How Can I Prepare My Business for IOSS?
The new VAT policies make sure that the international trade between EU and non-EU states is made easy. As an IOSS registered business you will be providing better service to your customers as they won’t be facing any delays in the deliveries and won’t have to deal with any surprise costs after they have bought the product. On the other hand, as a business you might also be reducing your administrative costs because when you are registered for IOSS you will be required to register only in one of the EU member states instead of registering in every single EU country where you have customers. If you are supplying your goods internationally to EU or non-EU states and the value of your consignment is below 150 you can register your business for IOSS scheme. As there are benefits associated with the IOSS scheme, many businesses want to register for IOSS as this will reduce the admin costs and also provide better customer services. AS A BUSINESS YOU SHOULD PREPARE YOURSELF FOR THE IOSS UNDERSTAND YOUR BUSINESS You should understand your business. You might be selling your products internationally both through a marketplace and through your own website. If you are selling your products thorough a marketplace you don’t have to register for IOSS as the marketplaces such as eBay and Amazon have already registered for IOSS and they deal with your VAT. However, for those products being sold through own website you will have to consider the value of your consignments and consider if it’s worth registering from financial as well as administrative point of view. KNOW THE VALUE OF YOUR CONSIGNMENTS The low value consignment relief has been abolished and VAT is due on all items exported to EU and non-EU states. The IOSS Scheme is only for consignments below £150, for consignments above this value they will have to go through the customs etc. Therefore, you should have a very fair idea as to what is the value of your consignment. CONSIDER RE PRICING YOUR PRODUCTS As part of the new VAT reforms the businesses are supposed to charge customers VAT based on where they are based. As the rate of VAT can vary in all the European countries this can affect the prices. You should have that it in mind while you decide the price of your product. And the correct VAT rate should be incorporated in the prices. TRAIN YOUR STAFF You should train your staff by providing them guidance on IOSS. If you sell your products through the online marketplace then you don’t have to account for the VAT. However, you will have to account for VAT on the other products. Sold through the website. You will also be accounting for VAT differently when you are selling in both international as well as domestic market. You should make sure that your accountants dealing with VAT have all information in order to avoid mistakes and waste time correcting them. If you want to register for IOSS or OSS we at Taxaccolega can help you with that. Just call us at 020 8127 0728 and our accountants in Croydon, Surrey will be happy to help you. If you have any queries you can drop us a message here and we will be happy to help you
Do I have everything I need to file my accounts in September 2021?
If you are a private limited Company and your company’s financial year end is December 2021, you need to file your annual accounts latest by the end of September. The deadline to file the accounts with the Companies House is 9 months after the Company’s financial year ends. While you need to file accounts with the Companies house you need to file your tax return with the HMRC. You can do this separately or you can also do it together using an online service. To file the accounts online you need to make sure that you have a full set of annual accounts made which should include: The annual accounts that you prepare should be according to the international standards that means that IFRS should be followed, or you can use UK GAAP. If you are not sure you can hire an accountant. We at Taxaccolega have a team of accountant who can help you with the making of the accounts accurately and according to the standards. You should have a record of income and expenses, company assets, liabilities and credits, you should also have a record of the inventory of the stocks at the end of the financial year. All the business bank account statements should be available which are needed to prepare the annual accounts. If your company is VAT registered, you should have all the VAT records of your business to fill in the VAT returns which are also reflected in your annual accounts. You should also make sure that you have all your PAYE records, in case your company is registered as an employer. You will have to incorporate all this information in your annual accounts, and you are required to keep a record of all the company documentation. To use the online service to file the accounts you will need: You should apply to get this code as early as you can as it takes up to 5 days to get the code by post. Due to security reasons HMRC only sends these codes by post. You will need your company number, your email address to apply for the code. You will also be needing: You should know when you are due to file your accounts and tax returns, if you are late and you do not submit on time you will have to face penalties. These are as low as £150 if you are up to 1 month late and as much as £1500 if you are more than 6 months late in filing the accounts. If you think you are not ready to file your accounts with the Companies house because you have a valid reason and because of an event which was not under your control you can tell the Companies House. If your business is affected by the Coronavirus, you might be able to apply for the extension of 3 months. If you have received any penalties you can contact us and we will appeal on your behalf. Our committed team at the Taxaccolega can help you with preparing and filing the accounts. If you are looking for accountants at reasonable rates in Croydon, Surrey, London contact us at 020 8127 0728 and our team of expert accountants having an in depth knowledge of PAYE, VAT and all the accounting standards will prepare your accounts and file them in the timely manner.
