If you are considering starting your own small business, you may well choose to act as a sole trader rather than a limited company. Before you set up as a sole trader, you should find out about the legal requirements. Legal requirements as a sole trader include choosing and protecting your business name, registering with HM Revenue and Customs (HMRC) for self-assessment, keeping accurate records, and ensuring you pay your personal income tax and National Insurance on time. In this blog, we will cover some of the legal obligations that you as a sole trader need to be aware of. What is a Sole Trader? A sole trader is a self-employed person where, in the eyes of HMRC, you and your business are treated as a single legal entity. On the other hand, there are limited companies, which are regarded as separate legal entities and therefore have limited liability if the company gets into financial difficulties. If you are a self-employed sole trader in the UK and earning over £1,000 per tax year you are required by law to register with HMRC. What are the Legal and Financial Requirements to be a Sole Trader? While sole trader legislation is less complex than other legal structures, there are still some obligations that you need to consider when starting out. You are the sole beneficiary of your company's achievements, so you are solely responsible for complying with legal obligations and deadlines. There's definitely more personal risk and responsibility to ensure your business is up to par, but when you're the only employee it ultimately becomes easier to manage. 1) Register for the Self-Assessment If you are considering becoming self-employed you must take steps to notify HMRC of your employment status. You should tell HMRC that you are self-employed and register for self-assessment to ensure you pay the correct amount of income tax. If you have never been self-employed or have never completed a self-assessment tax return, you will need to register online with HMRC if you decide to become self-employed. By registering online you will be able to create a Government Gateway user ID which you will need for all future dealings with HMRC. After registration you will receive a letter with your Unique Taxpayer Reference (UTR) - keep this safe as you will need it or your accountant will need it to file a tax return and pay taxes. 2) Keep Records of Your Company's Sales and Expenses Because the law requires you to keep a record of all of your company's income and expenses, you should carefully consider how you do this. Accounting software is ideal for this task, with a wealth of features to help you keep track of your day-to-day finances with minimal fuss. The accounting software allows you to automate your bills and track all your expenses through the mobile app, keeping your accounts up to date without the worry of being investigated by HMRC. 3) Choose a Name for Your Sole Proprietorship Naming your business can be difficult but fun when setting up and starting out. However, before you find what you think is the perfect sole trader name, it's important to know that, Sole traders may not use the following terms in their name as this would be misleading as to the legal status of the business. So, as a sole proprietor, you cannot use: ● Limited (Ltd) ● Limited Liability Partnership (LLP) ● Public limited company (Plc) Your company name must not be offensive and should not contain any mandatory sensitive words. This includes names suggesting that your company is government-affiliated or of national importance (e.g. UK or international) unless you have specific permission to use them. 4) Comply with HMRC VAT Regulations If you expect to have a turnover of £85,000 or more over a 12-month period you will need to register for VAT. Once registered you will need to charge your customers for VAT and submit a VAT return to HMRC online using compatible accounting software. VAT can be tricky, but don't worry! PTA manages the UK VAT system so you can keep your business on track and file VAT returns directly with HMRC. 5) National Insurance As a sole trader, you must pay National Insurance Contributions (NICs) on your income, but unlike full-time employees, who only pay Class 1 National Insurance, you must pay Class 2 National Insurance and Class 4 National Insurance contributions. While Class 4 is calculated automatically and included in your taxes, Class 2 is calculated weekly. 6) File a Self-Assessment Tax Return Every Year HMRC normally collects income tax from employees directly through their employer's payroll system. However, if you are a self-employed sole proprietor and run your own business, you must submit a tax return to HMRC once a year to declare your income and allow HMRC to calculate the tax you owe. You must report your annual income and expenses to HMRC each year via a self-assessment tax return. This must be submitted by midnight on January 31st each year. HMRC uses this tax return information to calculate how much income tax you owe. 7) Pay Your Tax Bill January 31 at midnight is also the deadline for paying your self-assessment tax bill. It's a good idea to file your tax return well in advance to ensure you can pay on time - you could face a £100 fine if you miss it! Don't forget that on January 31, you may also have to pay a deposit on next year's tax bill that's half of the previous year's bill. For example, if the total bill for your first year of the business tax year is £2,000, you must pay that amount by 31 January plus an additional payment of £1,000 for next year's bill. After that, another payment on the account is due on July 31st. 8) GDPR The General Data Protection Regulation (GDPR) came into force in May 2018. General Data Protection Regulations regulate how companies collect, store and handle an individual's/customer's data and set out the penalties for those who do not comply. Any company that holds personal information about an individual/customer, whether electronically or on paper, must ensure that it can demonstrate that it has obtained consent to the storage/use of that personal information. In contrast to large companies, sole traders and the self-employed do not have to appoint a data protection officer. However, they could be fined up to 4% of their annual turnover for not obtaining sufficient consent to collect, store and use an individual's data. Final Thoughts Starting your own business in the UK, with all the legal and financial requirements involved, can be as daunting as it is exciting. However, if you choose to start this journey as a sole trader, it simplifies the legal requirements into just a few steps so you can focus on your business. Just remember to keep detailed records for yourself and HMRC and to file your tax returns on time to avoid fines. For personal help and advice on becoming a sole trader and legal obligations for sole proprietors, contact our team at 07985689912 or email info@protaxaccountant.co.uk

The Child Tax Credit is used to help families pay for the cost of raising children. It is now being replaced by Universal Credit so only some people are still eligible for Child Tax Credit. The Child Tax Credit program is meant to assist families with the expenses of raising children. One household only gets one Child Tax Credit for each child. There is no need to be unemployed in order to receive Child Tax Credit. However, you need to be earning below the threshold to receive it. Child Tax Credit does not offer any help to pay for the cost of childcare. If you already have tax credits and are earning a small income then you could have the right to a working Tax Credit and this benefit could include help with the cost of childcare. You cannot claim Child Tax Credits and Universal Credits simultaneously. The Child Tax Credit program is now being changed with Universal Credit. Please NOTE: · This applies to England, Wales, Scotland, and Northern Ireland · Age restrictions: You can claim Child Tax Credit if you are over the age of 16. If you're younger than 16 your parents, or anyone who is accountable for you, could include you as well as your child in their own legal claim. Do I Qualify For Child Tax Credit? Child Tax Credit will be substituted by Universal Credit. It is only possible to claim Child Tax Credit if you already receive a Child Tax Credit or Working Tax Credit. If you'd like more money to assist with the cost that comes with raising children you'll be required to obtain it through Universal Credit (if you or your spouse are under retirement age) and Pension Credit (if the two of you as well as your partner are older than Pension old). You can determine if you qualify to claim Child Tax Credit by using our Benefits Calculator or by seeking assistance. If you're in the category of Child Tax Credit and your situation remains the same, then you do not be required to apply for Universal Credit at present. The government began the process of transferring a few individuals into Universal Credit in May 2022 and plans to finish the process in March 2025. Who Is Eligible For Child Tax Credit? You could qualify for Child Tax Credit if you are currently on Tax Credits (Working Tax Credit or Child Tax Credit) at the moment unless you are claiming Universal Credit. Furthermore: * You must be 16 or over and * You must be responsible for at least one child. The child should be: * Under 16, Or * Between 16 to 20 years old and enrolled in a relevant educational institution or training. If there is a kid between 16 and 19 that is included as a beneficiary in the Child Tax Credit claim, be sure to inform HM Revenue and Customs (HMRC) every year by the 31st of August if they are currently in the relevant educational program or training that is approved. If you fail to do so then, your child will be excluded from your tax credit claim and the amount could be reduced or even suspended. What Will Happen With What Happens To My Child Tax Credit If I Have A New Partner? If you have claimed tax credits as a single individual and later you have one of your partners join your family, you'll need to end your tax credits. If you wish to receive money to assist with the expenses that come with raising children you'll need to apply for Universal Credit. Does the Child Tax Credit Continue If I Divorce My Spouse? If you jointly filed a request for tax credit when you were a couple but when you split, you'll need to end the joint claim for tax credits. If you want to receive money to assist with the expenses of raising your children then you must apply for the money by claiming Universal Credit. If you're the responsible person for youngsters or children born before April 6, 2017, you may be eligible for up to £3,480 in tax credits for children for your first child, and up to £2,935 per year for your children up to the time they reach 16. You can continue to claim until you turn 20 if you continue to attend an approved school. If you have children born after April 6, 2017, you're able to receive tax credits for children in the primary or your second. You can receive £2,935 each calendar year per child. There are certain exceptions to this rule For instance when you're expecting twins or triplets. You can find the rules on GOV.UK. It's not necessary to be in a job to qualify for tax credits for children - however, the amount you'll receive is contingent on your situation. To determine the amount you'll receive, HMRC looks at: * your earnings from the tax year prior (what you earned in the 12 months prior to 5 April) * How many children, or children, who are enrolled with a valid education or training, live in your home * At the time your children of yours were born * If one of these young children or children is handicapped You'll never know for sure how much you'll earn as tax deductions until the claim is approved - this can take between 5 and 5 weeks. If you're over the age of 18 You can utilize the calculator for benefits from Turn2us prior to you submitting your application to determine the amount you'll be eligible for. You'll need to give information about your earnings, your