Tax Saving Tips Archives - Page 7 of 9

tax, Tax Issues, Tax News and Tips, Tax Saving Tips, Taxation

Tax Deductible Travel Expenses for Self Employed

George / 30/11/2022

When you claim your travel expenses as a self-employed individual, the first important thing you need to do is identify which travel comes under a specific category. Whether you are self-employed or working with an organisation, the travel that you are covering daily as a commute to your permanent workplace will not be considered an expense that is deductible. It becomes an allowable expense when you are travelling to a workplace that is temporary. The cost and amount of money that you spend on ordinary commuting can not come under the allowable expenses. Many of you must be wondering by now what are self-employed tax-deductible expenses then. Further, this guide will help you to gather information about what are permanent and temporary workplaces, how are they related to travel expenses, what are allowable tax-deductible expenses for self-employed individuals, and what points you should be considering before you plan to claim the costs for tax purposes. Reach out to one of our professionals to get to know self-employed tax-deductible expenses for your earnings in the UK. Get in touch and you will be provided instant professional help! What are Temporary and Permanent Workplaces? Sometimes the regular workplaces are temporary, however, the grey area is still there and the point becomes complicated. When you are associated with a construction project and you expect to work there for a duration of two years at least, many of you might confuse it with a temporary workplace. However, the case is entirely different because of the duration. This is a permanent workplace. How are Temporary and Permanent Workplaces Related to Travel Expenses? If we talk about the salesperson who works in the field, this will also be considered his permanent workplace. The commute and travelling expenses from some areas will not be considered allowable expenses in this scenario. The travel that is done for the business meeting can be claimed while you’re doing your tax returns. In some cases, you might require to travel to visit a client. If you travel from the permanent workplace, these expenses will be considered, however, if you travel from home to the client the expenses will be allowable in a few circumstances. You can seek the help of a professional to understand the rules of HMRC for your unique situation. What are Self-Employed Tax-Deductible Expenses? Travel for business purposes comes first on the list of tax-deductible expenses. While you are on a business journey, it is imperative to understand that you need to keep all the related receipts for any transport you have used. This includes the uses of public transport as well like buses, vans, cabs, and taxis. The journey that is purely related to the business purpose will be considered. You can even use Transport for London’s “TFL App” if you are travelling in London. You should keep the receipts intact that are related to the toll booth charges, car rental, parking costs and congestion charges. A few salient features to consider in this regard are explained below. 1- Mileage Tracking In case you are the one who is driving, you will have to keep a track of the mileage. This should be 45p per mile for the initial 10,000 miles. This is the instruction for the cars and vans. This will help you to save a lot of money. 2- Cost of Travelling One of the frequently asked questions that people ask is whether you have to avail of a cheap form of travel while you are on a business trip. The simple answer is no. For example, you are travelling in the UK and the tube cost you pay is £5.90, however, if you find it easy to take a cab you can have one. Even if the cab is an expensive commute, you do not need to worry about that. What are the Things to Remember Before You Claim Expenses for Tax Purposes? The take-home points you must remember before you plan to claim the allowable business expenses are listed below. You should keep the record of your business travel intact to get approval and provide any kind of evidence that is required. Keep a record of the purchases that you have done for your business and ensure to keep it separate from your personal expenses. Your mileage log should be as detailed as possible. You can better use the automatic mileage tracking app. The partial parts of the journey may not include in the list of allowable expenses and your claim may not be successful if you add them. Ensure to understand your journey details to make an accurate tax return and get the claim of the maximum that you have spent. It sounds like a time-consuming process but it will help you to provide pieces of evidence when required. You can get in touch with the professionals if you are unable to understand the details of your journey and how to record them. The Bottom Line Now that you have gathered a fair amount of information about self-employed tax-deductible expenses, we can bring the discussion towards wrapping up. The deductible travel expenses for a self-employed individual might sound complicated to record every detail of the journey, however, you can use the automatic apps to do the needful and save time. The more detailed your record is, the more accurate the tax return you will be able to file. You can even take the help of an advisor for a better comprehensive guide. We hope these few minutes of reading have helped to develop a better understanding of self-employed tax-deductible expenses and tax rates. Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for self-employed tax-deductible expenses in the UK. Disclaimer: The information about the self-employed tax-deductible expenses provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

tax, Tax Issues, Tax News and Tips, Tax Saving Tips, Taxation

How Do I Get My Tax Refund After Leaving the UK?

