What are the new Corporation Tax rates?

Smaller businesses will not be required to pay the whole Corporate Tax rate but there is still the standard 19% which will increase to 25%. While businesses with yearly earnings of 250,000.00 Pounds or more are subject to the maximum 25% rate. Meanwhile, the current 19% rate will still be in effect if the annual profits are less than 50,000.00 Pounds. Hence, there will be an implemented application of a system of marginal relief between these two rates.

 

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What about short accounting periods and associated companies?

According to the initial press announcement about the Corporation Tax raise, during brief accounting periods and in cases where there are connected entities, the lower and higher limitations will be correspondingly lowered. For instance, the criteria will be between 25,000.00 and 125,000.00 Pounds if two connected entities exist.

 

Electrical Vehicle

1. Capital Allowances

The firm can deduct a 100% First Year Allowance from its corporation tax bill if a fully electric automobile is acquired outright or purchased by a hired entity. Nonetheless, the business will be responsible for paying corporation tax on any revenues from the sale of the car.

Electric vehicles are not eligible for the 130% super-deduction. The government offered qualified equipment and machinery. The super-deduction can only be availed until March 31, 2023.

 

2. Corporation Tax and Lease Payments

Lease payments are applicable if the vehicle is for leasing. This will be recorded as an expense, reducing the company’s profit and taxable income for the year.

 

3. Corporation Tax and Hire Purchase

The firm will benefit from a 100% first-year allowance and save corporation tax on interest on monthly payments if acquired through HP (Hire Purchase) arrangement.

 

4. VAT

It may be more favorable for businesses to use their electric vehicles for business purposes to be eligible for a VAT refund. If the vehicle is leased, they can deduct 50% of the VAT from the lease payments.

 

5. Benefit-in-kind

Electric vehicles have a benefit-in-kind or BIK rate of 2% of the vehicle’s list price, compared to 37% for gasoline and diesel vehicles. Note that this benefit-in-kind is not installing a charging station for a business vehicle. The employer and/or employee are responsible for paying tax and national insurance on benefits-in-kind, with the corporation paying the list price multiplied by 2% and the employee paying the marginal income tax rate. This 2% is added to the 13.8% national insurance rate payable by employers.

 

How will Corporation Tax work in 2023?

The standard rate of corporation tax for businesses with profits of at least 250,000.00 will be 25%. Meanwhile, businesses with earnings of at least 50,000.00 will be subjected to a 19% Small Profits Tax.

 

What are the changes to UK Corporation Tax 2023?

Corporation tax will be leveled at 25% and 19% for small profits threshold in the fiscal year 2024 (April) as proposed in Spring Finance Bill 2023.

 

How will the 25% Corporation Tax work?

Profits for companies with accounting periods that overlap April 1, 2023, will be the schedule of implementation of the Tax rate increase.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

How Do You Track Income and Expenses on a Monthly Basis?

Let’s face it; you can never fully attain success in life with a poor financial plan. True, as Alan Lakein memorably said, “Failing to Plan is planning to fail.” The most successful individuals are, without a doubt, the best financial planners. This important strategy not only gives you clarity in life but also provides meaning and direction to your financial decisions.

A good financial plan should help you track your income and expenses as well as invest and manage funds without compromising on your standard. What’s more, with monetary planning, it is possible to earn, invest, track your cash flow, prepare for emergencies, and make sound financial decisions.

In this article, we will provide you with detailed insight into how to track your income and expenses on a monthly basis to help you create a good financial plan.

 

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Check Your Account Statements

How often do you check your account statements? Well, a good financial planners should be aware of their spending habits. The best way to track your spending habits is to take inventory of all your accounts and credit cards.

Note that your spending will consist of variable and fixed expenses. Variable expenses are the day-to-day expenses like food, travel, and clothing. Fixed expenses, on the other hand, can include rent or mortgage, debt payment, utilities, and insurance. They are likely not to change every month.

 

Categorize Your Expenses

Now that you have identified your monthly spending habits, you need to categorize your expenses. Begin by grouping them into different categories. The majority of financial institutions will automatically categorize your purchase with tags such as “automotive” or “department store.”