working hours, and child care. If you'd rather discuss this with an advisor, get in touch with your local Citizens Advice. When Will You Receive the Payment? The government made a payment in September 2022. the government announced an expense of living payment to those with child tax credits. The government will provide anyone who is claiming tax credits for children the cost of the living benefit of £324. The payment will be made between November 23 until the 30th November 2022. To qualify for this tax credit, you need to get tax credits for any period from 26 August 2022 to 25 September 2022. The additional cost of living benefit only once, even if you receive more than one benefit. In 2023, the next payments will be made from 2nd to 4rg Jan. 2023. The tax year 2023's maximum Earned Income Tax Credit is $7,430 for taxpayers with three or more children who qualify, up from $6,935 in the tax year 2022. Revenue procedures include the table that lists the maximal EITC amount for different categories, income thresholds, and the phase-outs. If you're still waiting for the first living cost payment and you believe you need to make contact with HMRC. If Your Child Has A Disability Tax credits for children are available. credits for every child or young person that you're accountable for that: * Earns Disability Living Allowance (DLA) or Personal Independence Payment (PIP) * Is blindly certified (or is within 28 weeks of the date of your claim) It will cost £3,545 a year more, over the usual amount of £4,975 if they receive one of the following: * The highest percentage in the health component DLA * The higher cost of living portion of PIP. What Do I Need To Do To Apply For Child Tax Credit? If you already receive tax credits but you want to alter the amount you claim, because you're receiving Working Tax Credit and want to claim Child Tax Credit, you are able to call HM Revenue and Customs (HMRC) Tax Credits office by telephone or manage your tax credits on the internet. * Phone: 0345 300 3900 (or the Relay service 18001 0345 3900) • Online: Gov.UK: Manage Your Tax Credits Be aware that your tax credit claim must be renewed every year before the 31st of July. If you don't renew your claim the tax credit payment could stop and you might be required to pay refunds for the tax credit. Check out Gov.UK How to Renew your Tax Credits What Documents Do I Need To Be Able To Claim Child Tax Credit? When you submit an application to claim Child Tax Credit, you might be asked to provide: The national number for your insurance. If you don't have an insurance number for Your country then you should fill out the claim form in order to prevent delays Evidence for your identification, such as a birth certificate or passport Proof of your annual earnings such as a P60, bank statements, or pay slips. If you're eligible to be exempt from the Two-Child Limit, you could be required to provide additional documents, like: * Adoption certificate * Social worker's confirmation (for the placement of kinship care) * Support worker's statement (for children born in the aftermath of the rape). Change in Circumstances The Child Tax Credit can be paid on a year-by-basis, but it is crucial to inform HMRC about any changes to your situation during the year, which may impact the amount you receive. It is important to notify HMRC about certain changes within a month. Changes in circumstances should be reported to HMRC via post, telephone, or the internet. What Can I Do To Challenge The Validity Of A Child Tax Credit Decision? If you do not agree with the conclusion made regarding your case, you may generally request it be reviewed. This is referred to as a "mandatory reconsideration". If you are still dissatisfied with the final decision you can make an appeal before an impartial tribunal. The time limit is rigid, and you'll typically have 30 days to contest the decision, therefore it is essential to seek out advice and take action promptly.

The Cost-of-Living crisis results from high inflation, decreasing people’s purchasing power, and low wage growth in households. Inflation is the annual increase in the average price of goods in the consumer price index (CPI), a basket of everyday grocery items. This has made it challenging for the average citizen to afford essential goods to sustain their lives, such as energy or food. How Has the Cost-Of-Living Crisis Affected Workers? Workers in particular industries (such as the public sector) have unionized to protest against their employers, demanding higher salaries to match the inflation rate. If the dispute between union members and employers continues, workers practice labour strikes when they refuse to go to work. A recent example is the NHS strikes involving nurses and ambulance staff, which are essential jobs that people rely on so it can be quite dangerous if their pressure to increase wages is ignored. How Are Small Businesses Impacted? Small businesses are the most vulnerable players during this crisis. While larger firms have brand-loyal customers, richer shareholders, and greater credit scores to take out loans, smaller businesses are burdened by the rising costs of raw materials. To remain competitive, they may have to lower their profit margins or use up excess reserves as higher prices will reduce demand. How Should Small Businesses React? A critical economic theory known as the shutdown rule states that firms should continue to operate as long as price (average revenue) can cover average variable costs in the short term. For example, If the revenue generated by a restaurant can pay for workers’ wages, ingredient costs, and other variable costs, it would be advantageous to continue running the firm as its subnormal profits would pay towards its rent (a fixed cost). By Avaiz

There is a myriad of eligible expenses that you can claim as legitimate ways to lower taxes you have to pay. We've listed 10 Self-Assessment expenses that you might not know about. The running of a company isn't easy, particularly when it comes to accounting. When you're the owner of a business, you'll face a myriad of reporting regulations and obligations to comply with HMRC on behalf of your business. However, what many aspiring entrepreneurs don't realize is that when you begin your own business, you must register for self-assessment. Sole traders that are self-employed directors of limited companies’ shareholders, directors as well as LLP members are all required to submit Tax returns for self-assessment to HMRC every year. Depending on their income, the majority of people are required to pay income tax as well as National Insurance contributions to the income that is tax deductible. The amount you have to pay will be different, based on the number of profits you earned in the prior tax year. The good news is that the UK Government appreciates that running your own business can be costly. This is the reason you're able to reduce the cost of a few of these expenses from your earnings which will reduce your tax liability. that you have to pay by way of Self-Assessment. For help in saving cash, take an overview of the following list of Self-Assessment expenses you can be able to claim against the tax invoice. 1. Electricity and Gas Bill It's true that many of us work from home because of the current circumstances. If you are a home-based worker. It is possible to claim a part of the costs for your home. It would be impossible to perform your job without the lighting on or with no heating during winter. Therefore, HMRC lets you determine the amount of your housing bill according to the hours you are working and the areas of your home. 2. Your Mortgage If you work from home your business depends on the roof above your head to operate. It is therefore possible to take a portion of the interest you pay on your mortgage as an expense of the business. It is calculated using the percentage of your home that is used for business. If you're renting from a tenant, you could also claim some of the rent based on the amount that is being used for business use. 3. Office Supplies Look around at what you use on a daily basis. You could claim for: ● Stationery ● Costs for printing ● Your mobile phone ● Software for computers ● Your laptop You could even pay for "pre-trade expenses" to cover purchases made prior to the time you were legally self-employed. The rule of thumb applies to anything bought in the past seven years that is eligible as tax-deductible if you had bought these items during trading. 4. Council Tax That's right. It is an expense of business and is determined by the length of time you're working and in which specific areas in your residence. 5. Motor Expenses Did you use your vehicle for the company? If yes, then you may get a part of the expenses for maintenance and run. It's always beneficial to keep track of your mileage, even if it's not much. The reason for this is that you'll be able to claim 45p off of your tax bill for each mile you travel that exceeds 10,000 miles. Then, the tax rate is decreased to 25p per mile. You can also claim an additional 5p per mile if you are taking an employee or director if you drive your own vehicle that is used for business. In the case of motorcycles, this cost for motorcycles is 24 cents per mile regardless of the distance that was traveled during the tax year. 6. Your Phone Bill The simplest way to make sure you claim your work calls is to use a separate phone for work. It is also possible to keep track of all of your calls on a single phone, so you can determine what percentage of your cost should be associated with work calls. 7. Marketing Expenses An additional Self-assessment expense business owners frequently do not claim is the expense of marketing their company. HMRC will permit the claim of business expenses: ● Advertising you've made in directories or newspapers ● Advertising in bulk mail ● Costs associated with free samples that you've made and disseminated ● Hosting and maintenance costs for websites There are some exemptions to the general rule. It is not possible to claim expenses for entertaining customers and suppliers as well as for event expenses for hospitality on a year-end Self-Assessment return. 8. Donations to Charitable Organizations If you donated money to charity in the past you might be able to claim it as a deduction on your Self-Assessment return. If you're a high-rate taxpayer, any donation to charities that are registered through gift aid will lower the tax burden. 9. Training Training courses that are related to your company. This includes any training that can help you develop your abilities or gain knowledge that you can apply to your business. However, this doesn't apply to training classes that can help you establish your own business or expand into a different sector of business. 10. Costs of Legal and Financial Services When you calculate the Self-Assessment expenses, you must also add any additional expenses, when you hire an accountant or solicitor, surveyor, architect, or other professional, you've made a payment to help you. The Most Important Thing The bottom line is that there are a lot of totally acceptable Self-Assessment expenses that HMRC will accept in your tax return, especially in the case of simple expenses. However, it's essential that you have the ability to prove that the expenses are legal. This means that you must keep track of all your business expenses to prove your expenditure. It is not necessary to submit these records for proof of expenses when you file a Self-Assessment tax return, and the odds are that nobody will ever ask to look them up. However, If HMRC decides to dig at your bank accounts and requests to see evidence that you have paid your bills, it is best to always have them on hand. That's 10 of the top Self-Assessment expenses you should be taking advantage of - however, should you require more help you'll find a wealth of guides on how to use and helpful details in the PTA blog. If you've any concerns regarding the tax accountant, contact us and we'll be glad to assist you!

