Following the announcement in the Summer Budget of a major change to the taxation of dividends, HMRC has now published a factsheet which clarifies the rules. How will they work? Changes to taxation of dividends In the Summer Budget the Chancellor dropped a bombshell for owner managers of smaller companies by stating that, from April […]
New ‘National Living Wage’ tax credit changes!
The most radical announcement by the Chancellor on 8th July was a significant reduction in the amount the government plans to spend on tax credits and other State benefits. At the same time he announced that there would a new national living wage to be paid by employers, rising to £9 an hour by 2020. […]
Shares to employees & directors
Whenever companies issue shares to employees and directors, they need to consider whether or not an entry needs to be made on the end of year HMRC Form 42. This form is used to report events relating to shares and securities obtained by reason of employment and now needs to be submitted online by 6th […]
The Summer Budget – Director shareholders hit hard!
DIVIDEND TAX For many years dividends have come with a 10% tax credit which means that there’s no additional personal tax to pay on dividends received by basic rate taxpayers – the basic rate of tax on dividends is currently 10%. However, the Summer Budget has announced that, from 6 April 2016, this tax credit […]
The £2,000 Employment Allowance continues for 2015/16
The £2,000 “employment allowance” introduced in 2014/15 continues to be available for 2015/16. Note that this allowance provides relief from paying employers NIC on the first £2,000 of contributions. The £2,000 allowance is set against employers NIC on a cumulative basis during the tax year. The allowance is available to most employers, although those under […]
State Pension Changes
From 6 April 2016 the new flat rate State Pension will be introduced, which is expected to be around £150 a week. A person’s actual entitlement will depend on their National Insurance contribution record. Those who have built up an entitlement greater than the flat rate amount due to paying SERPs or other additional contributions […]
VAT Rules Changing for Promp Payment Discounts (PPD)
In last year’s Finance Act it was announced that the VAT rules for dealing with prompt payment (or early settlement) discounts would be changing from 1 April 2015. HMRC have now issued brief 49/2014 setting out guidance for businesses affected by the change, many of whom may need to change their invoicing procedures. The change […]
End of Year PAYE Return
Prior to the introduction of RTI, employers were required to complete an end-of-year checklist and declaration on form P35 and submit to HM Revenue and Customs. Under RTI this was replaced by the final full payment RTI submission which included a similar checklist and declaration. HM Revenue and Customs have recently announced that from 6 […]
No NIC due on rental income!
Class 2 NICs are payable by the self-employed at the rate of £2.75 per week, although there is a small earnings exemption for those earning up to £5,885. It is understood that HMRC believe Class 2 NICs also apply to buy-to-let landlords. This is not correct and was tested in a case before the Tax […]