George / 24/11/2022

Are you the individual who is planning to work abroad or to live there and leave the UK? The first thing you must gather information about is the tax refund entitlement. This has to do a lot with the current tax status and the unique circumstances of your case that will help HMRC decide whether you are eligible for a UK tax refund. You will have to get in touch with the tax authority of the UK and HMRC to inform them about the date when you are leaving the UK and finally going overseas. This will help them to make the right calculations for your tax refund, if any. Moreover, there are plenty of online calculators available that you can use to calculate your amount of tax refund amount yourself. In this guide, you will find out what is leaving a UK tax refund is, what is the eligibility criteria, what is the amount of tax refund, and how can I get the tax refund before I leave the UK to settle overseas. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help whether you want to learn about leaving the UK tax refund. What is the Leaving the UK Tax Refund? Leaving the UK tax refund refers to an amount that you will have to claim within four years after leaving. This works as the timescale of the refund. The tax office will require a claim to be received, considering the limit of the timescale before you expect to receive the amount of refund. This can be the overpaid income tax that you paid in the same year when you left the UK to settle abroad or to move back to your country. Who is Eligible to Claim the Tax Refund after Leaving the UK? The UK residents who have now planned to move overseas are in a position to claim a tax refund. This is allowed because of the fact that you will no longer have the status of being a UK resident, and the tax implications will not be implemented anymore. You will have to pay the tax in the new country that you are planning to move in. For the cases who have lived for a long time in the UK or have worked here, and now want to move back to their own country, it is allowed to claim the tax refund before they leave the UK. However, you will have to be a PAYE employee and must have left the UK within the past four years. Also, consider that you were earning an amount that you were able to pay the income tax in the year of claim. How Much UK Tax will I Get after the Refund Claim? According to the information provided by HMRC, there is no upper limit decided for such cases. There are multiple factors that you will have to consider and it depends on the unique circumstances that will decide the amount of tax refund. Especially when you have more than one income source. For these factors, your situation will be considered to provide the amount of tax to your unique case. Because it always varies from one person’s case to another. The common practice is that you get the income tax refund for the same year in which you plan to leave the UK. HMRC will decide the amount of tax you have paid in the situation of leaving and the amount you would have paid if you were planning to stay in the UK. How will I Get the Refund if My Claim is Accepted? It is the job of the tax office to provide an accurate calculation of any overpaid tax and generate a P800 form that will have all the details about the amount of your tax refund. The breakdown of your tax refund will also be updated on your personal tax account if you own one, and the tax authority will post the form to your available address. Moreover, you are even allowed to explain to HMRC how you are comfortable getting the tax refund. You have the option of getting the tax refund to one of your UK banks through a bank transfer or receiving a cheque for the payment. There are several cases when people do not have a personal bank account in the UK. If that is the case with you, you have the option to nominate someone who will receive the tax refund in their account on your behalf. The Bottom Line Now that you have gathered a fair amount of information about leaving the UK tax refund, we can bring the discussion towards wrapping up. Getting a tax refund might sound exciting and add up to your existing amount of money while you are leaving the UK and planning to settle overseas. However, there are multiple factors that are considered to be entitled for the tax refund. If you meet the eligibility criteria, you will be lucky enough to get the amount. We hope these few minutes of reading will help you to develop a better understanding of how to be eligible for a tax refund while leaving the UK. Are you seeking professional help to know about leaving the UK tax refund? Why not get help from the experts at the CruseBurke? Talk to us now! Disclaimer: All the information provided in this article on leaving the UK tax refund includes all the texts and graphics. It does not intend to disregard any of the professional advice.