If you're planning to grow your business by acquiring new premises or equipment or investing in recruiting as well as marketing strategies, you could consider getting a business loan. To help you decide if an unsecured business loan is the best option for you, we examine the different types of loans, what you'll need to do to get one, and what alternatives are available also answer the most frequently asked questions regarding business loans. What is a Business Loan? The business loan can be described as a type of credit for commercial enterprises instead of individuals. Some are more appropriate for businesses that are just starting out, and others are appropriate for businesses that have some amount of years of filing accounts. The amount borrowed in installments of monthly payments over a specified period of time, and pay additional interest added on top. In general small business, loans can be found in sizes ranging from PS1,000 to possibly millions of dollars. How Do Business Loans Work? When you get a business loan, you must apply and tell the lender what it is for. Just like applying for a personal loan, you must provide the lender with proof of your income and your intent to repay the loan. You can choose the period you have to pay. Typically, you repay it over a period of between 1 year and 30 years, depending on whether you opt for a medium or long-term loan. Payments and interest rates are usually fixed over the life of the loan. Are Business Loans Secured? Business loans are secured or unsecured. Secured loans are those which is tied to an asset like a vehicle, property or stock. That means that in the event that you are unable to make your payments the lender could use your assets in order to repay the loan. Because there's less risk for the lender secured loans are generally larger and interest rates tend to be lower. Unsecured loans don't need any asset to be secured, therefore they tend to be smaller amounts and have greater interest rates. Unsecured loans might be more suitable for small-sized businesses that don't have big assets. Some lenders require an individual guarantee from the company's director to secure an unsecured loan. Is It Possible to Start a Business With A Personal Loan? Business loans are secured loans designed specifically for businesses. However, getting a business loan to start your business can be difficult as most lenders want you to provide two annual statements when you apply. If you don't have a business loan, you can use a personal loan to start a business. When applying, the lender will ask what you want out of the loan, so before applying for a personal loan, it's worth checking if starting a business is a valid reason. Otherwise, you risk rejection. What Types of Business Loan Are There? The most popular kinds of business loans are: Bank Loan Through a business loan from a bank, You'll take out a predetermined amount of money from a building society for a specified amount of time and pay interest. Government-backed Start Up Loan It's a personal loan that is backed by the federal government to begin or expand your company. For this kind of credit, one has to reside in the UK and be over 18 years old and be operating (or are planning to start) a business from the UK, and have operated in less than 24 months. Start-Up Loans have a fixed rate of interest of 6%. They're in the range of £500 up to £25,000. you are able to repay your loan in a time that ranges from one to five years. Short-term Business Loan Business loans for short-term duration are targeted at businesses that want to borrow for just a short period of time, not years, and do not want to be bound by long payments. They may be spread in the form of weeks or even months. They do have higher interest rates than other loans. Therefore, be sure to know what they are. Peer-to-peer Business Loan Through a peer-to-peer loan (or P2P) the borrower will take funds from investors who are private, rather than banks. It is common to match these investors via the internet via an intermediary. There may be fees to obtain the loan, therefore pay close attention to any charges, fees, and interest rates prior to committing. Cash Advance The cash advance loan for businesses (also called the merchant cash advance) permits you to get money to cover your company's future debit or credit card sales. The amount you pay each month is based on an agreed-upon percentage of the sales you make with your cards which means you'll pay more when your business is performing well, and less when it's not. Invoice finance This is when a loan provider makes use of your invoices that are not paid as collateral to loan to you. There are two major types of invoice financing: Invoice Factoring is in a position to borrow a portion of the number of your invoices. The lender will take payment directly to your customer. In turn, the lender is going to pay its expenses and you'll be paid the remainder. Invoice Discounting, which lets you take out a loan against the number of your invoices. However, you'll be able to collect funds from your clients and pay the agreed amount. How Do You Decide Which Type of Business Loan To Apply For? If you are thinking about applying for a business loan and deciding on the type of loan to take out You'll have to consider: How Much Money Do You Want to Borrow? Which types of loans are best suited to your particular business model? Some loans, such as Start Up Loans are only appropriate for businesses that are just starting out as well as cash advance business loans are ideal for businesses that make some amount of income through card transactions The amount you are able to repay each month considering an interest rate in consideration The amount of time you'd prefer to borrow the money and the amount of time you'd like to take it out. Although it might be tempting to take the loan for an extended period of time, you could pay more in interest Comparing the costs and fees on each loan you're looking at. It is important to evaluate your options and explore your options before you commit to any lender or an option taking a look at the overall cost of borrowing. Should I Choose a Long-Term Business Loan or A Short-Term Business Loan? When you repay the loan depends on your business and your finances. Long-term loans usually have lower monthly payments and lower interest rates. But you're paying it off over a longer period of time, so you're typically paying more interest. You can also limit your monthly cash flow. It is usually more difficult to approve a long-term loan because of the greater risk that your financial situation will change. Applying for A Business Loan Before you submit an application for a business loan you'll have to be certain about: The amount you'd prefer to take out What are you borrowing the money for How much can you afford to pay back each month How long it will take you to pay back the loan Like other loans, your company's credit score is likely to be assessed, and more attractive loan terms are available for those who have an excellent credit score. A few ways to boost your company's credit score include: Reviewing your credit report and resolving any mistakes Invoicing on time If you're a limited company that is a limited company, you must file full, not abbreviated accounts to the companies that house them. Be sure to have enough money in your bank account for any future payments You should only apply for credit only when you really need it. The number of applications you submit indicates that you are in financial trouble. You can request an estimate instead. Keep all your personal information including your address for business, current. Inform your suppliers, as the company's house of any changes Avoiding court judgments from county courts (ccj) since they are included in your credit file. You could also be required to submit proof of your company's accounts statements from banks, bank statements, information on loss and profits, and tax returns, as well as an outline of your business plan, along with proof of address as well as IDs of directors of the company. Once you've gathered all the necessary documentation and decided which type of business loan is most appropriate for your needs, you are able to search around before submitting an application. Can I Apply For A Personal Loan? Peer-to-peer (P2P) lending is relatively new to business lending, but it's an option many people turn to when they need extra cash. They work with lenders or investors who lend their money to small businesses. It could be one person lending you money or a group of people lending you a small amount. The lender collects interest on the loan, and the small business then pays it back as if the loan came from a bank. This is a good idea for businesses as they are often more likely to get financing than going to the bank. However, there are some risks for borrowers, such as the fact that P2P lending is not yet fully covered by the Financial Services Compensation Scheme (FSCS). This means that if a P2P lending platform goes down, it can be difficult for borrowers to get their money back. However, most P2P platforms have taken strict measures to prevent this. Comparing Business Loans When looking at loans, crucial elements to consider are: To determine if you're suitable for the loan you're thinking about. Be sure to verify the requirements of the lender thoroughly prior to submitting an application The interest rates for the loan, and if they're variable or fixed. It is important to note that Representative APR implies that either rate or less rate, is available to at the very least 51% of the applicants, therefore 49 percent of applicants are likely to receive a better rate. If the loan provider you choose to work with provides a payment holiday (a couple of months to pay). But, taking an absence from payment could mean it will take longer to repay the loan, and you'll have to pay more interest over the long term. the early repayment fee on the loan. Alternatives to Business Loans If you're not convinced an entrepreneur loan is a right choice appropriate for you, you have alternatives, including: Credit cards for business - if you're seeking to get a loan for smaller amounts then a business credit card could be a good choice. It is possible to enjoy an interest-free timeframe for your purchases. Be sure to make sure to pay your balance in full every month to avoid fees or charges. You should also determine what the annual cost and interest rates will be after the 0% rate. Crowdfunding is a way to attract investment by presenting your idea online with the intention of remuneration for investors you have attracted. You could offer to sell a part of your company through crowdfunding for equity or offer rewards like free goods or tickets to rewards crowdfunding. Overdrafts: Your business account could have an overdraft that is either interest-free or low APR. It's usually only good for small amounts, however, it is important to verify the terms of your overdraft and adhere to them. How Much Can I Borrow With A Business Loan? You can typically borrow between £1,000 and £3 million when you take out a commercial loan. However, this depends on your business situation and credit rating. It also depends on the type of business loan you are getting and the length of time you want. Make sure you can afford to pay and consider what you will do if your financial situation changes.

