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Tax E-News – Budget Special

Tax E-News – Budget Special

16/03/2023Tax News and Tips

On 15 March 2023, Chancellor Jeremy Hunt presented his first Budget to Parliament and set out a plan to reduce inflation, grow the economy and get government debt falling all whilst avoiding a recession and tackling labour shortages. Below we set out some of the main points.   Cost Of Living Support Energy Costs The Energy Price Guarantee (EPG) brings a typical household energy bill in Great Britain down to around £2,500 per year. It has now been announced that the £2,500 EPG will be extended by 3 months to 30th June 2023, before increasing to £3,000 until the end of the EPG period on 31 March 2024. This extra 3 months at £2,500 will be worth £160 for a typical household. In Northern Ireland, a similar scheme operates, reducing typical household energy bills to around £2,109 per year. This has also been extended at the same rate until 30th June 2023. A new scheme for businesses, charities and the public sector has been confirmed. The Business Energy Bills Discount Scheme will run until 31 March 2024, giving non-domestic customers discounts on their gas and electricity bills. Childcare Additional support is being provided towards childcare costs in what the government describe as a ‘childcare revolution’. This includes 30 hours of free childcare for every child over the age of 9 months, with support being phased in until every eligible working parent of under 5s gets this support by September 2025. For Universal Credit claimants, the government will also pay childcare costs in advance rather than arrears, when parents move into work or increase their hours. The maximum they can claim will also be boosted to £951 for one child and £1,630 for two children, an increase of around 50%. Benefits and State Pension As confirmed at Autumn Statement 2022, the government will also increase benefits, including the State Pension, paid to recipients in the tax year to 5 April 2024 by 10.1%. This increase in the State Pension means that most pensioners will receive £10,600 in 2023/24, where they have 35 qualifying years. Individuals are being urged to check their contribution record on their Government Gateway account and consider making Class 3 voluntary National Insurance (NI) contributions in respect of missing qualifying years. Normally it is only possible to make voluntary NI contributions for the past 6 tax years, but until 31 July 2023, it is possible to go back as far as 6 April 2006 and pay additional contributions at the 2022/23 Class 3 rate of £15.85 per week. In-year Class 3 contributions for 2023/24 will increase to £17.45 per week.   Income Tax Increasing liabilities The personal allowance and basic rate band threshold are now frozen in place until 5 April 2028. As earnings increase, individuals will move into higher tax bands. This is often referred to as ‘fiscal drag’ because it will raise more tax without the government increasing income tax rates. The personal allowance continues to be partially and then fully withdrawn for higher earners, with £1 of personal allowance lost for every £2 of adjusted net income over £100,000.   Summary table of key income tax rates and allowances for the tax year to 5 April 2024 (2023/24) Band Taxable Income Tax rate in 2023/24 Other income Savings income Dividend income Personal allowance Up to £12,570 0% 0% 0% Basic rate £12,571 – £50,270 20% 20% 8.75% Higher rate £50,271 – £125,140 40% 40% 33.75% Additional rate Over £125,140 45% 45% 39.35% Other allowances Savings income continues to benefit from a personal savings allowance of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Dividend income attracts a £1,000 dividend allowance in 2023/24, down from the £2,000 allowance seen in previous years. These allowances are in addition to the personal allowance and attract a 0% rate of income tax. Scotland Individuals living in Scotland and classed as Scottish taxpayers have a slightly different banding system for ‘other income’ (non-savings, non-dividend) as follows: Band Taxable Income Tax rate in 2023/24     Other income Personal allowance Up to £12,570 0% Starter rate £12,571 – £14,732 19% Basic rate £14,733 – £25,688 20% Intermediate rate £25,689 – £43,622 21% Higher rate £43,623 – £125,140 42% Top rate Over £125,140 47% The application of income tax to savings and dividends income is the same as for the rest of the UK. Pension tax relief There was good news in the Budget for those saving in a personal pension. The current pension lifetime allowance (LTA) charge is being abolished from 6 April 2023. The LTA has caused some high earners, particularly doctors, to retire early as tax charges apply on crystallisation of pension funds if the LTA (currently £1,073,100) is exceeded. Individuals may be able to receive 25% of their pension savings as a tax-free lump sum when they become entitled to their pension benefits. This is currently capped at 25% of the LTA and going forwards, for most individuals, will remain capped at £268,275. Another pension limit increased by the Chancellor in the Budget was the pension Annual Allowance (AA) which increases from £40,000 to £60,000 from 6 April 2023. The AA applies to the combined pension input by the individual and, in the case of employees, their employer. Pension contributions in excess of the AA result in a tax charge on the individual, although they may take advantage of unused AA amounts from the 3 previous tax years. For those with high incomes, the AA is tapered. From 6 April 2023, where a taxpayer’s adjusted income exceeds £260,000 (increasing from £240,000), the AA is tapered by £1 for every £2 in excess of £260,000, down to a minimum of £10,000 (increasing from £4,000). The Money Purchase Annual Allowance (MPAA) replaces the AA when an individual starts to flexibly access a defined contribution pension scheme. The MPAA will increase from £4,000 to £10,000 on 6 April 2023. Note that an individual’s pension contributions can be very tax efficient depending on their level of income. The taxation rules …

