The New Year has begun in the financial calendar. This is the time of year where the Government implement the new rules and laws. Changes have been made to your allowances, pension and minimum wage. In our blog we will touch up on the most popular and usually most important changes. Keeping you informed and up to date!
 
Your personal allowance has gone up to £11,850 from £11,500. Your personal allowance is the amount of income you can make before you must pay any tax over. The tax you pay over will depend on which income band you are in.

Income BandTaxable IncomeTax Rate
Personal AllowanceUp to £11,8500%
Basic Rate£11.851 - £46,35020%
Higher Rate£46,351 - £150,00040%
Additional RateOver £150,00045%
 
If your income is over £123,700 then you do not get a personal allowance. Dividends allowance has unfortunately gone down from £5,000 to £2,000. If you own shares in a company and receive dividend you will have to pay tax. You only pay tax if your dividends go above your dividend allowance in the tax year. The tax rate is different for dividends.

Tax BandTax Rate on Dividends over your Allowance
Basic Rate7.5%
Higher Rate32.5%
Additional Rate38.1%
 
There has been changes to the ever-changing employment tax laws. If you employ staff, you will have to adhere to these rules. As there can be heavy fines if the rules are broken. You will have to supply a workplace pension for all staff members that qualify. A percentage of the member of staffs pay is put into the pension scheme automatically every payday. The minimum employer contribution is 2% and the minimum employee contribution is 3%.
 
The national minimum wage and living wage have increased. As an employer you are legally obliged to pay the correct rate to staff. Wage is worked out on the age an employee is. Minimum wage bands are Under 18, 18years-20years, 21-24 years and 25 years old and over.
 
Take a read of our employment law blog where we go in to the finer details of pension contributions and the national minimum wage rates. This is the time of year when company accounts are due as the next financial year rolls over, if you are stuck with yours or want more information on what steps you need to take visit our website on www.crossaccountingservice.co.uk or call us on 02920 653 995

Happy New Year to you all, we hope you’ve had a lovely Christmas. It’s the New Year but some things remain the same, and that’s the deadline of 31st January for Self-Assessment returns.

 

Self-Assessment is a system HMRC uses to collect tax. For people who are self-employed, with their own business or others who make additional income. 

The dates for Self-Assessment is 

1st April 2016 to the 31st March 2017. With online returns needed to be submitted by

31st January 2018 and paper returns to have already been submitted by 31st October 2017.

 

The best way to keep the tax bill down is to have your paperwork organised. You will need the actual receipts to claim as expenses. Collate your receipts and keep together as HMRC can ask to see evidence at any time. Another great way is to utilise the ISA savings as any interest received is tax-free. You’ll keep your savings on a tax-free basis for as long as you keep the money in your ISA accounts.

 

Higher rate tax payers benefit from additional tax savings when they contribute in to pension schemes and give to charity.

 

An example of a list of records you will need are;

  •          Business and personal bank statements
  •          Records of income
  •          Records of purchases
  •          P60/P45
  •          Rental Income
  •          Interest Income
  •          Child Benefit and Income Support

 

You need many other records to keep, here at Cross Accounting we give our clients a more in detail list of records which we require from them to complete their tax return. This also includes a reminder of approaching deadlines to ensure not to be penalised. HMRC fine £100 for anyone who misses the 31st January deadline.

 

HMRC have revealed a record number of people are filing for self-assessment this year as the numbers are north of eleven million. If you’re a couple of years behind, then do not worry as you’re not alone, we have taken on a number of clients in this situation, and have supported them and brought them up to date. If you’re not sure if you need to submit a self-assessment or you need to complete a return, you can call us on 02920 653 995 or visit our website on www.crossaccountingservice.co.uk to see how we can assist you. 

Your year end can cost you more than you think

Preparing your year end accounts can be costly your business – and that’s before you’ve event considered the financial aspect.

In finding, organising and making sense of your paperwork and records, there are time costs, emotional costs (usually stress!) and work-life balance costs to consider.

15% off your year end with us

Cross Accounting Services can help on all fronts. We love year end and so as a thank you from us, we’re offering 15% off your first year end fees with us.