If you spot a VAT error on a previous VAT return, make sure you take the necessary steps to correct it, otherwise, you risk penalties on top of the VAT you owe. There are two different 'routes' that can be taken to notify HMRC of an error and which one you choose will depend on your value. Correct an Error Manually In some cases, you can correct an error on a prior VAT return by amending a future VAT return. You can do this when the error: ● Was made on a statement for an accounting period that ended less than four years ago. ● Had a net worth below the HMRC reporting threshold of £10,000. ● Was not intentional. ● Had a net value of between £10,000 and £50,000. You can calculate your net error by subtracting the overpaid VAT from the underpaid VAT. If the errors you made meet the above criteria, you can correct them on your next VAT return by adding the net value to your next VAT return. If the errors on your VAT return do not meet the above criteria, you should contact HMRC to report them. When in doubt, ask your tax accountant if an error on your statement meets the above criteria or not. Reporting an error to HMRC If you need to report a VAT error to HMRC because you do not meet the above criteria, please complete form VAT652 and send it to HMRC. You can download the form online by clicking here or call HMRC at 0300 200 3700 and ask for a form to be mailed to you. It is possible to submit a report to HMRC without the VAT652 form. If you are unable to access a form, you can write directly to HMRC to report an error at: ● HM Revenue and Customs ● VAT Error Correction Team - SO864 ● Newcastle ● NE98 1ZZ ● United Kingdom When contacting HMRC, there are certain details you need to know about the errors you are reporting. So make sure you have the following on hand: ● Details of how each VAT error occurred ● the VAT accounting period in which the error(s) occurred ● the amount of VAT your business overpaid or underpaid ● How did you calculate this amount? ● the total amount of VAT to be adjusted HMRC VAT Notice 700/45 provides detailed information on how to correct VAT errors, but you should consult your tax advisor if you have any concerns about your VAT return. What Would Trigger a VAT Penalty? The amount of the penalty will be precisely determined based on how the penalty arose and how promptly and transparently the taxpayer reported it to HMRC. For example, if HMRC classifies the error as 'reckless', the penalty can range from 0% to 30% of the potential loss of revenue, depending on the level of disclosure by the taxpayer. If HMRC determines that the error is "intentional and secret", taxpayers could face penalties of up to 100% of the potential loss of income. Penalties vary from case to case as they depend not only on the error but also on the actions of the taxpayer after the error is discovered. What Should I Do If I Receive a VAT Penalty? We encourage anyone who may be subject to a fine from HMRC to contact a member of the Pro Tax Accountant team immediately to find out if they have grounds to appeal a fine. There are strict 30-day deadlines to appeal VAT assessments and fines, so it's important to act quickly. PTA offers an independent and competent source of VAT advice. We are based in London, work throughout the UK and have overseas clients who need VAT advice and assistance relocating to the UK. With VAT advice for organizations that, for whatever reason, find themselves in an unfortunate time with UK VAT, we can help. Our areas of expertise are VAT-sensitive sectors such as universities, colleges, housing associations, charities, and businesses, where VAT can be a real expense. exporters challenged by HMRC on export certificates; a real estate development where VAT-exempt activities are complex; a municipality, a cultural or leisure foundation: no matter in which industry you need expert VAT advice, you will find it at PTA. Support from a Pro Tax Accountant! Here is a brief description of the rules for reporting and correcting errors on the VAT return. If you would like professional tax advice on any aspect of VAT reporting or adjustment or confirmation that you comply with HMRC VAT rules, our team of experienced tax advisers will be happy to help. For more information please contact us at 07985689912 or info@protaxaccountant.co.uk. For a direct accounting quote, click here.

Tax is something almost all of us have to face at some point or another during our lives but very few are ever actively involved in managing tax. It doesn't matter what quantity of taxes you are required to cover on wages, tax credits, or even the state pension you receive, every person would benefit from knowing more about the tax implications of their individual. That's why HMRC has launched this particular initiative: The personal tax account. In line with their overall effort in order to "make the tax system digital" personal tax accounts have been made accessible to all for free. HMRC launched the Personal Tax Account system in 2015. But have you ever used it? The process of registering for a personal account by contacting government officials of the UK is free and can be completed in only 10 minutes. In this article we'll discuss: 1. What is a Personal Tax Account? 2. Can anyone get a personal tax account? 3. Why Should I Register for a Personal Tax Account? 4. What can I do with my Personal Tax Account? 5. What is the Benefit of Signing Up? 6. How do I set up my Personal Tax Account? 7. What's the Government Gateway? 8. What happens If I already have a Government Gateway User ID with a Password? 9. Do I Need a Personal Tax Account and a Self-Assessment Account? 10. Is a Personal Tax Account Compulsory? 11. How do I claim a refund for the current tax year, in-year? 12. Your Security and Safety are Assured through Your Personal Tax Account 13. Where can I access the digital services of HMRC? 14. What do I need to do before I can access HMRC's digital services? 15. What is Assisted Digital? 16. Sharing Information with your Accountant 17. How Much Does a Personal Tax Accountant Cost? What is a Personal Tax Account? Personal tax accounts were developed by HMRC to assist individuals in managing their taxes more efficiently and also to provide transparency in data. Introduced in 2015, the tax account for personal use is available to all and serves as a central point for all HMRC-related information. It has been historically difficult to track your tax obligations due to the information being scattered. A personal tax account is designed to solve this problem by connecting the different tax areas in a single location that can be easily accessed online. Of course, this type of data is extremely sensitive, therefore authorities have taken measures to ensure it's extremely safe. You'll need the Government Gateway ID to log into the system, and it will require two-step authentication. This is crucial to secure your personal information and keep your information as safe as possible. If you already have an account with HMRC services for tax credits or self-employment, you may be familiar with the security measures that are implemented. Accessing every financial record can allow you greater knowledge and control. The information contained in your personal tax account is relevant to you and, therefore, you don't have to browse through other pages to find out the information you should be aware of. Can Anyone Get a Personal Tax Account? Yes, anyone can get a personal tax account. HMRC introduced the Personal Tax Account system in the year 2015. More than a 3.5million customers are in the process of signing up and are using this system. HMRC encourages all to set up a personal tax account. This article provides the fundamentals of personal tax accounts and how you can use them, and the advantages of joining. Why Should I Register for a Personal Tax Account? Personal tax account is a free service that was established by the UK government. It is backed by high-security security systems. The most significant benefit of having your personal tax account in operation is that you can access your tax data all in one place. The concept is that having the entire data easily accessible from one place can give you greater financial control overall. Your account is tailor-made to you. This means you aren't required to search through a sea of useless stuff in order to locate the rules that are applicable to you. One of the benefits of this new system is the speed at which information is processed. It could reduce the waiting period between applying for tax rebate and receiving your refund. What Can I Do With My Personal Tax Account? The system is evolving constantly and you are already able to access many elements of improving your finances like: ● Simply notify HMRC that you've moved home. ● Be sure you have the correct tax code. Most people overlook the importance of this. ● Find your National Insurance number. ● Create and track the progress of a self-assessment tax return online. ● Examine your income tax estimates to help you budget better. ● Reviewing the status of your State Pension track. ● Keep an eye on tax-related forms you have submitted to the HMRC online. ● Create tax credits. ● Check and update Your Wedding Allowance. ● Find a lost UTR number ● Review benefits at work, such as medical insurance, or company car. ● Examine your P800 tax form Keep in mind that this is only the beginning list of the Personal Tax Account. HMRC are adding new components constantly as they strive towards their goal of having a fully digitized platform. What is the Benefit of Signing Up? This new system makes it easier to modify the information HMRC has regarding you. Families who want to make a new claim for Benefits for Children online can make use of their personal tax account. They don't have to submit the birth certificate of their child to HMRC since they can immediately verify the information with the appropriate Birth Registration Offices. For parents who claim Tax Credits, the updated system will make it simpler to keep track of the amount you are entitled to and you can renew it online. It is known that the HMRC assistance line is often difficult to connect to, so this new system could help save you time and help you deal with HMRC more efficiently and less stressful. For more information, please don't hesitate to call us at 07985689912. How Do I Set Up My Personal Tax Account? Let’s be honest here, there are no actual ten-minute jobs. In fact, HMRC claims that it will be 5-10 minutes to get it set up. To begin, you have to sign in to your gateway for government accounts. The online form is simple to use since it only involves the setting up of security protocols and filling in your details. But how long it takes you to find the details you need is entirely dependent on how organized your paperwork is to start with. Things you must be aware of when applying for a personal tax account are: ● The National Insurance Number (this is located on your pay slip) ● Recent payslip ● The most recent P60 or UK passport (must be up-to-date) ● Your landline or mobile number as part of the two-step security ● Select the email address you would like to add to the account. Now that you've got everything in place, navigate to Government Gateway and select either the individual, group (if you represent a business), or agent (if you represent others' financial affairs with Government) column to begin your registration. Accessing the Government Gateway HMRC have released a brief YouTube film that provides you with an explanation of personal tax Account. You can also go straight to the Personal Tax Account login webpage on GOV.UK. A charity called Tax Help for Older People has created a helpful guide to set up your personal Tax Account that includes an example that shows the types of screens you will encounter throughout the process, as well as easy step-by-step directions. In the event that you already have an existing Government Gateway account, you will need to utilize the user ID and password you received when you created the Government Gateway account. As part of the HMRC 2-Step verification process, you will also have to answer some additional questions based on information HMRC are aware of about you including details from your most recent P60 or your passport data. Before you get access to your personal tax account, you will also need to enter an access code which HMRC will forward to your mobile (or tablet). HMRC will give you an access code every time you log in. If you don't have yet a Government Gateway account, you could sign up for one as part of registering for your personal tax account (the identical procedure described in the next paragraph). Be aware that as part of the procedure, you are asked for an email address, a mobile number, and other personal information such as name, and birth date along with your National Insurance Number. If you don't know your national insurance number, then when you arrive on the page asking for your personal information, you should simply click on the link which says "I don't know the National Instance number. In the alternative, you will be asked to provide your postal code. You then proceed to be asked additional questions that will assist HMRC to determine and identify you. you will be given the choice to answer questions regarding your payslips, passport, or P60. If you choose 'payslips' as an instance, you are asked 'How much National Insurance is shown in the section 'Deductions' on one of your most recent payslips? What is the amount of National Insurance shown on your payslip?'