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main types of taxes

What are the Main Types of Taxes in the UK?

03/03/2023tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

It has been observed that the tax code in the UK is most extended since the tax year 2009. It will not be wrong to presume that tax affairs are one of the most complex matters here. This is due to the fact that the tax authorities and system is designed in a straightforward way. One of the main yet difficult parts of tax rules is that even spouses are considered separate entities. Every individual whether living in a civil partnership, married, or single is being taxed individually according to the tax law. Then there are a few exceptions observed as well. As a beginner in tax affairs in the UK, you must gather basic information regarding the main types of taxes in the UK. Moreover, this is imperative to mention here that when you will begin to pay taxes, you will have to go through three different stages. There is the involvement of the central government, local government, and the devolved government. The tax year is on the 6th of April and ends on the 5th of April and it is also known as the fiscal year. Moreover, there are main types of taxes that are mostly implemented for a resident of the UK. We have covered everything related to these types in this guide. Let us get started with the discussion to learn more.   Reach out to our smart and clever-minded guys to get an understanding of the main types of taxes in the UK. We will help to understand your queries instantly.   What are the Main Types of Taxes in the UK? Usually there considered to be six main types of taxes that are implemented on individuals when living as a UK resident. This involves the tax liabilities of paying the national insurance contribution, value-added tax, excise duties, corporation tax, stamp duty, and income tax. The relevant details are explained below for further understanding.   1- National Insurance Contribution National insurance is paid by individuals in the UK to ensure that they qualify for state pension and some other certain benefits from the government. National insurance contribution is mandatory to pay for the ones who are more than the age of 16 and earn to a certain limit. In the case of being self-employed, the profit has to be more than a certain amount to bring in the liability of paying the national insurance contribution. Moreover, there are different classes of national insurance contributions. This explains that not every individual is paying the same amount. The decisive role is played by the amount you earn and what is your employment status in this regard. You must also ensure that there are no gaps in the record of your past payments of national insurance contributions.   2- Value-Added Tax (VAT) Value-added tax is also known as a consumption tax. This tax is also a great source of government income just like the national insurance income tax is. The standard rate of VAT which is 20% is applied to several common things in the UK. The fair of taxis, pushchairs, prams, chocolates and alcoholic drinks are a few examples of which VAT is implemented with a standard rate normally. However, the rates of VAT on the mobility of elders, solid fuel, heating oil, gas, electricity, car seats, and oil is a little lower than other things. There is a category of zero rates items well which includes poultry, meat, fruits, vegetables, and household water. Then comes the things that are exempted from VAT.   3- Excise Duties Excise duty is normally charged on things like vehicles, betting, tobacco, and alcohol. The individuals who are involved in producing these items are also charged excise duty. Normally the excise duty tax is implemented on the final price for sale. The consumer will have to pay the excise duty indirectly to the government in the UK. There is a separate form for the excise duty as well. So it is better to be aware of the standard rates of excise duty to know what exactly are you paying in form of tax indirectly to the government.   4- Corporation Tax A corporation tax is known to be a tax that is implemented on the number of profits of a company. This explains that if you are involved in carrying out business through a limited company, a foreign company that has a UK branch, or any club corporation, you will be liable to pay corporation tax. There is a standard rate of corporation tax as well which could even come down in certain situations. This depends on the kind of business you are carrying out that will decide how much you will pay as a corporation tax for your limited company.   5- Stamp Duty This tax is known as the stamp duty land tax. If you are an individual who is interested in buying a piece of land or a party in the UK that has prices over a certain figure, you will have to pay stamp duty land tax. In the case of buying a first home in the UK, you might get entitled to some discounts in this regard. In some cases of buying the first home, you will not have to pay any tax at all.   6- Income Tax This kind of tax is implemented on your income directly. How much amount you will pay in form of income tax depends on the figure you are learning that is over the amount of your personal allowance. You will have to consider the fact about which tax band you belong to according to your earnings. There are some cases where you can even apply for income tax relief.   The Bottom Line Now that we have gathered a fair amount of information about what are the main types of taxes in the UK, we can bring the discussion towards wrapping up. There are main six types of taxes that are normally implemented according to your unique …

