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Posts Tagged ‘tax’

Did you know that 30th May is also known as “Tax Freedom Day” for UK residents?

According to the Adam Smith Inistitute, it has been calculated that for the average UK taxpayer, the 30th May is the first day when your 2013 earnings go into your own pocket.
Up until this date, all your earnings have effectively gone to the government in the form of various taxes.

This year, tax freedom day is a day later than last year, a sign that the tax burden for UK citizens continues to increase.

This date is calculated by measuring taxes and national insurance contributions as a proportion of the UK’s national income. This results in a figure of 41.5 percent, which in turn gives 150 days as a share of the year.

Tax freedom day varies depending on where you live. In Australia and the US it comes much earlier in mid April, but for citizens of France it isnt until July.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups.
We can also help with interim financial controllers for small and medium sized businesses.
Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or telephone on 01277 365447

Accountant BrentwoodTransform AccountingEssex Accountants

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car

It is common practice for employees to be reimbursed a reasonable rate per mile for using their own car whilst on company business.

HMRC issue a system of Approved Mileage Allowance Payments (AMAP) which applies to employees using their own vehicle for business journeys.

These rates are as follows;

  • Cars and Vans (first 10,000 miles pa) – 45p per mile
  • Cars and Vans (additional mileage above 10,000) – 25p per mile
  • Motorbikes – 24p per mile
  • Bicycles – 20p per mile

Whilst HMRC issue the above rates, it is still up to the employer to decide their own reimbursement rates.

If the employer pays more than the AMAP rates, then a benefit in kind has occurred and the benefit needs to be declared on an annual P11D form.

If the employer pays less than the AMAP rates, then the employee is entitled to claim tax relief for the shortfall (Mileage allowance relief).  This relief is also applicable to employees who are paid a company car cash allowance.

This tax relief is the difference between the AMAP rate and the company rate, multiplied by the number of miles claimed. For a higher rate tax payer who completes a large number of business miles, this recovery can often generate a significant tax reduction.

EG – An employee who completes 15,000 business miles and who is paid 14p per mile from his employer will collect;

15,000 miles at 14p per mile =   £2,100

However, HMRC allow this tax relief to be calculated at AMAP rates ;

10,000 miles at 45p per mile = £4,500, plus
5,000 miles at 25p per mile = £1,250 = £5,750

Therefore, an additional tax relief on £3,650 (£5,750 minus £2,100) can be claimed on your annual tax return.

For a higher rate tax payer, this results in a saving of £1,460

Bookkeeper HarlowTransform AccountingBookkeeper Essex

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tax return

tax return

January is the time of year when our attentions are may be focused on our new year resolutions such as getting fitter, losing weight or maybe paying off the credit card bill after Christmas.

Unfortunately for many, January is also the time of year when the annual self-assessment tax return can be put off no longer.  Some even resort to panic as the deadline and penalties for failing to file approach.

But there is an alternative to this stress.

Employ an accountant to make your tax filing on your behalf.

There are many advantages to this approach.

Firstly, a good accountant will be able to give you good advice to ensure that you do not pay too much tax. In many cases, the fees of the accountants are actually offset by paying a lower amount of tax. Be sure to choose an accountant who has up to date tax knowledge and qualifications, and one who will be able to give appropriate advice rather than just making a basic filing.

Secondly, a good accountant should prevent any last minute panics by making sure that you have timely reminders about when your returns are due, and should work with you to make sure that everything is filed in plenty of time. Remember, there are no downsides to making a return promptly and no advantages to filing at the last minute. Some accountants will even offer discounts to their fees for making a filing in the middle of the tax year rather than their busy period at the end of the year.

Thirdly – find an accountant who you are comfortable with. Some web based services can appear to offer the cheapest fees, but they will usually offer virtually no advice, certainly no face to face contact and you may find your return is handled by an unqualified office junior.  It is common practice for the cheapest web based services to e mail you a series of spread sheets for the client to complete, and then these are just processed and electronic tax filings are made.