. You must answer two of these questions and, if you successfully answer them, you will proceed to the main page of your Personal Tax Account. This can be done in four steps: 1) Enter your name as well as your email address, and then enter an individual password. The program generates the Government Gateway User ID. 2) For logging as the first time you are required to have this username, password, and a unique 6-digit code. In this step, you have to specify the phone number. This could be a landline or mobile. The majority of people believe that sending a text to a mobile phone is the easiest, but it's completely up to you. Once you get the number, you input it into the correct field to verify your identity. 3) Answer security questions using the details you need from your passport, P60, and payslips. 4) Your identity of you will be confirmed through your answers. Then you are able to access all the information in your personal tax account. It's over, the next time you will require your username and password to login to your account. If you encounter any issues regarding the process you may get in touch with HMRC to get some assistance. What is the Government Gateway? The Government Gateway is a central location in which you can sign-up to access online services offered by the UK government. To sign up for an account on the Government Gateway account you have to confirm your identity. You can make use of the username and password you get during the sign-up process. This will allow you to access many services which include many of the digital services offered by HMRC. You can sign up for the HMRC online service or your Personal Tax Account (and that means each of the services that are hosted within it) through the Government Gateway. What Happens If I Already Have a Government Gateway User ID with a Password? If you already have a Government Gateway User ID and password, this indicates that you already have a Government Gateway account. You can then simply add the online services (personal tax account) you want to use to your account. Before you are able to access them, you will receive a code delivered to your mobile or tablet in the 2-Step verification process described above. In the event that you have changed the number of your phone from when you last logged into Your Government Gateway account, you must contact HMRC's Helpdesk which will deactivate your old number, so that a new number is able to be connected to your login information. Note that you require a different Government Gateway user ID and password in case you wish to gain access to services such like: ● an individual (for example so that you can file a personal tax return) ● an organization (for example to register for PAYE for Employers). Do I Need a Personal Tax Account and a Self-Assessment Account? If you already have enrolled for self-assessment you are familiar with the online tools available. But, a tax personal account is distinct from a self-assessment account. It is advantageous to keep both. You won't be able to file your self-assessment tax return through your personal tax account at home, however, you can submit it using the self-assessment feature once it is activated through the Gateway account. In the meantime, you can use it to manage your self-assessment accounts throughout the year. A few of the roles you could perform can include: ● Find your Unique Tax Reference (UTR) ● Review your self-assessment messages ● Print or view the tax calculation you have made from your self-assessment ● Notify HMRC regarding the possibility of increasing or decreasing profits in order to modify payments on the account for self-assessment Is a Personal Tax Account Compulsory? No, it is not compulsory but, HMRC is encouraging everyone to set up a personal tax account based on the data accessible. By having a better understanding of your financial information, you will be able to make more informed decisions. There are more services that could become available in the coming years, and the capabilities will grow. There is no need to set up a tax account login in the event that you would rather not. You are able to contact HMRC by phone or by using paper-based methods. Yet, HMRC is notoriously difficult to reach via phone and it will only get more difficult as more services become online. Paper-based administration can be lengthy and requires more tests or documents. This is because it's feasible to perform automated checks online using the information you can provide right directly on the spot. This eliminates the requirement for traditional documents that could be time-consuming to print and distribute. This is why it is strongly recommended to establish a personal tax account. How Do I Claim A Refund For The Current Tax Year, In-Year? If you think that you are overpaying taxes through PAYE for the tax period (2022/23), then there's an issue with your tax codes. If you are still employed or receiving pension benefits, you should tell HMRC the reason you believe you are overpaying tax prior to the close of the tax year. It is possible to do this on the internet by using your personal tax account. If you prefer to telephone HMRC, the helpline for individuals and employees can be found on GOV.UK. Before you make a call to HMRC, you will need to collect: ● Your personal information, like your full name, address, date of birth, and National Insurance number ● The details of all your pension providers or employers including their PAYE scheme reference number. Your Security and Safety Are Assured through Your Personal Tax Account You are the sole person that can access your personal tax Account with your personal username and password. This service is only accessible to those who are following the exact registration process as you. HMRC is very concerned about security and utilizes firewall security as a standard feature on all its systems. This ensures the highest security for your data since it blocks any attempts at the entry that aren't authorized. All information you give to HMRC online is secured and only your account will be viewed by you. It is important to remain aware of your own online security. Don't divulge your password or user ID and If you must write the information down, do so in a secure spot. A security measure inside this system will display the date and the time you have logged in to your personal tax account. You must verify this, and if things don't appear right, then you must make contact with HMRC immediately on their website. Another security feature already included is the automatic log-out feature in the event that your account isn't active for more than 15 minutes. HMRC will not ask for your financial or personal details via phone or text message, including reference to your personal tax account. We all need to look for fraudsters and report anything that appears suspicious even in the event that we haven't made any losses. Where Can I Access The Digital Services of HMRC? All digital services offered by HMRC are accessible through GOV.UK. HMRC web-based service is an important hub or central point which is where you can gain access to a wide range of services like Your personal tax account, self-assessment online VAT, corporation tax, and PAYE for employers. You can access a comprehensive list of the services with the help of HMRC's official website on the internet. One of the primary online services that are relevant to people includes of them - the personal tax account that permits you the ability to control your finances through HMRC online. It's similar to an online bank account however, it is for tax purposes. There are stand-alone digital services that aren't part of the HMRC's online services hub, as well as Personal Tax Accounts. Personal Tax Account, and that you are able to access directly through GOV.UK. Since GOV.UK provides wealth in terms of services and information, it's difficult to locate the information you want to find. If you are looking to learn what HMRC services are online A good place to start could be to browse GOV.UK's HMRC service and information section on GOV.UK. If you find the information you want is not available, GOV.UK has a search tool that could assist. HMRC also has an interactive mobile application that you can download to an Apple or Android tablet or smartphone. At the moment, you can use the application to review and manage tax credits, review your income tax bill for the current year, and keep track of taxes on tax documents you have filed online. You'll need an existing Government Gateway account to log into the app for the first time. It is possible to create one via the application in case you don't have one. What Do I Need To Do Before I Can Access HMRC’s digital services? Before you have the ability to access all of HMRC's online services, HMRC needs to check that you are who you say you are. In order to do this, you will have to confirm your identity through a "secure entry portal'' which is Government Gateway. What is Assisted Digital? Assisted Digital is the term HMRC uses to describe the extra assistance that people might require in dealing with tax credits or tax refunds online, perhaps due to the fact that they suffer from a disability or don't have internet access. It is also designed to assist those who have access to the internet but struggle to use it due to a lack of confidence, lack of skills, or the fact that they might be facing IT technical issues. If you believe you require HMRC's assisted Digital assistance, you can ask for assistance at the HMRC support line. The assistance you will receive can include: ● Assistance to access an internet connection and a computer. HMRC might suggest you to an organization or charity that could assist you to access the internet. ● Inputting information on your behalf, or helping you to do this yourself. ● Scheduling a face-to-face meeting If you require one. You can also contact those who can provide help on the phone or via webchat with: ● Difficulties logging in or signing up issues (there is also a 'Get help on this page option at the bottom of relevant pages) ● Error messages you receive when using the majority of HMRC systems. ● Using HMRC free software and tools ● Difficulties in sending forms online Trusted Helpers HMRC also offers the Trusted Helper option which permits you to request a trusted family member or friend to assist you to make use of the Personal Tax Account. This service can only be used to help you with your personal tax account. The service cannot be used to assist you in completing your Self Assessment tax return. In the event that you determine that you wish to alter or eliminate your trusted helper, you can do this by blocking the person you can do by using the 'Help friends or family members' section in your Personal Tax Account. If you have blocked someone, it is vital to know that you are unable to make them available for assistance with your personal tax account. If you are using the Trusted helper service It is crucial to be aware that you remain legally accountable for your own taxes and any errors committed by the Trusted helper will be deemed to be yours. Sharing Information with your Accountant Your personal tax account is an excellent way to keep track of all the tax information you have. It is useful to provide your tax professional with details to complete an income tax return or file an application for a tax rebate. Instead of writing out all the details, you could just take a screenshot of the tax information on the Personal Tax Account page and include it in your email. You will always require the tax year as well as the name of your employer. Alternatively, you can go completely old-fashioned and print the appropriate document from your personal tax account. Then forward it to your tax accountant. Whatever way you give your information away Your Personal Tax Account can be an effective tool for assembling everything related to your tax status. How Much Does a Personal Tax Accountant Cost? It's not as easy as simply providing a single figure or even a set of expenses to determine the cost of a personal tax accountant. The reason for this is that the experience that the accountant has, as well as the nature of service you receive and the amount of personal information you have can all influence the price. For instance, if you want an accountant to prepare your tax return but without offering any guidance or a thorough analysis regarding your personal taxes the cost will be considerably less. However, If you are a business that needs assistance with technical issues as well as compliance with numerous filing requirements It is likely that the price will be higher. The cost can vary from £150 to £500. With the accessibility of your web-based HMRC personal tax account, you may not require assistance from an accountant. When you sign up for an account for your personal tax and sign up for any applicable tax-related services you have complete access and you will be in a position to keep track of and submit any necessary information. It is important to mention that using a tax professional on your own can reduce costs and also ensure that everything is in order. It could be worth spending only a few pounds to avoid penalties or find efficiencies that are available. Tax law can be complicated and there can be financial penalties for mistakes, which is why hiring a competent personal tax accountant could prove beneficial economically. If you decide to employ a personal tax accountant you must be fully transparent about the price. It is best to discuss this with them right from the beginning to make sure you know what services you will receive as well as their expertise and cost. Please get in contact with us for any questions you have or concerns regarding this article.

