July Bulletin 2024
With the advent of July and the children breaking up from school, people are turning their minds to the summer holidays. Fingers crossed we get some form of summer in the UK!
Earlier in the month British voters made it rather clear they wanted a new government. Labour's campaign has pledged not to raise National Insurance, income tax, or VAT, but it has proposed significant tax reforms. One key policy includes applying a standard 20% VAT rate to private schools. Labour also plans to replace non-dom status with a "modern scheme for people genuinely in the country for a short period," which includes ending the use of offshore trusts to avoid inheritance tax (IHT).
A major focus of Labour's manifesto was also to address tax avoidance. The party aims to modernise HMRC and reform laws to combat tax evasion. HMRC has faced substantial criticism in recent years for long waiting times and poor service standards, highlighting the urgent need for investment and improvement.
We will keep you updated as things roll, in the meantime do get in touch if you would like to talk further about any of the areas covered.
HMRC rolls out VAT Registration Estimator
HMRC has launched a VAT Registration Estimator tool for small businesses to determine if they need to register for VAT. Whether you are a new startup or long-established, you can visit the HMRC webpage, input your details, and check if your turnover necessitates VAT registration.
Available on the gov.uk guidance page, not the Government Gateway, the tool keeps your information private and confidential as it doesn't store any of the data you or your adviser input. Additionally, the tool provides guidance on the VAT registration process and offers information for businesses considering voluntary registration below the threshold. However, HMRC has noted that the estimator cannot provide business-specific advice.
Payment on account 31 July, need a reminder?
If you’re a Self Assessment taxpayer you’ll know that you may have to make Payments on Account of your tax liability.
The second payment on account towards income tax self-assessment liabilities and Class 4 national insurance contributions (NICs) for 2023/24 is due on 31 July.
Do you have to report UK property income to HMRC?
If you are earning income from a property let which results in you making a profit, you must let HMRC know before the 5th October following the tax year that the income arose.
Notifying HMRC is not the same as filing a tax return, you need to register for self-assessment.
Whether you need to report this income will depend on the amount you earn. Periodical lets that don’t exceed £1,000 in a year could be covered by the property allowance of £1,000, therefore there would be no profit.
If you are concerned or confused as to whether this applies to you, get in touch to speak to a member of the team.
Maximising allowable expenses for limited companies
As a limited company owner, understanding, claiming, and managing your allowable business expenses is crucial for running your business efficiently and ensuring you pay the correct amount of tax. Spending money on tax-deductible expenses lowers your company's profits for tax purposes and therefore lowers your tax liability.
Allowable expenses must be wholly and exclusively incurred for business purposes.
ABMV runs a personalised service with our clients where we run through these expenses in detail and compile strategies for maximising deductible expenses. If you have any specific query please do get in touch.
The PAYE system celebrates its 80th birthday this year
Depending on your point of view that may or may not be a cause for celebration. Either way, the PAYE basics are the same today as they were when it was introduced. For example, your tax code tells your employer how much of your salary is tax-free and the tables show the rates of tax that apply. Ensure you check your tax code. Visit this link for more information.
Band Taxable income Tax rate
Personal Allowance Up to £12,570 0%
Basic rate £12,571 to £50,270 20%
Higher rate £50,271 to £125,140 40%
Additional rate over £125,140 45%
ABMV Company Update
We have introduced the ability to ePay your invoice through the new ABMV website and/or via the ePay link on your individual invoice. Paying your invoice couldn’t be easier.
If you have any questions or would like to learn more about how we can help you with your accounting and business needs, please don’t hesitate to contact us. Our team of experts is always ready to assist you with any queries you may have.
