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Most individuals who are self-employed are required to pay Class 2 NIC. This is a contributory benefit which protects their entitlement to the State Pension. Those who are not liable to pay can pay voluntarily to protect their benefit entitlement.
Changes have been made for the 2015/16 tax year. The amount of the liability will be determined when that person completes their self assessment return. This means that it will be paid alongside their income tax and Class 4 NIC.
Existing direct debit arrangements will cease by July 2015. For those who wish to spread the cost HMRC will retain a facility to enable them to make regular payments throughout the year. For those who do not use this facility the payment date for the 2015/16 liability will be due on 31 January 2017.
Those with small profits will no longer have to apply in advance for an exception certificate. Voluntary payments will continue to be allowed.
And just when we were just getting used to this change the Coalition government, in Budget 2015, proposed the abolition of Class 2 NIC. Class 4 NIC will be reformed to include a contributory benefit test.
Please contact us for further details if this is an area of interest to you.
In July 2012, Lord Hodgson issued a report on the Charities Act 2006 which included a number of recommendations for charities in England and Wales. One of these was to increase the audit exemption threshold. Further to this report, two statutory instruments have been laid before Parliament and are effective in England and Wales for financial years ending on or after 31 March 2015.
Blake Morris (Assistant Manager) and his partner Rachal have had a baby boy, born 18th April, named Carter Zayn Morris. Congratulations to Blake and his family.
This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.
From time to time there is a change to the income or corporation tax system which can significantly impact on capital tax planning. Some would argue that the new tax treatment of pension funds is one such change.
If you are an employee or a director you typically will have received a notice of coding for the 2015/16 tax year about three months ago. If you haven't done so already, it is well worthwhile comparing this to the notice of coding for 2014/15. Because if you have a company car and you haven't recently changed your car, you will probably see a larger than normal increase in the estimated company car benefit.
For many businesses the prospect of obtaining a 100% tax deduction for the cost of plant and machinery purchased by the business is attractive. The Annual Investment Allowance (AIA) provides such deduction to many businesses for the cost of most plant and machinery (not cars) purchased by a business up to an annual limit. Where businesses spend more than the annual limit, any additional qualifying expenditure generally attracts an annual writing down allowance of only 18% or 8% depending on the type of asset.
Peter Davies continues to be busy with our International Association
If you offer a discount to your customers for prompt payment, the VAT treatment in your VAT accounts has become quite tricky.
In recent years, there have been a number of cases before the Employment Appeal Tribunal (EAT) and the Court of Justice of the European Union (ECJ) which show that it can be difficult to calculate the amount of holiday pay due to an employee.
The risks to any business paying for the services of an individual are significant. Paying a person as if they are self employed can result in large arrears of PAYE and NIC being payable by the employer.
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The government has delayed the introduction of Making Tax Digital (MTD) for Income Tax Self Assessment (MTD for ITSA) for a year.
From April 2022, the government plans to create a new social care levy which will see UK-wide tax and National Insurance Contribution (NIC) increases.
HM Treasury has announced that Chancellor Rishi Sunak will deliver the Autumn 2021 Budget on Wednesday 27 October.