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News,May 2018

Small Business Tax

A Simple Guide Based On Small Business Tax!

16/05/2022Tax Issues , Tax Saving Tips , Taxation

Individuals who are associated with sole trading or small businesses in the UK are mostly aware of small business tax. You might know about these several types of taxes like VAT to PAYE, however, this does not mean you are certainly sure about which one applies to your structure of the business. It mostly depends on the type of business your company carry out and then your business performance. This will help to measure the statistics and eventually narrow down to reach the tax type that applies to you. So, it is important to learn what are the unique circumstances you have at work and what pertains to those specific needs. Moreover, this comprehensive guide will explain the following: Learn Multiple Types of Small Business Tax  The Suitable Type of Tax for Your Business Structure Wrap Up Learn Multiple Types of Small Business Tax The requirement of tax depends upon the type of business structure you have. Your business profits and income will also make a difference in the specific needs of your company. It is better to consider all the small details like your business is offering services or selling products as well as other specific conditions. It has been observed that people find it way complicated to figure out the suitable category for their specific business needs. Before delving further into the discussion, we will outline the possible types of small business tax types that your business might require to pay. Furthermore, this will help you to know the tax relief that you can claim and enjoy the benefits for your business. Here is a comprehensive overview of the types of tax. National Insurance Income Tax PAYE (Pay As You Earn) Business Rates Value Added Tax (VAT) Corporation Tax National Insurance: This is applicable when you are eligible for government benefits like state pension and others. Income Tax: This is a kind of tax that is on the business income and it has to be paid by the company if it is applied to it. PAYE (Pay As You Earn): A business that has a requirement to hire employees. This type of tax is applied to the income that is deducted from the employees’ salaries. Business Rates: At times your business is run with the use of non-domestic properties. If this situation relates to your business practices, tax on non-domestic properties is applicable to you as well. Value Added Tax (VAT): VAT is required if your business turnover exceeds £90,000 in a 12-month period. Corporation Tax: This kind of tax refers to the tax that is applicable to business profits and is paid by the corporation. We’ll help you get your VATs sorted out, get all your taxes filed on time, and let you know when you’re overpaying for any of them.  Talk to our chartered accountants in Croydon today! The Suitable Type of Tax for Your Business Structure After reviewing the type of tax, you must be wondering about the suitable type that applies to your business structure. This depends on the legal structure you choose to carry out your business. This could include any one of the following: Sole Trader Partnership Private Limited Company Sole Trader: The taxable business profits come from the business, a sole trader has to pay tax on it. This is also a part of self-assessment. This practice is done on annual basis. The tax-free personal allowance limit has to be considered. If you are making any figure beyond this limit, you will have to pay income tax. Private Limited Company: The limited companies are liable to pay corporation tax on the profits that they are making. The good news is that you can claim certain tax reliefs on corporation tax as well. Some examples include the following: Creative Industry Relief, it is mandatory to pass the cultural test to get this relief. Some examples of such creative industries are video game production, museum and qualified galleries, and film production companies. Research and Development Relief is applicable when you intend to work with the creative advancement in your field or a project that is mostly related to technology and science. Property and income loss relief is applicable when you are struggling with property income loss. The disposal or sale of a capital asset also makes you eligible for this relief. Trading loss in the case of publically trading can make a claim as well. Partnerships: Normally the partnership directors are happened to be self-employed. The share of profits also comes under the responsibility of paying income tax. Here it is important to consider taxable income and personal allowances. Are you stuck with your taxes? Feel free to get our guys on a quick call. Call us on 020 8686 8876 or email us today. Wrap Up Finally wrapping up the discussion of small business tax since you have gathered important information that can help to build a basic understanding. The tax process is often considered complicated and we have tried to make it simple in these few minutes of reading. This can work as a roadmap to figure out the suitable type of business for your business. If you are still in doubt as to when it is due or how much you owe to pay, you can always seek additional help from professionals. We hope this guide will help you to make the right decisions in order to avoid any tax complications in future. Disclaimer: The information about small business tax provided in this article is general in nature. It does not intend to disregard any professional advice.