I am a Locum Doctor. Can I work through a limited Company?
If you are a locum doctor and you are looking for some ways to save on the taxes that you pay to HMRC, you will have to look for your employment status. You pay taxes through PAYE when you are employed by an agency or by the NHS under a fixed term contract. The employer will pay tax and NI on your behalf however, in this way you cannot claim any expenses that you made to carry out the job, for example travel expenses etc. Even Though this kind of an arrangement is a little hassle free and as a locum doctor you don’t have to worry about calculating taxes and submitting your taxes on time this is not a vey tax efficient way to carry out your work as a locum doctor. Another option that you have is to set up a limited company and work through that limited company. When you set up a limited company you can be the director of that company as well as an employee of the company. Setting up a limited company can be demanding as you will have to manage and take care of the deadlines and do all the administration work such as keeping the receipts of your expenses that are related to your work organised which will help you make your accounts accurately, deciding on the time and amount of the dividends, transferring salary on time, claiming expenses, making accurate accounts and submitting them on time, calculating taxes accurately and paying them in a timely manner. You might need to hire an accountant for all the work but don’t worry the accountant fee can also be claimed as an expense against the profits that you make. How is Limited Company Tax Efficient? The limited company can be tax efficient when you pay the right combination of taxes. This means if you pay the dividend and salary to yourself in a way that you have to pay the minimum tax. You get a tax free dividend allowance of £2000 per year and if you are a basic-rate tax payer you will pay dividend tax at 7.5% and if you are an additional rate taxpayer you will pay tax at 32.5% these rates are lower than the income tax rates. You can calculate the dividend tax by using our dividend tax calculator Is my contract under IR35? If you are working through your company you should be very clear in what your contract is really like with your client. HMRC wants to make sure that you are not a ‘disguised employee’ and therefore getting the employee benefits and paying taxes at lower rates. In order to avoid any extra charges and make sure that you are paying the right taxes, it is important that you know if you are falling within IR 35 or not. Being Inside IR 35 means that for tax purposes you will be treated as an employee of your client and your taxes will be deducted at source. Make sure that you are not getting any employee benefits such as maternity pay etc, you are able to provide a substitute if you are not able to work the client will then pay you for the substitute and you will pay the person who substituted, you should not be working for one client. Make sure that you have different clients or atleast change them regularly. If you are a locum doctor or a dentist and you want to form a company contact Taxaccolega and our team of experienced accountants will be there to help you. Taxaccolega accountants in Croydon and Southall will give you all the information that you need.
I sell goods on Ebay . Do I need to register for IOSS (import one stop shop?)
