Key Points of Budget 2015

Below are the key points to take away from the 2015 budget

  1. Economic forecast for UK

The economic forecast seems to be promising after years of low growth figures. The growth forecast for 2015 is 2.5% which is up from 2.4% predicted in December, This will be followed by the growth rates of 2.3%, 2.3%, 2.3% and 2.4% in the next four year. Inflation is predicted to fall to 0.2% in 2015.

  1. Public borrowing and deficit

It is encouraging to note that the deficit has halved since 2010 as a share of national income

Borrowing is also predicted to fall from £97.5bn in 2013/14 to £90.2bn in 2014/15, £75.3bn in 2015/16, £39.4bn in 2016/7, £12.8bn in 2017/18 before reaching a £5.2bn surplus in 2018/19

Debt as a share of GDP is expected to fall from 80.4% in 2014 to 80.2% in 2015-16 before falling in every year, reaching 71.6% in 2019/20

  1. Pensions

Pensioners will be free to trade in their annuities for cash, with the 55% tax charge taken off and tax applied at the marginal rate

  1. Personal tax

The tax-free personal allowance will rise from £10,600 in 2015/16 up to £10,800 in 2016/17 and £11,000 in 2017/18. The threshold at which people start paying 40% income tax is set to rise from £42,385 in 2014/15 to £43,300 in 2017/18

Annual paper tax returns to be replaced by digital tax accounts by 2020.

To find out more on how this year’s budget will affect you please visit

http://www.bbc.co.uk/news/uk-politics-31928641

To view the fill budget 2015 report visit the HM Treasury

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/413949/47881_Budget_2015_Web_Accessible.pdf

 

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Important Announcements from the 2014 Autumn Statement

So, how this year’s autumn statement would affect you. Here are some important announcements from the autumn statement that was presented this week.

  1. Tier system introduced for stamp duty.

Under the old stamp duty rules, you would need to pay stamp duty Tax at a single rate on the entire property price. However, under the latest announcement, you will only pay the rate of tax on the part of the property price within each tax band. This is similar to the income tax system.

  1. The personal allowance to be increased up to £10600.00

The amount you earn before you have to start paying income tax will be increased again from £10,000 to £10,600 in 2015.

  1. Children to be exempted from tax on economy flights

This will apply for under 12s on flights from 1 May 2015, and for under 16s from 1 March 2016

  1. Spouses to inherit their partner’s individual saving account (ISA) benefits after death

Currently, if someone passes away they can’t pass on their ISA to their spouse, even if they have saved the money together. But under the latest announcements, from 3 December 2014, if an ISA holder dies, they will be able to pass on their ISA benefits to their spouse or civil partner via an additional ISA allowance which they will be able to use from 6 April 2015.

  1. Business rates to be cut and capped.

To support small businesses in local communities, the ‘high street discount’ for around 300,000 shops, pubs, cafes and restaurants will go up from £1,000 to £1,500, from April 2015 onwards.

  1. Clampdown on tax avoidance.

Currently some large multinational companies divert profits abroad through complicated business structures. So if a company conducts a lot of activity in the UK – sales, for example but avoid paying corporation tax by moving profits generated in the UK to other countries, the UK will now be able to tax those profits at a rate of 25%. This will be introduced from April 2015.

Above is a short summary of the chancellor’s announcements this week. As a business owner, how have these changes affected you?

Read more on this story by clicking the below link

https://www.gov.uk/government/news/autumn-statement-2014-16-things-you-should-know

The Second Income Campaign

The Second Incomes Campaign is a chance given by HMRC to bring your tax affairs up to date if you’re employed and have additional income that’s not taxed.

 

You can take this opportunity if, you’re an employee, you’re resident in the UK or you have additional income from working for yourself

 

What counts as a second income?

 

A second income could come from income sources such as consultancy fees, organising parties and events, providing services like taxi driving, hairdressing or fitness training, making and selling craft items etc

 

You need to tell HM Revenue and Customs (HMRC) if your additional income hasn’t been taxed through a PAYE scheme, self assessment or your main job. This is known as the voluntary disclosure.

 

To get the best possible terms you need to tell HMRC that you want to take part in the campaign. It is always advisable to declare the second income sources before HMRC becomes suspicious and launches an investigation.

 

If you are unsure of declaring your second income, contact KVS Accountants. We help sole traders and freelancers to declare the right amount of income and pay the right amount of tax. KVS accountants serve Roehampton, Putney, Barnes Common, Barnes, Battersea and Fulham

How can e-businesses thrive in the Modern World

When launching a new business based on the e-commerce platform, there are several factors that you need to take into account to make your business a successful e-business. It is important that every e-commerce provider must keep these factors in mind when considering how to expand its reach to new audiences and achieve its business goals in the market it serves. Below are some of these factors

  1. Expanding brand appeal

In today’s globalised world, the opportunities for e-businesses to expand it limitless. However, you need to create an appealing business brand from the inception in order to penetrate the global markets. Majority of the online traffic comes from the association of a brand. This is hard-won value resulting from the trust of your current customers.