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Tax On Second Job

Second Job Tax: How to Pay Tax on Second Job

20/04/2022Budgets & Other , Tax Issues , Tax Saving Tips , Taxation

Wondering about second job tax and how it might affect your income? If you’re thinking about taking on a second job, it’s important to understand how taxes work—so you don’t underpay or overpay. Whether you’re doing it for extra income, to support your household, or simply because you enjoy it, knowing your tax responsibilities will help you avoid surprises. Let’s explore the basics, how much tax you pay, and how to stay on top of it all. The Basics: Can I Take a Second Job? Before you start working a second job, consider these important points: Check your current employment contract. Some employers include clauses that restrict taking up additional employment, especially in similar industries or if it might affect your performance. Understand the working hours. Taking on more hours may affect your wellbeing or work–life balance. You must be paid at least the National Minimum Wage in both jobs. There’s no law stopping you from having a second job, but make sure it doesn’t breach any of your primary job’s terms and conditions. How Much Tax Do I Pay on a Second Job? In the UK, HMRC considers your highest-paying job as your main job and applies your personal allowance (£12,570 for 2025/26) to it. Your second job is usually taxed at the basic rate (20%) from the first penny you earn, as it doesn’t get any personal allowance. This is done using a tax code—typically: BR (Basic Rate – 20%) D0 (Higher Rate – 40%) if your total income is above £50,270 D1 (Additional Rate – 45%) if your total income is above £125,140 Example: If you earn £10,000 from your first job and £6,000 from your second job: Your first job will be tax-free (under personal allowance). Your second job income will be taxed at 20% using BR code. If your total income from both jobs pushes you into a higher bracket, HMRC may change your second job tax code to D0 or D1. How to Avoid Underpaying or Overpaying Tax To stay accurate: Tell HMRC when you start a second job so they can assign the correct tax code. Provide a P45 from your first job or complete a starter checklist for the second job. Check your tax codes on your payslips. Your main job should have a code like 1257L, and your second job should have BR, D0, or D1 depending on your income level. Review your income regularly to ensure you’re not pushed into a higher tax bracket unknowingly. Can I Split My Personal Allowance Between Jobs? Yes—but only if your total income from both jobs is below the personal allowance (£12,570). You can ask HMRC to split your personal allowance across both jobs so you don’t overpay tax. You’ll need to contact HMRC to arrange this. National Insurance (NI) on a Second Job You also need to consider National Insurance contributions: You pay NI separately on each job. If you earn more than £242 a week in either job, you’ll pay Class 1 NI at 12% (for earnings between £242–£967). If you’re self-employed for one job, you’ll pay Class 2 and Class 4 NI through Self Assessment if profits exceed £1,000 per year. What If My Second Job is Self-Employed? If your second job is freelance or self-employed: You must register for Self Assessment with HMRC. Submit an annual tax return by 31 January. Pay tax and National Insurance (Class 2 and 4) based on your profits. Even if your self-employed income is less than £1,000, it’s good to keep records and check whether you’re eligible for the trading allowance. Conclusion Now that you understand how second job tax works in the UK, you’re in a better position to plan your finances. The most important things to remember are: Inform HMRC as soon as you take on a second job. Watch your tax codes and total income to avoid overpaying or underpaying. Consider the impact of National Insurance and higher tax brackets. Need Help with Tax Codes or a Second Job Setup? We advise on personal tax, prepare tax returns for sole traders and directors, and help you manage your PAYE jobs correctly. Our accountants in Croydon are happy to help. Disclaimer The information in this article is for general guidance only. It does not replace professional advice tailored to your circumstances.

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Property Income Allowance

What is Property Income Allowance?