When starting a business, you may encounter various problems, which means that taxes are often deferred while more pressing problems are resolved. However, it is important to remember that companies that pay late taxes are subject to significant penalties. For this reason, it is always a good idea for small business owners to have a good understanding of their tax obligations. So what are the different types of taxes? When should you start paying taxes? How to claim tax relief for small businesses? Read our full guide to find out. When Do You Have to Pay Taxes? This fiscal year runs from April 6, 2022, to April 5, 2023. Different types of taxes have different payment times, so we'll give you an overview of the different taxes and due dates for payment. Different Types of Taxes for Small Businesses in the UK Corporation Tax There are many types of taxes in the UK, corporate tax is one of them. It is a tax on your company's profits during the fiscal year. It is due nine months and one day after your company's financial year ends. Its period starts on March 31st, which means you will have to pay corporation tax before January 1st. The corporate tax rate is currently 19%. It is important not to declare corporate tax after the deadline, as this can lead to penalties. Income Tax Income tax is paid on income you receive in person, such as, salary and dividends. If you are a director of a public company, income tax is paid through your company's payroll system. In the case of sole proprietorships, income tax is paid on corporate profits, which are included in the tax return. State Insurance State insurance helps you collect your state pension and pay benefits. Like personal income tax, standard insurance for company directors is also contracted through PAYE. The payment process for independent merchants is slightly different. It is basically calculated as part of the annual self-assessment and is paid to the HMRC before January 31st and as part of the upfront payment (July 31st). VAT Value-added tax is a consumption tax that is added to the price of goods and services. Businesses are not automatically registered for VAT unless their annual turnover exceeds the VAT limit (£ 85,000). If you have to pay VAT, you must pay it quarterly and submit VAT returns to HMRC within 37 days of the end of the quarter. It is also important to remember that the structure of your business determines the tax liabilities of your business, which also determines when your taxes are due. Tax Liability Towards Sole Proprietors As a sole proprietorship, your allowance is £ 12,500. As long as you earn less, you don't have to pay income taxes. If your business earns between £ 12,501 and £ 50,000, you will pay a basic income tax of 20%. If your income is between £ 50,001 and £ 150,000, you pay 40%. A 45% rate is applied to entrepreneurs whose tax base is greater than or equal to £ 150,000. It is also necessary to file an annual tax return and pay national insurance policies. If you expect your income to exceed £ 85,000 in 12 months, register for VAT. No sole Proprietor is subject to corporation tax. Tax Liability of Limited Liability Companies LLCs are required to file an annual tax return with Companies House, prepare statutory accounts, file a tax return with HMRC and register for VAT (if income exceeds £ 85,000). In addition, the director of a public limited company must file a tax return and pay national insurance taxes/contributions via PAYE when receiving a salary from the company. Tax Liability of Companies Businesses have similar tax obligations. First, shareholders must pay income tax on their share of the company's profits (the same proportion applies to partnerships as to individual owners). You will also need to pay National Insurance, file a personal tax return and register for VAT if your income is over £ 85,000. In addition, the designated partner must file an annual corporate tax return. Tax Obligations for Limited Companies Limited companies must file an annual corporate tax return. If the profits of a limited company exceed the limit (£85,000). Additionally, each partner must pay income tax on his partner's share of profits, file a personal tax return, and pay social security contributions. How to Claim Tax Relief for Small Businesses? Running your own business is a tough time and it's always worth looking for ways to ease the financial burden. While there are a lot of bills to pay when running a small business, there may be a few ways to recoup some of the taxes you pay. We've pulled together some tax reliefs small businesses can claim. Employment Allowance (National Insurance Relief) If you are an employer, you may be eligible for a social assistance supplement of up to £ 4,000 (the total supplement for all employers, not all employees). By claiming your work allowance, you can pay less than your employer's national insurance contributions each time you pay your salary until you reach the limit of £ 4,000 or at the end of the working year, whichever comes first. Annual Investment Allowance The government has extended the £ 1 million limit on annual investment allocation (AIA) until 2022. AIA is a type of equity deduction that allows you to deduct the costs of machinery and equipment from your earnings when you pay taxes. Investment Program for Seed Companies The Seed Business Investment Scheme is a venture capital scheme that helps start-ups raise funds as long as they use it for a "qualified business". It provides tax benefits to investors when they buy new shares in your company. Business Rates Relief Some business premises can take advantage of city corporate discounts. There are different plans depending on your business. For example, a small business interest subsidy is available if your property's appraised value is less than £ 15,000 and your business occupies only one property. Another type of price reduction for companies is the commercial belt, which can be useful if you are moving or starting a career. If you work in business, you can earn up to £ 55,000 per year in business interests for five years. Marginal Relief If you are self-employed, you may be able to apply for a small income tax exemption to reduce your corporation tax assessment. It gives you a gradual increase in your tax rate between the small profits rate and the main rate. Entrepreneurs' Relief You may be able to reduce the capital gains tax rate if you sell your business by applying for a Business Asset Exemption (Entrepreneurs' Relief). The Patent Box If you own a business, the patent box can mean that you can collect a lower corporate tax rate on your profits from any patented invention you own. About Us Pro Tax Accountant help you by paying your taxes and reducing the administrative burden on your invoice research team. Find out how we can help you with one-time or recurring tax payments.

