Uncategorized
Who’s being Targeted?
“Growth is the engine that carries every one of our ambitions forward.
Through Stability, Investment and Reform – The platform from which British ambition can finally get moving again. Because growth doesn’t just appear out of thin air. It is built – patiently, and stubbornly, by the people who take risks, By founders who bet their savings on an idea, By firms breaking into new markets, developing new technologies, creating new jobs and new opportunities, By the men and the women who work hard every day in all parts of our country.
Our job is not to watch from the sidelines, but to partner with them— backing them every step of the way. To match private enterprise with public ambition.” https://lnkd.in/ex2SWvti
Thus began the budget speech last year. These were then the only people to get a direct tax rate increase. Dividend tax for basic and higher rate tax payers receiving a 2% increase. Business asset disposal relief raised from 10% to 14% this year and 18% from April
Just saying.
Interest Rate Increase on Late Paid Tax
Current HMRC interest rates
The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:
- late payment interest rate — 3.75% from 5 July 2022
- repayment interest rate — 0.5% from 29 September 2009
HMRC interest rates are set in legislation being linked to the Bank of England base rate. There are 2 rates:
- late payment interest, set at base rate plus 2.5% (the current base rate is 1.25%)
- repayment interest, set at base rate minus 1%, with a lower limit of 0.5% (known as the ‘minimum floor’) – until the base rate exceeds 1.5% this rate will remain unchanged and has been since September 2009
Annual Tax on Enveloped Dwellings (ATED) return
Do you own residential property through a limited company, a partnership with a company member or a collective investment scheme?
If you haven’t registered to use HMRCs online service, you have until the 1 April 2022 to register. The ATED period is 1 April 2022 to 31 March 2023, where you own a residential property on 1 April 2022 that is contained with a limited company, returns for that period must be filed by 30 April 2022. You can begin populating an online ATED return for 2022 to 2023 from around mid-March, but can’t submit it before 1 April.
This applies to residential properties (dwellings) within the company with a taxable value of over £500k. The taxable value is its value at 1 April 2022, or if acquired after, its cost. This value applies to each individual property and not the value of the portfolio as a whole.
If the value of the property is within 10% of one of the value bands you can request a pre-banding check from HMRC to get a determination as to whether the property will be subject to the charge.
There are exemptions and reliefs. Exemptions mean you won’t need to register the property and so there is no requirement to complete a return. Reliefs need to be applied for so, even if a full relief applies and no charge will be payable, you still need to register and complete a return.
HMRC rejects calls to relax tax return deadline
HMRC will not waive late filing penalties or extend the 31 January deadline, but it will accept pandemic related disruptions and agent delays as a reasonable excuse and will also extend the period to appeal a penalty.
Social distancing in the workplace
For the current, official guidance on social distancing practice within specific work sectors, the Government have posted detailed advice.
Sector Guidance
Budget 2020 Rates and Allowances
Remember the budget? It was only three weeks ago but feels like a lifetime! We’ll be updating the rates and allowances on the website as soon as possible with adjustments for Coronavirus provisions.
Job Retention Scheme Update
Guidance has just been published with answers to many of the questions surrounding this scheme. There will not be a portal open for claims until late April so you can’t access it yet.
The Government website has been updated and provides answers to questions raised such as what constitutes wages. This is particularly important for those paid irregular amounts and commissions.
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
Deferral of VAT payments as a result of COVID-19
The Chancellor announced a VAT payments deferral on 20 March to support businesses with cash flow during the COVID-19 pandemic.
This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 30 June.
You therefore have until 31 March 2021 to pay any VAT deferred as a result of this announcement.
You do not need to inform HMRC if you wish to defer payment. You can opt in to the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit you should cancel this with your bank. You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.
Should you wish, you can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. You must continue to submit VAT returns as normal.
Who has the broadest shoulders?
Posted on Updated on
What about Director/Shareholders?
Let’s keep it simple. The same £50k of taxable profits with a sole director shareholder extracting that in the most tax efficient way possible.
https://lnkd.in/e5ktvYhb
We’ll compare that with “working people” – a phrase used five times in the budget speech. That person was left with £3,293.30 per month.
Here goes…
The typical advice given by most accountants would be to take a nominal salary of £12,570 and the rest in dividends. Dividends are a distribution of profits after tax. So before the dividend is paid, corporation tax is deducted of at least 19%. £50,000 less £12,570 is £37,430 taxed at 19% leaves £30,318.30 as taxable dividend income. This tax year (2025/26) that will be taxed at 8.75% leaving a monthly take home pay of £3,352.95. Less than £60 per month more than the “working person”.
Because their broader shoulders can take it, in 2026/27 the basic dividend rate will be 10.75, meaning take home pay is reduced to £3,302.42 – less than £10 better off
As an aside, for those with an income in excess of £125k there has been no increase in the additional rate dividend tax – perhaps their shoulders are not as broad.
This entry was posted in News and Comments, Uncategorized.