tax, Tax Issues, Tax News and Tips, Tax Saving Tips, Taxation

Time to Pay Arrangements with HMRC

George / 23/11/2022

There are several companies and organisations in the UK that fail to meet the deadlines for tax bills. If you are also one who is carrying out a business in the UK and struggling with the tax bills, you might be offered an instalment plan by the HMRC to pay your tax bills easily. This will allow you to get your payments cleared by having a long period of time and in the form of instalments. To avail of this opportunity, you must have a basic understanding of the time-to-pay arrangement. This article will turn out to be helpful in this regard, and you will be able to gather information about what a time-to-pay arrangement is, what the criteria are to check eligibility, how you can negotiate with HMRC, and how to apply for the instalment plan. Reach out to one of our professionals to get to know what is the time to pay arrangement HMRC for your business in the UK. Get in touch now and get your queries answered quickly. What is the Time-to-Pay Arrangement with HMRC? The time-to-pay arrangement refers to a kind of agreement that is working between the taxpayers and HMRC in case you fail to pay the tax. This allows you to pay the tax in instalments by availing of a long period of time. This is the agreed duration of the period that is specified for the payment plan. This plan can work for all kinds of taxes; however, it is most commonly used for the sake of corporation tax. The companies use it for the payment of VAT and PAYE. If you are a limited company that is struggling with short-term cash flow difficulties, the time-to-pay arrangement is your handy solution. However, for the companies that have a usual habit of having tax problems and paying the tax late, HMRC will not entertain the instalments for such cases. What are the Criteria to Check Whether I am Entitled to Get a Time-to-Pay Arrangement? The main thing to consider for the HMRC when a company applies for the time-to-pay arrangement is that the company needs time to clear the payment in an easy way or to find an escape from the tax bills. When a company applies, it has to prove the genuine reasons with shreds of evidence that can explain the reason why it can not pay the tax bills at the moment. The genuine shred of evidence will be able to make HMRC feel considerate about the case to approve the time-to-pay arrangement. Moreover, the payment history from past records will also be checked by HMRC. HMRC makes decisions after checking the ability of a business to pay the instalments by its financial position. Also, the chances of future tax bill payments will be considered by HMRC. Is there a Possibility of Negotiation? There is a limit to the matter of negotiation, but HMRC is flexible for this. This is not the idea to put more pressure on a business that is already going through a rough patch. This means that HMRC is open to negotiating in such hard circumstances for a business. You can even hire a professional to do the job on your behalf. Because HMRC will respond well to a person who has a better understanding of their rules. How to Apply Online for a Time-to-Pay Arrangement with HMRC HMRC now allows eligible individuals and some small businesses to apply for a Time to Pay arrangement online, making the process quicker and more accessible. This service is ideal if you are experiencing temporary financial difficulties and want to spread the cost of your tax bill into affordable monthly payments — without needing to call HMRC directly. Who Can Apply Online? You can apply for a Time to Pay plan online if all the following conditions apply: You owe up to £30,000 in tax. Your tax return has been submitted on time. You are within 60 days of the payment deadline. You don’t have any other active Time to Pay arrangements. You can pay the full amount in monthly instalments within 12 months. If you meet these conditions, the online service is the quickest way to set up your instalment plan. Taxes You Can Pay with an Online Plan Self Assessment Tax (most common) PAYE (for sole traders) Corporation Tax or VAT may still require phone-based arrangements. How to Apply Log in to your Government Gateway accountYou’ll need your login details and your UTR (Unique Taxpayer Reference). Go to the HMRC Time to Pay portalApply for a payment plan Follow the on-screen steps Enter your tax owed Choose how much you can pay upfront (if anything) Select how many months you want to spread the payments over Review and confirm your arrangementIf accepted, your direct debit will be set up automatically. What If You’re Not Eligible? If you: Owe more than £30,000, or Need more than 12 months to pay, or Are outside the 60-day window …then you’ll need to contact HMRC directly by phone to request a manual arrangement. The Bottom Line Now that you have gathered a fair amount of information about the time-to-pay arrangement with HMRC, we can bring the discussion towards wrapping up. The business that is going through a struggling phase will have to prove the genuine reasons behind it to HMRC before expecting the payment plan and the flexibility of HMRC. We hope these few minutes of reading will help you to develop a better understanding and you will be able to deal with business struggles well in the future. Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for the time-to-pay arrangement with HMRC for your business in the UK. Disclaimer: The information about the time-to-pay arrangement HMRC for your business in the UK provided in this blog includes text and graphics of a general nature. It does not intend to disregard any of the professional advice.

