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Corporation Tax

What Are You Asked For When Setting Up With A New Accountant | New Accountant |
What are you asked for when setting up with a new accountant? 758 513 Stepping Stones Accountancy

What are you asked for when setting up with a new accountant?

Change can often fill people with dread. We are at our most happy when we are content and feel safe. Even the little things like changing the provider of our home insurance or our utility provider can cause stress, so much so that many just stick with an auto renew.

However, change can be good and should be embraced. Gone are the days when changing to new suppliers cause extra work, hassle and delays. Instead, change is simple, easy and stress free. The same can be said when appointing a new accountant. Of course, there is a little bit of work to be done but by completing the following simple activities your new accountant can be up and running in no time:

Stage 1 – 20 Minutes

The first step takes no more than 20 minutes, it is a simple telephone call to undertake a fact-finding exercise. It is a great chance to cement the business relationship, run through some standard business questions, identify the type of help that is needed and recommend steps to move forward.

Stage 2 – 2 days

Next step is a data exchange process which includes proposal of work, access to all relevant online portals and uploading data. This is typically a 2-day process, and the result is the acceptance of the accountant’s plans and commitment to agree to work being undertaken.

Stage 3 – 1 week

Our third step is a 1-week process focussed on due diligence. The necessary security checks will be undertaken, including photo ID for recognition and anti-money laundering. Following this will be the full registration to a client portal.

Stage 4 – 2 to 5 weeks 

The final stage, which is the longest, is the registration through HMRC. This will involve applying for Corporation Tax, PAYE, VAT and Self-Assessment codes which allow the accountant to act on behalf of the business or individual. Authorisation will typically take 10 days to arrive and then a scheduling of works can commence.

Once these key steps are taken a business owner can sit back and relax in the knowledge that all of their accountancy responsibilities are taken care of, and they can focus solely on the successful running of their business.

If you have any questions or have a few more questions, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 30-minute call with Yarka – https://calendly.com/yarka-ssa/30min

Corporation Tax Changes Ahead | What Are The New Corporation Tax Changes | Help with Corporation Tax
Corporation tax changes ahead 758 513 Stepping Stones Accountancy

Corporation tax changes ahead

The 1st of April 2023 will see a substantial increase to corporation tax for UK businesses. The current rate stands at 19% for all businesses no matter what their size, however this will be increasing to 25% for companies with profits above £50,000 from next year. All companies whose profits fall below this threshold will continue to pay the current rate of 19%.

There is however, some good news for those companies facing this huge increase, if their profits fall between £50,000 and £250,000 it may be possible to claim Marginal Small Companies Relief (MSCR), allowing for a tapering of the new rate. However, the formula used is complex and not necessarily beneficial. Thus, depending on the profit levels of the business, it may be of more benefit to plan ahead in order to reduce profit margins so that they fall below this marginal rate relief limit. Strategies such as pensions contributions and large equipment purchasing can be utilised to achieve this.

There are many things that must be considered when planning for this new rate, including when there are multiple companies, the impact on dividends and the situation for companies vs sole traders and partnerships.

For help and advice on understanding and planning ahead for the corporation tax increase, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

HMRC Explore Options for Changing Tax Payments | HMRC Tax Advice | Modern Tax Administration | HMRC Tax Help Bristol
HMRC exploring options of changing tax payments 758 513 Stepping Stones Accountancy

HMRC exploring options of changing tax payments

The Government have recently announced a 10-year strategy to build a modern tax administration systems and as part of this they have begun a consultation period which lasts until 13 July 2021. This will involve a “call for evidence” approach which focuses on the benefits and challenges of the current tax payment system with a view to reducing the gap between when income/profits increase and income tax or corporation tax is paid. 

As with any new scheme there will be some issues to overcome. For example, how do you consider payments that are made under the income self-assessment heading or corporation tax for small companies, as these do not fall under the quarterly tax instalments?

How it currently stands

As it currently stands any self-employed taxpayer who has just started trading will have up to 22 months to pay their first tax bill. For an established trader, payment will typically be made twice a year and a balancing payment on any outstanding liability.

If we look at corporation tax there is also a delay between making profit and when a corporation payment is due. Payment is due in 1 instalment no later than 9 months after a company’s accounting period.

The need for change

The current situation brings with it a range of issues, having a large liability to pay at a specific time of the year can cause problems, especially when a tax bill comes out higher than what was expected. Changing this to a more regular payment based on the end of year reports could provide more accurate figures and greater control.

The issue

The HMRC are focussed on trying to improve how they receive funds, especially considering that 34% of their outstanding debts are for income tax and corporation tax.

What are the plans?

Consideration is being given to whether payments should be on either a monthly or a quarterly basis. As it stands HMRC are exploring all options.

Tax payments could be calculated in the year, developed as a result of up-to-date information and with projections on annual liability. Alternatively, tax payments could be based around the previous year’s tax liabilities. Finally, it could be based on estimations of the taxpayer’s liability for the operating year.

Of course, all ideas are on the table at the moment. The focus is to develop ideas that can be given careful consideration before a framework for moving forward can be finalised. HMRC also recognises that plans might need to be different for specific industries or taxpayer types.

If you have any questions or would like to discuss your tax liabilities please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

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