corporation tax

The Key Points Of The 2021 Budget For Businesses

The Key Points Of The 2021 Budget For Businesses

Earlier this month the Chancellor for the Exchequer, Rishi Sunak, presented the 2021 budget. It looked at tax and spending budgets for the year ahead. The 2021 budget also included support for the financial burdens of the pandemic.

But, how does the 2021 budget affect your business? That’s what we look at in this blog post.

Coronavirus Business Support

  • Furlough has been extended until the end of September 2021. Employers are expected to contribute 10% towards furlough payment in July and 20% in August and September.
  • The support for self-employed people has been extended until September. Access to these grants has been widened and around 600,000 more people are eligible.

Taxation Changes

  • There are no changes to the rates of income, national insurance or VAT.
  • Personal income tax allowance has been frozen at £12,570. This will also be the rate it is frozen at from April 2022 until 2026. The higher rate income tax threshold has also been frozen. It has been frozen at £50,270 and will stay here for the same period as the personal income tax allowance.
  • The corporation tax on company profits is set to rise from 19% to 25% in April 2023. Rates will be kept at 19% for around 1,5 million smaller companies that have profits of £50,000 or less.
  • There are no changes to inheritance tax, lifetime pension allowance or capital gain tax allowances.

Business Support

  • There will be a tax break for firms to ‘unlock’ £20bn worth of business investment. Firms will be able to ‘deduct’ investment costs from tax bills. This will reduce taxable profits by 130%.
  • The VAT rate for businesses in the hospitality industry will stay at the reduced rate of 5% until September. In September there will be an interim of 12.5% VAT rate for the following six months until it returns to the normal VAT rate.
  • The business rates holiday for firms in England will continue until June. After this time there will be at 75% discount.
  • Restart grants will be available for shops and other businesses that were forced to close. This is up to £6,000 per premises for non-essential outlets due to reopen in April. £18,000 is then available for gyms, personal care providers and other hospitality or leisure industry businesses.

If you’re not sure how the 2021 budget affects your business or finances, contact our team of friendly accountants in Peterborough. We will discuss anything you need to be aware of and recommend any grants you could be legible for too.

Do You Know Where Your Limited Company Registered Office Details Need To Be?

Do You Know Where Your Limited Company Registered Office Details Need To Be?

When you become a limited company, you need a registered address for your business. In this blog post we look at what a registered address needs to be. We also look at where you need to display your company address, as a legal requirement.

The Elements Of A Registered Address

There are three elements that make up your registered address as a limited company. Firstly, your company number. This is the number you are given when you register at Companies House. Secondly, your address. This is your registered business address for your limited company. And finally, the place. By this we mean England and Wales, Scotland or Northern Ireland, if you are a UK limited company.

Your registered office address is the address that is used for all correspondence from Companies House and HMRC. It is also the address used for serving any legal notices and similar. That statutory registers and records are also kept there for inspection.

How To Stay Compliant With Your Limited Company Registered Address

While this all may sound relatively straightforward, there are things you need to do to stay compliant with your limited company registered address. We have listed some of these below for you. However, if you do have concerns about the registered address for your limited company, give us a call.

  • The registered address of your limited company doesn’t have to be the principle place of your business. Some business owners prefer to use a local accountants office address as their limited company registered address. This is a service we can offer here at AK Bookkeeping.
  • If you move location, then you need to inform Companies House. This will ensure that your records can be updated.

As your local Peterborough accountant, we can provide you with the registered address your limited company needs. This will ensure that all your statutory documents are dealt with promptly and professionally. By using our address, it also protects the confidentiality of your home address.

Making Tax Digital – Are you ready?

VAT Registered Business from April 2019

The clock is ticking as VAT Registered Business i.e. Turnover in excess of £85,000 will need to submit their returns via MTD Compliant Software. The HMRC online portal currently used will no longer operate.

Therefore, if you currently process your Accounts on a spreadsheet or similar software then log onto HMRC to submit a VAT Return you will be affected.

AK Bookkeeping use SAGE and XERO Software for our clients and this is compliant with the MTD requirements from April 2019. Give us a call to arrange a meeting to discuss how we can help at a price significantly less than most Accountants.

Companies, Sole Traders, Partnerships currently not registered for VAT

Business under £85,000 turnover or Sole traders such as Plumbers, Builders, Retailers who currently submit their accounts at the end of the year have until April 2020 to get ready. Again compliant MTD Software is required but submissions will be quarterly.

If you currently drop a bag of receipts to your Accountant at the end of each year then you will be breaking the law and liable to penalties if you fail to change to quarterly accounts.

A big issue is the cost that an Accountant may charge for doing your accounts 4 times a year instead of 1. You should therefore find out what it is likely to cost. Call us for a competitive quotation.

What You Should Know About Your Taxes as a Business Owner

As a business owner, corporate tax issues will be part and parcel of your routine and one of the main  tasks that your accountant will have. If you are a director of a limited company, the tax issues responsibility falls on you. You have to make sure that the business’s tax issues are in order and that the tax liability is accurate. This also includes ensuring that HMRC is paid on time.

What is Corporation Tax?

Corporation tax is based on limited companies and their taxable income or the profits they make. As the owner of one you need to calculate this yourself and you need to pay the amount to the Inland Revenue without an assessment beforehand. The payment date is 9 months and 1 day after the due date of the business and this is usually the very last day of the accounting period itself.

The good news is that this tax rate will be cut from 20% to 17% come 2020 according to the government. The accounting period cannot be more than 12 months for this tax and it is usually the same financial year that your business’s annual accounts fall under. The duration also has an effect on your deadlines and filing your tax returns.

You can check your accounting period by logging onto the online service for HMRC and by checking the dates there. Once your business is registered for Corporation Tax, the HMRC will send you a letter for your exact accounting period.

What is Value Added Tax?

Value Added Tax or VAT is tax that is based on the consumption of certain services and goods that are accumulated through each stage of distribution and production. In other words, most services and products that come from a business will be accountable for this tax. The standard VAT rate is 20% but this can change according to the business you have. You should register for VAT if:

  • The total value of taxable supplies or services within 12 months is more than the registration threshold (which amounts to about £85,000).
  • If the forecast value of said supplies in the next 30 days or so may be more than the threshold.

The amount includes not only the profits you gain but also the amount that is being spent on the business and going through it. The returns have to be submitted online and the good news is that any and all liabilities can be settled electronically.

AK Book-keeping can help you with all of that and more.  We are based in Peterborough and have been in the book-keeping business for decades.

If your paperwork is taking you away from things that should have your undivided attention, then you know who to turn to. Allow us to manage your books so that you can manage your business with little or no distractions. Satisfaction guaranteed!

 

Call Les’ Hotline: 07732090847

Email: Les@akbook-keeping.co.uk

www.akbook-keeping.co.uk

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