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low down on income tax

The Low-Down on Income Tax in the UK for Foreigners

31/01/2023tax , Tax Issues , Taxation

Being a resident of the UK when you come from some other country has become an inclination for many these days. You must get yourself prepare for a well-planned low down on income tax if you are among those people as it takes quite much to get settled with the new requirements that will bring in. You will have to take a conscious decision after understanding income tax and other relevant liabilities, to become a resident of the UK. Coming from a different origin and becoming a resident in the UK will be a complicated process initially, this might require you a professional to make you understand the tax affairs and how HMRC is given a slim margin in this matter. If you are the one, you are on the right page and we have got you covered with everything that you need to know about the low down on income tax. In this comprehensive guide, we have compiled facts that will help you to consider the needful before moving to the UK. Because, unlike the people who are originally from the UK and grew up here, the climate itself becomes challenging for other people who are trying to get settled. So if you come under the category of foreigners who are also making money from outside the UK, this post is the right click for you. The discussion will cover income tax, why foreigners need to pay tax in the UK, how will double taxation agreement help, and what tax you will be liable for after becoming a resident in the UK. Let us kickstart the discussion.   The Low Down on the Income Tax for People Originated from Outside the UK When people who originated from some other country are new to the UK, the tax affairs and relevant liabilities become a confusing challenge to them. Let us take the instance of an individual who does not belong to the UK originally and can not stand the extreme weather, this makes them decide to witch the country and settle there. Now their status makes them a foreigner in the new country. So under the tax rules, a foreigner is referred to as someone who is actually earning outside of the UK origin. Now according to the tax rules in the UK, any individual whether they are of UK origin or not is liable to pay the tax if their earnings are more than the amount of personal allowance which is £12,570. The income tax will cover the savings interest, benefits, and pension as well. Your band will depend on the amount of money you make in a certain period.   What is the Reason for Paying Taxes if You have Just Moved in? When you originated from a different place than the UK, and you are an employee of a limited company, this will make you pay tax through the system of PAYE. In the case of being a self-employed individual in the UK, you will have to get register for self-assessment tax returns. This is because of the requirement of filing tax returns and paying income tax according to the law of tax in the UK. Many of you must be wondering about the procedure that makes you a UK resident. Well when you are in the UK and meet any of the following requirements, you will be considered an automatic resident here. You are working as a full-time employee for a period of two years or more than this in the UK. You have a home in the UK and you have stayed here for a period of one month in the UK tax year. You have stayed for a 183 days period in the UK. Moreover, if any of the above-mentioned requirements are met, you are a resident of the UK and you will have to pay tax on any kind of income that you are earning from the UK. Also from any other country. Only then it is possible to be entitled to social benefits, pension, and health care. If you are under the category of non-resident, you will only pay tax on the income coming from the UK. Moreover, British citizenship does not come with being a UK resident.   How can a Double Taxation Agreement Help? There is no doubt that if the tax case of a new resident is not handled well, sometimes they end up paying double tax. Because this will make them liable for paying taxes in their native country as well as in the UK. The good news here is that you have the support of a double taxation agreement in the UK with many countries. This will protect you from being taxed twice. This depends on the unique circumstance that will decide in which country you will pay the tax. This is imperative to keep yourself protected from such scenarios and take conscious decisions.   The Bottom Line Now that you have gathered a fair amount of information about the low down on income tax, we can bring the discussion towards wrapping up. It is imperative to have a basic awareness of the income tax low down when you are in the scenario of being a new resident of the UK. Otherwise, you will have to deal with the tax liabilities in your native country as well as the UK in the future. So keep conscious awareness about the low down on income tax for your own benefit.

