This tax is also issued by HMRC like any other tax to calculate tax on your income. It is paid by individuals who are self-employed or professionals. It is their legal responsibility to tell HMRC revenue and customs about your wages, salary, and expenditure.

How To File a Self-Assessment Tax Return Online?

Filing a self-assessment tax online can be the fastest and easy way through HMRC. The amount of tax you need to pay will be there automatically and you will get the return amount as an allowance that you owe.

● For online systems, you need to register as early as possible to avoid delays and reach deadlines.

● Register with the official HMRC website

● You will need your ten digits unique taxpayer reference number (UTR)

● Make sure you refer to every deadline because there are penalties if you are late even for a single day.

● The benefit of registering on HMRC online is that you will receive information from HMRC online that your return has been submitted or delayed.

Do They Send Tax returns?

Not submitting your tax return on time can be really dangerous sometimes. They do send tax returns in cases such as:

● You make capital gains beyond the margins of the annual exempt amount.

● If they asked you to file a Vat returns last year, they may send it this week.

● If you’re a company director.

● If you have untaxed income from investment or after selling assets.

It is advisable that you should not wait for HMRC to connect you before submitting a tax return. As an individual, it is your responsibility to make sure that you filled the details correctly without any error. If they send you a tax return, you have to return it irrespective of whether you owe that tax or not.

What Are the Details That Are Needed to Be Included in Your Tax Return?

● UTR number while registration

● Salary: Details about all taxed or untaxed income from individual earnings, self-employment, or dividends from capital gains after selling your assets/property.

● Benefits: Benefits as in anything that you’ve received such as a carer’s allowance or industrial death benefits count in benefits. Along with this, it includes total taxable benefits from job seekers’ allowance and others.

● Marriage allowance: This gives you the option to transfer some of your personal budgets to your spouse.

● Details of any taxed awards schemes or any payments.

● Documents such as Form P45, Form P60, and form P11D.

● Other details such as incentive payments or benefits through vouchers.

Difference Between Self-Assessment Tax Return and Corporation Tax Return

A self-Assessment tax return is mandatory for self-employed sole traders or a company based. Whereas corporation tax return is paid by businessmen in UK-based companies. Unlike self-assessment tax returns, these companies do not get any tax allowance if they pay corporation tax returns.

Conclusion:

If you’re a self-employed person, they will reduce the amount of profit when you are paying tax. For this, you have to be a sole trader or a UK-based company.

Bookkeeping and vat: Bookkeeping is the procedure of maintaining cash receipts and payments or flow of cash in your small venture. This practice involves recording all financial transactions in your business, including expenses such as materials, services, payroll, and income, like customer or client payments for goods and services. Bookkeeping is an essential operation in your business for both legal and financial management purposes.

VAT or Value Added Tax is a tax collected at any point of time a value is added to a product or service. Businesses pay VAT to HMRC when they sell or hire out their goods or services. VAT applies to consumer and business sales revenue. VAT is a consumption tax. Therefore, it’s paid by the customer rather than the business that sells the product or service. This makes it an indirect tax.

EFJ Consulting is your best choice for optimized Bookkeeping and vat services.

Self-assessment tax returns: It is essential to consider that after a taxpayer has paid their advance amount and if there are any taxes pending that need to be paid after the end of the financial accounting year, they have to be paid as what is known as self-assessment tax.

The person who pays tax before filing their income tax return must submit the self-assessment tax return. In the case of employed taxpayers, the fee is estimated and decided on behalf of the taxpayer by the employer. Suppose a taxpayer is responsible for paying self-assessment tax returns. In that case, they will not be able to file their gains or income tax returns unless they have paid the self-assessment tax returns. The self-assessment tax needs to be measured by the taxpayer on their terms, and after that, it has to be evened out with the Government. There are several ways a taxpayer can settle their self-assessment tax returns, which can be executed both offline and digitally. Both the procedures must be carefully followed, as any discrepancy can lead to significant issues in the return form and processing.

Construction Industry Scheme: The Construction Industry Scheme (CIS) is an HMRC scheme that can affect you if a contractor in the construction sector employs you but not as a worker, such as a self-employed person. The CIS rules imply that the contractor is typically responsible for detaining tax on its payments to you, at a rate of 20% if you are ‘registered’ or 30% if you are not.

The CIS covers excess of what you may typically think of as building and civil engineering work. For example, it includes work in demolition, site clearing, repairs and decorating, and installing power systems. The HMRC CIS manual details what work is included within the Construction Industry Scheme.

EFJ Consulting takes care of all your taxation needs and queries and delivers the best fit solution. All the services mentioned above, such as Bookkeeping and vat, self-assessment tax returns, etc., are catered by them with efficiency and absolute professionalism, making them the best accounting support in Bexleyheath. You know what to do next!

EFJ Consulting provide professional and practical help with all aspects of accountancy and taxation to businesses of all sizes, from start-ups to established businesses, as well as individuals.

EFJ Consulting aims to provide supreme quality of service to clients, the majority of which are individuals, partnerships, and companies based in the UK, and working within the construction, property management/real estate, cryptocurrency, e-commerce/technology, care, and dental industries. Its accountants are always clear and open, approachable, and happy to explain anything the client needs.