One of the best things about categorizing your expenses is that it helps you sort your wants and needs. In doing so, you can prioritize your spending based on your budget, especially if you need to cut costs for debt repayment or savings.

 

Build Your Budget

Budgeting is the most critical step in financial planning. You need to put into consideration every category of your needs and wants to help you build a good budget. Consider using an app to help you track your expenditure. There is quite a wide range of budget apps that can save you time and help you build momentum with new spending habits. Besides, it is imperative to ensure you revisit your budget every few months and make adjustments where necessary.

 

Find a Good Budgeting App

Mint and You Need A Budget are some of the best financial planning apps that are specially designed for on-the-go cash management. These apps allow you to allocate a specific spending amount every month based on how much you are getting and what you are buying.

If you want the best results with the apps, you must be willing to fill in your purchase log including the time, and ensure you strictly stick to your budget. You can also opt for a paid app. Although it might be a bit expensive, it might be worth the cost depending on the results you get.

 

Identify Room for Change

Change is inevitable. Even as you track your expenses, you need to be ready to make adjustments where necessary. Lower your big fixed expenses such as vehicles and utilities or the cost of housing. They can make an impact on your budget.

Apart from that, look for additional ways to save money to give you some room to breathe.

 

Final Thoughts

There is no doubt that the success of your business relies on the steps you take to track your income and expenses on a monthly basis. The process can prove to be daunting, but you can always choose to work with a professional to help you achieve your financial goals in the shortest time possible.

 

Is there an app that tracks expenses and income?

Yes, there is quite a wide range of apps that are specially designed to help you track your monthly income and expenses. Mint is the most recommended app, especially for beginners. Other apps include Personal Capital, which is best for Investors. Expensify, on the other hand, is best for Receipt Saving, while QuickBooks Accounting is best for Small Businesses.

 

How can you track monthly income and expenses for small businesses?

The first step should be to open a business account with your desired bank. Choose accounting software from the wide range of options available online and connect your financial institutions. After doing so, file all your receipts and ensure you review your business expenses regularly.

 

What is the best way to track income and expenses for self-employed?

Ledgers are the oldest and most successful methods of tracking income and expenses. It is a fancy word for your normal standard bookkeeping. Although you can keep a record of your income and expenses in an online accounting software or spreadsheet, handwritten ledgers are the recommended option.

 

What are the two main methods of tracking income and expenses?

Cash and accrual are the two main methods of tracking income and expenses. In the cash method, expenses are recorded only when they are paid, while income is recorded after it has been received. There is also an alternative bookkeeping method, which is a combination of the two methods.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What is companies house?

It is essential to acknowledge that we are not associated with Companies House; instead, we are an independent Certified Accountancy firm. Companies House is a government-run agency under the remit of the Department for Business, Energy and Industrial Strategy and provides an easily searchable database of all UK businesses using either a company name, number or director’s particulars.

 

The Department for Business, Energy, and Industrial Strategy oversees Companies House – a government-run agency that offers an easy to access registry of all organizations situated in the UK. This can be looked up by either providing the name or registration number of the company as well as information about its director.

How to incorporate on Companies House?

In the United Kingdom, forming a business necessitates registering with Companies House. This procedure can be accomplished either online or through conventional mail (which is slower and pricier). On completion, you will obtain an incorporation document that comes equipped with the following: selecting a company name & registered address; appointing directors & secretaries; designating shareholders/guarantors; determining who has noteworthy control over the firm’s operations (e.g., one founder); generating a memorandum of association when enrolling electronically; preparing articles of association using model articles or creating original ones, and paying the filing fee before submitting your application.

 

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Choose a company name and registered address.

-Choose a Board of Directors, including a Secretary, to preside over the company

-Decide upon those who will serve as Shareholders and/or Guarantors

-Identify all individuals with significant control (PSC) over the organization (e.g., an individual originator)

-Craft a Memorandum of Association, which shall be automatically generated for you when registering online

-Compose Articles of Association either utilizing model articles or creating your own unique version thereof

-Remit payment for filing fees and submit the application

 

What can you submit on the Companies House WebFiling service?

