Tax Updates and MTD: November Newsletter
We haven’t done a newsletter in a while, and I honestly can’t tell you why not 🤔. It has been a hectic few months of ups and downs in the United Kingdom and there is so much uncertainty that the best answer was that I couldn’t write about tax matters as they were changing by the month (or week)!
The change regarding tax seems to have stabilised for now and I can get back to my routine of writing about relevant matters. I hope our clients and community have been doing well and luckily I have been in touch with my clients on a monthly basis.
The huge uncertainty regarding rising inflation, interest rates and cost of living has made a lot of people feel negative about their financial affairs. If this is you and you think I can help, book a zoom meeting and let’s talk through your thoughts.
From Anlo’s side, we have successfully implemented a Monday.com system and Kylene and I are keeping on top of tasks and projects to complete. Kylene will be visiting Edinburgh in December and we hope to meet a few of you over coffee. Shout if you want to pencil in some time with us.
Also, I am almost finished with my coaching supervision course, and I can’t wait to share what I’ve learned with you.
Making Tax Digital for Self-Employed Businesses and Landlords
From the tax year starting 6 April 2024, all sole traders/self-employed businesses and landlords whose income or turnover is over £10,000 will need to also use MTD to file their returns.
Read more on what we know so far about the MTD for Income Tax Self-Assessment requirements, based on the pilot scheme and pending legislation being published by the government:
Tax News
If your registration details change for Income tax, VAT or PAYE it is important to update these details at HMRC. We have noticed that people’s addresses and corresponding email addresses are incorrect at HMRC which means that they don’t receive the communication necessary from HMRC.
For our VAT registered business, on or after the 1st of January 2023, the default surcharge will be replaced by new penalties if you submit VAT returns late or pay VAT late, as well as changes to how VAT interest is calculated. Any nil or repayment VAT returns received late will also be subject to late submission penalty points and financial penalties.
Late submission penalties will work on a points-based system. For each VAT Return you submit late you will receive one late submission penalty point. Once a penalty threshold is reached, you will receive a £200 penalty and a further £200 penalty for each subsequent late submission.
You will be able to reset your points back to zero if you comply with the VAT submission requirements.
For late payment penalties, the sooner you pay the lower the penalty rate will be. Late payment interest is calculated as the Bank of England base rate plus 2.5%.
Introduction of PAYE direct debit variable payment plan - From 3 October 2022, employers will be able to set up a direct debit for a variable amounts payment plan. You can set this up by signing into your business account for HMRC or using this tool.
We want to remind clients to please make sure that they have their own Government Gateway account as this will help them see and interpret their own tax affairs. We request agent access for all our clients, but this should not replace your own Government Gateway access. Let us know if you need any assistance.
The Corporation tax rate will increase ONLY for businesses with a profit of over £250 000 per year from 19% to 25% and this will start from the 1st of April 2023.
Dividends Tax – The first £2000 in dividends received per year by an individual is tax free. Any dividends over £2000 per year will be taxed based on their tax bands and it starts at 8.75% for basic rate taxpayers and goes up to 39.35% for additional rate tax payers.
If you receive dividends over £10,000 per year, you should register for self-assessment and declare your dividends as part of your self-assessment return. If you earn dividends less than £10,000 per year, then you can contact the HMRC helpline.