2014 Budget Summary
Please find below our 2014 budget summary with the most relevant changes in the budget for our customers. Individuals Personal allowances For people born after 6 April 1948, the personal tax allowance for 2014/15 is £10,000. This will increase to £10,500 from 6 April 2015. For people born on 5 April 1948 or before, the personal tax allowance for 2014/15 is £10,660. From April 2015, spouses and civil partners will be able to transfer 10% of their personal allowance to each other, which means £1,050 in 2015/16. To be eligible to make or receive the transfer, neither party must be liable to tax at the higher or additional rate. Tax rates 2014-2015 The basic rate of 20% will be charged on income up to £31,865. The higher rate of 40% will be charged on income from £31,866 to £150,000. The additional rate of 45% will be charged on income over £150,000. Companies The main rate of corporation tax will be 21% from April 2014, falling to 20% from April 2015. VAT The VAT registration threshold with effect from 1 April 2014 will be as follows: Registration (£) Deregistration (£) UK taxable supplies 81,000 79,000 ‘Relevant Acquisitions’ from other EC Member States 81,000 81,000 Annual Investment Allowance To continue to support business investment, the Government is doubling the Annual Investment Allowance to £500,000 from April 2014 until the end of 2015. Other news From 1 July 2014, cash and shares ISAs are to be merged into a New ISA – NISA – with an annual tax-free savings limit of £15,000. Savers will now have complete flexibility over the cash and shares mix within the overall limit of £15,000. From April 2015, the starting rate of tax for savings income will be reduced from 10% to nil. The maximum amount of taxable savings income that will be eligible will rise to £5,000 from £2,880. From 1 June 2014, the cap on Premium Bonds will rise from £30,000 to £40,000, increasing further to £50,000 in 2015/16. From August 2014, two £1 million prizes per month will be on offer, instead of the current one. And finally… HMRC is going to be given debt collection powers to recover money direct from the bank and building society accounts, including ISAs, of debtors who owe over £1,000 of tax or tax credit debts. HMRC will use this route after the debtor has been contacted ‘multiple times’. A minimum of £5,000 will be left ‘across’ debtors’ accounts after the debt has been recovered. I think we’ll blog more about this later, this is a new tactic by HMRC who don’t have a reputation for getting their calculations right and so this is probably something to be concerned...
read moreWhat happens if I file my Annual Return late?
What happens if I file my Annual Return late? Firstly, do not confuse your annual accounts with your annual return. The annual return is a snapshot of general information about a company’s directors, secretaries, registered office address, shareholders and share capital. Every company must deliver an annual return to Companies House at least once every 12 months. The deadline is 28 days after the anniversary of incorporation of the company or the anniversary of the made-up date of the last annual return. Helpful tip: If you don’t know the date, you can look at the Companies House Web-Check service, simply enter the company name or the registered number and the summary screen will show you when it is due. So what happens if I file my annual return late? Companies House will remind you that it is a criminal offence not to deliver the annual return on time and that the company and its directors could be prosecuted. This could mean the directors have a criminal record and also a £5,000 fine for each document not filed on time. Companies House will not impose a penalty (unlike the late filing of accounts). Companies House will send increasingly threatening letters warning of removing the company from the register. Ultimately the company will be removed from the register and if you want to keep the company you will have to pay a fee to have it restored. That was pretty much it, however recently we have seen Companies House take the threats further with more real threats of prosecution. A client who had forgotten to file his annual return received an email from Companies House reminding him that it was overdue and he could face prosecution, they also intended to remove the company from the register. He replied, apologising and advising that he wanted to keep the company. Companies House responded stating was that it was now being referred to the legal team as they intended to prosecute. We intervened and the matter was resolved without prosecution, penalties or fines. But the lesson here is that: Think twice before forming a company. Discuss your business plan with your accountant. Is a company really the best way to trade? Don’t ignore the Companies House letters, bring the annual return up to date. Customers and suppliers will check you out and if your documents aren’t up to date it doesn’t give a good impression. If you don’t want your company, the striking off fee is only £10. So deal with it properly. If you want any advice regarding your company statutory filing or with anything else please feel free to contact us...
read moreShould I Voluntarily Register for VAT?