If you're looking to hire a bookkeeper, there is a chance you're starting a new business or you are already in business or self-employed and need help with the financial side. bookkeeping consists of the continuous monitoring of the financial transactions of the company. bookkeepers are responsible for managing the current and accurate financial reports about the business they are working with. Most of the time, the accountant is quite limited in scope – providing reports to business owners or providing documentation to accountants for the next step. However, as with most professions, skills and experience vary, and some bookkeepers can help with strategy and planning. Good Bookkeepers Good bookkeepers must be methodical in keeping accurate records. There are various methods, including "single entry" and "double-entry", and these are sometimes considered best practices in accounting. So as long as your accountant keeps up-to-date records of incoming and outgoing transactions, it's the same end state. There is no set line for when an accountant's role ends and when a bookkeeper's role begins, but generally, bookkeepers tend not to get involved in corporate tax filings. Tasks of a Bookkeeper A bookkeeper is an expert person who: ● Manage accurate financial transactions ● Manage internal business processes ● Capture your company's financial information in a standardized way so that accountants can also access it ● Review of internal business processes. ● Organize, collect and record financial data on a daily basis ● Keep track of purchases, sales, and payments Why Do You Need a Bookkeeper? If you've started your own business, chances are you're passionate about it and focused on the things you love to do. But if you're not interested in keeping track of every detail of every financial transaction. For example, imagine you have a small business. Maybe you have: ● A simple business model ● Invoices from suppliers of hair products ● A high transaction rate with many customers ● Many sales per day, maybe dozens or more ● Record and pay employee wages Without proper bookkeeping, transactions would easily go unnoticed and accumulate at the end of a financial period. Mistakes can be made and important details can be missed or overlooked. This is where bookkeepers come in. You can relieve the company. It can take care of the daily entry of receipts, invoices and other transactions. What Do They Actually Do? They provide current and accurate financial information about a business. Basically, the two tasks that define their tasks are data entry and bank reconciliation. Other roles can be: ● Business profit and loss management ● Pay bills and suppliers ● Management of company books. ● Company balance sheet management ● Complete tax forms ● Record of financial transactions ● Process customer invoices, approve payments (or reject) payments ● Preparation of financial reports ● Complete sales tax returns However, a professional bookkeeper does more than just reconcile bank statements. If you hire an outside bookkeeper for your business, you may come up with other ideas, such as; Developing systems to account for all financial transactions by creating a chart of accounts. They can help define accounting policies and best practices. What Skills to Look for in a Bookkeeper? Let's start with the non-negotiable bits. If they can't reconcile the books or are bad with numbers, they may not be the right people. These are the main areas your bookkeeper should be comfortable with: ● Balance sheets ● Bank deposits ● Power calculation ● Annual accounts ● Bonuses and Commissions ● Bank reconciliation ● Charity accounting ● Debits and credits ● Deferred transactions ● Pay payroll taxes ● Depreciation ● Payments ● Payroll entries ● Inventory movements ● Invoice ● Billing ● Journal entries ● Transaction and cash flow management ● Currency exchange ● Extra hours ● File payroll taxes ● Calculation of wages and salaries ● Payroll tax calculations But even if your bookkeeper has excellent basic skills, they can still be a headache if they're not organized or know how to work with clients and vendors. What are the Benefits of Hiring a Bookkeeper? Hiring a bookkeeper depends on the growth stage of your business and how comfortable you are with your accounting. So when should you call a bookkeeper? If your business is new and you have a small amount of bookkeeping, you may be able to do your bookkeeping with a simple spreadsheet. But as your business grows and becomes more complex and profitable, it's time to think about professional support. Here are the reasons why you should hire a : 1. A Professional Bookkeeper Will Save You Time You spend many hours each month on accounting and other financial activities. Because it's so long and boring, always keep it at the bottom of your list. So when the tax return deadline runs out, you will waste valuable time. And every time you switch to non-core activities like accounting management, you spend time growing your business. The time you spend on bookkeeping can be spent on your business - product development, customer experience, and ultimately your bottom line. 2. Keep Accurate Records Not only will your bookkeeper help you keep accurate records, but he will understand your financial situation. He helps you evaluate how to make important business decisions, such as: if it is a good time to grow or when to stop. He can also identify trends in your industry and help you take advantage of those opportunities. Finally, he can help you set a budget and stick to your budget. He will help you create a realistic financial plan that will allow your business to grow by reaching short and long-term goals. 3. You Won’t Miss Unpaid Invoices Overdue and unpaid invoices can impact your cash flow and business goals. A bookkeeper can set up a process to help you keep track of your bills. This can include sending reminders about overdue invoices, making phone calls or charging fees for delays. It also tracks overdue or forgotten payments, so you don't have to worry about losing financial commitments. 4. They Help You Identify Liquidity Problems Since your bookkeeper handles the daily entry of invoices, receipts and other transactions, he has a good idea of ​​your income, expenses and spending habits. Paying attention to your accounts will help you understand how your business is doing and identify any cash flow issues that may arise. 5. You Have the Option to Pay Less Tax If a bookkeeper has experience with a company in your industry, he will understand the daily expenses and will be able to advise you on tax-deductible business expenses. For example, a bookkeeper who works with other yoga studios can tell you if the cost of additional training for one of their teachers is tax-deductible. Also, the cost of hiring and working with a bookkeeper is tax-deductible. 6. Expert in Managing A bookkeeper is an expert in maintaining, classifying and recording your business's financial transactions. They spent time executing their experiences and skills. During this time, they have seen and fixed any bookkeeping issues you may have. Their experience makes them more effective in treating these problems. Plus, they understand the business trends and challenges that other players in your industry face and can even help you overcome them. They also know what questions to ask to help you make important decisions and can share best practices with you. 7. You can Focus on Growing Your Business Understanding your company's income and expenses will help you manage your finances better. You recognize consumption patterns and sales trends. A tax and bookkeeping officer can help you make better business decisions about your day-to-day activities, such as what time of year is the best time to make major purchases. They can help predict seasonal peaks, ensure you have access to capital in the months of slowdown, and prevent you from raising too much in the good months. Being more aware of costs will help you control and reduce operating costs where possible and save money in the long run.

Once you've decided it's time to hire a tax accountant in the UK, the next step is deciding which accountant to hire. It's important to take the time to do this carefully and there are a few things to think about first. You need to think about things like the accountant's position, how the workload will be distributed, and what kind of accounting software you'll use. Think about how much you will have to pay the accountant and if he can help you reduce your corporate income tax or not. The best thing for your business is a person with knowledge and experience who takes care of one of the most important aspects of your business: your finances. The right person will save you time and money year after year. Here are some things to keep in mind when choosing a tax accountant in the UK. Find out Soon about Your Options Consider choosing an accountant before you start your business, or as soon as possible, as they can advise you on start-up costs and filing with the IRS. They can also start a business on your behalf, register you for Corporation Tax, and VAT, and create your payrolls if you wish. Certified or Chartered You need to decide if your company needs a Chartered or Certified Public Accountant. You should also consider the amount of work your accountant will be doing, as well as the needs of your business and position. chartered and Certified Public Accountants are graduates with extensive work experience. The only difference is that chattered accountants can operate internationally thanks to their ACCA status. This can be even more helpful if you need an international accountant. Plus, it gives you peace of mind knowing your accountant is audited by a reputable professional body. Find a Tax Accountant with Relevant Experience You need someone who has experience preparing tax returns and financial documents for businesses similar in size and revenue to yours. If your business uses cloud-based software for most of its operations, you probably need someone with cloud computing experience. It's even better if they've worked with companies in similar market sectors to yours, as it will help them understand your specific business needs. You may want to check if they have any great clients. If so, that's a good sign because you know they should be able to meet your growing needs over time. You can also ask them for a list of clients outlining gross sales and the number of employees per company. Find out how their clients have grown and developed over the years to understand their ability to meet the needs of their evolving business. Contact a Small Limited Specialist Make sure your accountant has experience with other small businesses, especially other businesses in your industry. For example, if you're an entrepreneur or self-employed, it's usually best to speak to a specialist accountant rather than a "general" company, as there are specific tax laws you need to be aware of, such as IR35. Think of Several Candidates Before choosing a tax accountant in the UK, you should interview several candidates. Interviews provide information about an accountant's qualifications and background. Then compare that to their prices and expected workload. After interviewing a good selection of candidates, compare their work experiences and qualifications and compare them to your company's needs. Does your business need the most qualified person for the job available to manage your finances, or can you cut costs with a less experienced candidate? At the same time, the idea is to have someone who is more helpful in proactively checking and saving money. Therefore, your choice should be the one that offers the company the highest net profit. Talk to Authorities and Professional Associations Small businesses are at the heart of the economies of many countries. That is why governments want to boost their growth. As a small business owner, you can take advantage of available networks of business advisors to help you make decisions such as choosing the right trustee. There are also often local voluntary organizations and chambers of commerce that will be happy to advise you. Use them because they are there to help you and their advice is usually free. They can also be useful places to network and talk with other entrepreneurs. Do this several times and you will find that other business owners recommend you to an accountant. At a minimum, it can help narrow down the list of potential interviewers. How Much Does Your Accountant Charge? See how much your accountant costs. Is this an annual or monthly cost? Is there entry or exit fees? How much is charged for overtime, if it is not part of the agreed work for your company? Will you charge a "collection fee" if you change meters before the end of the year? Use Your Links Online While Facebook might not be the best place to post a listener testimonial request (although it's not the worst), a more business-oriented network can help. LinkedIn is one of the largest in the world, and if you already have a profile there, you can use it to find accountants recommended by other people. What Services Are Included? There are a number of important tasks that all CPAs need to carry out (eg preparing payroll, preparing your company's financial statements if you run a business, administering VAT, administering HMRC, etc.). Will you also complete self-assessment statements (important for individual ownership, but if you're a driver it's a personal expense), and provide certificates for mortgage/lease purposes? Do you offer IFA services? Communication In our experience, the biggest problems we've had with accountants in the past have been misunderstandings. Failure to return documents to the authorities on time can result in a fine for your business, and the days of waiting for a tax question to be answered can also be very frustrating. Talk to Different Accounting Firms When choosing a tax accountant in the UK, always check with multiple companies. You should already have an idea of ​​how to become a customer the first time you work at a company. It is important that you feel that you can build a good relationship so that your intuition is your best guide at this stage. Ask to meet each auditor and discuss your need needs before applying. Technology Does your tax accountant in the UK work with major online accounting packages like Xero, Sage, and Free Agent? This type of software has fundamentally changed the lives of accountants and their clients. Keeping your accounts up to date and seeing the status of your payments and tax obligations has never been easier. If an accountant has not yet adopted cloud software, it is best to avoid it. Ironically, thanks to clouding accounting software, switching accounts has never been easier. Conclusion Choosing the right tax accountant depends upon many factors, like experience, qualification, types of services offered, fees, etc. You should consider all these factors (as mentioned above) and then make a decision. Obviously, you can only be sure about the level of service from any tax accounting company, when you have actually used it.