If you are selling your goods online this means that you are attracting customers from EU and Northern Ireland. If your business is registered in Great Britain and you have your consignments going to the customers in the EU and the value of the goods do not exceed £135 have been given the option to opt for IOSS. If you supply consignments to the Northern Island and the sale value of the goods do not exceed £135 and you are also VAT registered in the UK will be able to pay any VAT due to the HMRC through their IOSS return. They are required to tell HMRC about their IOSS registration number before they can move goods to the Northern Island. If I am not registered for VAT? If you are a Business registered in Great Britain and you are not VAT registered because you might be below the VAT registration threshold but you are registered for IOSS, in that case you will be able to tell HMRC about the IOSS registration number before you can move your goods to the Northern Island but no VAT will be charged on the goods supplied to the Northern Island. What exactly is IOSS? IOSS is created for the benefit of the buyer and seller of the goods being transported to the EU and Northern Island. If as a seller you are registered for IOSS your customer will know that the price they are paying includes all the VAT charges and it saves them from the hassle of paying any other hidden charges. What are the benefits of registering for IOSS Although registering for IOSS is optional there are advantages of IOSS. The main advantage of IOSS is that there won’t be delays at the customs, in contrast if you are not registered for IOSS the products might get stuck at the customs where they ask for the VAT and the handling fees. Registering for IOSS means that the VAT is charged at the point of sales and your customers will not have to go through the delays. Happy customers mean a successful business. If You Sell Through Ebay ? If you sell on an online marketplace they must have registered for IOSS. Ebay, amazon and the other marketplaces are responsible for charging, collecting and paying VAT on behalf of the seller. if you are sending your products through the Royal mail they will ask for the market place where their products are sold. The correct IOSS number will be allocated to the item by the Royal Mail, when the parcel arrives at the destination country they would know that VAT has been paid by the information on the package. Who can help me with IOSS registration? IOSS registration can be time consuming, we at Taxaccolega can make it easy for you. You will just have to give us your business details and we will take care of the rest. We are accountants based in Croydon and South hall, call us at 020 8127 0728 or drop us a message here and our team will be happy to help you.
I own a property – how can I reduce my Inheritance tax bill?
If you own a house, it is part of your estate for inheritance tax purposes and inheritance tax should be paid on it when you die at 40% however there are ways that can help reduce the tax bill. According to HMRC guidelines you do not pay inheritance tax if the following applies to you: Inheritance tax threshold Each person has a tax free allowance of £325 000. If the value of their estate at the time of their death is less than £325 000 no inheritance tax will need to be paid. Passing the house to spouse If you pass your house to your spouse ( your husband\wife ) or a civil partner, charity or a community sports club you don’t pay inheritance tax even if you do that within 7 years of dying. If you pass your home to your children or grandchildren the tax free allowance will increase from £325 000 to £500 000 and you will not have to pay inheritance tax if the total value of your estate is £500 000 or less. You can therefore reduce or avoid paying inheritance tax if the value of your estate is within the tax free allowance thresholds. You can do this by taking the following steps: Giving gifts during your lifetime If the value of your house is £325 000 or less but the value of your total estate which includes money, possessions etc exceeds this threshold you can give them away as gifts during your lifetime. HMRC has defined such gifts as exempted gifts and you have a tax free allowance of £3000 per year. If you don’t use this allowance in a particular year you can carry it forward to the next year. Giving away home before dying Even if the value of your house is more than £325 000 and you pass it to your spouse there is no inheritance tax even if you die within 7 years of giving it away. You can give the house away and continue living in it If you give the house to any of your relatives or even to your children and live for 7 years there will be no inheritance tax to pay on it. You can choose to continue living in the same property however, you will have to give rent to the new owners at the market rate and pay all the bills of the house. If the new owners are your children and they are living with you in the property you don’t have to pay rent even if you gave them a portion of your property. Giving charity If you leave 10% of your estate to charity, the inheritance tax will be paid at the reduced rate of 36% Transferring any unused nil rate band between husband and wife. If there is any unused nil rate band when one of the partners dies it can be transferred to the tax free allowance of the other partner and this can reduce the inheritance tax bill. If you own a property or you have inherited a property or you are selling your property and you want to know about the taxes don’t hesitate to call Taxaccolega and our expert team of accountants will be happy to help you. Call our accountants in croydon 020 8127 0728 or drop us a message here.
Online Tutor – What expenses can I claim and what taxes do I pay?
