Tax Saving Tips Archives - Page 12 of 15

News,May 2018

A Guide About Tax-Free Rent-a-Room Scheme

George12/10/2022Tax Issues , Tax Saving Tips

People are always interested towards the idea that are useful for making a few extra pounds. Are you also the one who is seeking such profitable ideas these days? You are on the right page if so. One of the brilliant ideas for improving your bank balance is the rental income that you can make just from the comfort of your home. If you take a house visit and focus on that spare room that can help you increase your earnings. The rent-a-room scheme is for your suitability and you can sign up without any difficulty. This will allow you to enjoy an immediate increase in your income. Also, there is an opportunity for you to have an amount of income that is totally tax-free. The limit of tax-free amount is £7,500 in one tax year. If you are still wandering and need your queries answered for the rent-a-room scheme, we have got you covered here. Further, the discussion of this article involves the points like what is a tax-free rent-a-room scheme, what is the eligibility criteria, and what are the advantages of this scheme. Reach out to one of our professionals to get to know the rent-a-room allowance for your business. We will love to offer instant help! What are the Eligibility Criteria for the Rent-a-Room Scheme? This scheme is open to the tenants who have the option of the main home available for lodgers and furnished accommodation letting. Also, the owners and occupiers of the property can avail of this opportunity if they have any spare room for this purpose in their main home. Even the portion of the main house can be a perfect fit for this purpose. This venture allows the owners to enjoy an amount of £7,500 that is tax-free within the duration of a tax year. If the property is owned by the partners or in the case of jointly owned properties, the amount becomes £3,750 for each partner in the scheme. Several people confuse this with the condition to be the homeowner. That is not the case at all. Even if you are the tenant yourself and you have a spare room in the main house, you can avail yourself of the opportunity to enjoy the tax-free amount. You can simply rent the room to a lodger, however, you are bound to seek the permission of the owner. What are the Prominent Advantages of the Rent-a-Room Scheme? There is no doubt that this scheme brings in a lot of benefits it is a great source to provide accommodation for the lodgers as well as to supplement your income. However, when it comes to the benefits there are certain effects that are mean-tested. In the following, these are listed and explained. 1- Rent-a-Room Scheme and Housing Benefits This scheme affects if you are working as a social housing tenant. A lot of it also depends on the tenant who is getting the room and how is he classified. Subtenants and the broader are two classes in this regard. Sometimes the tenants avail the option of getting prepared food along with the room, such tenants come under the category of broader. On the other hand, when the tenant is only interested in availing of the room and not the prepared food, the tenant will come under the category of a subtenant. You need to get the categories classified vigilantly as it will affect the income. 2- Council Tax Reduction Some people are making a living on their own. Now they decide to use that spare room for the tenants. If such an individual is availing the benefit of a 25% single-person Council Tax Reduction because he qualifies for it, he is not allowed to have a tenant otherwise he will stop getting the discount since he no longer qualifies for this with a tenant. 3- Rent-a-Room Scheme and Universal Credit People who are on universal credit earned money through the sources of lodgers and sub-tenants will not be a part of the income up. This means no tax-free allowance amount will be up for you. This will make it a possible option for you to supplement your income. How to Opt-In or Out of the Rent-a-Room Scheme? In case the amount of money that you are earning through the source of renting a room and this earned amount is less than the threshold, tax exemptions will be automatic for you. You will not be required to do anything in this regard. On the other hand, if you are making more money than the limit threshold, you will be liable to file tax returns. Consider doing any one step from the following mentioned points: Decide to opt into the scheme. You will have to inform HMRC about this and make a claim while you are submitting your tax returns. This will let you enjoy your tax-free allowance. If you decide not to opt into the scheme, you will have to maintain a record of your expenses and income on the property pages while doing the tax returns. The Bottom Line Now that you have gathered a fair amount of information about the rent-a-room scheme, we can say that this scheme is a wonderful way to earn extra money and increase your monthly income, however, there are certain points to consider to check if you are qualified according to the eligibility criteria. To enjoy the availability of the scheme will demand to fulfil all the required standards whether you are the owner of the property or living as a tenant. We hope these few minutes of reading will help you to develop a better understanding and handle your tax-free allowances well in the near future. Get in touch with our young, clever and tech-driven professionals if you want to choose the best rent-a-room scheme for your business. Disclaimer: The information about the rent-a-room scheme provided in this blog includes text and graphics of general nature. It …

Do I have to Pay Tax as an Online Seller?