  1. Creating an effective online sales channel

Another huge challenge for online businesses is how to most effectively create an online sales channel that supports customer needs as well as meet their organisational and technical capabilities. Getting the foundations right from the beginning is essential in having a strong revenue stream for the business during the first few years

We, KVS & Co advise many clients based in London engaged with online sales. Apart from advising them on accounting and tax matters, we also consult them on the strategic direction of their business.

E-commerce Accountants in London

With more and more businesses going online to sell their goods, it is important that the business owners are fully aware of certain aspects of their business that affects the accounting and tax side of things.   From the start up stage, it is important that the business owners keep a track of all business related payments, revenue and expenses related to their business.   In the point of view of HMRC, any claims for expenses needs to be backed up by an invoice. But, many of the e-commerce based businesses are facing the issue not having the original paperwork as their business mainly engages in online transactions. However, this is not an excuse if HMRC raises any query or launches an investigation for expenses claims.

As experienced accountants, we are serving a portfolio of e-commerce based clients and are in a position to advise start-ups as well as more matured businesses on the best practices of running their business in terms of accounting and tax. This will enable the business owners to make ongoing improvements to their business model. Our aim is to make the client’s business more tax efficient as well as to protect it from unnecessary tax investigations.

More Regulations for the CIS Industry

Contractors in the CIS (Construction Industry Scheme) usually file tax forms online, but now the HMRC proposes that the employers need to do an electronic check that sub-contractors are paying the right amount tax.

This suggestion has been made with the objective of increasing the tax revenue received from the CIS scheme, which has largely seen tax evasion in the past.

Statistics wise, the construction sector contributes around £90 billion or 6.7% of the UK’s gross domestic product, and employs 1.3 million people, According to HMRC, around one million businesses are registered with the CIS.–

Many of these improvements are aimed at creating efficiencies for both CIS contractors and HMRC, but to fully realise these benefits it will require all the businesses to file all information online,

Are you a business registered for the CIS scheme? If so these changes could have a dramatic impact on how you carry out your dealings with HMRC. Contact KVS accountants for advise with your CIS scheme

Digital Tax Dashboard of HMRC

Three major tax related functions of HMRC are about to get a new digital makeover. Reports suggest that these new digital services are progressing through user testing in preparation for potential release to the public in the next year.

The newly designed business tax dashboard, now known as Your Tax Account (YTA), PAYE for employees and Self Assessment Online are all going through a new form of iterative user testing, at the moment, according to HMRC reports.

PAYE for employees could be ready for public testing as soon as June. In addition, YTA has completed private user testing and will be ready for public trials in the near future. Agent Online Self Serve, the final of HMRC’s new digital strategy, is set for testing later this year, although this timetable could change depending on its development.

According to HMRC reports, they have involved customers and staff from the outset in the design and development of the new online services. Each of these is then put together in a series of small, incremental steps.

For more information, please follow the below link

http://www.accountingweb.co.uk/article/digital-default-hmrc-update-2/558242

Different Classes of Ordinary Shares

Majority of the companies have just the ordinary shares. They carry one vote per share, are entitled to participate equally in dividends and, if the company is wound up, the ordinary shareholders will share the proceeds of the company’s assets after paying all the debts

However, there are some instances where companies create different classes of ordinary shares, e.g. ‘A’ ordinary shares, ‘B’ ordinary shares, etc. The main purpose of this is to create some small difference between the different classes of ordinary shares. For example this is done to allow the directors to pay different dividends to the holders of the different share classes, or to distinguish between the shares so that different rules apply for share transfers, etc. If the company has different share classes, their rights cab be explained in detail in prescribed particulars.

What are prescribed particulars?

These set out details relating to shareholder voting rights, rights in respect of dividends and capital distribution, and redemption of shares; they must be self explanatory and reflect relevant information declared in the company’s articles

For more information and advise, contact an experienced accountant for advice. We, KVS accountants have advised several limited company clients on how to go about in re-classifying the shares. We serve the areas of Earls Court, East Sheen, Chiswick, Kensington, Holland Park and Clapham

 

HMRC’s Property Tax Campaign

It has come to note that there’s a backlog of 200,000 tax cases waiting to go to tribunal. This would roughly take 38 years to clear, which is something the media frequently misses while engrossed in ‘tax dodge’ headlines, Bearing in mind the likely delays and costs, it is fair to think by anyone that HMRC has better things to do and more certain cases to tackle.

Continue reading “HMRC’s Property Tax Campaign” »

HMRC in a Rush to Revolutionise the Tax System

At the moment HMRC is in a rush to revolutionise the tax system and it is creating many troubles for businesses. This week’s announcement of the closure of all 281 of the department’s enquiry centres has been met with a sense of disbelief and astonishment by those in the industry.

Continue reading “HMRC in a Rush to Revolutionise the Tax System” »