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Self Assessment

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.

Gain Control of your Self Assessment | Help with Self Assessment | Self Assessment Hints & Tips
Gain control of your self assessment 758 513 Stepping Stones Accountancy

Gain control of your self assessment

It is surprising how a to-do list can achieve so much. The art of writing down a list of actions and then following them through to completion is nothing new but it still remains an incredibly powerful tool for efficient people. So how can this method help you get control of your self assessment?

Quite simply, if you follow some specific instructions to a set timeframe every year then you will have complete control of your self assessment. For example, if we look at the period of 2021 to 2022, it really is a very simple process based on 5 key steps:

  1. Monthly – keep track of all your monthly business transactions, logging a record of invoices, receipts and expenses.
  2. Register for self assessment by 5th October 2021 (if you have never done this before)
  3. When filing online submit your return by midnight on 31st January 2022
  4. Ensure relevant tax payments are made by midnight on 31st January 2022

In order to complete the self assessment you will need the following:

  • Your 10-digit unique taxpayer reference (UTR)
  • Your national insurance number
  • All details of your untaxed income for the period 2021/22 (this will include income from self-employment, dividends and interest on any shares
  • All records of expenses in relation to self-employment
  • Charity or pension contributions that should be eligible for tax relief
  • A P60 or any other records to demonstrate how much income you have received which has been paid on

Keeping in control of your self assessment can be a very simple exercise just follow your to-do list. Otherwise simply delegate and get your accountant to look after it for you.

Should you have any questions or need any help in relation to your self assessment please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

In Control of Self Assessment 150 150 Stepping Stones Accountancy

In Control of Self Assessment

In our latest animated video we show how you can get complete control of your self assessment, when it needs completing and what information needs to be submitted.

Help With Self Assessment Deadline 150 150 Stepping Stones Accountancy

Help With Self Assessment Deadline

Do you know what the self-assessment deadline is? Do you know what expenses you can claim? This video will explain all about it.

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