So, you get to spend time doing the things you love at a reduced all round cost – and we get to spend time doing the things we love, thanks to you!

Call Nicola on 029 2065 3995 and quote reference CA15 to receive your discount or email her asking for more information also quoting CA15 Closing date 31 March 2014

Cross Accounting Service | Blog

A couple of weeks ago we highlighted main aspects of the previous chancellors mini-budget. A lot has happened in the house of parliament recently and the new chancellor, Jeremy Hunt reverses most of the mini-budget tax cuts.

 

Below you can find the updated version from Jeremy Hunts statement.

 

National Insurance

One of the few things that is staying, is the reversal of the National Insurance social care levy. From 6th November 2022, the extra 1.25% will no longer be added to National Insurance contributions. This means a saving of £330 per year for nearly 28 million people.

 

Originally the extra 1.25% was introduced to fund the NHS, however, this will now be funded through general taxation.

 

Income Tax

The biggest reversal is in the rates of income tax. The ex-chancellor said that income tax will be down to 19% from April 2023, however, this will now not go ahead. It will remain at 20% for now.

 

The abolition of the 45% higher rate income tax has also been reversed. The 45% higher rate income tax band now means that the higher rate earners will pay income tax on earnings over £150,000

 

Corporation Tax

The reversal on corporation tax for companies means that the increase from 19% to 25% will go ahead after all. This will come into action from April 2023. Only businesses with profits of £250,000 or greater will be taxed at the full 25% rate - about 10% of companies in the UK.

 

Any companies with profits of £50,000 or lower, will pay at the 19% rate

 

Benefits

Rules around the benefit system will remain and unchanged. Benefits can be reduced if people don’t actively search for job commitments. Around 120,000 more people on universal credit to be encouraged to actively seek more work, the over 50’s to be given extra time to work with coaches to help them in the return to work.

 

What else has been cancelled?

Other measures that have been cancelled include:

·         VAT-free shopping for overseas visitors,

  • A freeze on alcohol duty. Planned increases in the duty rates for beer, cider, wine and spirits will now go ahead
  • Cuts to the tax paid on shareholders' dividends - the increase introduced in April will now stay in place

 

Energy

A typical household using both gas and electricity would pay no more than £2,500 annually for two years the government said. However, the energy price guarantee now only covers this winter. It will be in place until April next year. A review will look at what measures should be put in place after this date.

 

Stamp Duty

Stamp duty will remain in place. In England, no stamp duty is paid on first £250,000 and for first time buyers, this is increased to £425,000. To check out Wales’ stamp duty rates, please click here

 

These rules seem like they will stay in place now but, as always, we will keep you up to date with the latest

We highlighted the main aspects of last weeks mini budget. If you missed it, click here to find out what the mini budget means for your finance. The Chancellor spoke of Stamp duty and how he intends to support 200,000 home buyers from paying any tax on when they buy a house. In England, no stamp duty is paid currently on first £250,000 and for first time buyers, this is increased to £425,000.


The Welsh government have also followed and raised the threshold on Stamp duty here in Wales. Officially known as Land Transaction Tax, this is paid if you buy a property or land over certain price threshold in Wales.


If you already own one or more residential properties, then there are different rules, and you may need to pay the higher residential rates. However, if you’re replacing your main residence, the higher rates may not apply. 


The new Land Transaction Tax thresholds are to come in on 10th October 2022.


Purchase Price Bands (£)

Percentage Rate (%)

Up to 225,000

0

Above 225,000 and up to 400,000

6

Above 400,000 and up to 750,000

7.5

Above 750,000 and up to 1,500,000

10

Above 1,500,000

12

The chancellor Kwasi Kwarteng has claimed that he has made the biggest tax cuts in a generation. So, what is in his mini-budget?

National Insurance

With the cost of living on the rise it is paramount that the Government step in to help. The biggest announcement from this mini budget is the reversal of National Insurance levy that was introduced in April 2022 by ex-chancellor Rishi Sunak. The extra 1.25% increase was going to be used to help fund health and social care. With the latest turnaround, the funding for health and social care will now come from general taxation. 