05/01/2022Landlord , Property , Tax Issues

The income you earn from land or property, along with the rental income gained from renting a part of a flat or house (like a single room) is known as property income. It also includes income generated from caravans or houseboats. Similar to other incomes, it is also taxed in the UK, unless the property qualifies for reliefs or allowances. The amount of tax you need to pay on this income will be subject to your income tax band. In this blog, you’ll learn the what are tax rates for property income, what is property income allowance, when you can’t use this allowance and what records you may need to make a claim? Let’s explore! We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today. What Tax Do I Need to Pay on my Property Income? The income tax band determines the rate of tax you need to pay. The rates of property income are the same as those of your personal. However, you may fall under the higher rate band if your property income and other income are added together. Here is the income tax you need to pay as per your income tax band:     What is Property Income Allowance? It is a standard allowance or tax exemption on which no property tax is payable. Currently, in 2021-22, you get a tax free allowance of £1,000 a year (from 6 April 2017 onward). If your income is below this allowance, you don’t need to inform HMRC or declare any tax return. However, sometimes you need to complete a tax return even if your income is below £1,000. But, if it’s higher you need to declare your property income and complete a tax return. And you may need to file a tax return for other income. You must inform HMRC if: your property income is more than the property allowance from £1,000 up to £2,500 the property income is more than £2,500, you need to register for self-assessment Want to register for Self-Assessment? Allow us to do the hassle on your behalf. Save your time by filling out this form and let us handle everything!  In case, your annual gross property income from one or more sources is over £1,000 you can still use these allowances, instead of subtracting any expenses or allowances. With this allowance, you can subtract £1,000 from your income as partial relief which should not be over your income. If you find that your expenses are over your income, you need to consider availing of expenses instead of the allowance. And, if you own property jointly, you’re each owner is eligible for the allowance as per the share of the rental income. When You Can’t Use this Allowance? You are not eligible to use the property allowance if you are making income from: employment (your employer/employer of your spouse/civil partner) a partnership where you or someone associated with you are partners a company owned or controlled by you or someone associated with you You are also not eligible to use property allowance if you: deduct expenses from income by renting a room in your own home, rather than availing Rent a Room Scheme claim the tax reducer for finance costs (such as mortgage interest for residential property) Records to Keep for Property Allowance You need to keep records of your income to claim for this allowance. Records may include: a spreadsheet of your income receipts copies of your invoices (both paper or electronic) bank statements emails indicating income earned bank deposit pay-in records statements from the company who make payment to you a diary/appointments book showing your income from the customers When Do You Need to Contact HMRC? You need to get in touch with the Income-tax helpline if: you don’t know whether you are eligible for this allowance or not you’re not registered for self-assessment and have paid tax via PAYE on some of your property income (you may be due a refund) Quick Sum Up So, that’s all about the property income allowance that is £1,000 for the year 2025-26. The tax you will pay on your property income would be the same as your personal income. However, you may fall within the higher rate tax band when your property and other income is combined. You don’t need to file a return if your property income falls below the property allowance. And make sure to keep records to provide HMRC with proof of your property income. Our property accountants are reliable and transparent. If you need any help with accounting, tax payroll, and other finance-related issues. We will solve your tax issues in no time and at an affordable price! So, contact us now! Disclaimer: The information is taken from the HMRC and is intended to provide general information.

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How to Avoid Capital Gains Tax on Gifts

How to Avoid Capital Gains Tax on Gifts?

