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

What is ATED? Annual Tax on Enveloped Dwellings Explained

George / 07/12/2022

ATED referred to the annual tax on enveloped dwellings. This is a kind of tax that is implemented on companies in the UK regardless of whether they are residential or non-residential. However, the condition is that they must own some residential dwellings in the UK. This does not cover all the residential properties but only the properties that have a valuation over the limit of £500,000. Before delving further into the discussion, we must be aware of the relevant basics of annual tax on enveloped dwellings. Here in this article, we will help you to gather information about what is an annual tax on enveloped dwellings, the kinds of dwellings associated with it, why it is important to know that property valuation and what are business reliefs available in this regard. Reach out to our smart and clever-minded guys to get an understanding of the annual tax on enveloped dwellings queries answered quickly. We will help to understand your queries instantly. What is the Annual Tax on Enveloped Dwellings (ATED)? In simple put, we can say that the annual tax on enveloped dwellings also known as ATED is about the tax implication on the residential properties that have a market value over the figure £500,000. It can be either for a limited company or for a partnership. This is imperative to know here that one of the partners has to be the company in this regard. If any of the property is falling under the category of limited company or partnership, it will be required to file the tax returns at the beginning of the financial tax year. People often enquire about the taxable value of the property at this point, and this totally depends on the market value of the property in the same tax year. If your property does not qualify as a dwelling, you will be out of the scope of ATED. What are the Dwellings Associated with an Annual Tax on Enveloped Dwellings? According to the government of the UK, a dwelling is known to be a property that is either owned by you entirely or you own a part of it. Also, the property will have to be used for residential purposes. The related parts that are associated with such buildings like the ground or the garden are also considered dwellings. It is imperative to mention here that every property’s market value differs from others. The valuation depends on the use of the property as well. There are no examples of two properties observed that have the same market value. There are a few examples of the properties that are excluded from the list of dwellings, we have outlined them in the following: Prisons The accommodations of the military The homes used as care homes The accommodation that is used for the boarding school The halls are used for the students and for their accommodation Hospitals The guest house The area that is used for hotels The properties are exempted from the inheritance tax The dwelling that is under the public property The properties that are under the ownership of charity organisations purely for the purpose of charity Why is it Important to Know the Value of Your Residential Property? The respective valuation date matters a lot in knowing the value of your property. The value of a property also goes up every year alongside the Consumer Price Index. The chargeable amount for the years 1 April 2022 to 31 March 2023 are outlined below. The annual chargeable amount depends on the property value. If the property value is more than £500k to £1m, the annual chargeable amount will be £3,800. If the property value is more than £1m to £2m, the annual chargeable amount will be £7,700. If the property value is more than £2m to £5m, the annual chargeable amount will be £26,050. If the property value is more than £5m to £10m, the annual chargeable amount will be £60,900. If the property value is more than £10m to £20m, the annual chargeable amount will be £122,250. If the property value is more than £20m, the annual chargeable amount will be £244,750. What are the Reliefs Provided to Businesses? It is possible to reduce the chargeable amount in a tax year. There are certain reliefs provided for this reason. If you want to claim the relief, you will have to prepare and submit Relief Declaration Return to HMRC. You can do it online so it is not considered to be a very time-consuming process. A few examples of the available relief are outlined below: It must be under the ownership of a provider who is registered and belong to social housing. It should be available for the public once in a tax year at least for a minimum period of 28 days. It must be associated with a property developer for the sake of property release. The Bottom Line Now that you have gathered a fair amount of information about the annual tax on enveloped dwellings, we can bring the discussion towards wrapping up. The details of annual tax on enveloped dwellings are important to consider before you begin to calculate the valuation of your property and what is the percentage of the increase in a tax year. You can even look for a relief to claim, however, the provider must be someone registered and trustworthy in this regard. We hope these few minutes of reading will help you to understand the tax implications for the annual tax on enveloped dwellings. Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly. Contact us now. Disclaimer: The general information provided in this blog about the annual tax on enveloped dwellings includes text and graphics. It does not intend to disregard any of the professional advice.