George29/09/2022Tax Issues , Tax Saving Tips

You are an online seller in the UK, and you are left wondering, Do I need to pay tax for an online business? It can be if your sales go beyond the specified limits or you run your operation as a business. There are different taxes that you are required to deal with depending on the type of your business, earnings, and sales. In this blog, we will discuss the primary taxes that you incur, such as income tax, VAT, national insurance, and corporation tax. We use the official UK guidelines and the best practices to make sure that you are compliant in 2025. We have divided it into several steps. Reach out to our smart team of professionals to get your sales tax for the online seller queries answered quickly. We will help to let you decide about tax relief with a clear mind. Do I Need to Pay Tax for An Online Business? You pay tax on your online business where HMRC considers your activities as a trade. HMRC checks include things such as whether you are trying to make a profit, whether you are selling the same product over and over, or whether you are adding value to products to sell. When you sell personal things infrequently, you are not likely to pay tax. But websites such as eBay, Etsy, Depop, Vinted, or Amazon will send your information to the HMRC in case the seller sells more than 30 items or earns above approximately £1,700 annually. This reporting began in January 2025, and it did not introduce any new taxes. It simply assisted HMRC in identifying undeclared income. You enjoy the trading allowance, which enables you to make up to £1,000 on online sales tax-free each year. Your gross sales will have to remain under this amount to avoid tax. When you cross £1,000, then the excess is your income and you pay tax. Some sellers begin online businesses as a side hustle. But when your sales increase, you get to be registered as self-employed with HMRC. Then you have to submit a self-assessment tax return by 31 January at the start of every year. Tax on Online Sellers If you are selling your old items like clothes, shoes, some gadgets, or any other used items to dispose of them. It’s usually tax-free. But if you are practising it too often and in bulk, it will be a trade. You need to report this online business to HMRC through your tax return. When you are a sole trader or a partner, you pay income tax on profits that are received in your online business. Profits refer to your sales less permissible costs, such as the cost of stock, the cost of shipping, the cost of marketing, and the cost of platforms. HMRC counts this as self-employment income, and you include it in any other income of yours. Thresholds and Rates In the UK, you have a personal allowance of £12,570 in 2025/26, where you do not pay any tax. You subsequently make payments of tax on income as: 20 per cent between £12,571 and £50,270. 40 per cent between £50,271 and £125,140. 45 per cent on the £125,141 and above. For example, if your online profits are £20,000 and you do not have any other income, you will pay 20% of £7,430 (after allowance), which equals £1,486 income tax. It is emphasised that you must deduct expenses to reduce your taxable profits. You are claiming home office expenses, web hosting expenses, or even mileage expenses incurred in delivering goods or services. How An Online Seller Files a Tax Return? You need to get a Unique Taxpayer Reference (UTR) by registering with the HMRC online. Then submit your return online by 31 January, following the closure of the tax year on 5 April. You make any payable tax on the same date, or, in case of large taxes, make payments on account. Make this easier with GoSimpleTax or FreeAgent software, as numerous other online businesses do. VAT Obligations for Online Businesses Most goods and services have Value Added Tax (VAT) to which you can charge, provided your business comes under the tax payments. It depends on where the online businesses operate and sell their products. When to Register for VAT You are to register for VAT once you have a taxable turnover amounting to £90,000 in one 12-month period of time, or when you anticipate it to be above that within the next 30 days. All the online sales that are taxable are considered taxable turnover. In the case of international online sales, the import VAT is charged on goods coming to the UK, and in the case of exports to non-EU countries, the export is often zero-rated. VAT Rates and Compliance The standard VAT rate is 20%, although lower rates are also charged. A 5% on items such as car seats or products that use less energy, 0 percent on children’s clothes and books. You also apply the VAT to the charges you make and send the difference between the prices charged and paid VAT to the HMRC every quarter in Making Tax Digital (MTD)-compliant software. The National Insurance Contributions As a self-employed online seller, you contribute to National Insurance (NI) to build entitlement to state benefits like the pension. You pay Class 4 NI on your annual profits, with a rate of 6% on profits between £12,570 and £50,270, and 2% on profits over £50,270 for the 2025/26 tax year. Mandatory Class 2 NI was abolished from April 2024, but if your profits are above £6,845, you are automatically treated as having paid contributions to protect your NI record and build entitlement to the state pension. If your profits are below that amount, you can choose to make voluntary Class 2 contributions. Corporation Tax for Online Business When running an online business as a limited company, you pay corporation tax rather than income tax on the profits. Rates and Filing For the 2025/26 financial year, …

What are the Tax Implications of Side Gigs?

