Tag Archive for Tax

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

Read more...

Hot Business News Today

HMRC to go easy on small business strangled with Covid debt

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Originally written by Timothy Adler on Small Business
Small businesses struggling with Covid debt will not be forced to pay overdue tax to HMRC immediately, says business secretary Kwasi Kwarteng.
HMRC had manoeuvred itself to be first in line to be payed-out should a small business go bust post-Covid. Being pressured into payment by tax collectors can be an extremely unpleasant experience for owner-directors of small businesses.
But Mr Kwarteng has told the Institute of Directors and business group R3, which represents insolvency and restructuring practitioners, that HMRC will go easy on small businesses unable to pay tax because of Covid-19 debt.
>See also: Small business owners who duck out of repaying Covid debt face ban
The government wants to avoid a tsunami of insolvencies this summer.
The news will come as a relief to small business owners, who already have enough to worry about with a stop-start reopening post-lockdown just as Covid-19 financial support such as Bounce Back Loans start having to be repaid.
Insolvency practitioners have warned that many small businesses will struggle to stay afloat from July when emergency Covid-19 financial support measures begin to be wound down.
In a letter, obtained by the Financial Times, Mr Kwarteng wrote that HMRC would be updating its

Read more...

Hot Business News Today

HMRC to go easy on small business strangled with Covid debt

by  •  • 0 Comments

Originally written by Timothy Adler on Small Business
Small businesses struggling with Covid debt will not be forced to pay overdue tax to HMRC immediately, says business secretary Kwasi Kwarteng.
HMRC had manoeuvred itself to be first in line to be payed-out should a small business go bust post-Covid. Being pressured into payment by tax collectors can be an extremely unpleasant experience for owner-directors of small businesses.
But Mr Kwarteng has told the Institute of Directors and business group R3, which represents insolvency and restructuring practitioners, that HMRC will go easy on small businesses unable to pay tax because of Covid-19 debt.
>See also: Small business owners who duck out of repaying Covid debt face ban
The government wants to avoid a tsunami of insolvencies this summer.
The news will come as a relief to small business owners, who already have enough to worry about with a stop-start reopening post-lockdown just as Covid-19 financial support such as Bounce Back Loans start having to be repaid.
Insolvency practitioners have warned that many small businesses will struggle to stay afloat from July when emergency Covid-19 financial support measures begin to be wound down.
In a letter, obtained by the Financial Times, Mr Kwarteng wrote that HMRC would be updating its

Read more...

Hot Business News Today

Mileage allowance in the UK – what is it and how does it work?

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Originally written by Katerina Nicolova on Small Business
Providing mileage allowance for employees who drive for work has become more popular in recent years. But with HMRC’s many rules, it can be confusing for employers and employees alike how this process works. This article will guide you through the main rules you should be aware of as an employer paying out mileage allowance, as an employee receiving the payments, and as self-employed – claiming deductions.
Mileage allowance for employees
My employees use their private vehicles for travelling for business. Do I have to provide them with mileage allowance payments?
As an employer, you are not obliged to pay a mileage allowance to your employees. However, many choose to reimburse their employees for business mileage, as anything paid under or at the same level of the approved mileage rates from HMRC is not reported to the authority.
Your company can choose to pay the exact amount of mileage allowance as stated by HMRC, less or more than it.
If you pay more per mile than the approved rate, the excess sum will be considered as personal benefits for your employee and they’ll have to pay tax on that amount.
To pay out MAPs (mileage allowance payments), your employees

Read more...

Hot Business News Today

Mileage allowance in the UK – what is it and how does it work?

by  •  • 0 Comments

Originally written by Katerina Nicolova on Small Business
Providing mileage allowance for employees who drive for work has become more popular in recent years. But with HMRC’s many rules, it can be confusing for employers and employees alike how this process works. This article will guide you through the main rules you should be aware of as an employer paying out mileage allowance, as an employee receiving the payments, and as self-employed – claiming deductions.
Mileage allowance for employees
My employees use their private vehicles for travelling for business. Do I have to provide them with mileage allowance payments?
As an employer, you are not obliged to pay a mileage allowance to your employees. However, many choose to reimburse their employees for business mileage, as anything paid under or at the same level of the approved mileage rates from HMRC is not reported to the authority.
Your company can choose to pay the exact amount of mileage allowance as stated by HMRC, less or more than it.
If you pay more per mile than the approved rate, the excess sum will be considered as personal benefits for your employee and they’ll have to pay tax on that amount.
To pay out MAPs (mileage allowance payments), your employees

Read more...

Hot Business News Today

5 most common tax mistakes when you’re self-employed

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Originally written by Simon Thomas on Small Business
What’s worse when you’re self-employed? Having to pay your tax bill, or making a mistake and finding out you’ve overpaid?
Filing your small business taxes each year does not have to be stressful or painful. Tax can be a bit of a headache for anyone in business, and for the self-employed, it’s no different. The danger of getting taxed wrongly could mean submitting tax returns late, incorrectly, or not at all, leading to some hefty penalties and time-consuming investigations from HMRC.
>See also: How the newly self-employed should navigate the complex SEISS process
However, if you make sure to do little bits of work throughout the year, filing your taxes can be quite straightforward.
5 most common tax mistakes when you’re self-employed
Some stresses are easily avoidable. Make sure to avoid these 5 common tax return mistakes that many self-employed people make:
#1 – Not registering for self-assessment
If you earn more than £1,000 from one or more trades, you must register with HMRC. People commonly confuse this with the basic personal allowance and believe they do not need to register with HMRC unless they earn over a certain threshold.
This, however, isn’t the case.
Everyone is entitled to earn a certain

Read more...

Hot Business News Today

5 most common tax mistakes when you’re self-employed

by  •  • 0 Comments

Originally written by Simon Thomas on Small Business
What’s worse when you’re self-employed? Having to pay your tax bill, or making a mistake and finding out you’ve overpaid?
Filing your small business taxes each year does not have to be stressful or painful. Tax can be a bit of a headache for anyone in business, and for the self-employed, it’s no different. The danger of getting taxed wrongly could mean submitting tax returns late, incorrectly, or not at all, leading to some hefty penalties and time-consuming investigations from HMRC.
>See also: How the newly self-employed should navigate the complex SEISS process
However, if you make sure to do little bits of work throughout the year, filing your taxes can be quite straightforward.
5 most common tax mistakes when you’re self-employed
Some stresses are easily avoidable. Make sure to avoid these 5 common tax return mistakes that many self-employed people make:
#1 – Not registering for self-assessment
If you earn more than £1,000 from one or more trades, you must register with HMRC. People commonly confuse this with the basic personal allowance and believe they do not need to register with HMRC unless they earn over a certain threshold.
This, however, isn’t the case.
Everyone is entitled to earn a certain

Read more...

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

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...