tax, Tax Issues, Tax Saving Tips

Tax Fears and How to Solve them

Chris / 22/11/2022

If you are a new individual associated with the status of self-employment, you need to know everything about your relevant tax implication to avoid ending up in the fluster. Putting off the tax liabilities is not recommended because you will have to deal with unfavorable circumstances. You will also screw up if you plan to leave your tax submissions for the eleventh hour. The best practice is to keep a good track of the income and expenses dates. The tax fears and how to solve them is the query of several beginners. You all must have experienced the stress of being new to filing tax returns. If you aim to breathe and live in the tax implications even at the first experience, this article is the right kind of search for you. Talk to one of our intelligent and clever professionals to get your further queries about tax fears and how to solve them. We will ensure to come up with the best possible solution. How Do Beginners View Tax Fears? For any individual who is associated with freelancing and offering the services like content writing, being a co-founder, influencer, and an artist, the first ear of tax returns is always stressful. This is because of the uncertainty and not being clear on what exactly to do with the process of filing tax returns. Beginners often find the atmosphere of the tax industry intimidating. Navigating the whole process of filing tax returns is quite a hassle for the first time. There are plenty of services and professionals that can help to reduce the tension in such a case. Five Tips to Help to Do the Tax Returns If you are a beginner in filing tax returns, you are not alone in this. The fears you might stress about are the common fears among people while dealing with tax implications. Here are the listed five popular tips for doing tax returns for the first time with less hassle and in a stress-free manner. 1- Focus on the Way Expenses Work Keeping a track of expenses and income is quite confusing in the middle of process for the beginners. What is the exact amount that is allowed for you to deduct from your taxable income is a big question especially when you are new. When you are sure about the expense that is associated purely with the business purpose like the training courses fees, the office furniture etc. Such an amount can be deducted from the income to ensure that the tax is paid on the profits only. If you still be unsure about the exact amount of your expenses, the easy way is to get in touch with HMRC to get your queries answered. 2- Keep Some Amount of Money Aside This is not suggested to wait for the eleventh hour and then be shocked about the amount of money you have been keeping for the sake of tax is less than what you actually owe. It is better to put some money aside on a daily basis maybe 20% of your earnings to be well prepared for the tax bills and payments on time. You can even use the tax calculator to get an idea of what is the amount you owe for the tax bills. 3- Keep a Track of the Deadlines The deadlines within the frame of a tax year are important to keep a track of. This will help you to be prepared for the payments before the time and you will be able to avoid any fines and late submission penalties. 4- Open a Business Account If you aim to make things easier for yourself, open a business account for yourself. Several free offers will benefit you in the process. However, you must ensure that the account is being used for the sake of earning and spending on the business activity. This will further help you to keep a difference between your personal spending and your business spending. When you will collect the data, you will find out that everything is in one place. 5- Record on Google Sheets The google sheet and the excel sheets will work for your ease to maintain the records. When the time of final submission will come, you will get the information in an organised manner. This will help you to have a clear picture of the amount that you have spent on the business and earned from the business. The Bottom Line Now that you have gathered a fair amount of information about tax fears and how to solve them, we can bring the discussion towards wrapping up. When you are new to filing a tax return, tax fears are common. However, if you keep yourself maintained and organised by using the tips discussed above, you will be able to experience a hassle-free process of filing tax returns. We hope these few minutes of reading will help you to develop a better understanding of tax and related fears as a beginner. As well as how to deal with them professionally in the future. If you seek professional help, learn more about tax fears and how to solve them. Why wander somewhere else when you have our young and clever team of professionals at CruseBurke? Disclaimer: The information provided in this blog is about tax fears and how to solve them, including the text and graphics, in general. It does not intend to disregard any of the professional advice.