George27/09/2022Tax Issues , Tax Saving Tips

This is the era of ideas where people are so smart and full of unique ideas to meet both ends to make a living. People do not rely on one job only and tend to manage a side job along with the management of a full-time job. This is usually to pursue their dreams or to earn extra pounds. Whatever the reason is but the side gigs are way more popular than you expect especially among the residents of the UK. We know this feels so productive to earn extra money from your side gigs but what about the tax implications of side gigs? Are you aware of the tax liabilities this extra income can bring in for you? Is it worth it to go with it after you realise how beneficial it can get after seeing it tax-wise? Several people are unaware of the fact that there are tax implications for their side gigs too. If you do not get a clear understanding of the tax responsibility of your extra income coming from your side gigs, you will end up being stuck in the unexpected visit from HMRC. To be on the safer side, this guide will help you to understand everything that you need to know about what is side gig, what are the tax implications of side gigs, what is the need to declare the extra income from side gigs, and how tax you will have to pay on this extra earning. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get ensured instant help whether you are running a small business or large. Side Gig – What is it? When you are in full-time normal employment, you always have a few dreams to pursue or you still need those extra pounds to make a better living. A side gig is a way out to those dreams or to earn those extra pounds that you have always wished for. A side gig is one of the favourites and most popular ways to manage full-time jobs among the people of the UK. This is known to be a smart idea when you want to make extra money and want to manage your full-time job as well. As people are of the view that side gigs play a supporting role in not only pursuing dreams but making extra money for a better living as well. An example of an individual who works as a receptionist in a company also works for his twitch streaming in extra time is perfect mention here to relate. What are the Tax Implications for Side Gigs? You need to be aware of the fact that the money that is coming through your side gigs is untaxed. Unlike the system when you are a PAYE and the tax deductions are already done even before you get the salary and all the deduction details are mentioned in your salary slip. By this, we understand that the deduction of national insurance and income tax is already done from your salary through the system in regular employment. However, this is not the case when you are earning as a freelancer or earning through your side gigs. This is because the PAYE system is not involved in the process. This brings in the responsibility of tax payments like the income tax and national insurance contribution all by yourself. If you fail to do so you will have to struggle with the HMRC observational visit. What is the Need to Declare My Side Gigs Income to HMRC? This is imperative to understand that it is a must for you when you are earning through your side gigs that you will have to declare your income to HMRC. Because this income is not associated with the PAYE system and so it is untaxed. If you fail to fulfil this requirement, you will have to face penalties and interest on the late tax payments. This will make you suffer in form of tax payments that are more than the original bill of tax. The amount of personal allowance that everyone gets other than the amount they are earning is a favourite beneficial thing by the UK residents. In the case you are making less amount than the amount of your personal allowance, you do not need to declare your income to HMRC. Otherwise, you are bound to inform HMRC and submit the self-assessment tax returns as well. In order to make your earnings in a tax year evident, you will need the documents like your side gig receipts and your bank statement. This will help HMRC to calculate your overall income including your main employment earnings and charge you the tax accordingly. How Much Do I Pay on My Side Gigs? This purely depends on the amount of money that you are making from your side gigs that will decide the amount of your tax bill. Your main employed job earnings will also be considered in this calculation. In some cases, the overall earnings from the side gigs and the main employment push towards the higher tax brackets and you will have to pay the higher tax rate. There are online calculators to check the amount of money that you will pay according to your overall earnings. The Bottom Line Now that you have gathered a fair amount of information about the tax implications of side gigs, we can bring the discussion towards wrapping up. We can say that side gigs are a great way to pursue your dreams and make extra pounds to make a better living, however, you will have to consider the tax implications that come with this beneficial factor. Are you seeking professional help with the tax implications of side gigs? Why not get help from the experts at the CruseBurke? Talk to us now! Disclaimer: All the information provided in this article on the tax implications of side gigs including all the texts …

tax on property transfer during a divorce

Tax Implications of Property Transfers During a Divorce

George23/09/2022Tax Issues , Tax Saving Tips

Are you going through the procedure of divorce or separation? The most important thing that you must be aware of is a tax on property transfers during a divorce. It depends a lot on the time and circumstances in which you are proceeding with the formal steps of the divorce because this will decide some of the tax exemptions. This is because of the fact that some of the tax amounts are only off during the same year of the divorce. Once this tax year is over, you will no longer be able to get such benefits. While you are being careful about the transfer of properties, consider stamp duty land tax (SDLT), and capital gains tax (CGT) as well. If you are still wondering how CGT will work for you, we have got you covered here. As this guide will help you to develop a better understanding of how will CGT work for you, what is the tax on property transfer during a divorce, how can you avoid CGT when going through divorce proceedings, and how will HMRC decide the date of property transfer? Seek no further help after contacting CruseBurke’s team of experts and advisors about tax on property transfer during divorce with peace of mind and within your budget. Capital Gains Tax – What is it? There is a possibility of rising the capital gains tax in the case the value of the asset has increased at the point of sale. This sometimes increases to an extent that is even higher than the original value of the asset. The basic requirement of paying the CGT is when you are selling your main residence. However, this can work out to be different for you during the process of a divorce or separation. When you are an individual who is married or living in a civil partnership, you can transfer the property from one another without having to pay any CGT. Moreover, it depends on the type of property that is being disposed off and the level of income you are earning that will decide the liabilities of capital gains tax. You will be liable to pay the CGT when you are selling your main home and the rate will be: 18% if you are a taxpayer with the basic rates. On the other hand, if you are a higher taxpayer the rate will be 24% for you. If the property that you are selling is not your main home but an office building or any other land, you will be liable to pay CGT as the following: If you are a basic rate taxpayer, you will pay 10%. If you are a higher-rate taxpayer, you will pay 20%. Tax on Property Transfer During a Divorce Several people confuse the fact of transferring the property during a divorce proceeding by thinking that is not possible. This is not the case at all. You can transfer the property during this process, however, you need to pay attention and consider the right timings of doing it before the same tax year ends of the divorce proceedings. There is no CGT payable when you are transferring the main home during a normal marriage. However, you need to be aware of the fact that if you transfer the property after divorce in a different tax year, this will make you liable for paying CGT. If you consider the right timing and transfer the property in the same tax year when the separation or the divorce happened, it will be a no gain no loss process for you. Ways to Avoid Capital Gains Tax During Divorce Proceedings People are interested in avoiding CGT while transferring the property after the separation or the divorce from the spouse or civil partner. The only way to make it possible is to consider the right timing and do transfer the property in the same tax year of the divorce occurred. However, from the tax year 2023-24, the civil partners and the spouses will have a period of three years to do the process of property transfer at the benefit of no gain no loss. This means they will not pay any CGT and will have a longer period to transfer the property. The Time to Transfer the Property by HMRC When you are in the divorce proceedings, consider the following for the liability of CGT: Express it in the divorce through a court order. Express it in the agreement of the separation. Do it when the separation is in permanent circumstances. Moreover, when you are done with the process of deciding the date of separation or divorce, the market value of the property will be considered for the purpose of transfer of property. The date of the divorce or separation matters a lot in this case. If done in the same tax year, it will be a no gain no loss process as discussed earlier. The Bottom Line Now that you have gathered a fair amount of information about tax on property transfer during a divorce, we can bring the discussion towards wrapping up. Separations and divorce proceedings are considered to be a harsh experience for two people who are married or living in a civil partnership. However, to make it a less burdening process, you can take wide decisions to avoid paying the CGT on the property transfer. It is therefore suggested to choose the time wisely and do the pretty transfer in the same tax year of the divorce to make it a no loss no gain process. Are you stressed about tax on property transfers during a divorce? Feel free to contact our team of tax advisors and accountants to help you find accurate information and guidance. Disclaimer: All the information provided in this article on tax on property transfer during a divorce, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.