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

Voluntary Disclosure to HMRC: Is it Necessary?

George / 01/12/2022

Whether your employment status is being a self-employed individual or you are a business owner, the management of taxes is always a complicated process for everyone. The expectation of occasional mistakes that occur unintentionally also requires your attention. Sometimes, people tend to declare their income to HMRC but the mistakes are found after a long time. However, there is a high chance that you can rectify your mistakes. The recent mistake that you have just realised while declaring your income to HMRC, opt for voluntary disclosure. Now, what is voluntary disclosure? It is a kind of activity that keeps you penalty free and safe even if you have made some unintentional mistakes. Now you aim to keep your finances straight to grow your business and stop worrying about mistakes. Here is the need to know certain facts. This guide will help you to understand everything related to this procedure. This involves the understanding of what is voluntary disclosure, what comes under it, when voluntary disclosure is required and what is its importance. Reach out to one of our professionals to get to know what is the best way to handle the queries about what is voluntary disclosure for your earnings in the UK. What is Voluntary Disclosure? You are liable to submit the multiple income streams that are helping you to make money in every way possible to HMRC. You will have to declare your income as it is and keep the factor of transparency alive with the process. HMRC ensure that the customers get the accurate amount written in the tax bills and there are no errors in the payments of tax bills. However, there are still cases of errors that occur in the tax bills or in the information provided by the customers which make the process complicated. This results in businesses and individuals paying less amount than what they actually owe to HMRC. Here comes the role of voluntary disclosure which helps to reduce the chances of errors on the tax bills. Even the previous mistakes in the tax payments can be rectified with the help of correct declaration. The payments can then be updated. This service is known by the name of digital disclosure service and is very helpful in this regard. Your discrepancies related to the income tax, corporation tax, national insurance or any other tax that you owe can be rectified easily with this. Once you sort out the matter, you will have a period of 90 days to clear the tax payment. What Comes Under Voluntary Disclosure? This voluntary disclosure can be used when a business or an individual wants to do a disclosure about any of the following: Corporation tax National insurance contribution Capital gains tax Income tax Moreover, if you feel like you were not in a position to declare all of your income to HMRC as a business, you can immediately opt for voluntary disclosure to inform HMRC. When is Voluntary Disclosure Required? It is required for all kinds of organisations, businesses, companies, and individuals to declare their income streams and the exact income so that HMRC is ensured that everyone is paying the accurate amount of tax. Current legislation is considered to check the level of accuracy in this regard. If you realise that is an error in submitting your tax returns or any other procedure, you can choose voluntary disclosure to get in touch with HMRC to inform them about the mistake. What Makes Voluntary Disclosure So Important? If you deliberately plan to hide some of the information about your income or provide false documentation to prove a figure that is not correct, you’re in trouble. HMRC will find it out later in the process. So if you are expecting that you can do it and HMRC wouldn’t know, this is a serious mistake that can result in putting you in some serious consequences. You will have to pay a huge amount in penalties and even go to prison for several years. However, if you choose to opt the voluntary disclosure, HMRC will become lenient with your case and mistakes. But if the mistakes are figured out in doubt and then from the process of investigation, you will not be spared and the consequences will be more severe than you expect. The Bottom Line Now that you have gathered a fair amount of information about what is voluntary disclosure, we can bring the discussion towards wrapping up. A voluntary disclosure to HMRC is important when you have realised a mistake in your tax returns as this allows you to get lenient treatment from HMRC and you can rectify your mistakes as well. This will help you and HMRC to pay the accurate tax bill. We hope these few minutes of reading have helped to develop a better understanding of what is voluntary disclosure and relevant facts. This will help you in future to handle your tax affairs efficiently. Get in touch with our young, clever, and tech-driven professionals if you want to choose the best guide for what is voluntary disclosure in the UK for your income. Disclaimer: The information about what is voluntary disclosure 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

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

Can Self-Assessment UK Tax be Paid in Installments?