tax, Tax Issues, Tax Saving Tips

Everything You Need to Know About Living Abroad and UK Tax

Chris / 19/10/2022

If you are a businessman who is carrying out a business in the UK, however, you are not living in the UK but you are someone who is settled abroad. There are chances for individuals who are not residing anywhere in the UK but they have their properties here and they are earning through making them as rental properties. You will have to deal with the different scenarios of tax implication by HMRC and you are dishing pit everything that makes you obliged to have an understanding of what to do when ‘pay UK tax when I live abroad. Reach out to our smart and clever-minded guys to get your pay UK tax when I live abroad queries answered quickly. We will help to let you decide about your annual accounts with a clear mind. How to Pay UK Tax When I Live Abroad? It all depends on the unique circumstances of your earning sources. In the case you are an individual who is earning through multiple sources in the UK, you will be in a position to be obliged for the tax implications in the UK. This payment could possibly be from savings, pensions, rental property, or a business. When you have settled abroad and might have a source of income in the UK by having a rental property, you are in a position to get the allowance amount of £12,570 in every tax year. In the same way, as you are entitled to get the benefits, you will be entitled to duties and responsibilities. This means you will have to pay income tax. Am I Obliged to Pay Tax in the Country I am Settled? As discussed earlier that the tax responsibilities and tax implications are a serious matter to HMRC and when it comes to tax affairs, there is a very slim margin provided by HMRC. This makes the scenario a little complicated because you will be in a position where you will have to deal with the tax implications of the UK and the other country where you are settled in. Moreover, the only exception will be there unless the country you are living in has a double tax agreement with the government of the UK. This is also known as DTA. A double tax agreement turns out to be a very beneficial agreement for saving individuals who have settled abroad but earn in the UK as well. This way, you will keep yourself away from the edible tax payments. In other words, we can say that you will no longer be required to pay the tax in both countries, and the tax authorities will spare you in case of DTA. It will make you apply for any one of the following: You will be able to get a tax refund if you have paid the double tax. You will enjoy partial tax relief. You can enjoy full tax relief. The Prominent Differences Between a Non-UK Resident and a UK Resident It is imperative to develop an understanding of the differences between the residents of the UK and the non-residents of the UK who are settled abroad. You will have to consider the following conditions to be called a UK resident: You are required to complete the duration of 183 days to stay in the UK within a tax year to be considered a UK resident. You will have to work for a minimum of 274 days within a tax year in the UK, and this should be your main job. You should have a property in the UK, and you must spend 91 consecutive days in that property you own in the UK. Moreover, when it comes to the tax terms for the residents and the non-residents of the UK. If you are a non-UK resident, you will have to pay tax on the income earned in the UK. However, if you are not residing in the UK but are considered a resident, you are liable to all tax implications in the UK and the other country. The Bottom Line Now that you have gathered a fair amount of information about paying UK tax when living abroad, we can say that it matters a lot to know whether you are considered a UK resident or a non-UK resident to relate to your tax responsibilities. This can vary from one scenario to another because every person is in a unique situation. We hope these few minutes of reading will help you to develop a better understanding and you will now be able to handle your tax affairs efficiently in the future. Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly. Call us or email us today. Disclaimer: The general information provided in this blog about pay UK tax when I live abroad includes its text and graphics. It does not intend to disregard any of the professional advice.

tax, Tax Issues, Tax Saving Tips

What is a Provision for Income Tax and How Do You Calculate It?