Do YouTubers Pay Taxes?

George21/09/2022Tax Issues , Tax Saving Tips

Whether you are a streamer or a content creator, the big question on everyone’s lips is Do YouTubers pay taxes? In case you are running a youtube channel that is making enough extra money for you, you will not only be noticed by your subscribers but HMRC is also noticing you. Furthermore, HMRC, which is a government department liable to collect taxes from people, will be more than interested in knowing what is the amount of extra money that you are making through your youtube channel. Sometimes people do not realise that the extra amount of money that you are earning through the resources like merchandise, the donations of streaming, and advertising revenue come under taxable earnings. Previously youtube and content creators were considered as a part of hobbies, however, because of the popularity and good earnings that is not the case now. You are now liable to declare the amount of money you are making through your youtube channel. This will be done through your self-assessment tax returns. Further, in the discussion of this guide we will gather information about do YouTubers pay tax, what if youtube is just a side gig, how to pay tax as a youtube, and what is the eligibility criteria to claim the tax back. Reach out to one of our professionals to know more about ‘Do YouTubers pay taxes’. We will love to offer instant help! Do YouTubers Pay Taxes? In most cases when you are a resident of the UK and you are using the medium of youtube that is helping you to make a few extra pounds, you will probably be liable to pay tax. This is because if you are providing any services to people or selling a product through your channel advertising, you are running a business technically and this amount of money is taxable. On the other hand, people who are creating content just for the sake of enjoyment on youtube will also be liable to pay taxes. As we all know that the rules and regulations are very strict when it comes to paying taxes to HMRC. Moreover, if you plan to hide the extra amount of money that you are making through youtube, you will have to struggle with the hefty amount of fines and other penalties. You can even get an investigation from HMRC. This makes it really important to have a clear idea of the amount of money you have earned from multiple sources and the exact source of a specific earning. This will help you to declare your income to HMRC easily. Ensure to maintain the records well and keep copies of invoices, receipts and bank statements. This process will help HMRC to calculate the amount of tax you owe through the details of self-assessment tax returns. What If YouTube is Just a Side Gig? So people are confused about whether the same rules and regulations apply to them or if they are making a few pounds through youtube but they have a main job and youtube is just a side gig. The chances are that you will still be liable to pay tax. The amount of money you earn from youtube is taxed. Just like the case when you are an employee and PAYE is the system that makes deductions of income tax and national insurance contributions even before you receive your salary slip. However, the only difference here is that you will have to do this process yourself by getting in touch with HMRC and declaring your income. You will be responsible to pay income tax and national contributions yourself. People are often found confused when they are earning through multiple sources. They do not know how will personal allowances work in this case. This is because people tend to think that the figure of £12,570 remains the same for all the income sources. However, that is not the case at all. How to Pay Tax as a YouTuber? When you are a YouTuber and making extra pounds, you will have to declare and make your tax payments through self-assessment tax returns. If the amount of money you are making through youtube is more than the figure of £1,000 in a tax year, you will have to do the tax payments. Always keep in mind that HMRC is very strict and serious with tax affairs so it is useless to find the margin of mistakes. You must get an expert’s help to file the tax returns accurately. You can choose one of the following: Get in touch with online smart and competent alternatives. Hire an accountant to help you with the process. Complete the tax returns yourself with the help of HMRC. Moreover, in case you are a beginner who is doing the tax returns for the first time, the first thing you need to do is to get registered for self-assessment. Ensure to meet the deadlines while you are working with the process of self-assessment tax returns. 31st January is the last date to complete the process. The Bottom Line Now that you have gathered a fair amount of information about Do YouTubers pay taxes, we can say that there is no doubt that the YouTubers that are making a few extra pounds from the source of youtube are liable to pay tax even if they consider youtube as just a side gig with the main job. If the annual income through this source reaches a certain limit, you will have to get yourself registered for the self-assessment make the declaration of the income and pay taxes. We hope these few minutes of reading have helped you to develop a better understanding and you will be able to handle your tax affairs more professionally. Get in touch with our young, clever and tech-driven professionals if you want to know more about ‘Do YouTubers pay taxes? Disclaimer: The information about ‘Do YouTubers pay taxes’ provided in this blog includes text and graphics of general nature. It does not intend to disregard …