George / 28/11/2022

If you are the one who is wondering how to make HMRC agree upon the monthly instalments of your tax bills because you have a valid reason that is hindering your tax payments. The frequently asked question in this regard is can you pay tax monthly? Well, this totally depends on the kind of tax that you have to pay, it will help decide HMRC the possibility of the tax payment plan in instalments. The possible option that you have is to use the gateway account to set up the self-assessment payment plan. Anyone around you who is struggling with tax payments can be suggested to find the solution on this page. This article will help them to understand the possibility of paying the tax bills in instalments, what are the requirements of this procedure, how will HMRC help them, and how long this payment plan lasts. Seek no further help after contacting CruseBurke’s team of experts and advisors about whether can you pay tax monthly with peace of mind and within your budget. Can You Pay Tax Monthly in Instalments? It is possible to use your government gateway account for the self-assessment payment plan. This is also known as the time-to-pay plan. The following salient features are important to consider for this procedure: You can pay within a time limit of 12 months or less than that. There should be 60 days to reach the deadline at least. The payment you owe must be below the figure of £30,000. You must have filed the recent tax returns successfully. What Do You Require to Provide for Paying the Tax Monthly? To begin the procedure you can get in touch by using the helpline of self-assessment. This is the second option if you fail to do the self-assessment plan online. This mostly happened for the people who owe more than the amount £30,000 or need a very long period to pay the amount. When finally the time comes to set the plan, you will require a few things that are listed below: The information regarding the payments that you have missed in the past. The details of your bank account. In case you are carrying out a business, the VAT registration number will be required. The reference number of the tax bill you have not paid. Moreover, HMRC will require to gather information about a few things that might include the following: The amount of your savings and any kind of investment that is in the process currently. The usual monthly spending patterns. The amount of money that you earn. Whether there are any other kinds of taxes that are unpaid. Whether you are in a position to pay full tax. How much amount of money you will be able to pay in one month? Moreover, HMRC will also check what kind of assets and property you own and they will suggest you use your assets to pay as much as possible. How will HMRC Help to Work Out Your Instalment Plan? How much amount you will pay in one instalment monthly will depend on the amount you have after the rent and other utility bills are paid. The subscriptions and the fixed outgoing of money will also be taken into serious consideration. In usual practice, HMRC asks you to pay half amount of what you are left with after paying all the monthly bills and other subscriptions to pay the instalment every month. For people who are getting the pension, HMRC will consider this amount of pension as income in this procedure. However, this amount will not be a part of the savings. If you agree upon paying more than what HMRC has decided for your instalment every month. This will only work for your betterment. As paying early means that you are paying less amount of money. This is because of the fact that the interest is not added to the monthly instalments you are paying. For How Long Does the Payment Plan Lasts? Usually, there is no set limit to the last payment plan. This will depend on the amount of money that you can afford to pay every month and also the amount of money that you owe to HMRC as tax bills. The payment is flexible. If you have started to earn more and want to increase your monthly payment amount, you can simply inform by getting in touch with HMRC. The period of your payment plan can easily go longer or shorter. In case you do not inform HMRC about your circumstances changes, they will get in touch with you and discuss the recent changes and how can it affect your payment plan of instalments. The Bottom Line Now that you have gathered a fair amount of information about whether can you pay tax monthly, we can bring the discussion towards wrapping up. If you are stuck in a financial struggle and cannot afford to pay the tax bills, HMRC is flexible enough to offer generous payment plans. Consider making a short-duration plan to avoid paying the interest amount. This will help you to clear the due payment early as well. However, there are a few conditions to be eligible for this plan. We hope these few minutes of reading will help you to develop a better understanding of paying taxes in monthly instalments and the payment plan of HMRC. Are you stressed about your query ‘can you pay tax monthly?’ 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 whether can you pay tax monthly, including all the texts and graphics, is general in 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

What is a Certificate of Residence?

