VAT – Getting Started

VAT – Getting Started

VAT is an often misunderstood tax and clients often ask questions about it. Hopefully this post will dispel some of the myths and make clear how it works. What is VAT? VAT is Value Added Tax. It is a tax that’s charged on most goods and services that registered businesses provide in the UK. For the purposes of this post we won’t explore the complexities when trading outside of the UK but we are happy to advise on this if you use the Contact Us link. Who charges VAT? VAT can only be charged by a registered business. A registered business is an individual, a partnership, a company, club, association or charity. If your turnover is below the threshold then you do not have to register but you can voluntarily decide to register if it is to the benefit of your business. Once your turnover is over the threshold (currently £85,000 per year) you must register. How much is VAT? There are three rates: standard – 20% reduced – 5% zero – 0% Goods and services charged at a standard, reduced or zero rate are ‘taxable supplies’. Even though a zero rated item doesn’t have VAT charged on it it is still a taxable supply at a rate of zero. Most goods are standard rates. The reduced rate applies to children’s car seats, domestic supplies of fuel and power and products to help with quitting smoking. A zero rate is applied to most basic food items, books and magazines, children’s clothing and shoes, and travel by public transport. Rates on different goods and services – GOV.UK – via www.hmrc.gov.uk...
Paying HMRC by personal credit card

Paying HMRC by personal credit card

From 13 January 2018 HMRC will no longer be accepting payments made from personal credit cards. HMRC is only allowed to accept credit card payments on the basis that there is no cost to the public purse, and the EU Payment Services Directive 2, which comes into effect on this date, prohibits merchants (including HMRC) from recharging associated fees back to customers. Corporate, business and commercial credit cards are not affected by this change and HMRC will continue to accept personal and commercial debit cards. Customers will continue to have alternative payment options including: Direct DebtFaster PaymentBACSDebit CardCHAPS Details of ways to pay self assessment can be found on GOV.UK https://www.gov.uk/pay-self-assessment-tax-bill Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share on Skype (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to email this to a friend (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to print (Opens in new...

Tax year 2016/2017 – changes

We are now in the 2016/2017 tax year and many changes have taken place. If you are employed and over 25 your minimum living wage is now £7.20 per hour – see my previous post for more information. FOr those who are self employed the amount you are allowed to earn before paying tax in this year is £10,800 and next year will rise again to £11,000. If you have previously paid your class 2 national insurance contributions by direct debit this will change and they will be calculated and paid along with your self assessment tax and your class 4 national insurance. More information on the changes can be found on the HMRC website here Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share on Skype (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to email this to a friend (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to print (Opens in new...

HMRC taxing tax digital

HMRC taking tax digital Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share on Skype (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to email this to a friend (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to print (Opens in new...

Marriage Allowance

A little publicised marriage allowance has been introduced by HMRC which could mean that the average married couple could be better off by £212 per year. This is called Marriage Allowance and must be applied for. You can apply here. Basically you can transfer £1,060 of your personal allowance (the amount you can earn before paying tax) to your partner and this will reduce their tax liability by up to £212 for the tax year. The lower earner must have an income of £10,600 or less but you can visit the HMRC page to find out more information and apply for marriage allowance. The higher earner has to be earning between £10,601 and £42,385. Your application is completed online with HMRC’s marriage allowance application page and if the application is successful it will be backdated to 6th April. If you are employed or receive a pension the allowance will be given via a change in tax code. For the majority this will be to 1166M meaning that you will have £11,600 of personal allowance. If you are self-employed the marriage allowance will be given when your self assessment tax return form (SA100) is submitted. Marriage allowance continues each year unless you notify HMRC of a change in circumstances or either party cancels it. Bruton Young Bookkeeping can point you in the right direction for advice on a variety of financial matters. We have a panel of financial advisors and accountants that can assist with financial advice. Contact us for more information. Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share...

National Living Wage April 2016

From 1 April 2016 workers aged 25 and over will be legally entitled to a new minimum pay rate of £7.20 per hour, called the National Living Wage (NLW). As an employer you’ll need to check which staff are eligible for the new rates and update your payroll in time. Do you need help with this process or with running payroll for your staff? HMRC are running a number of free webinars to give you more information about the Living Wage (NLW). For more information see the HMRC living wage website here Bruton Young Bookkeeping can advice you on how to implement this and its impact on your bottom line profits, also how to minimise this impact. Contact us for more information. Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share on Skype (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to email this to a friend (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to print (Opens in new...