If you are thinking of starting online tutoring you should be well aware of the taxes that the taxman expects you to pay. HMRC expects you to pay taxes if you are earning money above a certain threshold. These thresholds are different for different structures in which the businesses are run. From the tax point of view if you are providing the services( in this case tutoring) and earning money from it you are running a business. You can choose how you want to run the business. For example, you can register your business as a sole trader or you can register your business as a company. Both business structures will have different thresholds, different tax rates and different deadlines. If you choose to run your business as a Sole Trader If you chose to run your business as a sole trader you would have to register as a sole trader with HMRC. You are required to register to submit your self assessment tax return if you have earned more than £1000 in a particular tax year. You can register by following the link here .You will receive your 10 digit UTR number which you will need for when you will be filing your self assessment tax return. You can do it online before the deadline 31 Jan or you can submit your paper return before 31 Oct of the following year in which you started your business. You should keep proper records of your income and expenses such as bank records, receipts, record of your bills etc. This is to make sure that when you state your profits and expenses you have proper records to back that information. Income Income will include all the tuition fees received during the tax year. You might have some defaulters. We will include only the income received and not the income which is due to be received although you have incurred the related expenses, this means that your tax bill would be a little understated in one particular year although tax on that income can be charged in the following year. If you receive any security you should not consider it as your income, it is your liability which you need to return according to the set terms of the contract. Expenses that you can claim There are certain costs that you can claim as allowable expenses. This means that you can deduct these expenses from your income which can help reduce your tax bill. If you are tutoring online you can claim the following expenses: The taxes that you have to pay As a sole trader you pay the following taxes: For more information on how to set up a company contact our accountants at Taxaccolega at 020 8127 0728 and they can guide you on setting up the company and related taxes.
Running my side business as a Sole trader or a Limited Company? Which one will be more tax efficient?
There is no one answer to this question. Either of the business structures can be tax efficient; it just depends on your individual tax position. Let’s take the example of an individual who works in a company and runs a business as well. What taxes he might have to pay. In any case there are few basic points that you need to consider: How much are you earning from your full time work? This question is important to see if the salary uses up all the personal allowance. Each individual is given an annual personal allowance, for the tax year 2021/2022 the personal allowance is £12 570, this means an individual can earn tax free upto this amount. You will be charged tax if you are earning more than £12 570. This comes out to be £242 per week and £1048 per month. Mr. A works in a company and gets a salary of £20 000 a year. He doesn’t get any other benefits. He will be taxed through PAYE meaning he will get his salary net of the taxes. He will be taxed as follows: £ Salary 20000 PA (12570) Salary after PA 7430 Tax @ 20 % (1486) Salary after tax 18514 Mr A won’t have to pay any NI as his earnings are within the lower earning limit of £6, 240. How Profitable is your business? Taxes if you chose to work as a sole trader If you have your own business and you are working as a sole trader you will be given an annual trading allowance of £1000. You are not legally required to fill in the self assessment tax return and hence pay taxes if you are earning less than £1000 from your business. Mr A earns £5000 from his business. How much tax will he pay as a sole trader keeping in mind he has used up all his personal allowance. £ Income from business 5000 Trading Allowance (1000) Expenses (100) Taxable profit 3900 Income tax@ 20% 780 Income after tax 4220 If you choose to work as a Limited Company If you choose to work as a limited company the profits that you will earn from your business will be subject to corporation taxes. There is no tax free allowance available if you run a limited company and therefore all the profits will be taxed at 19%. So if Mr A is earning £5000 and the expenses total £100. We are keeping the expenses constant in this example although in reality the expenses in the limited company are more due to added admin and legal costs. Also if you have an employee and you are giving a salary that salary is also expensed and therefore reduce the tax bill. £ Income from the business 5000 Expenses (100) Taxable profit 4900 Income tax @19% 931 Profit after tax 3969 In this example Mr A will be paying more tax However, if he keeps anyone for administrative work, the salary given to that person will be expensed and that can further reduce the taxes. When you are running a company with employees, you are running PAYE, there are deadlines to meet, annual accounts to be made and submitted on time, many individuals prefer hiring an accountant. The accountancy fees is also an allowable expense and can be expensed. This further reduces the taxes. If you are looking to run a business and you need an accountant to sort out your finances and meet all the accounting and tax deadlines you can contact Taxaccolega, accountants in Croydon and accountants in South hall at 020 8127 0728.
