Category: Capital Ganins Tax

how to avoid costly mistakes on your self assessment tax return

3/4/2022

Tax Affinity have many high street branches

HMRC relishes the idea that tax payers will make errors in their tax returns and then they will pay higher taxes or be fines for making errors. The number of errors by members of the public doing their own self assessments has been rising steeply in the last few years and HMRC has been raking in fines for errors. So its very important to try to ensure you make none.

Why? - Well simply mistakes on your tax returns could cost you a lot of hard earned money.
Solution? - Avoid HMRC penalties and charges by making sure you don’t commit these mistakes during tax return time by getting an expert like Tax Affinity Accountants (one the most highly recommended accountants in the UK) to do calculate and submit the return for you and sleep easy at night knowing you paid the least tax and everything was correct according to HMRC rules.

Key things to keep in double check:

Numbers / digits errors. Whether it’s a National Insurance or Unique Tax Reference (UTR) number for income, incorrect numbers on any form could cost you. Be mindful when entering bank account information when opting for refund. The last thing you want is for someone else to receive your refunds. You should double check all numbers entered on your tax returns.
Maths errors. Many taxpayers use pen an paper to work out numbers for submission. Even if you use a software package, it will still not catch errors for incorrect data entry. You should double check your numbers and then double check your calculations each time.
Not declaring all the earned income. You must, must report all earned income on your tax return. When HMRC find out that you did not report everything, you could owe interest and penalties in addition to the tax owed on that income. UK banks these days can report income to HMRC without the account holders knowledge.
Not staying up to date with your tax code. Check the latest changes to your tax code before filing your own tax return. New laws affect many taxpayers and they are constantly changing.
Filing an incorrect status. With many different filing status options available, the most accurate one for a taxpayer’s situation may not be easy to use. Each filing status could have an impact on the tax liability due to HMRC.
Mismatched names. This is a common mistake for newlyweds, typically when the wife takes a new last name and has not notified the NI department. Same issue may pop up for same sex marriages. The opposite applies also for divorcees who need to have a name change notified . If your name does not match the name and NI number and HMRC has on file, the tax return could be rejected or a tax refund could be delayed.
Declaring multiple country taxes. Don’t forget that income earned in another country must be reported. If you reside in one state and work in another, a non-resident tax return must be filed in the country in which you work. Only the money earned in that country needs to be reported. However, if you fail to declare this, you could face interest and penalties, in addition to the taxes owed.
Falling for tax schemes. One of the biggest concerns for the HMRC is tax fraud and identity theft. Taxpayers have lost thousands of pounds because criminals tricked them into believing they owed HMRC. HMRC will never send an unsolicited email or contact you through social media. HMRC does not ask for personal or financial information. If you believe you may be at risk for identity theft, you should contact the HMRC immediately along with your banks etc.
Missing deductions or credits. While penalties and fees mentioned above could cost you, missing a deduction or tax break could cost you by lowering a refund or increasing taxes.
Forgoting to sign and date the forms. It is an all-too-common mistake to forget to sign and date. While this may not cost you money, it will cause a delay in receiving any anticipated tax refund. Especially for those who owe HMRC and wait until the very last minute to file, forgetting to sign and date could cost you a late fee and penalty when HMRC sends it back for signature and the deadline has passed.

A good tax accountant should save you much more in tax than what he/she charges. And having a Tax Affinity accountant calculate your personal and business tax situation will lead to zero mistakes on your return and a lower tax bill first time every time. Fill out our contact us page to find an office near you and we will be happy to help you sleep easier at night.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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Autumn budget 2021 key points for business

11/5/2021

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We love a list that gets right to the point. So here is our key points for businesses in the UK from the Chancellor's autumn budget 2021:

1) Dividends: rise of 1.25% tax after nil band from 7.5% to 8.75% and higher rate band up from 32.5% to 33.75% from April 2022

2) Capital gains tax (CGT): with immediate deadline to report & pay after selling a UK residential property has increased from 30days to 60days after completion date. Giving landlords more time

3) Corporation tax: will rise from 19 % to 25 % from April 23. Businesses with profits less than £50k will get a small profit rate which is still 19%. For profits above £50,000 there is a tapered rate with bands & %’s going up to the 25% rate.

4) National insurance: Increase 1.25% national insurance contribution for all (employees, employers & self-employed) from April 2022.

5) National living wage: increase from £8.91 to £9.50 p/hr.

6) R&D tax relief: to be expanded to cover cloud computing & data costs now also as well.