How Much is Capital Gains Tax on Second Home?

George08/09/2022Tax Issues , Tax Saving Tips

Capital gains tax on a second home is different than the gains of a main residential property when you are living in the UK. You are obliged to follow the set of rules when you are planning to sell a second home. As we all know that private residence relief is also only entitled to the first main home. However, you have to meet the conditions associated with it. A kind of gain that is related to the second property will stand liable for the capital gains tax. There was a change that occurred in the set of rules in the year 2020. Moreover, in this guide, we have gathered the related information based on the frequently asked questions. You will get an understanding of everything you need to know about private residence relief capital gains tax on a second home, what is the possible tax payment, and some of the practical and helpful tips for selling a second home. Reach out to one of our professionals to get to know what is the best way to handle the capital gains tax on a second home in the UK. We will love to offer instant help! What are Capital Gains Tax on a Second Home? The gains related to residential property that is not even related to the private residence relief are bound to be in the knowledge of HMRC within the time of 30 days. This count will be started after the completion date. For this purpose, you need to go on the website of the government which is Gov.uk and set up the necessary capital gains tax on the property account of the UK. This will help you to report the gains. Moreover, in the case of the gains being reported at the time of self-assessment returns then there is no need to do it again. You do not need to go on the online services to do the process all over again if it is done before the time limit of a month. In the case you fail to fulfil this requirement there will be hefty fines and penalties issued by HMRC. Ensure to do the process within the given time limit. What is the Payment in Account of Tax? There is a requirement for payment on the account of the tax as well. This must be done within the time limit of a month. The best estimate of the capital gain is considered to be this. Ensure to clear what is due just before you hit the eleventh hour. There are a few steps to be considered before you aim to make your accurate calculations. These are listed below for you: If you realise any kind of loss before the time frame of the completion, add them for compensation. Make sure the loss is not utilised on any of the previous capital gains. Consider the amount annual exempt as well. This should not be part of the previous capital gains or in the same tax year. Also, take into consideration of the likely tax rates. Moreover, you can use the taxpayer’s Capital Gains Tax to make online payments. This is considered for the property account in the UK. You will be charged interest if you do not make the tax payments within the time limit of a month. A Practical Tip for Selling a Second Home The common and best tips to practice while you are aiming to invest in a property or plan to sell your second home are given in the following: Make accurate calculations of the capital gains with the right focus. Ensure to report the required information to HMRC right on time. The associated tax must be paid after completion. Ensure to do the follow-up of your payments within the time limit of a month as mentioned earlier. The Bottom Line Now that you have gathered a fair amount of information about the capital gains tax on a second home, we can bring the discussion towards wrapping up. We can say that it is imperative to have an understanding of the set of rules associated with capital gains and submission within the given time limit. If you fail to meet the required actions by HMRC, you will be facing consequences that will not go in your favour. Struggling with the fines issued by HMRC will be another stressful factor involved in the process. We hope these few minutes of reading have helped you to develop an understanding and better deal with capital gains. Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for capital gains tax on a second home in the UK for your business. Disclaimer: The information about the capital gains tax on a second home in the UK provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

What Tax Does a Sole Trader Pay? A Basic Guide!

