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
Tag Archive for Tax
Hot Business News Today
5 most common tax mistakes when you’re self-employed
by Simon Thomas • • 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
Hot Business News Today
All small businesses to go Making Tax Digital by 2024, Treasury suggests
by Timothy Adler • • 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
Hot Business News Today
All small businesses to go Making Tax Digital by 2024, Treasury suggests
by Timothy Adler • • 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
Hot Business News Today
Super-deduction tax break – what is it and how does it work?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
What is the super-deduction tax?
The super-deduction £25bn tax break, announced in last Wednesday’s Budget, is intended to spur investment by providing 25p off company tax bills for every pound of qualifying spending on plant and machinery.
How the super-deduction works
The super-deduction offers 130 per cent first-year relief on qualifying main rate plant and machinery investments from April 1 2021 until March 31 2023 for companies.
For most business equipment, there will be a super-deduction of 130 per cent of the expenditure incurred. This will mean that on a spend of £100,000, the corporation tax deduction will be £130,000, giving corporation tax relief at 19 per cent on £130,000, which is £24,700.
Normally such expenditure would either fall within a company’s annual investment allowance and produce relief of only £19,000 or alternatively be tax-relieved at 18 per cent of the cost per annum.
Nigel May, partner at MHA MacIntyre Hudson, said: “Companies looking to use this relief will need to take care when the assets that the expenditure relates to are sold: tax charges may then arise clawing back the relief. It is perhaps worth noting that certain expenditure is excluded, in particular the acquisition of company cars.”
What
Hot Business News Today
Super-deduction tax break – what is it and how does it work?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
What is the super-deduction tax?
The super-deduction £25bn tax break, announced in last Wednesday’s Budget, is intended to spur investment by providing 25p off company tax bills for every pound of qualifying spending on plant and machinery.
How the super-deduction works
The super-deduction offers 130 per cent first-year relief on qualifying main rate plant and machinery investments from April 1 2021 until March 31 2023 for companies.
For most business equipment, there will be a super-deduction of 130 per cent of the expenditure incurred. This will mean that on a spend of £100,000, the corporation tax deduction will be £130,000, giving corporation tax relief at 19 per cent on £130,000, which is £24,700.
Normally such expenditure would either fall within a company’s annual investment allowance and produce relief of only £19,000 or alternatively be tax-relieved at 18 per cent of the cost per annum.
Nigel May, partner at MHA MacIntyre Hudson, said: “Companies looking to use this relief will need to take care when the assets that the expenditure relates to are sold: tax charges may then arise clawing back the relief. It is perhaps worth noting that certain expenditure is excluded, in particular the acquisition of company cars.”
What
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HMRC tax investigations: Eight reasons HMRC might audit your business
by Ben Lobel • • 0 Comments
HMRC tax investigations are not an experience the average business owner wants to endure. HMRC tax investigations are expensive, time-consuming and stressful, lasting 16 months on average and costing roughly £5,000 in accountancy fees. They are almost a nightmare scenario; often not because you’ve actually done something wrong, but simply because you’ll be forced to
The post HMRC tax investigations: Eight reasons HMRC might audit your business appeared first on Small Business.
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How tech can save us from the annual tax meltdown
by Ben Lobel • • 0 Comments
Computers will never replace people. But I say let them try. There are just some things us humans were perhaps never meant to do so labour intensively in the first place. Bookkeeping tops my list. Traditionally, bookkeeping was a job for someone semi-skilled. Accounting paperwork used to be processed through double-entry bookkeeping principles, using appropriately
The post How tech can save us from the annual tax meltdown appeared first on Small Business.
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Tax planning tips for small businesses
by Ben Lobel • • 0 Comments
For many small business owners, tax is one of the most challenging areas of running a business. And with good reason, too – the tax system is complicated. Unfortunately, that can lead to problems. In 2016, it was estimated that UK citizens overpaid not far off £5 billion in tax by not taking advantage of
The post Tax planning tips for small businesses appeared first on Small Business.
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Tax-efficient ways to extract profits from your business
by Owen Gough • • 0 Comments
Navigating your way through the early stages of your company lifecycle can be one of the most challenging times for small businesses. From knowing when it’s time to recruit to choosing suitable office space, there are a number of pitfalls awaiting companies who aren’t prepared for what’s ahead – and financial instability can be one
The post Tax-efficient ways to extract profits from your business appeared first on Small Business.