7) Business rates : Rates revaluation cycle changed from 5 years to 3 years from 2023. New Improvement Relief, for businesses to improve/extend property, meaning they won’t pay additional business rates in 12 months after improvements. Plus a 50% business rates discount from April 2022 (to max £110k) for 1 year for retail, hospitality & leisure.

8) Annual investment allowance (AIA): £1m Annual Investment Allowance (AIA) extended to March 2023.

If your business is effected by these changes and you want help and support contact us today

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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Bitcoin rise and new uk tax rules for cryptocurrency

2/11/2021

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At Tax Affinity we believe in improving the financial lives of ever person in the world. Enriching each persons life to be better today and tomorrow. We do that by remaining at the forefront of business tax and finance and constantly researching and striving for knowledge. Making sure we are the first to know and advise on all things new so we can improve everyone's financial life.

With the rise of Bitcoin (BTC) and other virtual currency such as Ethereum (ETH), Litecoin (LTC) and Dogecoin etc. Many investors are looking to cash in on the rise of the new wave of crypto currency appearing in the news.

Experts know how to mine such currency not just buy and sell it and the value of keeping the currency in electronic wallets to avoid fraud or theft. They understand the blockchain and how to use GPU's and graphics cards to help them increase their investments. Plus the places they can spend and buy more coins and tokens. With the rise of established business and brands saying they will accept and have purchased Bitcoin; cryptocurrency is here for the long term even if the government and central banks don't like it.

And with this rapidly changing financial landscape tax authorities around the world are scrambling to make tax laws and rules to bring it within their taxable structure. So anyone investing in, buying or generating virtual curency will become subject to tax depending on the way it is transacted and declared. A sobering thought when virtual currency was always supposed to a currency for the people by the people.

This is where a tax expert in crypto currency like Tax Affinity Accountants is essential to help you keep as much of your hard earned money as possible. We make sure to keep researching and checking with the tax authorites for the latest rules and regulations. Powering ahead to the forefront of crypto currency support.

Tax Affinity are already succesfully helping both businesses and individuals with their cryptoinvestments knowing that the vast majority of accountants and tax advisors in the world are lack the knowledge an skill to support them at this crucial time.

After all its how you do things at the start that defines what will be the end result and leaving financial matters to the last minute usually ends up in misery. So get in touch with us today when you still have time to invest wisely and keep more of your hard earned wealth and investments.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Crypto currency, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert cryptocurrency business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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.

@Tax_Affinity #bitcoins #Ethereum #dogecoin #taxaffinity #recommended #tax #accountant #accountants

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key points of winter statement - vat, self employed grants, job support scheme, 10 yrs on bbl loans, delays to paying taxes

9/25/2020

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The Chancellor yesterday announced a raft of new measures to support businesses in the UK. Below are the key points to help you and your business:

Job Support Scheme - to replace the Furlough scheme

Government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
Employees must do at least a third (33.3%) of their normal hours
Employers will pay staff for the hours they have work
The government and the employer will pay a third (33.3%) each for the hours they can't work
This means someone working a third of their hours would receive 77% of their pay
The government part of the grant is capped at £697.92 per month per employee
All small & medium sized businesses are eligible for the scheme
It is open to employers even if they have not previously used the furlough scheme
The Job Support scheme will run for six (6) months starting in November 2020 and replaces the "furlough" scheme
Basically means the government will pay a maximum of 22% of someone's wages, down from 80% at the start of the furlough policy

Example:

If an employee (e.g. Mr Bob Smith) works reduced hours the employer pays for that. And in addition the employer and government pay one third of the lost pay each (up to the cap £697.92).

So if Mr Bob Smith normally worked for an employer at £2,000 a month, and then worked 50% hours, he would get £1,000 normal pay plus £333 extra from their employer and £333 from the government.

Self Employed Support - SEISS Grants

A grant will be available to those eligible for the Self Employment Income Support Scheme Grant (SEISS) previously ie basically a 3rd SEISS grant payout and possibly a 4th
The grant will cover three months' worth of profits for the period from November 2020 to the end of January 2021
It will cover 20% of average monthly profits up to a total of £1,875 (previously £6750 and £7500)
A further grant may be available to the self-employed to cover February 2021 to the end of April 2021, depending on circumstances

Bounce Back (BBL) Loans and Covid (CBILS) Loans - time extended from 6 to 10 years to repay + chance to pay interest only

Bounce Back Loans will be extended from 6 to 10 years, cutting down monthly repayments by nearly a half per month after the 12 month interest free period - may need to apply to your bank for this
Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from the current maximum of 6 to 10 years - may need to apply to your bank for this
Extension of deadline for the government's coronavirus loan schemes to the end of November 2020
Businesses that are struggling can choose to make interest only payments for six months and those "in real trouble" can apply to suspend repayments altogether for six months - will need to apply to bank to get this - businesses will not see their credit rating fall as a result, the Chancellor said.

