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Because we know you are a savvy lot and want to know the most up to date info without the extra side-helping of waffle. We've condensed the UK Chancellor's 2016 Autumn Statement to the key basic points to help.
Good News:
Bad News:
Either way news (depending on your view point):
By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.
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 At Tax Affinity Accountants we have a huge spectrum of clients from a multitude of industries and sectors. And all of them are effected directly or indirectly by the the shopping habits of the public during Christmas.
So whether your selling luxury brands such as Aston Martin's or Jimmy Choo shoes or selling personal services such as dental or psychotherapy work. The public's time and willingness to spend time and money on what your selling is effected by both the weather and their holiday spirit (not including if their tooth hurts or car breaks down). That's why large retailers are starting to show Christmassy type adverts and high streets and shops are starting to decorate their premisis to get people in the mood to spend money. Spend on others and also to spend on themsleves. Not every purchase is a Christmas gift. Granted the late and longer summer has moved the goal posts somewhat. But facts and figures do not lie. And if Coca Cola and a Starbucks are always busy looking at trend analysis to help push sales higher then why shouldnt a small business too. In fact maybe they need to doing it even more so. And so because everyone loves a Christmas list, here's one to help you sell more:
Over all innovate and update, learn and evolve that's what clever businesses do and its why their businesses improve year on year. Look at trends over previous years and look at what worked and sold well, then look at current conditions (economy/weather etc) and then make a very educated plan so you can optimise sales better than last year. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.  A few months ago it was #Brexit hitting the UK headlines and now its Trump. The cartoon series The Simpson's, many years ago, predicted Donald Trump would be the President of America and joked that he will bankrupt the country. In the cartoon Trump calls America just another one of his ex-wive's. (they even flicked through different possible years in the cartoon in one spooky sequence).
And if your wondering what does all this mean to the UK economy and to your business, then your not alone. Speculation and peoples opinions are what effects business on an a very basic level. The UK has not yet even activated article 50 to start leaving the EU but the vote made the (GBP) Pound drop dramatically in value and UK public spending to slow. Who'd have thought that there were there that many Marmite lovers out there? Similarly the US election win of Trump doesnt mean he is the 45th President yet, but public and business opinion has swung already and made the GB Pound rise and become stronger against all currencies as the exchange rate investers shift from the Dollar back to Sterling. Far Eastern economies jitter and UK confidence rise thinking they will have have just found a better business partner than the EU. Brexit may mean better trade deals in the future with the US, Canada, India, China etc as we shift focus on building stronger ties with others rather than Europeans. But negatively in the short term it has also meant direct increase in costs for businesses, which may eventually mean more unemployment and less spending. Have you noticed how many recruitment agencies have been calling you to place their candidates recently? Across the pond, Trump promised lower corporation taxes and more investement in infrastructure and the economy. Although lacking in detail how he really plans to make 'America great again' (suggesting its not very great at the moment). And not to mention the huge (Berlin/Chinese type) wall against Mexico. That curiously seemed to go down very well with US voters. So with so much media trash being touted to sway public opinion. A clever entrepreneur will try to cut through opinion and see the facts only. Then try to foresee the rise and fall of public opinion before it happens. Letting this be his/her guide as to what to do with their business and ensure that it remains in an optimal position no matter what the economic situation prevailing. That is why at Tax Affinity Accountants in Kingston we recommend all our cleints worldwide who could be effected by Brexit and Trump or whatever happens next (bad news usually comes in three's doesn't it?) to keep a cool head and see the the wood for the trees. Focus on making your business better and stronger even more so than before. And just keep moving forward even if its only an inch a day, because that is how winners perform. And that is exactly what hugely successful multinational corporations already do. Look at the facts and view the visible signs to work out if The Simpson's predicted it right and Trump will make America another one of his ex-wives or if he will make make it a more profitable place to do business than ever before. Maybe your business needs to have a established foothold in the US while Brexit ping pong starts with the EU or maybe you just need to make sure you offer a better level of service today if your prices are going up in 3 months time. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.  Reduction of the UK Corporation Tax Rate
Before we head straight to reduction matter of corporation tax let us make ourselves clear what corporation tax actually is. Corporation tax is charged on the profit from all around the world of UK-resident companies, public cooperation and unincorporated businesses. Companies based in foreign countries only pay corporation tax on UK profits. Any income companies make such as trading income, investment income and capital gains are charged under corporation tax unlike individual tax calculations. The corporation tax for the tax year 2015/16 the only rate applicable for corporation tax is 20%. Ex-Chancellor of Exchequer Mr George Osborne announced his intention to cut down corporate tax rates to 15% or less to come within the competition with several other country's markets like Ireland which has 12.5% to exhibit to the world the UK's willingness to encourage more businesses to set up base in the UK. Before this announcement the Ex-Chancellor set the target of slashing the corporation tax from 20% to 17% by 2020, which is 1% less than the target he set during the budget from 1st April 2015. Furthermore to corporation tax rate reduction Mr Osborne also announced about the changes in the carried forward trading losses for the companies (to be discussed in a later blog - watch this space). Implication of reduction on the UK Corporation Tax Rate The reduction to be made on the UK Corporation Tax to 17 % by 2020 is a good news for all the companies with the change in trade losses carried forward to be relieved against total general profit for the year rather than profit from the same trade and also can be relieved with group companies. This actually gives businesses in the UK the greater chance to grow and invest with confidence and pay less taxes rafting alongside with the UK tax avoidance rules. For the companies and corporate groups only running in the UK any reduction would be a good news especially owner-managed business (OMB) and small and medium enterprise (SME). Because they will simply pay less corporation tax in the coming years. Corporation tax reduction will also encourage UK tax resident individuals to work through a limited company or to incorporate their business for the trading purposes. As working the way tax payers save paying tax and NI from band 1 20+9%, band 2 40+9% and band 3 45+2% to simply 20%. Although the new dividend rule introduced in the current tax year has increased the income tax liability for many shareholders receiving dividends from the company, reduction in corporate tax to the level of 17% would constitute an immense bait and compensation tactic for shareholders in certain ways who are particularly affected. But with the UK's new Chancellor of Exchequer, Rt Hon. Phill Hammond, things might be different as we still have to see if he is of the same insight as Mr Osborne. Certain restrictions on the carried forward trading loss relief of trading loss carried forward can only be relieved for the 50% of the total profit for the year for the large companies with earnings more than £5 million might incentivise multinational companies to relocate their headquarter to some different countries compromising the tax rate. There is a possibility for these companies to claim loss relief and not pay any taxes for the year to help with their cash reserves to help them with their cash flow. But these multinational companies, some of which already exist in the UK, will have to consider these incentives if they seek to run operations in the UK. In conclusion it is good news for companies based in the UK, such as OMB and SMEs. And for UK tax residents who are still self employed this is the time to set up a limited company and trade throigh this and save tax. At Tax Affinity Accountants we can help you register a tax efficient limited company and help you take advantage of all the tax saving benefits and allowances available. By Mizon Maharjan and Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting business throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. |
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