News Archives - Ashman Accountancy

Making Tax Digital

April 4, 2018 By Nichola Ashman

Making Tax Digital Summary

Making Tax Digital is intended to bring the UK tax system into the 21st century, by providing businesses with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC). The timetable for rolling Making Tax Digital has been amended to ensure that small businesses have more time to prepare for the changes.
The first to be affected will be small businesses and individuals with a turnover above the VAT threshold of £85,000, who will be required to keep digital records for VAT purposes from April 2019.

If you would like us to help you through these changes then contact us.

Why is HMRC introducing this?

Making Tax Digital is intended to help you keep track of how much tax you owe, or how much you are due back, throughout the financial year.

Accurate Tax Information

Replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct.

Reduced Errors

Making Tax Digital’s new reporting function will allow HMRC will to look at your tax information almost immediately, reducing human error from data input.

Easier to understand

HMRC anticipates taxpayers will better understand how much tax is owed within the digital tax account, much like online banking.

Making Tax Digital will make it easier for you to contact HMRC online via webchats and secure messages.

Tax-Free Childcare opens to all parents with children under 12

February 15, 2018 By Nichola Ashman

From 14th February 2018, all working parents with children under 12 can apply for up to £2,000 of childcare support per child, per year.

Parents, including the self-employed, can apply online for Tax-Free Childcare.

More than 190,000 parents have successfully applied and now have a Tax-Free Childcare account they can use to pay for a wide range of regulated childcare, including nurseries, childminders, after school or holiday clubs.

For every £8 parents pay into their childcare account the government will add an extra £2. Once eligible parents have opened their new account they can start paying their childcare provider straightaway, using the government contribution.

How Tax-Free Childcare works

Working parents can apply, through the childcare service, to open an online childcare account. For every £8 that families pay in, the Government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children). This top up is added instantly and parents can then send electronic payments directly to their childcare providers. The maximum government top-up is £500 per quarter for each child.
All registered childcare providers – whether nannies, nurseries, childminders or after school clubs – can sign up online now to receive parents’ payments through Tax-Free Childcare.
Parents need to sign back in every three months and confirm their details are up to date, to keep getting Government top-ups.
By the end of the Parliament, we expect Tax-Free Childcare will support around a million families with their childcare costs.
Tax-Free Childcare is replacing Employer-Supported Childcare, including ‘childcare vouchers’, which is only available to parents if their employer offers it. Employer-Supported Childcare will be closing to new entrants from April 2018, but parents who are already a member of the scheme will be able to remain in it as long as their employer continues to offer it. The tax and National Insurance exemption for workplace nurseries will remain in place. Parents moving from Employer-Supported Childcare to Tax-Free Childcare can still use childcare vouchers they’ve previously accrued.

National Minimum Wage rates from 1st April 2018

February 14, 2018 By Nichola Ashman

The minimum wage a worker should get depends on their age and if they’re an apprentice.

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage – workers get it if they’re over 25.

It doesn’t matter how small an employer is, they still have to pay the correct minimum wage.

These rates are for the National Living Wage and the National Minimum Wage. The rates change every April.

National Minimum Wage rates from 1st April 2018

£7.83 for workers 25 and over
£7.38 for 21-24 yrs
£5.90 for 18-20 yrs
£4.20 for 16-17 yrs, who are above school leaving age but under 18
£3.70 for apprentices under 19 or 19 and over who are in the first year of apprenticeship

Exemptions

There are a number of people who are not entitled to the NMW.

Self-employed people.
Volunteers or voluntary workers.
Company directors.
Family members, or people who live in the family home of the employer who undertake household tasks.

All other workers including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the National Minimum Wage.

Spring Budget 2017

March 9, 2017 By Nichola Ashman

National Insurance

From April 2018 the main rate of Class 4 NI for the self-employed will increase from 9% to 10% and will increase further to 11% in 2019. As previously announced, Class 2 NI contributions will be abolished from 2018. These changes are aimed at reducing the disparity in tax between the self-employed and the employed.

Tax

Income Tax
As previously announced, in 2017/18 the personal allowance for England, Wales and Northern Ireland will increase to £11,500 and the higher-rate threshold will increase to £45,000.

Scottish rates are set by the Scottish Parliament. For 2017/18 the personal allowance will also be £11,500, but the higher-rate threshold will be lower than the rest of the UK at £43,430.

Capital Gains Tax

There were no changes announced in the Budget.

Inheritance Tax

No new announcements were made in the Budget, but as a reminder, April will see the introduction of the Residence Nil Rate Band. This is an additional allowance of £100,000 (increasing progressively to £175,000 by April 2020) that can be used against the value of an individual’s residence if it is left to their children or grandchildren. The allowance will be reduced or eliminated for estates worth more than £2 million.

Dividend Allowance

The tax-free Dividend Allowance will be reduced from £5,000 to £2,000 in April 2018. This will bring more dividend receipts into taxable bands. Dividends above this level will be taxed at 7.5% (basic-rate), 32.5% (higher-rate), and 38.1% (additional-rate).

Tax-Free Childcare has arrived

February 2, 2017 By Nichola Ashman

Tax-Free Childcare is an online account, like a bank account which you can pay money into. The account can only be opened by parents with children aged up to twelve, or 17 if they have disabilities
the parents must be in work, and each earn at least £115 a week, but not more than £100,000 each per year
anyone can pay into it, not just the parents, at any time they like
for each 80p paid in the government will add 20p
the money must be used to pay for childcare with a carer who is registered to receive a Tax-Free Childcare payment
to qualify you must not be receiving free or subsidised childcare, or childcare vouchers from your employer
if you close the account and draw the money out instead of using it for childcare, you’ll lose the government’s contribution.

When can you sign up? There’s good news and bad. While some parents will be able to start a Tax-Free Childcare account some time in spring 2017 (an exact date hasn’t been fixed), the scheme is being rolled out gradually. It’s being made available to those with the youngest children first. It might be much later in the year before it’s available to all working parents.

Making Tax Digital

Making Tax Digital Summary