George15/08/2022Tax Saving Tips , Taxation

According to a survey, there are millions of people who are associated with the private business sector in the UK. Several people among these are the ones who are carrying out private business without hiring any employees. The sole traders are the representations of the private sector of business in the UK. In the modern business era, there is a high tendency to increase their business frequency. The reason behind the increasing number of people working as sole traders is because they love the idea of freedom in working. The factor of autonomy is also achieved when you are self-employed. However, the question that arises here is what tax does a sole trader pay? It is known to be an easy process when it comes to setting up a business as a sole trader. People tend to put their passion into a career opportunity for their business. However, there are always law authorities in the country whose rules and regulations, you have to follow to carry out your business successfully. In this guide, you will get to know about what is a sole trader and what are types of taxes he has to pay. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get ensured instant help whether you are running a small business or large. Get in touch now! What is a Sole Trader? Before delving further into the discussion, let’s first learn how to define a sole trader. It is when you decide to become self-employed or to run your business, that you will have to pick one option of whether you will like to become a sole trader to run your business or develop a limited company. Know that they are the individuals who decide to run the business on their own and their employment status is self-employed. In the case anything goes wrong in the business, the sole trader will be liable for all the losses or debt clearance that their business might owe to debtors. On the other hand when an individual chooses the option of carrying out the business through a limited company. It brings shared liability and ownership among shareholders and directors. This means all the shareholders and directors will be liable for the debt clearance as well. What Tax Does a Sole Trader Pay? It is known in the UK that all limited companies are liable to pay the corporation tax, however, for sole traders, there is no such requirement of paying corporation tax. Sole traders are liable to pay the income tax. The amount of income tax is depending on the amount of income they make and the profits every year. There is also a requirement of paying class 2 and 4 national insurance contributions. While you are doing the calculations about the amount of tax that you will have to pay, you will add the business expenses. The business expenses can include the followings: Business travel expenses include the amount spent on fuel and vehicles. The utility bills of the business. The rent of your business premises. Internet and phone bills are used for the business. Amount spent on marketing and advertisement. Stocks or material. Here it is imperative to know that the tax you will pay as a sole trader will be on your annual profits. Your profits are calculated when you deduct your business expenses from the income you earned from self-employment. How Can a Sole Trader Pay Tax? It is a legal requirement for you because you run the business as a sole trader and you take the responsibility of paying national insurance and other tax to the government. The annual self-assessment scene is the one you use to pay your tax. You need to enter all the required information into your system and it will give you the exact details of what you have to pay to the government. The question that arises here is how can a sole trader pay the tax. There are many methods to pay the tax when you are a sole trader. They are listed below for you: Cheque in the post BACS Corporate credit card Debit card In your bank branch or the society bank branch The telephone banking CHAPS Online bank account How Much is the Amount of Tax? The amount of tax that you have to pay as a sole trader depends on the number of your annual profits. The more profits you earn from your business the more tax you will have to pay. See the following points to get an elaborate idea of how much you have to pay: VAT VAT is only payable for you as a sole trader when your business turnover has reached the amount of £85,000. National Insurance Class 2 and class 4 are applied for the sole traders in the case of national insurance. Class 2 is applied when your annual profit is going over the figure of £6,725. However, class 4 is applied when your annual profits are going over the figure of £11,909. Income Tax You are only liable to pay income tax in case your earnings are more than your allowance threshold. Personal Allowance The tax-free amount is £12,570. The Bottom Line Now that you have gathered a fair amount of information about what tax does a sole trader pay, we can bring the discussion towards wrapping up. It may sound easy to run your business as a sole trader, however, there are many factors that you have to consider to make it successful. We hope this guide has helped you to know about your tax liabilities in a better way. Are you seeking professional help to calculate what tax does a sole trader pay that is based on cash? Why not get help from the experts at the CruseBurke? Talk to us now! Disclaimer: All the information provided in this article on what tax does a sole trader pay including all the texts and …

SDLT Multiple Dwellings Relief – A Beginner’s Guide!

George11/08/2022Tax Issues , Tax News and Tips , Tax Saving Tips

People often wonder about available reliefs to offset their taxes when it comes to purchasing or selling a property. We will delve into the discussion of SDLT multiple dwellings relief, which will help you to learn about offsetting the payments of stamp duty when you plan to make a purchase of several properties at the same time. In such a case, the transactions are also done in the same go. This guide will help you gather imperative information about what SDLT multiple dwellings relief is, how you can be eligible to qualify, and the method to claim MDR. This will help you reduce your Stamp Duty Land Tax. We recommend finding professional help to further learn about SDLT multiple dwellings relief. Talk to our guys and get your queries answered quickly. What Is SDLT Multiple Dwellings Relief? Have you planned to purchase several properties in one transaction? Let’s take the example of an individual who is interested in buying properties from a developer, it can be multiple flats in one transaction. Or an individual who has planned to transfer his properties to a limited company. You have a chance to reduce your tax bills and save money with the help of multiple dwellings relief. Moreover, with the help of multiple dwellings relief, it is calculated on the average value of your property. The implementation of SDLT is then the rate is related to this average figure now. You are not considering the price of an individual property or the total price of a property purchase. This saves your amount of money and helps to reduce your tax bills. Several people get confused with the term dwelling. In simple words, a dwelling is known to be a flat or a house that provides living shelter to people. Moreover, regarding multiple dwellings relief, HMRC defines dwellings as a suitable building for one household. The properties that are in the process of construction are also considered dwellings according to HMRC. There are a few types that can come on the list of multiple dwellings relief. See the following listed options: The property is mixed-use like a flat that has shops with it. An annexe that is self-maintained and was bought with the main house. Flats and houses that are purchased in bulk. How to Qualify For Multiple Dwellings Relief (MDR)? There is a condition for purchasing two or more properties or dwellings in other words. This process has to be completed with the same transaction. The other option could be a series of linked transactions that are allowed to make you qualify for making multiple dwellings relief. In case a person is up for buying properties that are 2-5 in number. The condition of the residential property will be applied. On the other hand, if the person is up for buying multiple properties that are 6 or more in numbers. The property could be possibly for commercial purposes or residential. You can opt for no residential SDLT rates that are comparatively lower than the rates of residential SDLT. Introduction of A Linked Transaction When the process of buying multiple properties is carried out, the seller and the buyer remain the same in this condition. That is when it comes to the use of linked transactions. Transfer of personal property to your limited company is one such example. It is possible with the help of liked transactions that the value of all the properties is put together and that’s the figure on which SDLT will be applied. However, the disadvantage of this scenario is that the tax bill will turn out to be higher in comparison to an individual property. This makes multiple dwellings relief a better option to apply to like transactions. Learn to Claim Multiple Dwellings Relief You can save a lot of thousands from stamp duty by applying for multiple dwellings relief. It is advisable to reach out to a solicitor when you are buying a property to claim multiple dwellings relief successfully. In some cases when people overpay in form of stamp duty and realise it later. You have the option of retrospective multiple dwellings relief for a year. The starting date will be the date of filing the case. Moreover, there will be a requirement to provide solid shreds of evidence for multiple dwellings. The property floor plan and surveyor’s report can help in this matter. You should get help from a property tax expert in case you do not find a reliable solicitor. The Bottom Line Now that you have gathered a fair amount of information about SDLT multiple dwellings relief, we can bring the discussion towards wrapping up. It is important to have a basic understanding of multiple dwellings relief to reduce your tax bills and the amount of money you pay as stamp duty. However, the crucial criteria to qualify call for an expert’s help for seamless processing and to make the claim successfully. Most people tend to get the help of solicitors in this regard without knowing the fact that some of the solicitors are not good at handling such a case. It is suggested to speak to a property expert in this case. This way you will keep yourself protected from overpayment of stamp duty and go under the processor to get the overpaid amount back. We have these few minutes of reading that will help you to handle the SDLT multiple dwellings relief well and it turns out to be advantageous for you. Get in touch with our young, clever and tech-driven professionals if you want to know more about the SDLT multiple dwellings relief and how does it work? Disclaimer: The information about SDLT multiple dwellings relief provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