Tax due in July as a sole trader – payment on account
If you are self-employed running your own business as a sole trader you will have to pay your income tax through a self assessment tax return. For your trading income that will fall in the tax year running from April 2020 to April 2021, the taxes on that income will be due in full on 31 Jan 2022. This means you are not paying at source. In order to make sure that the self-employed are not paying their tax bills in arrears HMRC has a system known as payment on account.You have to make these payments twice a year. You will be making these payments on accounts If your tax bill for a tax year is more than £1000, you won’t have to make these payments if your tax bill is less than £1000 or 80% of your income is taxed at source, for example if you are employed full time at a company. How does it work? Payment on accounts are the advance payments towards your tax bill which is due in Jan the following year. These payments are calculated by HMRC based on your tax liability for the previous year. You pay 50% of the estimated tax liability on 31 Jan and the other 50% of the tax liability on 31 July. The payments on account will therefore mean that the self employed person will end paying 150% of their tax bill in a particular year. These payments on accounts include tax on your trading income and class 4 NI. It will not include any capital gains tax or student loan tax. These taxes are then paid as part of the balancing payment on 31 Jan the following year. This can be best explained with an example below: Claire is a sole trader and her tax liability for the tradings in the tax year 2019- 2020 were £6000. Based on her previous tax bill she will make 2 advance payments of £3000 each. One on 31 Jan 2021 and the second on 31 July 2020. If her actual tax bill for the tax year 2020-2021 comes out to be £7500 then she will have to make the balancing payment of £1500 on 31 Jan 2022 along with the first payment on account of £3750 which is an advance payment towards her tax bill. Claire will have to pay a total of £5250 on 31 Jan 2022. It is therefore important that you understand your tax bills and set your money aside accordingly in order to avoid financial shocks. If you make an underpayment of your taxes you might have to face penalty charges which is an extra cost to your business. If you have a business in which the profits fluctuate or they are fluctuating because of any other reason such as Lockdown you can reduce your payments on account by simply filling in the form and letting HMRC why you want to reduce your payments on account. You cannot simply ask to reduce your payments on account because you cannot afford to pay the tax bill. If you want to sort out your taxes and stay worry free you can contact Taxaccolega at 020 8127 0728 and we will do the numbers for you. We make sure that all your taxes are calculated accurately and all your tax bills paid on time. We are accountants based in Croydon and Surrey and we can help you with the personal taxes as well as corporation taxes and liabilities.
I have crypto currency. Will I be paying taxes on it?
