For businesses operating in the UK, understanding Value Added Tax (VAT) schemes is crucial. Not only does VAT impact your cash flow, but navigating the different options can feel overwhelming. This blog post simplifies VAT schemes in the UK, helping you choose the most suitable one for your business. Read more
by Ali at Taxfile.
For many self-employed UK taxpayers, the January Self-Assessment deadline looms like a tax-shaped storm cloud. But what if you could banish that pre-deadline panic and transform tax season into a breeze?
Psychology tells us that we are motivated when one set of thought processes outweighs the opposing ones, tipping the balance to make us act. With that in mind, here are 7 key things that may motivate you to act on your taxes sooner rather than later.
Filing early gives you a clear picture of your tax bill. This allows you to budget effectively and avoid any nasty surprises come January. Knowing if you owe tax or are due a refund empowers you to make informed financial decisions.
If you owe tax, filing early lets you explore HMRC’s Budget Payment Plan. This lets you spread the cost of your tax bill over monthly or weekly instalments, making it much easier to manage.
If you’ve overpaid tax, filing early means a quicker turnaround on your refund. That extra cash can be a welcome boost for your finances.
January is a notoriously busy time for HMRC and accountants. Filing early ensures you avoid spending hours over the phone to HMRC, or your accountant having to contact HMRC on your behalf and spending over 45 minutes on hold.
Sometimes mistakes happen. Filing early gives you time to review your return and identify any errors. This allows you or your accountant to rectify them before the deadline, avoiding potential penalties.
A completed Self-Assessment tax return can be used as proof of income when applying for a mortgage, loan, or certain benefits. Filing early ensures you have this documentation known as an SA302 readily available.
If your tax bill is higher than expected, filing early gives you more time to explore tax-saving opportunities with an accountant (if necessary). In our experience, it also allows us to keep an eye on your turnover and spot early if you might need to be VAT registered, or are steadily moving towards it. It could also allow us to advise whether you’d benefit from setting up a limited company.
File Early — and catch the worm!
By taking charge of your Self-Assessment early, you gain control of your finances and avoid unnecessary stress. So, ditch the last-minute panic and embrace the benefits of early filing.
At Taxfile we would like to instil healthy habits in our clients and encourage you to come and see us in the early months after April. By doing so, we can file your tax return early and remove all the stress and worry.
Get ready by making an appointment to see our tax agents today. Call, message, or use our online booking system:
by Ali at Taxfile.
The UK Chancellor, Jeremy Hunt, delivered his Spring Budget on March 6, 2024, amidst a backdrop of subdued economic growth and limited fiscal headroom. The budget aimed to strike a delicate balance between supporting economic activity, controlling public spending, and preparing for future challenges.
If you have missed the announcements, the Key Highlights for the majority of our clients are as follows.
The budget continued the government’s commitment to lower taxes, announcing a further 2p cut to National Insurance contributions (NICs) for both employees and the self-employed as of 6th April 2024. This measure, alongside previous cuts, delivers the largest-ever reduction in NICs, aiming to boost disposable income and stimulate economic activity. Hunt says the National Insurance cut, to begin next month, is worth £450 a year for the average worker earning £35,000 p/a.
Recognising the crucial role of small and medium-sized enterprises (SMEs), the Chancellor announced an increase in the VAT registration threshold from £85,000 to £90,000 starting from 1st April 2024. For the de-registration from VAT, the taxable threshold has also increased, by the same amount, to £88,000.
The Spring 2024 UK Budget contained two key points regarding child benefit:
The current system has been criticized for being unfair, as two single parents each earning £49,000 would receive full child benefit, while a single parent earning £50,000 would not. Assessing the charge based on household income aims to address this disparity.
The Spring Budget also includes two changes relating to Capital Gains Tax (CGT) on property:
The higher rate of capital gains tax (CGT) due on disposal of residential property will reduce to 24% (from 28%), beginning on 6th April 2024. This means that individuals selling a second home or investment property will pay a lower tax rate on their profits.
Announced for 6th April 2025, the budget proposes abolishing the FHL tax regime. This regime currently offers beneficial tax treatment for furnished holiday lets. Instead, all UK residents will be subject to the same capital gains tax rules on their rental income, regardless of whether the property is a long-term or short-term let.
The previous system, where ‘non-doms’ only paid UK tax on non-UK income and gains if they brought them into the UK (remitted), is being abolished entirely.
The reform aims to create a simpler and fairer tax system for individuals regardless of their domicile status. It also encourages spending and investment within the UK by offering temporary tax exemption on foreign income brought into the country. This will be done by:
The new regime focuses on residence instead of domicile. Individuals arriving in the UK after April 2025 will be exempt from tax on foreign income and gains for their first four years of UK residence.
Existing non-doms will have a transition period to adjust to the new system.
Taxfile are high-quality accountants and tax advisors in Tulse Hill, and Dulwich in South London.