HLAS

It is also proposed that there will be a 1.25% increase in the rate of tax payable on dividends received by those who own shares in companies. This would mean that after the £2,000 tax free dividend allowance the rate of tax would be 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for those with income in excess of £150,000 a year. This will catch many family company director/shareholders who traditionally “pay” themselves by taking a low salary and larger dividends to minimise NICs. PLANNING ACTIONS BEFORE THE NEW RATES COMMENCE The announcement of the proposed [...]

The Prime Minister announced on 7th September that the government will introduce a new 1.25% Levy to provide an extra £12 bn a year to support the NHS and social care. From April 2022 it is proposed that there will be a 1.25% rise in National Insurance Contributions (NICs) to be paid by both employers and workers. This will then become a separate Levy on earned income from 2023/24 - calculated in the same way as NIC and appearing on an employee's payslip. Note that the 1.25% increase also applies to the Class 4 contributions paid by the self-employed on their [...]

With more employees going back to work after the end of CJRS furlough support, they need to start thinking about childcare if they have children. If they haven’t already done so employees should set up a “Tax-Free” Childcare Account to help pay towards the cost of childminders, breakfast and after school clubs, nursery fees and approved play schemes. For every £8 an eligible family pay into the special account the government adds £2, up to £2,000 a year, or up to £4,000 a year if a child is disabled. The scheme is available to parents or carers who have children [...]

The capital allowance legislation specifically denies tax relief for plant and machinery installed in a dwelling house. However, plant and machinery installed in the common areas of blocks of flats such as hallways, stairs and lift shafts would qualify as the flats themselves are the dwellings not the building as a whole. HMRC have recently confirmed their view that common areas in Houses of Multiple Occupation (HMO) are parts of a “dwelling house” and ineligible for capital allowance claims. This would seem inconsistent with the treatment of blocks of flats and there may be a test case on the interpretation, [...]

As the result in recent increases in petrol and diesel prices HMRC have increased the advisory fuel rates that apply for the reimbursement of employees' private fuel for their company cars. The same rates apply when the employer reimburses employees for fuel used for business journeys in their company car. The new rates apply from 1 September 2021, but you can continue to use the previous rates for up to 1 month from the date the new rates apply. Where there has been a change the previous rate is shown in brackets:- Engine Size Petrol Diesel LPG 1400cc or less [...]

The future of bookkeeping & accounting The accounting industry is moving at an incredible pace. Add in advances in artificial intelligence, and we are set to see many more changes! As accountants, this makes us incredibly excited – because it means enhanced customer experienced, greater data protection, easier and safer accounting processes, and a wealth of other opportunities. Read on as we explore how artificial intelligence (AI) is going to influence the future of bookkeeping – both in the short term and long term. The future of bookkeeping: Short-term opportunities In the short-term, AI technology will strive to lend a [...]

Though budgeting is key to your business’s future, it is not always easy – especially if you are self-employed, freelancing, contracting, or commission-based. One month you have work rolling in from every client – and the next month, you get barely any. While it is tough to budget on a somewhat unpredictable income, your business can continue to excel. Here is a little advice on how to budget on irregular income; we hope you find it useful! Practise good bookkeeping To budget effectively, you need to be able to view your outgoings with ease. We recommend using cloud-based software like [...]

What is the best cloud accounting software? A large portion of accountants and their firms now offer cloud accounting services (including us!). We have compiled a quick, non-exhaustive list on the reasons why you should try cloud accounting today. Automated payslips, invoices, P60s, P45s, you name it Centralised access to your accounts via a single dashboard Collaborate and share information with your personal accountant Compatible with essential payroll platforms (like Sage) Data accuracy and minimising the risk of submitting costly errors to HMRC Enhanced security & data protection Guidance from fully-trained accountants Integrated bookkeeping management Saves you time (up to [...]