Blog


 


Concerns grow as taxpayers go on blissfully unaware of tax changes


There is no hiding from the fact that huge changes to the tax system comes into effect from April, the introduction of the Personal Savings Allowance and the Dividend Allowance, will see radical changes to individuals tax bills, across all tax bands.


Many will find their employment income reduced, due to changes to tax codes, to compensate for their interest not being taxed at source, which for many will be inconvenient, savings is for growing and wages is for enjoying. An individual earning £45,000 and receiving interest of £4,000 could see a reduction in their take home salary of £116.66 per month or if not included in their tax code could find themselves with a tax bill of £1,400.


For those with lower income relying on their savings and the interest their savings generates, this could see them receiving tax bills for the first time. Usually individuals with earned income below their personal allowance and large savings income, would expect a refund of tax, but under the new regime, there is potential for huge swings. We are looking to advise our clients who fall into this category, one client who usually receives a refund of £1,600 is now expecting a liability of £3,600, a swing of £5,200!


With scenarios such as this, you would think HM Revenue and Customs would be taking every opportunity they could, to warn individuals of these implication, but unfortunately they have not. Also, the banks are advising on mass, that interest will be paid gross because of the Personal Saving allowance, but no individual, tailored advice is being given, so people could end up with a large tax amount to find. We are not the only ones worrying about this non-published potential issue, the House of Lords committee concluded, that HMRC’s communications strategy, is “inadequate”.

Subscribe to Updates

Subscribe to:

Have something to say? Leave a comment below.

Leave a comment   Like   Back to Top   Seen 2 times   Liked 0 times

Subscribe to Updates

If you enjoyed this, why not subscribe to free email updates ?

Subscribe to Blog updates

Enter your email address to be notified of new posts:

Subscribe to:

Alternatively, you can subscribe via RSS

‹ Return to Blog

We never share or sell your email address to anyone.

I've already subscribed / don't show me this again

Recent Posts

The Autumn Statement 2013 – Preview

| 22nd October 2018 | Blogging

The Autumn Statement 2013 – Preview The Government’s plans to secure the economic recovery are set to be revealed at the Autumn Statement 2013 on Thursday 5th December by Chancellor of the Exchequer, George Osborne. Whilst in Washington attending the International Monetary Fund’s annual meeting, Osborne told reporters: “I still sit round that table at the G-20 with one of the highest budget deficits. Britain continues to have some very serious public finance challenges that need to be addressed, and although we’ve brought the deficit down by a third it’s still too high. Where we’ve got resources available we’ve got to make sure we’re doing what we can to reduce the deficit.” The Office for Budget Responsibility’s forecasts in March this year, used as a basis of the plans, showed a prediction of 0.6% economy growth in 2013, prompting Osborne to say he will announce revised budget forecasts and details of new measures at the Autumn Statement. He also stated: “We have a clear economic plan; we’ve stuck to that plan. I’m very far from feeling the job is done. We’re still in the very early stages of the recovery.” Surveys suggest actual growth figures for 2013 were better than expected, seeing expansion of around 1.4% as opposed to the OBR’s prediction of 0.6%. Common preconceptions of what the Autumn Statement may reveal include further cuts to the annual pension allowance, a rise in personal allowance, a 5% drop in income tax for those earning over £150,000, an increase in National Insurance Contributions for the self-employed, and introducing the recognition of marriage within the tax system. What plans would you like to see revealed? Let us know on Facebook or Twitter!...

Seminar in September

| 22nd October 2018 | Blogging

Seminar in September On the 10th September 2013, we will be holding our biannual seminar, this time focusing on Cost Conscious Growth. The event will be held in Gravesend, Kent – featuring a welcome breakfast on arrival, key speakers and the opportunity to network with other industry professionals over drinks. A morning and evening session are available with the three professional speakers presenting at both. The speakers bring a wealth of experience from their different backgrounds: Finance, Marketing and IT. First to take the mic will be Simon Fenech, Sales Manager of Codestone, covering The Benefits of Moving to the Cloud. Then, Dean Spencer, Director of Grapevine Marketing, will show you how to prevail with Zero Cost Marketing. Last but not least, Joanna Trinder from King and Taylor will demonstrate how to keep your finances in order with Online Book Keeping. Increasing revenue is not the only route to profit margins! We want to help our clients reduce their outgoings on necessary business services.  At King and Taylor, we want you to learn from industry experts who can teach you about certain aspects that could be vital to the success of your business. There are many accountants to choose from, so we recognise the need to help our clients on more than just financial matters by interacting with them. This event is held twice a year and features a specific theme every time, if you would like details on the next seminar then contact us here. It’s not too late to attend the upcoming seminar! To view the event details and register your attendance, please follow this link....

Construction Industry Scheme

| 22nd October 2018 | Blogging

Construction Industry Scheme The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. For those contractors and subcontractors it is important to understand and comply with the regulations set out by the HMRC. The deadline for submission is 14 days after the end of the tax month. A key reminder for contractors: even if no subcontractors have been paid during a month, they still have to make a nil return. Employed or self-employed? Contractors must make a monthly declaration showing they have considered whether an employee is employed or self-employed. It is vital as the HMRC can be strict and impose a penalty of up to £3000, if they consider that negligent or incorrect information has been provided. It can be hard to declare which option title is correct, as many factors and stipulations apply, so please contact us for specialist advice: http://www.kingandtaylor.co.uk/contact-us/ Verifying with the HMRC The contractor has to contact HMRC to check whether to pay a subcontractor gross or net, not every subcontractor will need verifying. HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own records. These numbers are a fundamental part of the system and it is important there is a fool proof system in place for obtaining and retaining them. Payslips Contractors have to provide a monthly payslip to all subcontractors paid, showing the total amount of the payments and how much tax, if any, has been deducted from those payments. It is a necessary requirement that the contractors include certain specific information on the payslip, for more details on this and any other details regarding CIS please follow this link to see the full document:http://www.kingandtaylor.co.uk/wpcontent/uploads/2012/01/Construction_Industry.pdf or alternatively contact us via our website for expert advice....

VAT Annual Accounting Scheme

| 22nd October 2018 | Blogging

VAT Annual Accounting Scheme Over the years HMRC has introduced a number of VAT schemes helping small businesses reduce the burden of administrative duties. The annual accounting scheme means companies are only producing one VAT return a year, in comparison to the usual four. Instalments still need to be paid throughout the year based on the businesses annual liability. Application to join the scheme must be made on form 600(AA) which can be found at the back of VAT Notice 732. Eligibility for the scheme must be considered because certain stipulations apply. Firstly, a company cannot apply if their taxable supplies will exceed £1,350,000 within the next 12 months. Following this, businesses current VAT returns must be kept up to date and it is not possible to register as a group of companies. For further help with the term and conditions, please contact us for specialist advice. The amount required for the instalments needed to be paid will be advised by the HMRC but there are several payment options. Businesses that have been registered for 12 months or more will pay their VAT in nine monthly instalments of 10%, of their previous year’s liability. An alternative choice would be to pay their VAT in three quarterly instalments of 25% of their previous year’s liability, falling due at the end of months 4, 7 and 10. Get in touch so we can help you make the appropriate selection for your business. The scheme can help your business with budgeting and cash flow, and reduce the amount of paperwork, although, a possible disadvantage is interim payments being higher than needed because they are based on your previous year. For further information on the annual accounting scheme please follow this link: http://www.kingandtaylor.co.uk/wp-content/uploads/2012/01/VAT_Annual_Accounting.pdf. Also please contact us via are website, so we can help you plan your VAT administration and help you decide whether the annual accounting scheme would be beneficial for your business...