Managing a limited company necessitates the upkeep of multiple documents and records that must be submitted to Companies House using their WebFiling service. HM Revenue & Customs (HMRC) may carry out audits to make sure your firm is making its proper tax payments. To enable online submissions, Companies House has various forms ranging from yearly returns and financial declarations to updates regarding director information. The full scope of these services is detailed hereunder.

 

Confirmation statement and accounts

In this section, you can post the following documents: a CS01 Confirmation Statement, an AA01 amendment for the accounting reference date, an AA02 set of dormant company accounts, audit-exempt abbreviated accounts and full accounts; furthermore a joint file of yearly returns/financial statements to Companies House/HM Revenue & Customs (Tax return & annual acccounts) alongside micro-entity account production.

 

How to log in to Companies House?

Logging into the Companies House webFiling service is straightforward. All you need to do is navigate to https://ewf.companieshouse.gov.uk and enter your email address, password, authentication code, and company number before clicking submit. Once logged in, you will be met with a dashboard that gives an overview of all the details pertinent to your firm as well as any documents which have been published up until now. Furthermore, if desired you can set up eReminders at this point for promptness regarding future filing deadlines!

 

Is Companies House different from HMRC?

Companies House and HMRC are distinct entities, yet they have a tight-knit joint venture in some regions. They interchange crucial details, modify their operations to be more compatible with each other’s systems, thus improving productivity due to the partnership.

 

What happens if I don’t file with Companies House?

If you fail to hand in your financial records and tax filings to Companies House and HMRC before the expiry date, then you will be liable for a penalty. For public firms, there are different fines than those applicable for other organisations. If your accounts aren’t filed by the due date, an automated penalty notice will be distributed.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Do I need to register my limited company for CIS?

If you work for a contractor and fall under one of the following categories, you should register for the Construction Industry Scheme (CIS):

– an individual who runs their own business;

– the owner of a limited corporation;

– a partner in a partnership or trust

A contractor is required by CIS to take 20% from your payments and send the remainder to HM Revenue and Customs (HMRC).

These deductions are considered payments in advance of your tax and National Insurance obligations.

Contractors are required to withdraw 30% from your payments if you don’t sign up for the program.

 

How do I register for CIS?

If you are a contractor, you must first register with HMRC as an employer. You may do that right here.

After completing this, you will receive a letter from HMRC outlining all you need to know about operating as a CIS contractor. Your Employer Reference Number and a 13-digit accounts office reference number will be included in the details. To access the CIS service online, you’ll need these.

You must complete HMRC form CIS305 if you are a limited company working as a subcontractor in the construction sector. You can request gross payment status using this application as well.

 

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How do I register for CIS?

If you are a contractor, you must first register with HMRC as an employer. You may do that right here.

Once the process is finished, HMRC will send you a letter outlining all you need to know about operating as a CIS contractor. The details will include a 13-digit accounts office reference number as well as your employer reference number. To access the CIS service online, you’ll need these.

You can access your self-assessment account on the HMRC website using your UTR and password if you are a sole owner and want to apply for CIS as a subcontractor.

You must fill out HMRC form CIS305 if your company is a limited company and you are working as a subcontractor in the construction sector. You can request gross payment status using this application as well.

 

Do Ltd companies have to pay CIS?

If you make CIS deductions, you must claim them back through the regular payroll process of your employer. Try not to make a claim through your Corporate Tax return; doing so could result in a fine. Give HMRC your regular monthly Full Payment Submission (FPS).

 

How does CIS work for limited company?

Contractors withdraw money from a subcontractor’s payments under the Construction Industry Scheme (CIS) and send it to HM Revenue and Customs ( HMRC ). The deductions are considered advance payments for the tax and National Insurance of the subcontractor. Contractors must enroll in the program.

 

How can I register as a limited company with CIS (Construction Industry Scheme)?

Does my limited company need to be CIS registered?

If you work for a contractor and fall under one of the following categories, you should register for the Construction Industry Scheme (CIS):

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What are the reasons to Register for VAT?

Legal obligation: As we’ve already talked about, you have to sign up for VAT if your business makes more than £85,000 in a calendar year. Penalties and fines may apply if this is not done.

Credibility: When you sign up for VAT, clients and suppliers will see that your business is trustworthy and well-run.