Tax - 5% VAT to remain longer, VAT deferred interest free payments, more time to pay HMRC

The 15% emergency VAT cut for the tourism and hospitality industries will be extended from January 2021 to 31 March 2021
Businesses who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free instalments - this will need to be requested to HMRC VAT dept
Self-assessment income taxpayers who need help will be given more time to pay tax bills - again need to request from HMRC prior to deadline

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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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Budget 2016 the main points for small businesses

3/26/2016

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Small businesses and self employed individuals should be pleased with the chancellor's Spring Budget 2016. Because from 2020, the level of Corporation Tax will be reduced to 17%, less than the previously stated 18%. Making working through a limited company still a very tax effeicient choice. Capital Gains Tax (CGT) will also be reduced to 20% from 28% for higher rate taxpayers and 10% from 18% at the basic rate taxpayers. And the VAT threshold rising to £83,000.

Key Points for Small Businesses and the Self Employed:

From the 2017/18 Tax Year, the tax free Personal Allowance will increase to £11,500 and the Higher Rate threshold will increase to £45,000. With government target of £12,500 by 2020. Currently it is £11,000 from this April 2016.
From April 2020, Corporation Tax for UK Limited Companies will be reduced to 17%. Reduced annually from the current 20% level today.
Capital Gains Tax is now immediately reduced from 28% to 20% for Higher Rate taxpayers and for Basic Rate taxpayers CGT is reduced from 18% to 10%. This is a drop in tax rates and will help individuals who want to invest in companies or sell assets. Unfortunately though, individuals who own residential properties will continue to pay 18% and 28%, this relief is not extend to them.
Business Rates Relief threshold is to be increased from £6000 to £15,000 to help small businesses.
Tax on a Director Loan will increase from 25% to 32.5% with Dividend Tax changes.
From this April 2016 Dividends taken will only be tax free up to £5000 after which the tax rates are 7.5%, 32.5% and 38.1% (basic, higher, additional rates).
VAT Registration threshold increases to £83,000 from April 2016.
From April 2017, New Allowances of £1,000 per annum for property and trading income for very small traders and property landlords eg online trading.
From 17 March 2016, New Stamp Duty rates introduced for commercial property. This will become up to £150,000 at 0%; between £150,000 and £250,000 at 2%; and over £250,000 at a flat 5%.
From 17 March 2016, Leasehold properties will pay 2% Stamp Duty if the net present value of the transaction is more than £5 million and above.
New Tax Avoidance measures to be introdued to stop individuals disguising income as loans and imposing national insurance on termination payments over £30,000 from April 2018.

Other key points are:

Class 2 National Insurance to be stopped from April 2018, saving of £143 per annum.
Insurance Premium Tax increased from 9.5% to 10% across all types of insurance premiums.
A new 25% Top-up ISA for all under-forties who save with the Lifetime ISA. For every £4 that is saved the government will top-up by a £1, to the max value of £4,000 per annum.
Tax Free Allowance for saving into ISAs has increased from £15,000 to £20,000.
Reforms of Class 4 NIC so the self-employed pay enough towards state pension entitlement.
The Annual Investment Allowance (AIA) increased to £200,000. Majority of business can claim AIA towards their investment in assets and stand to benefit from relief.
New Pay as you go tax. From 2018, small businesses, self-employed, and landlords can elect to pay taxes on a pay-as-you-go basis. Which may help tax payers manage their cash flow better.
Lifetime Pension Allowance will be reduced from £1.25 million to £1 million.
Personal Savings Allowance is set at £1,000 for basic-rate taxpayers, £500 for higher rate taxpayers. But additional-rate taxpayers get zero personal saving allowance.

And finally other significant point were:

From 17 March 2016, Entrepreneur's Relief to be extended to cover investment in unlisted companies. with condition that the shares must be held for more than three years.
There is also greater loss-relief flexibility for companies from April 2017. Allowing many group companies to offset losses easily with lesser restrictions.
First-year Allowance of 100% for low-emissions car owners; the car-emissions threshold has been reduced from 75gm/km to 50gm/km.
More restrictions to offsetting profit with losses carried forward for companies earning profits of £5 million or more.
The Main Rate of Capital allowances attached to the car-emissions threshold reduced to 110gm/km.
Employee shareholder Status changes. Employees will receive a lifetime allowance of £100,000 on CGT so that gains of up to £100,000 are tax-free for employee-shareholder status employees.
NIC Relief on employer-arranged pension advice will increase from £150 to £500
Legislation to be introduced in Finance Bill 2016 to prevent offshore structures being used to avoid paying taxes on property development.
Also there is a new Sugar Tax to be introduced in 2 years time.