03/01/2022Tax Issues , Tax Saving Tips , Taxation

If you are wondering how to avoid capital gains tax on gifts, you’re in the right place. You might have heard this many times that gifting a property will cut down or eliminate the capital gains tax. But this assumption is not correct with every person to whom you gift. As the gift should be only given to a specified person or organisation to avoid CGT. In this quick post, you’ll learn what is CGT, and how to avoid it. So before discussing how to avoid capital gains tax on gifts, let’s start with when you actually need or needn’t pay capital gains tax.   If you are stuck with accounting or tax issues, particularly the CGT? How about speaking to us via a call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today.   Understanding Capital Gains Tax (CGT) Capital gains tax or CGT is the tax levied on the profit when you sell or dispose of any asset that has increased its value since it was bought. CGT is only payable on the gains you made not on the amount you receive while selling or disposing (or gifting) of any assets. You don’t need to pay CGT on the assets that are non-taxable and if the gains you made are below the tax-free allowance in a year.   When Do You Need to Pay CGT? Here are the circumstances where you need to pay CGT on the gain when you sell or dispose of: a property that is not your main residence or home shares that are not in ISA or PEP assets of your business most personal possessions worth £6,000 or more, apart from your car your main home if you’ve rent it, used for business or it’s very large The assets listed here are all considered chargeable assets.   When You Don’t Need to Pay CGT? In addition to the gain on the non-taxable assets, you don’t need to pay CGT on gains above any tax-free allowance (£12,300. £6,150 for trusts). Furthermore, when you gift something to your spouse, civil partner or a charity, you are not required to pay this tax. Let’s dig deeper into it. Find out: CGT rates here!   How to Avoid Capital Gains Tax on Gifts? Here are some ways to avoid capital gains tax on gifts:     Use your CGT allowance of £12,300 (2021-22) Offset against losses over gains Transfer your assets to spouse or civil partner Contribute to a pension Gives shares to charity Use your annual ISA allowance Reduce your taxable income Spread gains over tax years Invest in small companies   Have a query or need more help? Get help from our accountants to find out how to avoid CGT!   CGT on Gifts to Your Spouse The gifts you made to your spouse or charity are exempted from capital gains tax. It means that you don’t pay Capital Gains Tax on those assets you sold or gifted to your spouse or civil partner, unless: you gave them goods for their business to sell on you separated or divorced and did not live together at all in that tax year However, your spouse or civil partner need to pay tax on the gain if they further sell or dispose of the asset. You can work out the gain by subtracting the value of a first owned asset with their value when they’re disposed of or sold. You also need to keep records of the documents as evidence.   Gifts Made to Charity Assets that are sold or disposed of to the charity are exempted from CGT. If you fall within both conditions, you may be liable to pay if you sell an asset to charity: less than market value more than you paid for it Calculate your gain according to the amount you are paid by the charity, rather than the asset’s actual value.   Quick Sum Up Hopefully, you have got a basic overview of what is CGT, when it is taxed, when you don’t need to pay it and how to avoid capital gains tax on gifts. So, by using the above tips, you can save thousands of pounds. With careful planning and by taking the help of our accountant, you can reduce your CGT effectively without getting into any tax avoidance or evasion.   Contact us right away!   Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your CGT issues! So, allow us to do this at an affordable package!   Disclaimer: This blog is just written for general information and should not be taken as expert financial advice in any form.

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benefits of being vat registered

What are the Benefits of Being VAT Registered?