Ability to Reclaim VAT: If your business is registered for VAT, you might be able to get back any VAT you paid on goods or services you bought for the business. This may lead to significant financial savings.

 

Why would you register for VAT if you don’t need to?

Even if your company’s annual sales are less than the £85,000 threshold, you can still sign up for VAT voluntarily. If your business often buys from vendors who are registered for VAT, this could be helpful because you can get back the VAT you paid. Additionally, it can help your reputation as a VAT-registered company.

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Are there benefits to being VAT registered?

Yes, there are a number of advantages to having a VAT registration:

Ability to Reclaim VAT: If your business is registered for VAT, you can get back the VAT you paid on goods and services for your business. For your company, this could lead to significant savings.

Improved Credibility: An increase in trust from customers and vendors is a direct result of becoming a VAT registered business.

When calculating its VAT bill, a business that has registered for Value Added Tax (VAT) can select froma number of different VAT schemes, including the standard VAT rate and alternative VAT schemes, such as the Flat Rate VAT plan.

 

What are the downsides of VAT registration?

Although there are multiple positives to having a VAT registration, there are also some drawbacks to think about.

Businesses that are registered for VAT are required to file regular VAT returns and keep very detailed records of all VAT invoices they send out and receive. This adds to their administrative work. This may take a lot of time and put more administrative work on the company.

Complying with Regulations Costs: The expense of adhering to VAT laws, the added bookkeeping workload, and the possibility of an HMRC inspection or inquiry.

Price Increases for Consumers: With a valid VAT registration, you are required to add VAT to your sales. As a result, your customers may have to pay more, which could make your products or services less popular. Customers who are VAT registered will not be negatively affected because they can simply earn back the VAT they are charged.

It’s possible that your company’s profit margins will shrink if you are unable to increase prices to account for value-added tax.

 

Do you pay vat on profit or turnover?

The value of a company’s taxable supplies is what determines the amount of value-added tax due in the United Kingdom. One common term for this is “turnover” of a business.

 

What expenses can you claim as a social media influencer?

Here are a few examples of tax-deductible expenses:

-Website design and development

-Accountant Fees

-Web Hosting

-SEO expenses

-Photographers

-Camera and Equipment

What are the justifications for filing for VAT?

Legal obligation: As we’ve already talked about, you have to sign up for VAT if your business makes more than £85,000 in a calendar year. Penalties and fines may apply if this is not done..

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

It is imperative to bear in mind that we are in no way affiliated with Her Majesty’s Revenue and Customs, as we are an autonomous accounting firm acting independently.

Agent Dedicated Lines for Self Assessments, PAYE and Tax Credits

• HMRC Debt Management offers a specially reserved line, namely 0300 200 3887, for representatives that are in need of instant reply.

• Those who require the aid of HMRC Self Assessment and PAYE services for individuals may call the number 0300 200 3311 to be connected with an appropriate advisor.

• Finally, all those seeking assistance from Tax Credits Department can take advantage of 0345 300 3943 as their contact option.

 

Campaigns and Disclosures

For individuals looking to take advantage of HMRC’s various campaigns and disclosure facilities related to payment arrangements or any undisclosed tax information, they can do so by calling the appointed phone numbers. Such services include:

– Contractual Disclosures (0300 057 9336)

– Credit Card Sales Campaigns (0300 123 9272)

– Disclosure Line (0300 123 1078)

– Let Property Campaign (0300 123 0998)

– National Minimum Wage Campaign (0300123 2671)

– Offshore Disclosure Facility (0300 322 7012)

– Second Income Campaign (300123 0945)

– Tax Avoidance Schemes(300 058 8993).

 

Employers

Employers looking for general queries and inquiries can contact the HMRC Employer Helpline at 0300 200 3200.

Also available at the Employment Status number on 0300 123 2326.

Individuals, employees and agents may reach out to HMRC with queries via:

• The Individual Employee Queries line at 0300 200 3300

• The dedicated helpline for new employers at 0300 200 3211

• Agent Dedicated Lines for Income & Capital Gains Tax matters, available on request by calling0 300 200310

• Online Services Helpdesk over telephone by dialing up 03000 200360.

HMRC Postal Address? Please deliver to post addressed to HM Revenue & Customs Benton Park View Newcastle Upon Tyne NE98 1ZZ.

