All VAT returns must now be submitted digitally using MTD compatible software (unless the business has an exemption) so the VAT penalties have been revised to fit with this new regime. In addition to the new penalties for late VAT returns (see above) there is also a new system of penalties for late paid VAT.
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The national minimum wage (NMW) and national living wage (NLW) rates are due to rise significantly for pay periods starting on and after 1 April 2023. These increases - the largest since the NMW began - are being introduced because inflation is running at around 10%.
Continue ReadingMaking tax digital for income tax self-assessment (MTD ITSA) was set to take effect from 6 April 2024. This has been postponed until 6 April 2026.
Continue ReadingMarketing companies know that personal letters sent directly to customers are more powerful than broadcast or printed adverts. HMRC is using this technique to recover unpaid tax.
Continue ReadingOwners and directors of family businesses often take a small salary from the company and any extra funds as dividends. Other family members may also hold shares in the company and receive a dividend each year.
Continue ReadingCompanies can currently claim super-deduction allowances set at 130% of the cost of new plant and machinery or 50% of the purchase cost of certain fixtures and fittings for buildings. These super-deductions will expire on 31 March 2023.
Continue ReadingCompanies can currently claim super-deduction allowances set at 130% of the cost of new plant and machinery or 50% of the purchase cost of certain fixtures and fittings for buildings. These super-deductions will expire on 31 March 2023.
Continue ReadingThe VAT registration threshold has already been frozen at £85,000 since April 2017 and it will now be fixed at that level until April 2026. The Chancellor made the point that the UK's VAT registration threshold is more than twice as high as the average in OECD and EU countries so be prepared for this threshold to be cut in the future.
Continue ReadingWhen the current Prime Minister was Chancellor he announced an increase in the main rate of corporation tax to 25% to apply to profits above £250,000 from 1 April 2023. Under the previous administration this decision was reversed but the 25% rate will now apply next year.
Continue ReadingProperties subject to business rates will be revalued in 2023. Where the value has reduced compared to the last valuation point in 2017 that will translate to a rates reduction from April 2023.
Continue ReadingThe annual tax on enveloped dwellings (ATED) applies where a residential property worth over £500,000 is held by a company and is not commercially let out or used for some other qualifying purpose. This tax currently starts at £3,800 per year but that starting rate will rise to £4,150 from April 2023.
Continue ReadingIn September's mini-Budget the then Chancellor announced that the entry threshold for SDLT payable on residential properties would double to £250,000 for deals completed on or after 23 September 2022. This higher threshold will apply until April 2025.
Continue ReadingCapital gains made by individuals are generally taxed at lower rates to income and taxpayers benefit from a separate annual exemption that covers the first £12,300 of gains made per year. This exemption will be reduced to £6,000 for the tax year 2023-24 and then to £3,000 for 2024-25. Any annual exemption unused in a tax year cannot be carried over to the next year.
Continue ReadingThe main income tax thresholds and allowances had already been frozen at the 2021-22 levels until 2026 and that has been extended to 6 April 2028. The main income tax rates are unchanged for 2023-24 at: 20%, 40% and 45%.
Continue ReadingIn 2023-24 the cut in the dividend allowance will cost a basic rate taxpayer £87.50; a higher rate taxpayer £337.50; and an additional rate taxpayer £393.50 assuming that these individuals would use the full allowance
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