23/11/2021Tax Issues , Taxation , VAT

When setting up a new business, some people may think that it is necessarily important to register for Value Added Tax (VAT). But, you need to know that it is not mandatory to register, provided that your VAT taxable turnover is over £85,000 (VAT threshold). However, even if your annual turnover is below the threshold, you can still register for it voluntarily as it comes with a lot of advantages. There are a lot of benefits of being VAT registered. As it helps your new or emerging business to appear more professional and stable in the business world. So before we delve into the benefits of being VAT registered, let’s see what is VAT?   Want to register for VAT? We’ll take care of everything from scratch to acquire your VAT number. So, fill out this form and leave the rest on us!   What is VAT? VAT, Value Added Tax is a consumption tax on products and services collected by businesses on HMRC’s behalf. All businesses having a VAT taxable turnover of over £85,000 need to register for it. For businesses that are VAT registered, VAT is charged on the majority of all goods and services they provide. In addition, this tax is also charged on the goods and services imported from EU or non-EU countries. This tax is added to the sale price of things sold to commercial and non-commercial businesses. Businesses that are VAT registered can claim back the VAT paid to their suppliers or other businesses. Now let’s see the benefits of being VAT registered!   Benefits of Being VAT Registered This question is often asked by many new businesses that why there is a need to register for it if their turnover is below the VAT threshold. There are many advantages of doing so as it has a lasting impact on the financial health of your business. There are a lot of benefits of being VAT registered:     Improve Your Business’s Credibility To appear an established business and to improve your perception, you should consider registering for VAT voluntarily. As many businesses know that £85,000 is the VAT registration threshold. If your business is not VAT registered, your competitors will know that its turnover is lower than the VAT threshold. So, it is a great way to improve business credibility and to appear a large business in the eyes of your clients and competitors. Access to VAT Registration Number By registering for VAT, you can display your VAT registration number on all the business documents, and its website to show the public that you are a VAT registered business. It improves your credibility and provides others with a trustworthy image of your business. Increased Cash Flow One of the other benefits of VAT registration is better cash flow. Once your business is VAT registered, you can claim back your VAT costs. The higher your set-up costs, the more you can claim them back. All the costs you put in on your business like getting stocks, investing in technology, or getting professional services, so getting these costs back can be a life-saving step. Claiming VAT Refunds Your business will be able to reclaim the VAT that you paid for. If your input tax (VAT paid) exceeds the output tax (the VAT you charged), you can claim the difference from HMRC. When you invest in buying machinery, plant or equipment, you can reclaim a large amount of VAT. While submitting your VAT return, you may find that you can reclaim a lot from the HMRC.   Need professional advice from a VAT accountant? Get in touch with our experts today!   Reclaiming VAT from the Past Once you are registered for VAT, you can get the advantage to claim VAT for the last 4 years on the things you still use. To do it, you need to be VAT registered for a considerable time and keep all the records, invoices and receipts of the past 4 years. More Work Opportunities Many investors, buyers, lenders, and clients prefer to work with VAT registered business. So by registering, you will open doors to more business opportunities to widen your business spectrum.   Quick Sum Up Now that you are well aware of the benefits of being VAT registered, you can improve the position of your business by registering for VAT.  You can register for it directly on HMRC’s website or by filling out the VAT1 form. However, the process can be daunting, therefore allow us to register your business for VAT to avoid the hassle.    Register For VAT today!!!   CruseBurke offers inclusive VAT services at a reasonable price! Contact our qualified VAT accountants and sort out your VAT issues in no time!   Get an instant quote right away!   Disclaimer: This blog provides general information on the benefits of being VAT registered.

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What is Child Benefit

What is Child Benefit and How to Claim It?

15/10/2021Finance , Tax Issues

If you want to raise your family budget and you’ve just had a baby, you can claim child benefit anytime, but it is better to do so before the infant is three months old. You still need to apply, even if you believe that you won’t get anything. In this way, you won’t fail to take advantage of this benefit. Let’s explore what is child benefit and how you can claim it?   What is Child Benefit? If you’re parents or bringing up a child as a guardian, there’s a certain amount of money you’ll get as a child benefit. These rules apply to England, Wales, Scotland and Northern Ireland.  Essentially, this benefit is non-taxable, but if you or your partner earn over £50,000 (higher rate taxpayer), you need to pay tax on it.    Don’t have time to claim Child benefit? Turn to us! Rely on CruseBurke to take care of all your tax and financial issues. Contact us right away!   Can You Get Child Benefit? You are entitled to receive this benefit if you are responsible for bringing up a child who is: aged below 16 under 20- if they’re in approved full-time training or education You won’t get this benefit if your child: starts a paid job for up to 24 hours or more in a week is not in approved full-time education or training. starts apprenticeship gets certain benefits in his/her own right   How Much Can You Claim as Child Benefit? Currently, in 2021/22, there are two child benefits rates that you can get. You can claim: £21.15 a week for your first or eldest child £14 a week for additional children It means that you get over £1,000 a year if you have one child, and an additional amount of £800 for second and more children.   Manage your individual and business finances with CruseBurke. Just let us know your need for affordable financial services tailored to your business needs!    How to Claim Child Benefit? To claim a child benefit, you need to send the form (CH2) to Child Benefit Office. You can get the online form here on the government website. If your child is born outside the UK or Northern Ireland, you need to provide the original birth certificate of the child that will be returned. Other than that, you don’t need to send your child’s birth certificate. For adopted children, send the original adoption certificate.   How You Get Paid a Child Benefit? You’ll be paid this benefit directly to your Bank or Building Society account. You get the payments every four weeks, but it can be paid weekly for people who’re single parents or get: income support income-based Jobseeker’s Allowance income-based Employment and Support Allowance universal or Pension Credit   What Happens Next? When your children turn 16 until the 31st August or are 20 if they stay in education or training, you’d not receive the child benefits. When your child turned 16, HMRC will ask via a letter whether your child will stay in training or education or not. You need to respond to this letter to keep receiving the child benefit. You also need to inform HMRC if your family circumstances change, for instance, you are separated from your partner or your child moves out. If you or your partners earn above £50,000 a year, you might need to pay more tax. It only starts in April after you claim. In case, you disagree with HMRC’s decision or your claim is rejected, you can ask for ‘mandatory reconsideration   Quick Sum Up We hope now you have got a good understanding of what is child benefits and how to claim it. You need to apply for it to get over £1,000 a year if you have one child and £800 if you bring up more than one child. To claim it, just need to send the CH2 form to Child Benefit Office with the required documents. Then, you’d be entitled to get this benefit directly to your account after every four weeks or on a weekly basis. Higher rate taxpayer’s earnings above £50,000 a year might need to more pay tax.   Want to boost your savings? Optimise your finances with CruseBurke. We provide cost-effective accounting, taxation, and payroll services at affordable prices. Contact us today!   Get an instant quote now!   Disclaimer: This blog is intended to provide general information on Child Benefits.