In Conclusion
Overall, good for small businesses and individuals. Not so great for contractors and landlords.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Surbiton they are considered in the Industry to be experts accountants for small businesses. Helping and supporting business throughout the UK, they regularly help new and established businesses to succeed.

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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How to save money on Capital Gains Tax

5/11/2014

How to save Money on Capital Gains Tax

How do you save money on Capital Gains Tax? For an Accountant this is a question which is asked regularly. But as you can always find a way to save money. Below I give you a basic insight into how CGT (Capital Gains Tax) works, some tips, exceptions and how to avoid it completely:

How does it work?

CGT is run through the tax year (6th April one year to 5th of April the following year). It is worked out on the total of your taxable profit from any capital assets that you hold. For instance, property, bonds and shares on the stock exchange. Furthermore, it is when the amount exceeds the purchase price of a property, bond and shares/stock. The amount that is exempt (tax free) annually is £10,900 for 2013 to 2014 (which increases to £11,000 for 2014 to 2015). At present there are two different types of CGT. The basic rate taxpayers pay is 18%, although the higher rate tax payers pay is 28% and if the capital gains goes over your threshold you will pay the higher tax.

Tips to save money

Below are some tips to keep the CGT Low as possible:

Keep receipts and records of all assets that might get CGT.

If you are married or in a civil partnership each spouse has their own allowance to double the amount they can keep away from the tax man.

Paintings, antiques and other collectibles are tax efficient investments because you can sell them off as a set or individually as well.

Unmarried partners can recommend a different home as their main home to get tax relief on both.

And many more

Exceptions

Any profit made on selling your home is tax exempt, unless you did one of the options below:

Rent / Let part of your property

If you used parts of it to run a business

You can also get away with not paying tax if you make a profit on selling a car, ISA’s, Peps, UK government gifts, savings certificate, premium bonds, personal belongings that are worth £6,000 or less when you come around to selling them. Furthermore there is a 10% tax rate with the entrepreneur’s allowance, which is aimed to help people that are selling their businesses they have built up. It has a lifetime limit of £5m.

Avoid it completely

If you want to avoid paying the higher threshold of 28% there are some suggestions below:

Spreading you gain over a longer period of time. For Example, when you want sell some shares you should sell some before 6th April and then some after because you can take advantage of two years worth of allowances (£21,800.00).

You can deduct your capital losses against you capital gains in order to arrive at your net gains. For Example, a profit of £25,000 minus a loss of £10,000 will produce a net gain to £15,000. As you can see this has reduced it considerably and has now placed it into the lower threshold of 18%.

The easiest, quickest and the most popular way of not paying any type of tax ( which includes CGT)is to open an ISA as every person has a yearly allowance of £11,280 (£5,640.00 can be cash). Over 19 million of the British Public has an ISA because it keeps your income and investments away from the taxman’s grasp. Furthermore, many investors have built up six figure sums inside ISA’s, which is all protected from HMRC.

Make extra contributions to your pension schemes because if you add more to pensions the less income you have available to get taxed, which would come available after retirement.

One option is for parents who have children under the age of 15 can bring down there taxable income by purchasing childcare vouchers. Every parent can sacrifice up to £243 a month of their salary for tax free childcare vouchers.

And many more

You can defer your CGT by reinvesting it into the Enterprise Investment Scheme (EIS). You would have a limit of £200,000. Furthermore, any profit made will be exempt if you meet the qualifying standards.

Finally, while tax avoidance is legal, tax evasion is illegal. So do not be tempted to sell assets without declaring any profit to HMRC. Defrauding the tax man can land you with a large fine or even a prison sentence.

But the advice and support of an experienced tax accountant and some sound forward tax planning can save you thousands of pounds.

By Tahir Malik at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they are considered in the Finance Industry to be the experts in all types of Tax including Capital Gains Tax. Helping and supporting businesses and individuals throughout the UK, they regularly help people with their CGT tax issues.

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.

how to avoid costly mistakes on your self assessment tax return

Autumn budget 2021 key points for business

Bitcoin rise and new uk tax rules for cryptocurrency

key points of winter statement - vat, self employed grants, job support scheme, 10 yrs on bbl loans, delays to paying taxes

Budget 2016 the main points for small businesses

How to save money on Capital Gains Tax

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