As a growing practice, EFJ Consulting is able to focus on its clients and provide them with personalised service at a very competitive rate. It conceits itself on its client relationships, having grown organically with the majority of its new clients being derived from existing client recommendations.

EFJ Consulting is everything a start-up business could need in an accountant and more, with an expanse of experience in advising those who are new to the market. Starting a new business can be both exciting and challenging. EFJ Consulting can help start-ups by conferring the best bookkeeping system and the best tax savings options available. From choosing the right business structure, business banking setup, and cloud for maintaining accounting records, to support with accounting and tax, and financial needs and raising finances, clients can rest assured that they are in the best hands in terms of accounting support.

Meanwhile, established businesses have different needs to start-ups – EFJ Consulting’s experts can tailor accounting service to suit each business’s specific needs, whether it’s ensuring that accounting systems are up-to-date, that the business complies with statutory obligations on accounting and tax deadlines, or monitoring cash-flow forecast on a regular basis.

For those who are working in partnership with one or more people or businesses, an annual self-assessment tax return will need to be submitted. EFJ Consulting’s team can help clients who have entered a new partnership or are already in an established partnership with a range of services including bookkeeping, preparing income and expenditure account, splitting the profits according to the partnership agreement, providing the partnership capital account to each partner, preparing partnership tax returns, preparing each partner’s self-assessment tax return, and correspondence with HMRC. Read More…

Regarding accounting support for individuals, EFJ Consulting has years of experience in preparing and reviewing personal tax returns. It assists all individuals who are working to improve their current tax position and plan for the future. Services available include preparing tax returns, tax planning, claiming allowable business expenses, checking the client’s tax position, completion and submission of tax returns, and dealing with HMRC enquiries.

If you require any further information about EFJ Consulting or would like to discuss your accounting and taxation affairs, please get in touch for an informal no-commitment talk and find out how it can help your business grow. All initial consultations are free of charge. Read More.

Contact Details (To Be Published)

• Company: EFJ Consulting
• Contact: Firoz Karki
• Email: [email protected]
• Website: www.efjconsulting.com

Employee and employer both pay tax & corporation tax return on company cars. The car will have a taxable value based on its value, benefit in kind tax and its CO2 emissions.

 Employee: Employees will have to pay income tax based on the tax band they are in. The calculation for employee tax will be based on (P11d value) * (BIK Band) * (Tax band)

 Employer: The company will have to pay Class 1A National Insurance contributions of 13.8% on the taxable value of cars and fuel given to employees.

BIK tax bands are based on CO2 emissions of your vehicle. Higher the CO2 emission higher the tax. Until April last year, electric cars were subject to 16% BIK tax. However, it was reduced to 0% in April 2020, rising to 1% in April 2021 and 2% in April 2022. We do not yet know what the tax bands will be beyond then. However, the government Corporation tax return team has committed to providing information on new BIK tax bands two years in advance, “to provide certainty for employers, employees and fleet operators.

Corporation Tax Return Savings 

In addition to the benefits, you will also save on the corporation tax bill. Some low emissions cars are available for 100% first-year allowance which means you can use the purchase of the car to reduce the profits of your company and save corporation tax. You may also be able to lease the car and use the lease payments to offset profits and reduce corporation tax return liability.

Tips for self-employed
If you buy an electric business vehicle personally, you can claim 45p per mile as a business travel expense, despite the cost of an electric vehicle being an estimated 4p per mile.

Keeping the UK’s tax system running effectively and up to date with advances in technology is no easy task. But the introduction of the Government’s ‘Making Tax Digital (MTD)’ initiative is intended to solve this problem, by moving most taxation over to a digital model.

Making Tax Digital for VAT began in April 2019, making it compulsory for VAT-registered companies that met the £85k turnover registration threshold to comply with the MTD rules. But the MTD initiative will soon be extended to cover ALL VAT-registered businesses, followed by all sole traders and property owners who submit a self-assessment income tax return.

So, what will this extension of MTD mean for you and your taxes? We’ve summarised the key impacts and what you need to do to stay compliant with the MTD guidelines.

What does the extension of Making Tax Digital mean for you?

The Making Tax Digital system is already up and running for many VAT-registered businesses. But the extension of the initiative over the next two years is likely to bring a lot more UK businesses and individuals within the scope of MTD – and that means you need to be ready.

We’ve aimed to answer some of the key questions for you:

• How does Making Tax Digital (MTD) work? In essence, MTD moves the recording of tax records and submission of tax returns away from paper and online returns over to a digital model. Businesses and individual taxpayers will need to keep digital records of their finances and will then submit quarterly returns in a digital format, direct to HMRC.
• Who will be affected by the extension of MTD? The extension of the MTD initiative means that more businesses and individuals will now have to comply with the mandatory need for digital returns. According to the latest government briefing, this will mean:
• From April 2022: MTD will become compulsory for ALL VAT-registered business, including those below the £85k turnover threshold.
• From April 2023: MTD will become compulsory for all taxpayers who file income tax self-assessments returns for business or who have property income of more than £10,000 a year.
• What do you need to do? If you fall into either (or both) of the two affected categories, it’s prudent to start planning for the MTD extension as soon as possible. This means that businesses and individuals must:
• Keep digital records of their finances, along with all the relevant tax records
• Use a relevant accounting software that can connect to HMRC’s digital portal
• Submit a digital tax return on a quarterly basis, directly to the HMRC portal.