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How to Avoid Emergency Tax

How to Avoid Emergency Tax? A Basic Guide!

07/10/2021Tax Issues , Tax Saving Tips , Taxation

When you start work and fail to provide accurate and complete details to your employer, he will deduct the emergency tax from your paycheck. In addition to that, you will also pay an emergency tax on your pensions. So, read this blog to know how to avoid emergency tax and stop paying this. Reduce your business burden by letting us manage & record your finances! Our team could help you claim what is rightfully yours! So, Contact us now! What is an Emergency Tax? It is a tax that is charged by HM Revenue & Customs to your salary. It is charged when HMRC does not have enough details about your income and tax for a year. The other reasons for paying an emergency tax are as follows: If, after being a self-employed person, you have started working for an employer. If you have started a new job. If you have started getting benefits or state pension. How to Know if You are On an Emergency Tax Code? In order to know whether you are on an emergency tax code, check your payslips. HM Revenue & Customs will charge you emergency tax if your payslip contains any following tax codes. 1257 W1 1257 X 1257 M1   What is the 1257 Emergency Tax Code? Within the United Kingdom, almost everyone is authorised to a tax-free personal allowance. It means that a specific amount of your profits is paid to you every year without any tax charged on it. You will be provided with a tax-free allowance which currently stands at £12,570 if your tax code is 1257. It means that you will pay tax on anything above this threshold. This is because HM Revenue & Customs turned in the personal allowance of £12,570 into this tax code. Therefore, it simply means that you can earn £12,570 before paying tax if you have this tax code. How to Avoid Emergency Tax? The simpler way to avoid this tax is to provide a P45 or information about your previous income and tax payments to your employer. This information will tell about your paid tax in the last job to the new employer. Then, he will inform HMRC about these details. HMRC will send a Pay As You Earn (PAYE) coding notice to provide the correct tax code to your new employer. Then, on the recent payslip, this new tax code will appear from your employer. In case you do not have a P45, your employer will have to complete a Starter Checklist. This will assist your new employer in allocating a tax code to you that will be forwarded to HMRC. How Much Will You Pay in the Emergency Tax? This totally depends on your earnings and emergency tax code. It implies that you will be taxed on anything above your basic personal allowance (£12,570). Your personal allowance will not be taken into consideration if you have the BR code. You might pay up to fifty percent of your salary as an Emergency tax (the max it can be). Therefore, it is better to prevent emergency tax as you have to pay a high amount of tax. What is the Method to Prevent the Emergency Tax? You can stop paying emergency tax by the following method. The emergency tax code may imply that you have overpaid tax in the past; in this case, the HMRC will refund any overpayment of tax. You can call HM Revenue & Customs directly in case you have been working with your new employer for above three months and still paying the emergency tax. Final Thoughts After knowing about how to avoid emergency tax and the method of not paying an emergency tax, we will conclude our blog by saying that HMRC will charge you emergency tax if you fail to provide your new employer with your income and tax details. However, in order to avoid paying an emergency tax, it is crucial to provide these details. You can also claim back overpaid taxes, although avoiding emergency taxes is better. Turn to CruseBurke for managing finances and for claiming overpaid taxes! We have a team of skilled accountants who will handle everything with HMRC on your behalf. Contact us right away! Disclaimer: This blog contains general information about how to avoid emergency tax.