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tax for a tennis coach

Tax for a Tennis Coach – A Basic Guide

21/11/2022tax , Tax Issues

When you are playing the role of a tennis coach, you must know that your employment status is self-employed. Tax is considered to be a great piece of alliteration for the tennis coaches and for the tax service providers to take this tax affair into serious consideration as well. If you are an individual who aims to be a tennis coach and follow the rules of self-employment, you will have to deal with tax for a tennis coach implication along with the process. You will get your answers instantly if you are a tennis coach looking for relevant queries to be answered. In the article further, we will talk about and gather information about what is the lifestyle of a self-employed individual, what are the tax implications for tennis coaches, and what is the amount of tax that they pay.   Reach out to our smart and clever-minded guys to get your tax for a tennis coach queries answered quickly. We will help to decide how to deal with your tax implications.   What is the Lifestyle of the Self-Employed Individual? The day-to-day work life tends to be more controlled in the case of a self-employed tennis coach than the employees. You are free to take a decision about the amount of work you will allow for your routine, your rates and the relevant discussion with the customer is your responsibility, you will not have to follow the orders or the timetable of your employer. You are in a position to choose the clients that you want to work with, this is why the lifestyle of self-employed individuals is more empowering than the employees. However, we can not ignore the flip side because this makes you responsible to make enough amount of earnings to meet both ends and make a better living for yourself. The benefits for the employees include sick pay and other such holidays, there will not be any such perks. You will get paid if you are working and in case of sickness, you will not be entitled to paid leaves. This brings our attention towards the organisation of your money matters.   What Tax Does A Tennis Coach pay? There are two main types of taxes that you pay when you are in the role of self-employed individual and residing in the UK.   1- Income Tax The kind of tax that you will have to pay on your earnings is known as income tax. This does not matter whether your employment status is self-employed or employed, you will have to pay income tax in both cases. The rates of the tax will depend on the amount of money that you earn within the time limit of a tax year.   2- National Insurance To get yourself the entitlement of the state benefits, you will have to pay the national insurance. The state provides support including the following: Maternity allowance State pension Disability benefit Job seeker’s allowance Bereavement support Moreover, being self-employed does not make you eligible for all the benefits of the state.   What are the Expenses of a Tennis Coach? This is well known by most of you that HMRC is generous enough to allow self-employed individuals to minus business expenses from their income while they are in the process of calculating the number of tax implications on their earnings. The related expenses of tennis coaching that are even allowable to deduct from the income are the membership of the club, the fees of the court, the cost of the website, marketing material, the insurance of the equipment, mileage, refresher training, and the tennis rackets. Moreover, it is important for you to keep a record of the receipts. This will help to explain and work as a piece of evidence that the expenses are actually related to the business and services. You will then be allowed to deduct them from your taxable amount of income.   The Bottom Line Now that you have gathered a fair amount of information about tax for a tennis coach, we can bring the discussion towards wrapping up. Tennis coaching also involves the expenses of the mileage and it is also allowed to claim it with the expense. However, if you be considerate of the expenses and the relevant tax implications, there is a chance of saving yourself from the over-tax payments. We hope these few minutes of reading will help you to develop a better understanding of the tax implications of the tennis coach.   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 tax for a tennis coach includes text and graphics. It does not intend to disregard any of the professional advice.

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Do youtubers pay taxes

Do YouTubers Pay Taxes?

21/09/2022Tax Issues , Tax Saving Tips

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

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