Some clients may prefer a local, one or two man (or woman) qualified accountant who can provide a more personal service such as Transform Accounting, whilst others may prefer to visit a high street practice with multiple accountants and a wider range of services, but possibly higher fees due to higher overheads.

Whichever you decide is best for you, it is essential to find an accountant that you feel comfortable with and who can provide you with the appropriate financial and tax advice for your situation or business.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Accountant LoughtonTransform AccountingAccountant Essex

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taxreturn

The final day for filing a self-assessment tax return for the 2011-12 tax year is 31st January.

Care to know what the penalties are for missing the filing?

–          An initial £100 fixed penalty, which applies even if there is no tax to pay

–          If your return still isn’t filed after an additional 3 months, an additional penalty of £10 a day until the tax return is filed

–          If the return still isn’t filed after 6 months, a further penalty of £300 or 5% of the tax due (whichever is the greater)

–          If the return still isn’t filed after 12 months, a further additional penalty of £300 or 5 % of the tax due (whichever is the greater)

Remember, the penalties are for failing to file a return – they still apply even if you owe no tax or the taxman owes you money.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Writtle AccountantTransform AccountingEssex Accountants

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Recent surveys have shown that over a quarter of small business owners are still unaware of incoming changes to the way PAYE tax details must be filed.

And even more worrying, in the survey of 1,700 small businesses by the Federation of Small Businesses, only 16% of business owners stated that they were fully aware of what Real Time Information meant for their business and had made the appropriate preparations.

There is now less than 6 months before the changes are due to come into force in April 2013.

The survey also reported that of the firms that had prepared for RTI, over 30% had to buy new payroll software for their business.

If you have any concerns regarding Real Time Information and how it might affect your business, be sure to discuss this with your accountant in good time before April 2013.

Accountant EppingTransform AccountingEssex Accountants

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The wholesale price of a litre of petrol fell from 54pence at the beginning of October to 45pence at the end of the month.

Wouldn’t it be great if that was the price that motorists could pay, but the “wholesale” price is the price that retailers pay for their petrol before adding profit margins, fuel duty and VAT and selling it on to the UK’s motorises.

So, if the price to retailers has fallen by nearly 10pence, how much has the cost to consumers fallen in that same time period?

The answer? Less than 4p.

Something seems very wrong here, as VAT should have increased this difference from 9p to 11p, not decreased it to 4p.

So where has this difference gone?

There is very little transparency about wholesale fuel costs so it can be hard to identify where the blame lies. The obvious candidate is fuel retailers, but in the summer the Daily Telegraph newspaper identified that motorists had been paying too much for their fuel because banks and other traders are likely to have manipulated oil prices in the same was as they rigged the libor interest rate.

Calls from groups such as the Automobile Association for the Chancellor George Osborne to get a grip on price manipulation are now increasing in volume, but for now, it appears that an increase in fuel prices is passed on to the motorists almost immediately whilst a fall in the wholesale price seems to take an age to be seen at the pumps.

Accountant ChelmsfordTransform AccountingEssex Accountants

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Pressure on Chancellor of the Exchequer George Osborne to scrap the planned 3p per litre increase in fuel duty has increased in recent weeks.

The tax increase was originally supposed to be introduced in August, but was postponed by the Chancellor for five months in light of the poor economic performance in the UK.

Even the chairman of Asda, one of the UK’s largest supermarket chains and fuel retailer has joined in these calls. Andy Clarke reminded the Chancellor that the rise would come at the worst time for families facing rising energy costs. “With households feeling the cost of Christmas and energy price rises”, now was not the time to put more pressure on spending by raising fuel costs.

But as to whether the chancellor listens to these calls, or can afford to abandon the proposed rise remains to be seen.

If he remains resolute with his plans, remember to fill up on New Years Eve !

Accountant BrentwoodTransform AccountingEssex Accountants

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