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how to claim overpaid tax

A Guide Based on How to Claim Overpaid Tax from HMRC?

06/10/2021Payroll & PAYE , Personal Tax , Tax Issues

If you are looking for a significant source to know about how to claim overpaid tax from HMRC, then you just have found the right post. First, we will see the P800 tax calculation process of HM Revenue & Customs. This means that HMRC will automatically issue any tax repayment; you don’t have to claim it. But, you will need to make a claim in case you have overpaid tax and did not receive a P800 tax calculation from HMRC. Continue reading this blog to know more about how to claim overpaid tax from HMRC. Turn to CruseBurke for managing and recording finances and for claiming overpaid taxes! We have a team of skilled accountants who will handle everything with HMRC on your behalf. Contact us right away! When can I Overpay on Employment Income & Pension Income? If you get a pension income or employment income and pay your tax via PAYE, you might overpay tax. You can pay too much tax on employment income if: Your employer was utilising the incorrect tax code. At the same time, you have more than one job. Other income which HMRC taxes through your tax code has decreased. Your situations changed; for instance, you switched from part-time to full-time work. You have a new job, and for a time, you had an emergency tax code. You are a pupil who works during off days. You ceased working and had no taxable income or benefits for the remaining year. For a portion of the tax year, you have worked. You can overpay tax on pension income if: Your taxable income has decreased; You had more than one pension (more than 1 source of PAYE income). You overpaid tax on a total pension sum. Your pension provider was utilising the incorrect tax code; Your tax code contains the incorrect amount of state pension. What is a P800 Tax Calculation? The HMRC will get details about your total received income, amount of tax paid, and the value of received benefits-in-kind within the tax year from your employer or pension provider. With the help of this information, HMRC will automatically carry out a reconciliation in order to calculate you have paid the correct amount of tax. You will receive a P800 tax calculation by HMRC if they think you have not paid the correct amount of tax. Therefore, you have to check this calculation carefully because HMRC can have fewer or incorrect details to work out your tax accurately. In case HMRC thinks you have paid the extra tax, they will automatically issue you a tax repayment; you don’t need to claim it. And, if HMRC thinks you have not paid a sufficient amount of tax, they will write to you which explains how you can repay tax to them.  How to Claim Overpaid Tax from HMRC for the Current Tax Year? You have to inform HMRC why you think you have overpaid tax before the end of the tax year. You have to tell only if you have paid too much tax through the Pay As You Earn (PAYE) system. You can call HMRC directly to inform them. You have to gather the following details before calling HMRC: Your name, job, address, and NI (National Insurance) number. For the current tax year, estimation of your income and pensions from every source. Your employer or pension provider details such as PAYE scheme reference number displayed on your payslip, or ask them for it. For future reference, do ensure you have kept a record of the following: Advisor name you spoke to Time and date of the phone call Communication between you and the advisor In order to support your claim, you may have to send some more details. HMRC will let you know about those details if needed. After processing your claim, HMRC will issue you a new tax code. It means if there is any refund, it will be added to your pension or wages, and you will automatically get the amount through the payroll. This will result in a tax refund or lower tax deduction through PAYE. You might have to claim a repayment directly from HM Revenue & Customs. This is when the refund is due towards the end of the tax year, and you have already received your final salary. Unable to claim your overpaid tax? Let us handle this! Conclusion We hope now you have understood how to claim overpaid tax for the current year. You will have to provide those above-mentioned details and extra details in order to support your claim. Therefore, you should keep a record of your income and paid taxes properly. And, we will recommend you to take help from a professional for recording your finances and claiming repayments. Reduce your business burden by letting us manage & record your finances! Our team could help you claim what is rightfully yours! So, Contact us now! Disclaimer: This article intends to provide general information on how to claim overpaid tax.

