On occasion, HMRC provides one-off exemptions to UK companies, for example, tax-exempt staff Christmas parties, whereas the Employment Allowance is just that – an annual allowance to eligible employers of up to £3,000 in a given tax year via a reduction of Class 1 Employer National Insurance Contributions (NICs). The Employment Allowance was introduced in 21014 to encourage recruitment by UK firms, and specifically for small businesses to stimulate economic growth.
To be a contractor often means that you have to understand precisely how your position works within the confines of the law to ensure you operate legally.
However, the government reforms of working roles which are off-payroll, known as the IR35 legislation, currently in place for public sector companies and to be rolled out to the private sector this time next year, means that any contractor has to stop and think carefully about how they operate to make sure they’re still working within the confines of the law.
We’re going to be taking a look at whether you can continue to act as a limited company in spite of these new changes.
If you are self-employed and work from home there are expenses that you can claim for, although the rules set out by HMRC are complex and detailed and therefore each claim should be given due consideration being careful to keep within HMRC rules.
In this blog, we look at the key expenses where it is possible to claim as an allowable expense whilst working from home. As this is a complex subject, we do suggest calling us for information to receive tailored advice on your own personal circumstances.… Continue Reading
Please see the figures below. These are for each director/shareholder:
Total Gross income £50.000
- Your only source of income is your salary and dividends from your limited company
- You have the standard personal allowance available which is £12,500
- You are a UK resident taxpayer with a standard personal allowance
- Most importantly, your company has sufficient post-tax profits to support these dividends
If you would like any further information, please contact Southside Accountants in Wimbledon.
As accountants, we will help employees with completion and submission of their personal tax returns. HMRC is strict on expenses that can be deducted against employees income and as a result, reduce their tax bill.
However, they are a few areas that are worth explaining that may be of benefit to you as an employee.
You can claim expenses against your salary (employment income) where you have incurred expenses that are “wholly, exclusively and necessarily” in the performance of your employment duties…. Continue Reading
We are frequently asked questions, by buy to let residential landlords, about expenses they can claim against their rental income from buy to let properties. The objective of this blog is to help you on the tricky area of deductible rental expenses.
Expenses that can be categorised as incurred wholly and exclusively for the purpose of your rental business are allowable deductible expenses against your rental income. These expenses are called revenue expenditure. In plain English “wholly and exclusively” in this context means that the expense was incurred for the sole purpose of your rental business. If there is any personal gain, it should be incidental…. Continue Reading
There are many reasons why you may decide to set up as a limited company. If you are planning on growing your company and can envision a high turnover, setting up a limited company will have many benefits including saving tax.
However, there are many tax bills you need to be aware of and along with it an increase in related admin. Your tax bills will likely to be:
2. Payroll taxes
3. Corporation tax
As a director of the company, you will also need to pay personal income tax which is not through your company…. Continue Reading
To claim these travel expenses, they must satisfy:
- The ‘wholly, exclusively and necessarily in the performance of duties’ test
- The 24-month rule
- The 40% test
This is the second part of the two-part series of looking at IR35 and personal service companies. Carrying on from the last blog, if you are a limited company with just yourself as the director running the company and have only one customer, you are likely to fall into the deemed payment category. This blog will go through some examples and look at other company types that can be affected by IR35.
IR35 Employment status tool
The following examples go through the HMRC checklist (that was in the last blog) to show how they may fall in or out of the IR35 rules. This is not a definitive test, and each case will be treated differently, but these examples will give you an idea of what to look for…. Continue Reading
What is a personal service company?
A Personal Service Company or PSC is the name given to a limited company that has been created by a contractor for the purpose of serving one customer only. If that company did not exist, they would be an employee of the customer. It is also known as an intermediary company. One of the main reasons for creating this company is for the tax advantages…. Continue Reading