The reversal means an extra £330 per year for nearly 28 million people and will start from 6th November 2022. National Insurance is a tax paid by employees, employers and the self-employed. Employees pay National Insurance on their wages as well as income tax, employers pay extra NI contributions for staff, and the self-employed pay National Insurance on their profits.

Income Tax

There are also cuts in basic rate of income tax. Currently at 20% for everyone that earns above the personal allowance, from April 2023 this will be down to 19% Government estimates 31 million people will be getting an extra £170 a year in their pay packets.

45% higher rate of income tax abolished for England, Wales, and Northern Ireland taxpayers and a one single higher rate of income tax of 40% from April 2023.

Corporation Tax

Companies will also benefit as the rise in corporation tax has been cancelled. Corporation tax was due to be increased from 19% to 25% in April 2023, however, now this will not go ahead.

Benefits

Rules around the benefit system have also been changed. Benefits can be reduced if people don’t actively search for job commitments. Around 120,000 more people on universal credit to be encouraged to actively seek more work, the over 50’s to be given extra time to work with coaches to help them in the return to work.

Shopping

Overseas visitors will also benefit as VAT-free shopping to be introduced. This will encourage visitors to spend more while in the UK. Planned increases in the duties on beer, cider, wine, and for spirits have also been cancelled.

Stamp Duty

Stamp duty is paid when people buy a property. No stamp duty is paid currently on first £250,000 and for first time buyers, this is increased to £425,000. This is currently for England, we will have to wait and see what the Welsh Government do for us.

Energy

Energy bills was the one that worried most homeowners. There will be a freeze on energy bills which the government claims will reduce inflation by 5%

Total cost for the energy package to be expected around £60bn for the 6 months from October.

Click here to find out all the other information covered in the mini-budget.

2022 is the year where we move passed the pandemic. We have to think positive. It has been a long and difficult two years. We must pick ourselves up and get back on track. Whatever goals we had, we must try to achieve these, even if we have to tweak our usual processes to create an environment to allow us to progress. 


As April gets closer, the new financial year starts and with it some revised rules and regulations. We talk about the changes in national minimum wage and the introduction of the social levy care. The social levy is a 1.25% charge on National Insurance from April 2022. The rate also affects Employers National Insurance, and the dividend rates will also change in line with the new social care levy of 1.25%

 

Why is this levy being introduced?

 

The funds from the social care levy will be used for care homes and funding for pensioners. This includes several reforms to how people pay for adult social care in England, supported by £5.4 billion of investment over the next three years.

 

The National Insurance contributions rates will decrease back to 2021 to 2022 tax year levels and will be replaced by a new 1.25% Health and Social Care Levy where the revenue will be ringfenced to support UK health and social care bodies.

 

This will affect us all.

 

The new rates for National Insurance are below:

 

 

Rate from April 2022

Current Rate

Employee NIC

13.25%

12%

Self-Employed NIC

10.25%

9%

Employer NIC

15.05%

13.8%

 

 

Individuals above State Pension age will not be affected by the temporary increase to National Insurance contributions for the 2022 to 2023 tax year but will be liable to pay the levy from April 2023.

 

National Minimum Wage

 

As with every April, the Government traditionally bring changes to the national minimum wage rates. Following the advice from the Low Pay Commission, the government will increase the National Minimum Wage from 01 April 2022.

 

Anyone that does not abide by these rules, can get big fines.

 

The new rates from 01 April 2022 are below.

 

Category of worker

Hourly Rate

23+ Years old

£9.50

21 – 22 Years old

£9.18

18 – 20 Years old

£6.83

Under 18

£4.81

Apprentice

£4.81

 

Message us on nicola@crossaccountingservice.co.uk if you want to discuss how this will affect you. Our staff from our Cardiff and Bridgend office are always happy to help.


*Please note we will update this in the next few days, after today's Spring Budget announcement


It’s beginning to look a lot like Christmas, and most families up and down the country are looking forward to tucking into their festive turkey in just under a weeks’ time.

But, the turkey itself is not the item on the festive plate that most people are excited about according to new research carried out to discover the most important aspect of Christmas dinner.

Click here to find out