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Corporation Tax for A Limited Company

Corporation Tax for A Limited Company, How Much Is There To Pay?

03/09/2021Dividend Allowance , Limited Company , Tax Issues

If you are running your business as a limited company, you must pay corporation tax. Limited corporation’s tax rules are different from other corporations to some extent. Therefore, in this blog, you will know the corporation tax for a limited company, how much corporation tax needs to be paid, and what expenses you can claim capital tax allowances.   Are you looking for an accountant to help you manage your finances? Please do not hesitate to contact us! CruseBurke accountants provide tax services at a reasonable cost!   Types of Taxes to be Paid by a Limited Company? Following are the taxes that need to be paid by a limited company. Corporation Tax National Insurance Contributions (NICs) Value Added Tax (VAT) In this blog, we will cover corporation tax for a limited company.   Corporation Tax for a Limited Company If you are running a limited company, you must pay corporation tax on your company profits. The current rate of a corporation tax is 19%. Corporation Tax is levied on a company’s trading profits, the sale of taxes, and investments. When establishing your limited company, you must register yourself for corporation tax with HMRC within the first three months of trading. Late registering may result in a penalty of fees. So, registering for corporation tax must be your priority.   How much Corporation Tax to be paid by a Limited Company? The rates of corporation tax to be paid by a limited company in 2021 is as follows: The “main rate” for the companies, making profits except for ring fence profits, is 19%. The standard rate for the unit trusts and open-ended investment companies is 20%. You can check more information about the rates here!   What Expenses are Eligible for Capital Tax Allowances? When working out how much charge you owe, a few Corporation tax stipends are available for your company. When you prepare your accounts, you can deduct your business expenses from the trading profits before tax. Capital tax allowances can only be claimed on the “entirely and exclusively” expenditures incurred for business purposes. Some costs which are qualified for capital tax allowances are: Machinery & equipment Vehicles Accommodation Mileage Training Remember that these expenses must be incurred for business purposes, and you can not claim capital tax allowances for the costs used in entertaining clients.   Dividend Taxation for Limited Companies In case your local company has made a benefit after taking away trade costs and enterprise charges (corporation tax), it can give out these profits to its shareholders with something called a ‘dividend’. You’ll only pay shareholders a profit (dividend) in case you’ve got good benefits. Dividends are not charged in the UK, but the shareholders who gain them may be subject to income tax and NICs(National Insurance Contributions) depending on their personal tax allowance. However, when they complete their annual self-assessment, this will become clear. The tax rates can be changed yearly for limited companies, and it can be troublesome to decide (exactly) what your tax liabilities are. However, you can take help from the tax accounting apps to understand your tax liabilities and manage your finances.   Final Thoughts To conclude our overview of corporation tax for a limited company, we can see that limited corporations benefit from being exempt from income tax. However, there is no way to avoid corporation tax, NICs, and VAT. You need to pay the corporation tax on your trading profits. Besides this, you can claim tax reliefs on corporation tax. Many tax reliefs are available to reduce your corporation tax bill, such as Research and Development relief, Creative industry tax relief, The Patent Box, Marginal Relief, Disincorporation Relief, etc. Moreover, you can reduce the corporation tax bill if you make wise strategies about the dividend payments (that directors take from the business) and salary as you can not avoid your taxes, so it’s essential to remain up-to-date about your tax duties while remaining tax efficient.   Unable to claim corporation tax reliefs on your taxes? Let us handle this! We are qualified chartered accountants that can claim your tax relief and manage your taxes in no time!   Disclaimer: This blog contains general information about Corporation tax for a limited company.

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