A Basic Guide About Taxable State Benefits!

George26/07/2022Tax Issues , Tax Saving Tips

People are often confused about the way tax is paid when it comes to taxable state benefits. We all know that it is a little complicated tax affair to understand well. If you are among such a group of people, we are here to help. In the case you are lucky enough to get the state benefits, it is mandatory to be aware of the relevant facts about it and they are important. Be aware of the information that even if the state benefits are taxable, there is no amount of tax that will be taken off at the source. One of the reasons that may be the relevant person is below the threshold and is not eligible to pay the tax according to tax rules. On the other hand, when other sources of taxable income like your main employment source are considered too. In such a scenario when you are getting the state benefits and your threshold goes above the limit, you have to pay the tax on your taxable income. We have covered the basic details for you to develop an understanding of taxable state benefits and how to inform HMRC about it. Reach out to one of our experts to know more about the taxable state benefits. Call us on 02086868876 or email us today. We will offer instant help! How to Understand what Are Taxable State Benefits? It might sound surprising to many of you that a few of the state benefits are taxable for sure. The state pension is one fine example of taxable state benefits. However, you need to be well aware of the list of state benefits that are taxable and non-taxable to avoid any overpaid tax and other mistakes. A few examples listed below for you can be taxable only when you have paid based onset of the national insurance contributions. Allowance of Jobseekers (JSA) Employment and Support Allowance (ESA) Moreover, there are chances for the same state benefits to be non-taxable if there is any involvement of means tested. Your financial situation matters here a lot. You need to keep a vigilant eye on the receipt of the state benefits because this can affect your ability to claim universal credit or tax credits. If you still seek further about it, GOV.UK provides a wide range of informative discussions about it. You can gather accurate knowledge about the specific benefit that you are associated with. This is an integral part as it will keep you protected from the overpayments of tax and your ability to claim the refund in case you need it. How To Let HMRC Know whether I am Getting the Taxable State Benefits or Not? It is the responsibility of DWP which is a department of work and pension to be in touch with HMRC to let them know about state benefits every individual is getting. We will take an example of daily updates that the department of work and pension is liable to communicate to HMRC that explains they are starting pension for a particular individual. This includes the details of the payable amount of money and the required date to pay it. They can even advise the changes that have to be made in the amount of pension. The system of giving advice is slightly different when it comes to annual increments. However, the advisable words are to reach HMRC in advance to make the required changes before the payments are calculated. The system works in the same way in the case of JSA and ESA. Moreover, know that the other state benefits in the list are not following such a smooth system. Therefore, it is advisable to get in touch with HMRC when you are getting any other taxable state benefits. This will avoid any uncertainty about your tax bills. Your national insurance number has to be correct to keep everything going smoothly. This will ensure that other records are linked promptly. How Are State Benefits Taxed In The UK – JSA and ESA? The set of rules is very special when it comes to the state benefits like JSA and ESA. The popular state benefit that is taxable is considered to be the state pension. This is important to state that PAYE is not even operated on state pension by the department of work and pension. In case an individual has more sources to gain income and the payment is made through PAYE, HMRC tends to collect the due tax on the taxable state benefits. The code that your pension provider or the employer uses will be changed. The state benefits you are getting will not come under the coding notice automatically. So you are liable to speak to HMRC about it. The following points are important in the process: It is not an easy task for even HMRC to ensure that all the tax amount is collected using your PAYE code. In other ways, the simple assessment is issued by HMRC to collect the due tax. You can be required to complete the self-assessment tax return for this purpose as well. The collection of the due tax is considered a part of the calculation self-assessment. The Bottom Line Now that you have gathered the required information about the taxable state benefits, we can bring the discussion toward wrapping up. There is no doubt that the process of ensuring the due tax is collected and the taxable state benefits is a complicated task. However, if the advisable instructions are followed religiously by all the individuals getting the state benefits, it will be a lot easier for HMRC to complete the process. We hope the gathered information has helped you to develop a better understanding. Are you stuck with your tax affairs? Why don’t you speak to our young and clever team members and get your queries answered quickly? Call us on 02086868876 or email us today. Disclaimer: The information about the taxable state benefits provided in this …