 

Can you chat with HMRC online?

Generally, individuals have a range of options when it comes to getting in contact with HMRC. Options include using an online form, taking part in a webchat session, making a telephone call or sending mail. For those who may find it difficult to get in touch due to their health situation or personal circumstances, there is additional assistance available from the HMRC team, which can help provide guidance and support for these specific cases.

 

How do I ring HMRC about tax?

If you are in need of assistance from the HMRC, it is important to get in touch with the correct helpline for your specific needs. One of the most commonly used lines provided by HMRC is their Income Tax general enquiry number which can be reached on 0300 200 3300. This line allows customers to speak directly with an experienced advisor who can address any questions or concerns they may have about taxes, ensuring that all queries and issues are resolved quickly and efficiently.

 

Is 0300 200 3300 free?

Calling this telephone number will incur charges of 7p per minute in addition to your phone service provider’s access fees. This is a call connection facility; an alternative way you can reach HMRC without charge is by utilizing their website or via direct contact with them free of charge. Please note that we are not affiliated with Her Majesty’s Revenue and Customs (HMRC).

 

HMRC Contact Corporation Tax VAT PAYE Self-assessment Tax Credits

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Prepare for your Accounts throughout the year

 

Your company’s accounting period normally ends at the end of the year. It is often referred to as a limited company’s accounting reference date. When you file the mandatory year-end accounts with HMRC and companies house, your accounting period for the fiscal year is officially closed.

 

It is not advisable to wait until the very last minute to gather all the data needed for your year-end accounting. To eliminate and avoid your extra stresses, prepare for it all year long. In order to track down outstanding invoices and payments, we advise beginning work on your year-end accounts one month in advance of the deadline.

 

Gather relevant Paperwork

Income records, bank statements, statements of account from suppliers, invoices, and receipts are the documents you must make sure you have.

 

Chase Late Payments

To make sure your accounts are as accurate as possible, you should chase any outstanding bills before the reporting due date and deposit any money you receive.

 

Sort any expenses

Keeping track of your spending will help you cut your corporation tax because expenses will lower your company’s profits.

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Double-check your records

Ensure your records and the supporting documentation are in accordance with each other. Be sure that any sales that have been made but have not yet been paid for are recorded as debts due, not as income.

 

Update Staff Records

Ensure that all of your staff’s records, particularly those pertaining to payments, benefits, and costs are current. This is to avoid any tax penalties or National Insurance errors.

 

Hire an Accountant

Hiring a competent accountant who can learn all there is to know about your company in confidentiality and transparency will make your year-end account and tax reporting and filing the easiest tasks possible! HMRC offers these services with satisfactory results and in an orderly professional manner.

 

Be mindful of meeting the deadline for submitting your year-end accounts

You may submit your accounts to HMRC Companies House for assessment and consultation. If you have modified the accounting period with Companies House, the deadline can vary. Check out the website of Companies House for the following details:

• Within 9 months following the conclusion of your company’s fiscal year, submit any subsequent annual accounts to Companies House, and we will assist you with the filing and documentation of your tax and accounting needs.
• HMRC can also file and work out your Company Tax Return at the utmost professional standards.
• HMRC can receive payment for your corporate tax or you can negotiate that the business owes no tax or any other payable. This can be done after 9 months and 1 day following the conclusion of your accounting period.

 

How do you prepare a year-end account?

 

The following should be included in your year-end accounting checklist:

1. Preparation for a closing schedule
2. Gathering of outstanding voice receipts
3. Reviewing asset accounts
4. Reconciling all transactions from pending, canceled, or on-going
5. Closing out accounts receivable and payable
6. Accrue receivable accounts
7. Accrue payable accounts

 

What is the Preparation of Annual Accounts?

The balance sheet, income statement, statement of changes in net assets, cash flow statement, and statement of financial position are all included in the annual accounts.

 

Can I Prepare Company Accounts myself?

One can always be able to create and submit business accounts, tax documentation, and records. But, if the workload is of larger bulk and your company has less time to finish it, it could be wiser to use the services of accounting and tax firms to do the entire process or even adjust grants and entitlements

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham