Income tax

The UK government’s budget for 2023 has recently been announced and it includes several updates that will affect individuals and businesses. Here is a summary of the key changes:

There will be no changes to the income tax rates or thresholds for the 2023-24 tax year. However, the government has announced that it will be reviewing the income tax system with a view to simplifying it and reducing complexity for taxpayers.

National Insurance Contributions (NICs)

The government will be increasing the National Insurance threshold from £9,568 to £9,900. This means that individuals earning less than £9,900 per year will not have to pay any National Insurance contributions. The upper earnings limit for NICs will also increase from £50,270 to £51,000.

Pension contributions

From April 2023, the minimum employer contribution to workplace pensions will increase from 3% to 4% of an employee’s qualifying earnings. The employee contribution will also increase from 5% to 6%. This means that the total minimum contribution will rise from 8% to 10%.

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Corporation tax

The main rate of corporation tax will increase from 19% to 25% from April 2023. This will apply to companies with profits over £250,000. Small companies with profits under £50,000 will continue to pay the current rate of 19%, and there will be a tapered rate for companies with profits between £50,000 and £250,000.

VAT

There will be no changes to the VAT rates, but the government has announced that it will be reviewing the VAT system with a view to simplifying it and reducing complexity for businesses.

Capital gains tax

There will be no changes to the capital gains tax rates or thresholds for the 2023-24 tax year.

Business rates

The government has announced a two-year extension to the business rates holiday for retail, hospitality, and leisure businesses in England. This means that these businesses will not have to pay business rates until April 2023.

Environmental taxes

The government has announced several environmental taxes, including a new Plastic Packaging Tax and a reform of the Climate Change Levy.

The Plastic Packaging Tax will apply from April 2023 to all plastic packaging produced in or imported into the UK that does not contain at least 30% recycled plastic. The tax will be set at £200 per tonne.

The Climate Change Levy will be reformed from April 2023 to include a new electricity generation tax. This will apply to companies that generate electricity using fossil fuels, with the aim of encouraging them to switch to renewable sources.

Fuel duty

There will be no changes to the fuel duty rates for the 2023-24 tax year.

Alcohol and tobacco duties

The government has announced that there will be no changes to the alcohol and tobacco duties for the 2023-24 tax year.

Overall, the 2023 UK budget contains some significant changes that will affect individuals and businesses. The increase in National Insurance thresholds will provide some relief for low earners, but the increase in corporation tax rates will hit larger businesses hard. The extension of the business rates holiday will be welcome news for many struggling retail, hospitality, and leisure businesses, while the new environmental taxes show the government’s commitment to tackling climate change. As always, it is important for individuals and businesses to keep up to date with the latest changes in the budget and to seek professional advice if they are unsure how they will be affected.

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

UK Budget Update 2023: What Construction Companies Need to Know

The UK government has recently released its budget for 2023, and it includes a range of measures that will affect businesses across various sectors. For construction companies in the UK, there are several key updates to be aware of. In this article, we’ll highlight the budget updates that matter most to construction companies and how they could impact your business.

Investment in Infrastructure

One of the significant updates in the budget is the government’s commitment to investing in infrastructure. The government has pledged to spend £650bn over the next five years on roads, rail, broadband, and other infrastructure projects. This investment is expected to create new opportunities for construction companies, particularly those focused on infrastructure projects.

To support this investment, the government is also providing additional funding for training and apprenticeships in the construction industry. This funding will help to address the skills shortage in the industry and support the development of a more skilled workforce.

Changes to Corporation Tax

Another update in the budget that may affect construction companies is the change to corporation tax. From April 2023, the corporation tax rate will increase from 19% to 25%. However, small businesses with profits of £50,000 or less will continue to pay the current rate of 19%. Companies with profits between £50,000 and £250,000 will have a tapered rate.

This change to corporation tax could impact the profitability of construction companies, particularly larger ones with higher profits. However, it’s worth noting that the government has also introduced a “super deduction” for investment in plant and machinery. This deduction allows companies to claim 130% of the cost of new equipment against their taxable income.

Extension of the Reduced Rate of VAT

The government has also announced an extension of the reduced rate of VAT for the hospitality and tourism sectors. This reduced rate of 5% was introduced in 2020 to support these industries during the pandemic. The reduced rate has now been extended until September 2023, which will provide continued support for businesses in these sectors.

While this extension may not directly impact construction companies, it could indirectly benefit those involved in building or refurbishing hospitality and tourism properties. The extension of the reduced VAT rate may encourage businesses in these sectors to invest in new projects or refurbishments, which could create new opportunities for construction companies.

Changes to Immigration

Finally, the budget also includes updates to immigration policy. From January 2024, the UK will introduce a new points-based immigration system. This system will prioritize highly skilled workers, and those who do not meet the criteria may face additional restrictions.

This change to immigration policy could impact the construction industry, which has historically relied on migrant labor. However, the government has also introduced a new skilled worker visa, which will make it easier for highly skilled workers to come to the UK to work. The construction industry may need to adjust its recruitment practices to attract highly skilled workers from overseas.

In Conclusion

Overall, the UK budget update for 2023 includes several measures that will impact construction companies in the UK. The investment in infrastructure and training is a positive development, as it could create new opportunities for construction companies. The changes to corporation tax may require some adjustment, but the super deduction could offset some of the impact.

The extension of the reduced VAT rate for the hospitality and tourism sectors may indirectly benefit construction companies, and the changes to immigration policy could create new challenges for recruitment. It’s important for construction companies to stay informed about these updates and adjust their business strategies accordingly.

Can You Claim VAT Back on Fuel Without a Receipt?

If you’re a business owner or self-employed individual, you know that every penny counts when it comes to managing your expenses. One way to save money on your business expenses is by claiming VAT back on certain purchases, including fuel. However, what happens if you lose your fuel receipts or forget to collect them in the first place? Can you still claim VAT back on fuel without a receipt?

The answer is not straightforward, but it is possible under certain circumstances. Here’s what you need to know:

What is VAT?

VAT stands for Value Added Tax, which is a tax added to the price of goods and services in the UK. The standard rate of VAT is currently 20%, but some goods and services have a reduced rate of 5% or are exempt from VAT altogether. VAT-registered businesses are required to charge VAT on their sales and can claim back the VAT they pay on their business purchases.

Can You Claim VAT Back on Fuel?

Yes, you can claim VAT back on fuel used for business purposes, but there are some conditions you need to meet. Firstly, you must be a VAT-registered business or self-employed individual. Secondly, the fuel must be used exclusively for business purposes. This means you can’t claim VAT back on fuel used for personal use, such as commuting to and from work.

How to Claim VAT Back on Fuel

To claim VAT back on fuel, you need to keep accurate records of your fuel purchases, including the VAT element. This is usually done by keeping fuel receipts or using a fuel card that provides a detailed statement of your fuel purchases.

However, if you’ve lost your fuel receipts or forgotten to collect them, you may still be able to claim VAT back on fuel. You can use other evidence to prove your fuel purchases, such as bank statements or credit card statements, as long as they show the date and amount of the fuel purchase and the VAT element. You may also need to provide additional evidence to support your claim, such as a mileage log or vehicle logbook to show that the fuel was used for business purposes.

It’s important to note that the HM Revenue and Customs (HMRC) may ask for further evidence or clarification of your claim, so it’s always best to keep as much evidence as possible to support your claim.

In conclusion, while it’s preferable to have fuel receipts when claiming VAT back on fuel, it is possible to claim VAT back on fuel without a receipt under certain circumstances. As long as you have other evidence to support your claim and can prove that the fuel was used exclusively for business purposes, you may be able to claim back the VAT element of your fuel expenses. However, it’s always best to keep accurate records of your fuel purchases and seek professional advice if you’re unsure about your eligibility to claim VAT back.

5 Top tips for NHS Therapists – Self employed

As a therapist running your own business, filing a self-assessment tax return can seem daunting. With the complexity of tax regulations and the fear of making mistakes, many therapists find the process overwhelming. However, with proper preparation and organization, completing a self-assessment tax return can be a smooth and efficient process. Here are five tips to help you successfully complete your self-assessment tax return for your therapist business.

1. Keep Accurate and Organized Records

One of the most critical aspects of completing a self-assessment tax return is maintaining accurate and organized records of your business transactions. Keep track of all your income, expenses, and receipts throughout the tax year. Use accounting software or a spreadsheet to record all financial transactions related to your therapist business. This includes payments from clients, expenses such as office rent, utilities, supplies, and any other business-related costs.

Organize your records in a systematic manner, such as by month or category, so that you can easily locate and reference them when it’s time to complete your tax return. Proper record-keeping not only helps you stay compliant with tax regulations but also allows you to claim all eligible deductions and reduce your tax liability.

2. Understand Deductible Expenses

As a therapist, you may be eligible for various deductions that can reduce your taxable income and lower your tax bill. It’s crucial to understand which expenses are deductible and keep accurate records of them. Deductible expenses typically include business-related expenses such as office rent, utilities, supplies, professional development, insurance premiums, marketing and advertising costs, and professional memberships.

Make sure you are aware of the tax rules and regulations in your jurisdiction and consult with a qualified accountant or tax professional if you have any questions. Properly claiming all eligible deductions can significantly reduce your tax liability and help you save money on your tax bill.

3. Plan for Tax Payments

As a self-employed therapist, you are responsible for paying your own taxes throughout the year. This includes income tax as well as self-employment tax, which covers Social Security and Medicare taxes. It’s crucial to plan for these tax payments to avoid any surprises when it’s time to file your tax return.

Estimate your tax liability for the year and make quarterly estimated tax payments to the relevant tax authorities. Keep track of your payments and retain receipts as proof of payment. Failing to make estimated tax payments or underestimating your tax liability can result in penalties and interest charges.

4. Review Your Tax Return Thoroughly

When completing your self-assessment tax return, take the time to review it thoroughly before submitting it. Double-check all the information, including your personal details, income, expenses, and deductions. Make sure that all the figures are accurate and entered correctly. Errors or inconsistencies in your tax return can trigger an audit or result in penalties.

Consider using tax preparation software or hiring a qualified accountant to help you complete your tax return. They can provide expertise and guidance to ensure that your tax return is completed accurately and in compliance with tax regulations.

5. Meet the Filing Deadline

Meeting the filing deadline for your self-assessment tax return is crucial to avoid late filing penalties. The deadline for submitting your tax return depends on your jurisdiction and the type of business structure you have. Make sure you are aware of the filing deadline and mark it on your calendar to avoid missing it.

If you anticipate that you may need more time to complete your tax return, you can request an extension from the tax authorities. However, keep in mind that an extension only extends the deadline for filing your tax return, not for paying any taxes owed. Make sure to pay any taxes owed by the original deadline to avoid interest charges and penalties.

In conclusion, completing a self-assessment tax return for your therapist business requires careful planning, accurate record-keeping, and attention to

NHS Pension Entitlement

If you are employed by the NHS in roles such as a dentist (associate/performer), technician, hygienist, or therapist while also serving private clients, you may have considered whether registering as a sole trader or establishing your own limited company could help reduce your tax liability.

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As a dental professional, the choice you make could considerably impact not only your personal tax obligations but also your NHS pension entitlement. Prior to making any alterations to your contractual agreements or employment status, it is essential to consult with the NHS Business Services Authority and the British Dental Association to comprehend how such changes may affect your NHS pension entitlement.

Despite recent modifications, the NHS pension scheme remains a highly beneficial ‘defined benefit’ plan that can serve as an outstanding means of saving for your retirement. Based on your unique circumstances, you may need additional, specialized guidance concerning your retirement planning and pension.

What Is a Limited Company?

Creating a limited company allows you to establish a separate legal entity to operate your business, even if it’s a one-person operation. As the director, you bear the responsibility for any legal and financial decisions made by the company, and the company’s assets and liabilities are distinct from your personal finances.

If you work privately or your annual income from private work exceeds £35,000, forming a limited company may be more tax-efficient, resulting in higher take-home pay and greater flexibility in tax planning. Your company may also make pension contributions to a non-NHS private pension on your behalf. However, as previously mentioned in this article, your limited company cannot contribute to your NHS pension, and it is recommended that you seek expert advice on this matter.

Upon setting up a limited company, you will become a director and shareholder. You may receive a salary and/or dividends from the company’s available profits. As a director, you are responsible for ensuring that the company submits various annual returns and files annual accounts with statutory bodies like Companies House and HMRC. In our informative article, we outline several additional deadlines and responsibilities. Additionally, we offer another article detailing the primary benefits of incorporating a limited company.

What Is a Sole Trader?

As a sole trader, you are a self-employed individual running your own business. You have the ability to retain all of your business’s profits after paying taxes, but you are personally liable for any losses incurred by the business. Your business must adhere to specific regulations regarding its operation and name, and you must register with HMRC to declare your intention to pay taxes through an annual Self Assessment.

Should I Get an Accountant if I’m Self-Employed?

As a small business owner, having an accountant as your guide can be invaluable. They possess expertise in the intricate fiscal requirements of a business and can serve as a reliable authority on the subject. Furthermore, a certified accountant may provide you with tax saving tips, and they may have strong relationships with various government bodies from which you can benefit.

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