There are benefits to a voluntary VAT registration. You are able to charge VAT on your sales and claim back the VAT on your expenses. This is beneficial if you operate in a business to business environment and all your customers are VAT registered. They recover the VAT you charge (outputs) and you can recover the VAT (inputs) on your expenses. If you deal with consumers who are not VAT registered this can make you more expensive than your non-VAT registered competitor. If you sell zero-rated items and buy standard-rated items you would receive a VAT refund from HMRC if you have not yet sold anything or don’t sell anything during a VAT accounting period, you may still be able to claim VAT back on your purchases If you’re thinking about registering voluntarily, you might want to check the rules for reclaiming VAT on purchases made before registration since it is often possible to reclaim some of the VAT you are charged on goods or services that you use to set up your business. Can I backdate my VAT registration? You can apply to backdate your voluntary VAT registration by up to four years. You will have to account for VAT on any VAT taxable supplies you’ve made after your chosen date, and you won’t be able to reclaim any VAT on your purchases unless you have the right evidence, and meet the other conditions for reclaiming VAT. Responsibilities of voluntary registration If you decide to voluntarily register for VAT, you have exactly the same responsibilities as someone who must register. You must keep all required VAT records and issue VAT invoices. You also have to complete and submit a VAT Return at regular intervals, along with your payment if one is due. Do you want to know more? If you think anything covered in this blog may be relevant to you please get in touch. We’d love to help you....
read moreWhen Should I Register For VAT?
As a growing small business you should consider when you should register for VAT. If you’re in business, supplying goods or services within the UK and your turnover for the previous 12 months is more than the registration threshold (£79,000 at the time of writing), or if you expect it go over the threshold in the next 30 days alone then you must register for VAT. If you don’t want to register for VAT you may be able to apply for an exception if you have exceeded the limit temporarily. If you have taken over a VAT-registered business from someone else and your VAT taxable turnover over the last 12 months when added to the same for business you’re taking over exceeds the threshold, then you must register for VAT. The temporary exception mentioned above may also be available. If you are in the UK & have received goods from other European Union countries (known as acquisitions) with a total value of £79,000 or more in the current year since 1 January or you expect to acquire more than that value in the next 30 days alone then you must register for VAT. If you are supplying goods or services from the UK to other countries we suggest you give us a call or have a look at the HMRC website as this can be a complicated area. www.hmrc.gov.uk/vat/start/register/when-to-register.htm#4 If you have any queries regarding VAT registration please feel free to contact us and we’ll do our best to...
read moreUseful Resources
www.accaglobal.com The Association of Chartered Certified Accountants www.hmrc.gov.uk H M Revenue & Customs www.companieshouse.gov.uk Companies House Bis.gov.uk The Department for Business Enterprise & Regulatory Reform (The New DTI) www.sage.co.uk Sage Accounts Software http://quickbooks.intuit.co.uk/index.jsp Quickbooks Accounts Software www.microsoft.com/uk/smallbusiness/products/ office-accounting-professional-2008/overview.mspx New Accounting Software from...
read moreFears of energy supply disruption
The manufacturers organisation, the EEF has warned that some Yorkshire manufacturers are concerned about losing their power supply this winter. Andy Tuscher the regional director for the North has been quoted in the Yorkshire Post as saying, “We need an energy policy that isn’t just here for three, four or five years. It would be far more beneficial to have a clear coherent strategy on energy that would help industry and manufacturing, and help with investment.” He also commented on how some members were concerned about a complete loss of supply. He said, “In the previous three years, members have had letters saying that potentially their supply may be turned off. Thankfully, it hasn’t happened, but yes, they are clearly worried that this may happen.” Alison Kinna, the managing director of Outokumpu in Sheffield warns, “We need stable and competitive pricing in order to continue to locate high energy consuming production in the UK. Our competitors are not just in Europe, they are located in China and the US. How does the Government suggest we manage short-term price spikes caused by lack of gas storage? “We have been warned that this winter capacity will be extremely tight. The burden of this will all fall on manufacturing. We run continuous operations – any outages, particularly at short notice, cause massive disruption and we cannot afford to run during price spike periods. You can read the full article on the Yorkshire Post Website....
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