George / 17/10/2022

People often take corporate tax provisions as they work as a safeguard for your business and keep you protected from the tax fines and penalties charged by HMRC in the case you have made a late tax payment. It is also referred to as the tax burden that you might face in the current year; generally, this is set aside until the payments are made. This is known to be a unique kind of provision as well. This depends on the industry that your business is associated with that will decide what is the possibility of creating provisions related to bad debts, sale allowances, pensions, and depreciation. However, people still get confused and this article has got you covered to develop a better understanding of what is corporate tax provisions, what is the importance of tax provisions, and what is the way to calculate them. 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. What is Corporate Tax Provision? The corporate tax provisions refer to the amount of money that your business is liable to pay in the current tax year. It is an expected amount of the tax burden of your business. On the main role the provision depicts the main tax burdens of your business, however, on the other hand, it provides protection to your business from the charging of late payment fines and other relevant tax penalties. We all wish to have precise and complete details of our tax implications. The tax provisions are able to provide the most precise estimate possible for your business. Here are the current corporation tax rates and bands: £0–£50k profit: 19% small profits rate £50k–£250k profit: sliding scale via marginal relief Profits over £250k: 25% main rate In spite of the estimated provisions, the businesses tend to keep some buffer amount set aside. This kind of amount of money that is taken out from the business is referred to as income tax provisions. This will further help in the process of calculating the gross income of the company and what are the tax rates applicable to your unique situation. After the process is completed, the final figure is usually rounded off. The calculation steps might involve the following: Calculate the net income of your current tax year. You need to consider the tax rates that are relevantly applicable to you. Next, you will have to multiply both figures. Finally, you can add a small buffer. Moreover, this might sound simple to you; however, the calculations become a bit complicated practically. What is the Method to Calculate Corporate Tax Provisions? When you aim to identify the accurate amount you are liable to pay as your income tax, the process can be time-consuming. You will have to consider the involvement of the relevant professionals while you spare the time to grow your business valuations and work for the betterment of your business’s financial position. It is always a better idea to have an understanding of the corporate tax provisions when you plan to carry out your business. It is advisable to have a breakdown of the tax provisions and get an analysis of how other companies are handling the income tax and financial statements. Main Aspects of Tax Provisions The calculation of tax provisions is indeed a complicated process. This is because there is a difference between the procedures of Generally Accepted Accounting Principles and the rules of income tax accounting. However, most of the departments related to accounting follow the rules of Generally Accepted Accounting Principles. There are chances of a slight difference between the figures of the owned income tax amount and the estimated amount. Before delving further into the discussion, let us have a look at the two main aspects of the tax provisions as they are listed and explained below. 1- Current Year Income Tax Expenses By the term current year income tax expenses we mean the overall amount a business owes to HMRC. It involves the calculations of the current earning figure and the differences between calculations, whether they are permanent or temporary. The differences do not tend to reverse normally, so there should be a serious consideration while you are in the middle of the calculation procedure. Especially when your business is registered for the purpose of income tax. This might allow the factors of discrepancy in the results that you will regret later, so it s better to be accountable for them now. 2- Deferred Year Income Tax Expenses The deferred income tax expense refers to the cost that is considered a liability on the business balance sheet; however, it is not yet paid. It is also known as the opposite of the assets that belong to deferred tax. You can easily get it by calculating the difference between the rules of income tax and your company’s accounting rules. The Bottom Line Now that you have gathered a fair amount of information about corporate tax provisions, we can say that the provision of corporate income tax is a complicated procedure to make accurate calculations, even though the process and method might seem easy and simple to you. Sometimes it even requires the involvement of professionals to get accurate results. However, there is always a little difference between the estimated figure and the final calculated figure, which is usually because it is rounded off as discussed earlier. We hope these few minutes of reading will help you to develop a better understanding of tax provisions and how they work for your business. This will further allow you to handle your tax affairs efficiently in the future. Are you seeking professional help to know corporate tax provisions for a small business? Why not get help from the experts at the CruseBurke? Talk to us now! Disclaimer: All the information provided in this article on corporate tax provisions, including all the texts and graphics, in general. It does not intend

Personal Tax, tax, Tax Saving Tips, Taxation

How You Can Have Tax-Free Income of £18,570 from Savings?