George / 14/11/2022

If you want to spare yourself from being taxed twice on foreign income, you are in need to find out how you can get the tax residence certificate as an organisation, company, or individual. When you are not residing in the UK, you are allowed to claim tax relief but you are in a position that is making you pay tax on foreign income in the UK. For this, you need to get the tax residence certificate. This is also known as CoR. Moreover, there are a few conditions to apply for the CoR. These include checking if you are: Meeting the standard to be called a resident of the UK. The double taxation agreement is there with the other concerned country involved in our case. Furthermore, people who have paid the tax already without having knowledge of the tax condition will get a refund as well. The authorities overseas that are handling your matter will directly get in touch with HMRC to ask for the certification that you are a resident in the UK. Double taxation agreements with the country will also be ensured. For a person who is not entitled to the benefits of the treaty double taxation agreement, HMRC will not give your CoR. Now, this is the decision of the overseas authorities whether you will be given relief from foreign tax or not. Reach out to one of our professionals to learn more about the tax residence certificate for tax purposes. We will love to offer instant help! What is the Tax Residence Certificate? An individual who is considered a resident in the UK, also he is earning from overseas income or gains, there is a possibility of for you to avoid paying the tax twice or to claim tax relief. Many countries will require the CoR for this purpose from the tax authorities. This is to ensure that you are a UK resident. The good news is that you can apply for the tax residence certificate online now. HMRC has granted this opportunity to bring ease to the residents. It will also help to make the process swift and easy for people. However, there are a few conditions to meet before you plan to apply for CoR. You will have to provide evidence of your being a UK resident and there is the validity of the tax treaty by the other concerned country involved in your case. Moreover, the people who are in the process of making the tax payments will possibly get a tax refund soon. What Kind of Information will HMRC require? HMRC will require a certain kind of information when you apply for a tax residence certificate. This information can possibly include the following: The reason why you need a CoR? You will be required to provide the double taxation agreement under which you want to claim. The income sources for which you will make a claim, or any other relevant income source. The time for which you require the CoR is always different from the period of the issuance date. The confirmation about the owner of the benefits for the income to claim and relevant to the UK tax for income streams that are involved in the process of claim. Furthermore, you will have to inform HMRC if you have not filed your self-assessment tax returns for the relevant period. Consider the following points to bring in the knowledge of HMRC: When you arrive or leave the UK during a tax year is going on, you will require a CoR. You will need the CoR when you have spent a period of fewer than 183 days within a tax year in the UK. The reason that makes you believe that you are a resident of the UK. The date on which you left the UK or arrived here. UK residency is assessed using HMRC’s Statutory Residence Test (SRT), which considers factors like days spent in the UK, work ties, and accommodation. As mentioned above that the date of leaving or arriving in the UK will matter a lot here. The date that is created to the beginning or cessation of being a UK resident will be considered in the same way. Moreover, what are the instructions for the newly incorporated companies that have not yet filed the self-assessment tax returns? This case will be handled according to the SRT split-year rules. Split-year treatment may apply if you arrive in or leave the UK partway through a tax year, affecting your residency status for that year. Such companies will need to inform HMRC about: The basic details of the shareholders and the directors, like their names and addresses. What are the reasons that make the company believe that it is a resident of the UK? How to Apply for the Tax Residence Certificate? By now, you must be wondering about the process of applying for the CoR. When you are applying for the CoR as a sole trader or as an individual, you will have to take the following steps into serious consideration to apply for the CoR: You are allowed to use the online service to ensure that is for the process is a swift and easy experience for you. You can email the form, and when doing it online, you will not be required to sign the form. When you are in the role of an agent who is applying on behalf of an individual or a sole trader, you can do it online too. The Bottom Line Now that you have gathered a fair amount of information about the tax residence certificate, we can say that you will require the Government Gateway ID and the password if you plan to use the online service. For cases who do not have an ID already can easily create one before using the online service. Now, in a case where the other country provides the CoR, you will be required to send it to HMRC, Pay As You Earn and Self

tax

Are There Different Ways to Pay a Tax Return?

George / 03/11/2022

There are different ways to pay a tax return depending on the job type and wage payment mode your employer uses. HMRC provides different modes of payment to pay tax returns. If you have no idea how you can pay your tax returns and income tax, we have got you covered. In this article, we will discuss the ways employees or self-employed persons can pay their tax returns on time to HMRC, avoiding any penalty caused by late payments or inaccurate details. Sometimes, you might have incorrect tax codes or other times you might have no idea about how you can pay tax returns to HMRC. Let’s figure out everything in this informative article! Paying your taxes via different payment methods may not be acceptable to HMRC. Get instant help from professional accountants and tax advisors. Tax Returns In the UK Tax returns are filed with HMRC every year to estimate the tax liability. Mostly, citizens are not required to pay income tax under the PAYE because employers deduct income tax at source. However, if you are managing your own business or you’re working as your own boss being a contractor, then you will have to make self-assessment tax returns. There are different ways to make tax returns. The filer has to determine the best way or the most suitable method to avoid any discrepancies or penalties. First of all, we discuss the details of the tax filing details. Tax Returns Date HMRC Submitting tax returns to HMRC demands being mindful of the scheduled dates for the tax returns. If you’re paying tax returns using the online form, the due date is 31st January 2023 for the tax year 2021-2022. However, the taxpayers paying their tax returns on paper forms were supposed to complete them by 31st October 2022. The tax year begins 6th of April every year and ends on the 31st of January next year. Mostly, people pay their tax returns on the 6th of April. To avoid the probability of any inaccuracies, you need to submit way ahead of the scheduled dates of HMRC. What are the Different Ways to Pay a Tax Return? There are four ways to pay a tax return on the scheduled dates. Scheduled dates, as described above, may vary due to the form type. Paying Tax Returns Under PAYE If you get your wage under PAYE, your income tax will be deducted at source from your salary by the employer. So, you don’t need to pay tax returns. You’re free from the hassle of remembering due dates. On the other hand, if you have more than one source of income, you most probably need to make tax returns on or before the scheduled dates. Similarly, you can pay tax returns if you wish to claim more credits, expenses, and allowances. Besides, you can also do this to claim a refund from HMRC. Paying Tax Returns on Your Pension Under PAYE If your only source of income is the state pension, and you started getting a state pension on or after 6th April 2016, you don’t need to pay your tax returns, HMRC will inform you about the tax you owe to them. If a pension is your additional source of income and you are receiving another pension also, you will submit tax returns under PAYE and your employer will deduct tax at source from the state pension as suggested by HMRC. Working after you retire means you will pay tax returns on your income and state pension also. As a self-employed person, you will submit tax returns declaring all your income from your business, state pension and private pension. Construction Industry Scheme and Contractor Contractors also complete a tax return every year on their income and the allowable expenses. The registered contractors deduct roughly 20% from the payments they make to the subcontractors. These advance payments are transferred to HMRC as income tax and NICs. These early payments can be more or less than the actual income tax due. So, the contractors are required to complete Self-Assessment Tax returns before 6th April to ensure they have paid the correct amount of tax. Tax Returns as Self-Employed Persons As a self-employed person, the taxpayer will complete the tax returns as Self-Assessment Tax Returns. They are required to make adjustments and complete their tax bills by the end of January 31 or July 31 every year. They also need to pay Class 4 NICs. Different Methods to Pay Income Tax HMRC accepts different payment methods if you’re paying your self-assessment tax returns to HMRC. bank transfer using CHAPS, Faster Payments or Bacs by cheque through the post corporate debit or credit card Direct Debit in-branch at your bank or building society online banking personal debit card All of these payment methods complete the tax returns on the same day when payment is made. However, you must complete them before the due date to avoid any glitches in the financial systems or any other random mishaps. Final Thoughts Finally, we conclude the discussion that if you’re being paid under PAYE, you will make no tax bills, except when you have multiple sources of income or get a pension as well. Otherwise, you will complete your tax returns yourself in the category of Self-Assessment Tax Returns if you are your own boss and work freely without any employer. Get the best taxation advice and consultation at CruseBurke in under two minutes. Feel free to reach out to us. We’d love to help you to sort out your tax problems. Disclaimer: All the information provided in this article on, Different Ways to Pay a Tax Return, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.

