Making Tax Digital

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Making Tax Digital?

We’ve got you covered.


Making Tax Digital is fast approaching, and we know it can be confusing to know what this means to you and your business.

What is Making Tax Digital?

In a nutshell, MTD means that all information going to HMRC will have to be sent digitally.

But we’ve you covered.

We use Xero Accounting Software, which will be fully compliant, and we have our own data collection portal that works seamlessly with Xero.

Over the coming months we will be working with you to find the best way to collect your data simply and cost-effectively.

Timeline for MTD is as follows:

April 2019: VAT reporting for all VAT-registered businesses with a turnover above the VAT threshold.

April 2020 (earliest): All other taxes (Income and Corporation Tax).


Keep your eye out for any updates from us!

GDPR Update

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Data regulations are changing.

With GDPR coming into effect this month, we wanted to let you know we’re updating our privacy policy.

 

Our Commitment to your Privacy.

We’re protecting your privacy & rights through our commitment to the General Data Protection Regulation.

 

We’ve updated our Privacy Policy.

As of 25 May 2018, along with most companies we are aligning with the European Union’s new General Data Protection Regulation (GDPR). We’ve updated our privacy policy to provide you with more information on how Accumulus protects your privacy, including information on how to exercise your rights to your data. Click here to read and download the updated Privacy Policy.

 

If you have any queries please do not hesitate to contact us at gdpr@accumulusaccounting.co.uk.

Tax on Dividends

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The Government is introducing a new tax on dividends from 6 April 2016.

This is likely to increase the tax payable by small company owners who draw their money out of the company as a small salary with the balance as dividend.

How it will work

  • All dividends will be paid gross – the 10% tax credit will be abolished

  • The first £5,000 of dividends will be tax-free

  • Beyond this allowance, taxpayers will pay an extra 7.5% tax compared to 2015/16

Tax Planning

  • In general, the tax bill for small company owners who draw most of their income as dividend is likely to increase

  • There may be scope to increase dividends in 2015/16 before the new tax is implemented

  • From 6 April 2016 it may be worth considering drawing the £5,000 tax-free allowance if not already fully utilised

  • A share portfolio producing over £5,000 in dividends may benefit from being transferred over a period of time into an ISA

Tax Planning

The tax will be payable through the self-assessment system.

It is possible that this may trigger payments on account so it will be necessary to plan for the tax due in January 2018 which may be particularly high.

Example of extra tax payable

A small company with profits of £30,000 may currently pay the following tax (assuming personal allowance of £10,600):

The same scenario in 2016/17 would be as follows:

As usual, if you have any queries on how this will affect you, we’ll be happy to help.

National Minimum Wage

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It’s that time again.

The National Minimum Wage will be going up from 1 October 2015.

Find out more at Gov.uk

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National Living Wage

According to Gov.uk, the National Living Wage will be coming in from April 2016, and “will be £7.20 an hour for workers aged 25 and older. The minimum wage will still apply for workers aged 24 and under.”

We’ll keep you up to date with any news.

Death of the Tax Return

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“Tax really doesn’t have to be taxing, and this spells the death of the annual tax return.”

So said the Chancellor of the Exchequer when he announced in the 2015 Budget that we are to see the annual paper Tax Returns abolished.

It is a move to end the costly and time-consuming process, in what Mr Osborne says will be a “revolutionary simplification of the tax collection scheme.”

It is said that this will benefit 12 million people, mainly the self-employed.

The way we see this unfolding is that there will still be a need to file accounts information on a regular basis, rather than the rush to get it all done in January.

We are confident that Xero will be at the forefront of any technology that will be required, and that by continuing to extend our use of Xero we will be perfectly placed to meet whatever requirements HMRC sends our way.

“Only two things in life are certain,” they say, “death and taxes.” Well, sometimes for accountants it can feel like the two certainties are “death and tax returns”, so we for one will not be mourning this announcement from the Treasury.