How to Claim PIP Successfully?

George22/07/2022Dividend Allowance , Finance , Insurance , Tax Saving Tips

Are you an individual who is looking for income support because of an illness, mental health condition, or disability? You can be the one who can get help from Personal Independence Payment (PIP) can able to know how to claim PIP successfully. If other support schemes have denied your support in these challenging times, you can try to claim Personal Independence Payment. There is confusion among people that to be eligible for Personal Independence Payment, you need to pay the national insurance. This is not at all the case. Moreover, to claim Personal Independence Payment, you don’t even have to be a working individual or save any kind of money. However, in the case of terminal illness, the rules are a bit different to be eligible. In this guide, you will be able to gather information about the eligibility criteria to claim PIP, and what is the process of claiming Personal Independence Payment. Reach out to our young, clever and tech-driven team members to learn the eligibility criteria for Personal Independence Payment. How to Claim PIP Successfully? If you have decided to claim PIP successfully, it is vital to have an understanding of the process to make it a successful journey. Generally, the proclaiming aim about PIP is considered in three steps. These basic steps are listed and explained in the following: The first thing to do is to get in touch with the department of work and pension. You will be required to fill out the form named PIP1. This part can be done over a phone call as well. Next, you have to explain how your disability has affected you and your income. You can choose the online forum or email to do so. If you want to do it on paper and post it, that is a possible option as well. You will be required a medical assessment. Moreover, consider that it can be a process of 6 months from the moment you initiate it till you receive your first Personal Independence Payment. If the DWP find you the neediest, you can even get their first payment from the day you started the claim process. There is no such possibility of getting the amount before the date you made the claim. Get in Touch with DWP (Department of Work and Pension) It is advisable to be in touch with the department of work and pension over a phone call. This is a swift process rather than writing an email and waiting for a response. If the DWP find you eligible, there are chances that you get the payment right from the date of a phone call. Before you plan to make a phone call and get in touch with them, have the following information available to you: Dates and details in case you have stayed somewhere abroad for more than a month during the past three years. Immigration status or the details of your nationality If you have stayed in residential care or at a hospital, have the details with you. If there is a health professional who is dealing with your health matter, have his contact details. Account details of your bank or the building account details National insurance number your basic details that include your address, phone number, and name. The process over a phone call takes about 20 minutes. If you are comfortable someone can talk on your behalf. However, you should be around them to grant the permission and required information. The department of work and pension can even ask you if you need the forms through posting or online medium. Moreover, they will investigate your mental health and other medical conditions just to be sure that whether you need any additional support with the PIP or not? Eligibility Criteria to Claim PIP The main point to be eligible as per the PIP criteria is to have a medical condition that is a hurdle in your day-to-day tasks. This could be a physical condition as well as a mental condition. The major and prominent points to meet the required standard of the eligibility criteria of PIP include the following listed points: This condition must be with you for three months and will be there for the least nine more months. You are required to be a resident of Scotland, Wales, or England. Your age should be 16 or more to be eligible for Personal Independence Payment. In case you have reached the age of state pension, there are a few exceptions in the set of rules. The Bottom Line Now that you have gathered a fair amount of information about how to claim PIP successfully, we can sum up by saying that the process of making a claim is not very complex and you can easily handle it seamlessly on your own. However, you must consider the required standard to be eligible to get the money from PIP. Your queries will be answered when you will get in touch with the department of work and pension as well. The easy and swift way is to communicate over a phone call and they will even offer to fill the forms if you are ok with providing the necessary information. This possibly will take around 20 minutes and you will be done with the process. It has been observed that the deserving individuals start to get the money right after initiating the process of claim if they meet the required criteria. We hope these few minutes of reading will be helpful for you to check if you qualify according to the required eligibility criteria as well as how to initiate the process of claiming PIP. Get in touch with one of our experts if you are stuck with your Independence Payment We will offer to provide instant help. Disclaimer: The information about how to claim PIP successfully provided in this blog includes text and graphics in general. This does not intend to disregard any of the professional advice.