George / 14/10/2022

How much income is tax-free if you are saving from your income and earning interest on it? Many people in the UK put some savings aside and earn an interest rate on them. However, they have no idea about the tax-free income from savings they can have. Interest in savings is a good source of earning additional income in the UK where the cost of living is increasing every day. However, this income is also not tax-free. You have to pay tax on this income too. Just like income, there’s an income allowance, you can have multiple allowances on your savings as well. If you’re also one of those people who have no idea about allowances and tax-free savings incomes, then we have got you covered. In this blog, we will walk you through different types of tax-free allowances and how you can get the maximum tax-free income from your savings. So, let’s start! Do you need help in sorting out your tax problems if you are self-employed or working with an organisation? Let’s get instant help from the qualified financial experts at CruseBurke. Tax on Interest Income Many people in the UK keep their savings either in cash Individual Savings Accounts (ISAs) or in bank accounts. For this, they earn a certain percentage of interest rate on these savings. HMRC offers tax-free allowances to these people who save. Cash Individual Saving Accounts (ISAs) are free from taxes and anyone can have these savings accounts without paying any tax on them. However, other savings are eligible for taxes in the UK after certain allowances. These allowances are as follows: Personal Allowance Starting Rate of Saving Allowance Personal Savings Allowance Personal Allowance (PA) HMRC covers all the income received from all sources of income. If you have multiple sources of income, including interest income, you will get a personal allowance after calculating the total income from all these sources. You cannot get a separate personal allowance for each source of income. In other words, you will get only one personal allowance on the total income you received in a tax year. You will get a personal allowance of £12,570 after the calculation of the total income. The rest of the income will be taxed according to the tax bracket in which your income falls. Starting Rate For Savings (SRS) Starting rate for savings is zero percent for the people earning a low level of income. On the other hand, the starting rate for savings is tax-free up to £5,000. It is calculated after the calculation of the personal allowance. For example, if your income is £16,500 and you get a personal allowance of £12,570. The remaining income will be: £16,500 – £12,570 = £3,930 Now, you can calculate the starting rate of savings that is tax-free as follows: £5,000 – £3,930 = £1,070 It means you can have £1,070 from the interest income tax-free. For example, if you are earning £50 as interest on your savings, it is tax-free as it is within the limit of the starting rate of savings, that is now £1,070. Personal Savings Allowance (PSA) Personal savings allowance is another tax-free allowance on the income earned from the interest on savings. Personal saving allowance is fixed for different tax bands. For example, Personal Savings Allowance for Basic Rate Tax Payers is £1,000 Personal Savings Allowance for Higher Rate Tax Payers is £500 Personal Savings Allowance for Additional Rate Tax Payers is £0 In other words, if you are earning more than £12,571 and less than £50,000, you are paying 20% income tax on your income. However, you can get a Personal saving allowance of £1,000 on your interest income. On the other hand, you can get £500 Personal Savings Allowance, if you are a higher rate taxpayer. Unfortunately, you cannot get any PSA on your savings if you are a higher rate taxpayer in the UK. How Much Income is Tax-Free on Savings? If we calculate all of the above allowances for a basic-rate taxpayer, you will get a total tax-free income of £18, 570. For example: Tax-Free Income = Personal Allowance + Starting Rate For Savings + Personal Savings Allowance Tax Free Income = £12,570 + £5,000 + £1,000 = £18,570 The Bottom Line Finally, we can say that you can earn more tax-free income if you earn interest on your savings. However, you have to pay no tax if you have saved your income as cash ISAs in the UK. Otherwise, you will get a personal income allowance, a starting rate of savings and a personal savings allowance. For this, you need to work out your total income and calculate the tax-free savings income. You need to keep all records of all your sources of income and tax receipts to claim tax-free income from the HMRC. Experienced and certified tax advisors at CruseBurke are the experts in UK tax laws and able to deliver the best tax solutions to you. Feel free to contact us now! Disclaimer: All the information provided in this article on How Much Income is tax-free, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.

Tax Issues, Tax Saving Tips

What are the Tax Implications of Side Gigs?

George / 27/09/2022

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 Issues, Tax Saving Tips

Do YouTubers Pay Taxes?

George / 21/09/2022

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

Tax Saving Tips, Taxation

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

George / 15/08/2022

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