Watson Knipe Blog

Bookkeeping is a necessary task for all small businesses, and when not completed properly it can lead to chaos and confusion. The coming New Year is a great opportunity to get organised and sort out your accounts for the coming year.

If you are a man born on or after 6 April 1951 or a woman born on or after 6 April 1953, you’ll be able to claim the new State Pension. However, if you reached State Pension age before 6 April 2016 you’ll get it under the old rules instead.

Business owners of limited companies can maximise their earnings post-tax by paying themselves a low salary along with the balance in dividends from their company’s profits. However, from April of this year, the 10% dividend tax credit was abolished and replaced with a new dividend tax allowance of £5,000 per year.

Most people know that the tax year is from 6 April to 5 April the following year, but there are other dates you must be aware of especially if you are required to fill out a self-assessment tax return. If in the last tax year you were self-employed, a company director, lived abroad and had a UK income.

On Wednesday 23 November 2016, Chancellor Philip Hammond presented his first, and last, Autumn Statement along with the Spending Review.

His speech and the supporting documentation set out both tax and economic measures.

For GP practices and medical consultants, it is very important to know what your tax liability is. Establishing what the correct amount of tax to pay is for your company could make the difference between a practice with successful cash flow and one that fails. By working with a firm like Adcock Accounting, you can help maximise your allowance and claims and therefore reduce your tax liability.

Being self-employed means there is a lot to take on and remember. One of many being that your business will have various running costs. Allowable expenses are one to take note of as you can deduct some costs to work out your taxable profit.

A key part of running a business is effective record keeping. Why? Because it can help you run your business much more efficiently as well as saving you time and money if you are on track with all your records. If you fail to follow legal obligations for tax purposes, you may be fined up to £3,000 for inaccurate records.

There are lots of reasons why you may have to complete a Self Assessment tax return.  For example, if you are self-employed, a company director or have high earnings.  The HMRC uses Self Assessment as a method of collecting Income Tax.

If you are a dentist it is worth finding out the different business structures that you can practice under. A possible route is moving your dental practice to a limited company, or to incorporate a new practice as a limited company.

For NHS consultants it is important to know what you can claim tax relief on. HMRC states you can only claim on things that are used for work and it is possible to claim tax relief if you have had to use your own money for job-related matters.

As an employer, it is important to know that every working person in the UK is paid under the PAYE system, and are assigned a tax code by the HMRC. The code is made up of a number followed by a letter suffix. However, there are some ‘non-standard’ codes that can be used in exceptional circumstances.

Did you know that as an employer you could get up to £3000 a year off your National Insurance bill?  In previous years the employment allowance was £2000 but in 2016-17 this went up to £3000 as an incentive for companies to take on more staff. 

If you run your own business, are a company director or a high net worth individual you will need to complete a self-assessment tax return each year. This can always be a stressful time, especially if you haven’t kept all your financial records in order.

Continuing on our theme for the month about changes that will impact anyone that owns rental properties we wanted to give you more information about the changes in tax relief and the wear and tear allowance.

If you are a landlord, you need to be aware of your financial commitments when buying a property and when you sell it. When you purchase a property as a landlord, you will also need to pay stamp duty.

In April 2016 anyone that buys a second property will have to pay an extra 3% in stamp duty.  This additional stamp duty is payable by anyone buying a second home worth more than £40,000.  This applies if someone relocates and decides to rent out their first property right through to investors that own some buy-to-let properties.

As you probably already know you can get tax relief on your pension.  The amount of tax relief can vary depending on your level of earning.  Plus there are annual and lifetime limits to how much tax relief you can get on pension contributions.

All employers have to automatically enrol their eligible employees into a workplace pension scheme.  However, it is important to note that an employee can decide to opt out of a pension scheme if they do not want to take advantage of this. 

Accounting standards are used to prepare financial statements of all companies. These allow the companies, their investors and other regulators a standardised way of measuring financial performance. 

Essentially it is a system in which employers must automatically enrol their employees onto a pension scheme if they are eligible. In the past, many workers have missed out on the potential benefits of having a company pension.