Setting up a digital accounting system for your finances

Getting your accounting system ready for MTD will help to iron out many of the potential pitfalls. For businesses that are operating in the digital domain, the whole process of submitting your VAT and self-assessment income tax returns becomes far easier to action.

If you’re using a cloud accounting platform, such as Xero, Quickbooks or Sage, then you’re already primed and ready for MTD. If not, now’s the perfect time to switch from a paper-based system, or a desktop accounting set-up, over to the multiple benefits of cloud accounting.

As your adviser, we can run you through the planning that’s needed for MTD compliance, and can make sure your digital accounting system is fit for purpose and ready to submit returns.

For further details and help, please contact us

The Chancellor, Rishi Sunak has revealed the Spring Budget 2021 in the House of Commons on 03^rd March 2021. We are also expecting the government to publish several important tax consultations on 23^rd March 2021 setting our its long-term taxation strategy. The summary of the key announcements from the Budget are summarised below.

INDIVIDUALS

• No changes to rates of income tax, national insurance, capital gains tax or inheritance rates
• From 06^th April 2021, personal tax allowance to increase to £12,570, basic income tax limit will increase to £37,700 and higher rates threshold will increase to £50,270. These limits will be frozen until April 2026.
• National living wage increases by 2.2% from £8.72 an hour to £8.91 and hour from April 2021.
• Pension Lifetime Allowance of £1,073,100, inheritance tax nil rate band of £325,000 and residence nil rate band of £175,000 will be frozen until April 2026.
• Stamp Duty and Land Tax (SDLT) nil rate band for purchased up to £500,000 has been extended until 30^th June 2021 which will decrease to £250,000 until 30^th September 2021 and then return of £125,000.
• The capital tax exemption will remain at its current level of £12,300 for individuals and personal representatives and £6,150 for trustees of settlements until April 2026.
• Gift holdover relief will not be available where a non-UK resident person disposes of an asset to a foreign-controlled company, controlled either by themselvers or another non-UK resident with whom they are connected. This will apply to disposals made on or after 06^th April 2021.
• New penalty regime for VAT and income tax will be introduced from 01^st April 2022 and 06^th April 2023 respectively. The new points based late submission regime will be introduced with a £200 penalty for every late submission and a revised regime for late payment of tax.

EMPLOYERS

• Furlough scheme will be extended until the end of September 2021 with employees receiving 80% of their wages for hours they cannot work. Employers have to contribute 10% in July and 20% in August and September.
• The off payroll working (IR35) rules announced in Budget 2018 and delayed last year will go ahead from 06^th April 2021 as planned.
• Two further payments will be made under the Self-Employed Income support scheme (SEISS) with the payment in May based on 80% of average profits and a further payment in July. The newly self-employed who filed a 2019.20 tax return before today can claim these fourth and 05^th SEISS grants.
• £3000 incentive is given for new apprentice hires until September 2021

VAT and INDIRECT TAXATION

• VAT registration threshold will remain at £85,000 until 31^st March 2024.
• The current reduced rate of VAT at 5% for hospitality, accommodation and attractions has been extended until 30^th September 2021. This will increase to an interim rate of 12.5% until the end of March 2022 before returning to 20% from April 2022.

BUSINESSESS

• The main rate of corporation tax rate will remain at 19% until April 2023.
• From April 2023 the main rate of corporation tax increases to 25%, with Small Profits Rate of 19% for profits not exceeding £50,000. There will be marginal relief for profits between £50,000 and £250,000 (These thresholds are proportionately reduced for the number of associated companies and short periods). Family investment companies will not qualify for the 19% rate (Big change).
• Between 01^st April 2021 and 31^st March 2023, expenditure on new plant and machinery will qualify for a 130% super-deduction. Expenditure on assets in the special rate pool such as integral features in buildings and certain cars will benefit from a 50% first year allowance. The £1 million annual investments allowance limit for expenditure on plant and machinery will be extended until 31^st December 2021.
• For the next two years the period over which businesses may carry back trading losses is temporarily extended from one to three years with a maximum carry back amount of £2 million for each year.
•  From April 2021 the amount that SME can claim on R&D tax credits will be capped at £20,000 plus three times the company’s total PAYE and NICs liability.
• From June Budget 2021 withholding taxes will apply to the payments of annual interest and royalties to EU companies subject to the terms of the relevant double tax agreement.
• Business rates holiday for firms in England to continue until June with 75% discount after that
• £6000 per premises grant is given for non-essential outlets due to open in April and £18,000 for gyms, personal car providers and other hospitality and leisure business.
• New visa scheme to help start ups and rapidly growing tech firms source talent from overseas.
• Contactless payment limit to rise to £100 later this year.