Working from home tax relief is an HMRC initiative. If you were instructed by your employer that you should work from home during the pandemic, even for just a day you could be eligible for tax relief in the tax year. This money will be used to cover additional costs like broadband bills and higher heating. Do not worry if you are not ready to claim relief, because HMRC states that the deadline is a couple of years away from now. What Exactly is Working from Home Tax Relief? In the wake of the pandemic, people were advised to work at home by their employers the last few years. The cost of commuting has decreased, while other expenses like your internet, gas, and electricity are likely to have risen due to you staying at home more often. To help pay for these extra expenses, HMRC allows you to claim working-from-home tax relief. You can do so using a designated online portal. Can I Claim for Working from Home Tax Relief? To qualify for tax relief while working from home, your contract must clearly state that it's required by your job. Employers can also supply an official letter that confirms that you are working from home in the course of your job. You can claim back the last four years of tax relief only. Making claims could alter the tax codes of your previous years so that you have less income tax to pay for the foreseeable future. How Much Tax Relief will I Get? There are two ways of getting tax relief: ● Your employer will pay your expenses and add the tax-free wages into your paycheck. ● You are more likely to seek tax relief through HMRC instead of having your employer pay for the expenses. NOTE: You can't do both. You won't be able to take advantage of working-from-home tax relief if the employer pays your expenses. If you decide to claim tax relief, the amount you'll receive will depend on the rate of income tax you pay: ● Basic rate taxpayers will receive £1.20 per week or £62.40 per tax year. ● Higher-rate taxpayers will receive £2.40 per week or £125.14 per tax year. ● Top-rate taxpayers will receive £2.70 per each week or £140.78 per tax year. If you didn't claim for the tax relief for the current tax year or one before, but you did work from home, you are able to retroactively claim. Working-from-home tax relief is an individual benefit, so a couple or a group of flatmates can all claim it if you are all working from home. What is the Deadline to Apply for WFH Tax Relief? If you are working from home during 2020/21 or the tax year 2021/22 but did not manage to claim the rebate, you can still do so HMRC states that it has no plans to end the microsite or online portal. Claims can be backdated, meaning that you may be eligible for up to £280 (for top-rate taxpayers) tax relief if you claim for both the last tax year and the one before. HMRC confirmed that you will have until April 5th, 2025 to claim your tax relief for the 2020/21 tax year. Then, until April 5th, 2026 to claim for the 2021/22 tax year. Can I Claim Tax Relief for Working from Home in the Tax Year 2022/23? Some workers will be able to claim for the current tax year. However, many won't be qualified for the tax year because it's no longer a legal requirement to work from home. ● You are eligible to claim the tax relief if you have extra household costs due to working from home, and your employer hasn't yet paid for these additional expenses. ● To be eligible to claim this tax year that began on April 6th, 2023. any of these conditions must be in effect: ● You aren't able to work at the premises of your employer because they don't have the infrastructure like, for instance, your employer has a small office and has no room to work in the office. ● Your job demands that you be so far away from the premises of your employer that it is absurd for you to drive to work every day. For example, your workplace's premises are located in Newcastle however your job requires that you work in Scotland ● Government restrictions mean you must work from home, even though these restrictions have been lifted and cannot be used in this tax year. In order to claim tax relief, You cannot have made the decision to work at your home. HMRC has also warned employers who simply inform their employees that they can work from home could not be enough to qualify for tax relief. Therefore, if you're doing hybrid work. It is only possible to be eligible for tax relief if there's a shortage of suitable facilities on the premises of your employer for you to do your job. Who is Eligible for Tax Relief for the Last Two Tax Years? Not everyone is eligible to claim for the last two tax years so you need to check first that you: ● Were told to work from home by your employer. You cannot claim tax relief if you chose to work from home ● Have had to pay higher costs related to working from home (but you don't need to show evidence of this) ● Must not be receiving expenses directly from your employer to cover the extra costs of working from home Do you pay tax by self-assessment? You can still claim the tax rebate but you need to apply for it in your tax return rather than through HMRC's online portal. If you are still unsure whether you are eligible, there is a government tool that can help you find out. NOTE: If you are self-employed, you can't claim because you work for yourself. However, you can claim expenses on your tax return. If you are new to tax returns, check out our guide to self-assessment. How can I Claim Tax Relief? To claim the tax on working from home: ● Go to the official Portal and answer the eligibility questions. ● During this process, you may be asked about any other costs related to work that you may claim as well. ● You will require the Government Gateway ID to proceed with your application. If you don't have one you can get one at the time of the process. You'll need ● Your national insurance number. ● A current payslip, ● After you have logged in, enter the date on which you started working at your home. If you've been employed since the beginning of the lockdown's first phase (23 March 2020) enter that date and you'll get the rebate for two complete fiscal years (6 April 2020 until 5 April 2021 as well as 6 April 2021 until 5 April 2022). It is necessary to use this microservices portal to submit your claim. What If the Rebate Doesn’t Cover My Extra Needs? If the amount provided is not enough to cover the additional costs you've incurred, you can request relief on larger amounts. There are two possibilities: ● If you submit an annual self-assessment form, simply include the claim on that form. ● Complete the P87 form which permits workers to claim back any expenses to a maximum of £2,500. HMRC states that the additional costs may include things like: ● Heating ● Water bills that are meter-based ● Home contents insurance ● Business calls ● New broadband connection You'll need: ● Your employer's name as well as the PAYE reference (which you will find on your payslip or P60) ● Your job title ● Receipts (to be able to prove the additional costs) It is not possible to get back the entire cost of the additional expenses, but you will receive tax relief on the amount. For example, If you've spent £600 for additional expenses as a basic rate taxpayer you'll be able to see your net wages increase by 20 percent. How Will I Get the Money? If you're making a claim for the 2022-2023 tax year, HMRC will modify your tax code and you'll be able to claim tax relief from your pay. Note: You can hire a tax accountant. Your tax accountant can ensure that you are tax-compliant and have not paid too much tax. They can also help you get a tax return quickly and efficiently.

You may utilize an R85 form in the event that your income is lower than the tax-free allowance. You can avoid paying tax on building society and bank interest by filling out the R85 tax form. If your annual income in the past year is less than the personal tax allowance, you will fill out the form R85. It is a legal declaration. It informs banks and building societies that they are not allowed to charge tax on your accounts with them. HMRC has set £12,570 as personal tax allowances for the tax year 2022/23. This means you'll pay no tax until £12,570 of your total annual income. Your income over and above £12,570 is liable for tax at 20%. What Exactly is an R85 Form? This is the method of informing building societies and banks that interest paid on our accounts is not taxed because our annual earnings are less than the personal tax allowance. Interest income from the following sources is covered by this tax allowance and R85: ● Savings and credit union accounts ● Life insurance agreements ● Government or company bonds ● Personal peer lending ● Trusts (unit trusts/investment trusts) ● Open-ended investment companies ● Accounts with banks and building societies ● Annuity payments You may also need to file an R85 form for one of the following reasons: ● If you're helping a saver that has less capacity ● If you are the parent/guardian for a child who is the primary account holder ● If you're acting in the capacity of an attorney for the account What is the Personal Tax Allowance? For the tax year 2022/2023, the personal tax allowance will be £12,570. This means that you can avoid taxes and earn that amount if your total income is less than your personal tax-free allowance. Keep in mind that this Personal Allowance figure is only for the 2022/23 fiscal year and typically changes during each tax year. Can I only Register an R85 for My Own Account? There are many scenarios in which you may submit an R85. ● Your own account. ● the account of a child in the event that you are the parent or guardian of the child. ● If you are aiding a saver that has diminished capacity. ● If you hold a Power of Attorney for the account. What Information do I Require to Fill out an R85? First, you need to estimate your total annual income. It's not just the amount you receive from a job. "Income" also covers tax-deductible income from benefits (including Jobseeker's Allowance) as well as rental income, private and state pensions annuities, and interest from investments and savings. The second step is a simple comparison. If your "total income" figure is higher than the current personal allowance, you don't need to fill out an R85. If your "total income" amount is less than your personal allowance, you must fill out form R85 for every account you own and send the forms to your bank or building society. What is in the Future? ● You will start receiving gross interest payments on your building societies accounts and banks. ● If you've been paying tax for interest during the current calendar year, your financial institution might be able to pay it back to you. What Happens If My Income Increases after I File an R85? Don't worry, there's a form to help you with that! It's known as an IF17 and it's your responsibility to notify your building society and/or bank to know that you must be paying tax on savings interest. The responsibility lies with the taxpayer. There's no expectation that banks or your building society will examine an individual's accounts. Tax Services from Us Our experts are able to examine your tax situation to make sure you claim back everything you're entitled to in the past four years. This isn't just about interest on bank accounts. You could be entitled to the tax refund due to reasons such as not making use of the higher rate tax relief for pensions. Feel free to call us at 07985689912