tax, Tax Issues, Taxation

Calculating Your Dividend Tax Bill

George / 02/11/2022

Calculating Tax on Dividends might be confusing and you can commit an error in the calculation of tax on dividend income. Income taxes are relatively easier to calculate. On the other hand, dividend income brings a lot of confusion when it comes to paying taxes on them. Dividend income is an additional source of income. So, it is possible you have invested in a company and purchased shares or stocks. As a result, you will get regular income in the form of dividends when a company earns a profit. HMRC taxes these dividends as they are also a source of income for the investors. In this blog, we will help you how to calculate tax on dividends. We will use an example to elaborate on the tax calculation of dividend income. So, let’s start! Dividend income and taxation on it might be confusing for you. Let’s seek help from the best accountants and tax advisors at CruseBurke. Contact us now! What are Dividends? Dividends are the profits shared among the shareholders of a company. A publicly-traded company typically needs capital to run its operations. For this, they can either get capital from the investors or from the debt. Mostly, companies rely on investors who invest in these companies in return for getting a share in the profits. These shares in profits are known as dividends. Whenever a company earns profit, the companies either plough back those profits or give the shareholders dividends. The larger corporations usually don’t pay dividends, resulting in the high value of the stock. The investors enjoy these dividends as it steady stream of income for the shareholders. However, HMRC levies taxes on this additional income source. The tax on dividends is lower than the general income level. There’s also a dividend allowance of £500, just like an income allowance of £12,570. What is Dividend Allowance? A dividend allowance is a tax-free dividend income. In other words, an investor can enjoy the first £500 in dividends because it gives them an opportunity to get lower dividends tax-free. In addition to a personal income allowance of £12,570, an investor can also get the £500 dividend income tax-free. According to the 2024/25 tax year, all people who have earned income from dividends up to £500 are exempt from taxes. If dividend income exceeds this allowance, they will have to pay tax according to their income tax threshold. Similarly, the shareholders cannot pay taxes on their Individual Savings Accounts (ISA). UK Dividend Tax Thresholds 2024/25 Each of the income thresholds has a different rate of tax on dividends. The three thresholds calculate the tax on dividends after personal allowance and dividend allowance have been taken into consideration. The following are the UK dividend tax thresholds for 2022/2023: Basic Rate taxpayers will pay a dividend tax of 8.75% Higher Rate taxpayers will pay a dividend tax of 33.75% Additional Rate taxpayer will pay a dividend tax of 39.35% Example: Suppose, you’re earning an income of £32,000 and getting a dividend of £3,000 annually. When you will prepare your tax returns, you will have to provide your total income first. Your Total Income = £32,000 + £3,000 = £ 35000 After you have calculated your total income, you will deduct the personal income allowance. The personal allowance is £12,570. Income after Personal Income Allowance = £ 35000 – £12,570 = £ 22,430 This is the taxable income you will pay tax on. Deduct the dividend income from this taxable income and calculate dividend tax and dividend allowance separately now. Now, you need to deduct the dividend allowance Taxable income after dividends = £ 22,430 – £3,000 = £ 19, 430 This is the basic rate of income. So, you will calculate a tax of 20%, which is £3,886 Calculate dividend tax and dividend allowance separately now. This income will help you determine the UK Dividend Tax threshold. Taxable dividend after Dividend Allowance = £3,000 – £500 = £2500 So, £1,000 is the taxable dividend. Because your total income was falling in the basic rate taxpayer threshold, so you will calculate a dividend tax of 8.75% on £2500. This dividend tax is equal to £218.75 Your total income tax including dividend tax will be Total tax = £3,886 + £218.75 = £ 4,104.75 The Final Thoughts Finally, we conclude the discussion that dividend tax calculation is tricky due to the various steps involved in this process. You can also use online dividend tax calculators to avoid the hassle of calculating taxes. It will prevent any errors in the payment of the right amount of taxes. For this, you need to remember to deduct personal income allowance from your total income. Dividend allowance will be subtracted only from the dividend income. Your taxable income will help determine the right dividend tax. CruseBurke is the right place to sort out your tax problems instantly and professionally. For more information, feel free to give us a call or send us a message. Disclaimer: All the information provided in this article on, Calculate tax on dividends, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.