How you will be taxed on the cryptocurrency will depend on the nature and use of the crypto asset or the crypto currency as we normally call it. So What are CryptoAssets ? Cryptoassets are not any money or currency but it includes different tokens. All of these tokens work in different ways and they will be taxed differently. These tokens include Exchange tokens for example, bitcoin, utility tokens, security tokens and stable coins. Are you a business or an Individual? Different taxes will apply if the transaction of the crypto asset involves businesses and companies. If you are an individual dealing with crypto assets you will have different taxes that will be applied to you and we have discussed that below. IF YOU ARE AN INDIVIDUAL If you are an individual and you got crypto assets from your employer as a form of non cash payment you will have to pay the following taxes when you receive them: If you have bought cryptocurrency as an individual with the intention of selling it and making profit when the value of the cryptocurrency increases you will have to pay the tax on the disposal of asset. You will be paying tax even if you got the crypto asset from your employer and you sell it subsequently. The tax which is paid on the disposal is: you can report and pay Capital Gains Tax when you realise a gain in your self assessment tax return alternatively you can use Capital Gains Tax real time service to report it straight away. The disposal of an asset includes but not only selling but the exchange of the crypto assets as well. HMRC describes disposal as the following: You will not be considered as making a disposal if you are giving away the cryptocurrency in charity as a donation. In calculating Capital Gains Tax you are allowed to deduct certain expenses which can lower the tax that you will pay on the gain. These expenses include consideration originally paid for the asset, any transaction fees, advertising fees when looking for a purchaser, any professional costs involved this will include any fees paid to an accountant as well, costs of valuations. Calculating Capital Gains tax involves many other considerations and you might want to consult an accountant, we at Taxaccolega have experienced accountants who can calculate your taxes in the most efficient way and save4 you money. If you own crypto assets it will be considered your property and you will have to pay inheritance tax on it. All the rules of inheritance tax will apply as they apply on any property that you own. Other taxes involved can include stamp duty land tax but that only applies when the exchange tokens are given as a consideration for a land transaction. If you own cryptocurrency and you are worried about your taxes, you can seek professional advice at Taxaccolega, accountants based in Croydon, Surrey. Our team of accountants at Taxaccolega can advise you on the taxes that you are liable to pay, calculate the taxes for you and meet the tax deadlines. Please don’t hesitate to call us at 020 8020 8127 and we will be very happy to help you.
Employee Benefits and what are the related taxes?
The announcement in the budget that the income tax thresholds and the personal allowance will be frozen for next few years isn’t seen as an attractive deal for those who pay income taxes. This is because since the thresholds will not change with the inflation rate while the salaries do increase over the time, this will result in people being pushed in the higher income tax brackets. Employees might be looking for packages which include both the salary and some benefits in Kind which might make their salary packages a bit tax efficient. To attract good talent it has become increasingly important to include employee benefits in the salary package. WHAT ARE THE BENEFITS IN KIND? Benefits in Kind which are sometimes also referred to as perks or fringe benefits are the benefits that are given by your employer to you but it in addition to your salary. It works in a way that you will have access to the benefit which is actually paid by the company. WILL I BE PAYING TAXES ON THE BENEFITS IN KIND? Not all Benefits in kind are treated in the same way for tax purposes. Some are taxed and some are not taxed. If your employer is offering you the following perks you wont have to pay income tax on it so you will be saving some money there. Some tax free benefits are: However, you will be paying tax on the taxable benefits which will include paying tax on the cost of the insurance premiums if you are getting the medical insurance covered by your employer. If your employer provides you with loans of more than £10, 000 at reduced interest rate or zero interest rate you will be paying tax. In this case the tax will be paid at the difference between the interest rate that the market is providing and the interest rate that your employer provided to you. You will be paying tax on the company car which is being used privately. You will also be paying tax on the if your employer is providing you with the living accommodation. The general rule of thumb is if the company is providing you with the benefit and you are using it for personal use(with the exception of the small amounts that you will be spending on your meals and hot drinks at work) taxman will want you to pay them some cost. DO BENEFITS IN KIND SAVE YOU ANY TAXES? When an employee is paid a salary 3 types of taxes are paid With the introduction of the tax free employee benefits you wont be paying income tax and the NI as well. If an employee is being provided with the monetary benefit they will have to pay income tax on it however, they wont have to pay NI on it. On the other hand employer will be liable to pay NI on it. An employer can be benefitted as the Benefits in Kind are treated as an expense and can be deducted from the revenue. This can help them lower the Corporation tax bill. The tax rules for each benefit are different and they can get a bit complicated as well. Its always a good idea to consult an accountant . We at Taxaccolega are affordable accountants in Croydon and we can help you with your income taxes, property taxes, inheritance tax as well. Call us at 020 8127 0728 and we will be there to help you. Source: www.gov.uk