If you file annual self-assessment returns with HMRC, then you’ll know that once you declare what your income has been for the past financial year, you’ll be given a figure that reflects the tax owed on that sum.

Unless that sum is already covered by PAYE tax payments, or payments made earlier on account, you will required to clear it by making a ‘balancing payment’, which may also include capital gains tax and/or student loan repayments if applicable.

In most cases, the balancing payment must be made by January 31st after the end of the tax year in question so it is likely … Continue Reading

The deadline for filing your 2010/2011 tax return online is January 31st 2012 – are you prepared?

If you’ve never filed online before, you will need to register with HMRC’s self-assessment online service, at www.hmrc.gov.uk/sa.

Click ‘Register for Self Assessment Online’ in the top right hand corner, fill in your details and you’ll be sent an activation code which will be issued in the post. This can take a week or more, so if you haven’t already, now is the time to act! Anyone who fails to meet the 31 January deadline will be fined £100, regardless of whether or not any tax is … Continue Reading

If you’re self-employed, you will need to make an annual declaration of your incomings and outgoings to HM Revenue and Customs. This is known as a self-assessment tax return.

Your return will show your income (what you’ve earned) and capital gains (gross income) and allow a final figure to be produced stating the amount of income tax you are liable to pay.

Where can you get one?

Before you can file your self-assessment tax return, you will need to register with the HMRC by visiting http://www.hmrc.gov.uk/sa/register.htm. HMRC will then use the information you provide to set up a record for you.

You will … Continue Reading

Are you a teacher that does private lessons? Or weekend lessons? You need to make sure you have the correct documentation for HMRC.

Getting on the wrong side of the tax system can create huge problems that are easy to avoid if you do everything right to start with. Check out our guide of what you need to do if you’re a private teacher.

• Keep a record of all your incomings – Private teachers/coaches tend to be paid cash in hand and this why HMRC is now targeting private teachers to make sure they are paying the right amount of tax.
• Keep your … Continue Reading
  

Gift Aid is a way for registered charities to claim back the basic rate of income tax (20%) from the government on any donations given by taxpayers.

Who is it available to?

For a body to be able to claim back gift aid, it must be a registered UK charity.

How to give with gift aid

Taxpayers who want to donate to charity and include gift aid, simply have to complete a gift aid declaration. The declaration form is simple to complete and can be used for every donation you make to the same charity (if you make regular donations).

To complete a gift aid … Continue Reading

When taking on a new employee, depending on their position or seniority, you may wish to provide them with a company car. You could do this full-time, so only that employee gets to use the car or you could give them casual usage, which means they can use it during business hours e.g. to go to a meeting.

Sometimes employers choose to give an employee a company car to commute to work instead of giving them a pay rise, travel costs or other employee benefits. Company cars are typically given to sales managers, who need to travel long distances or management … Continue Reading

During the year, businesses with employees have to provide various documents to HMRC and to employees.

Here’s an overview of the most common ones:

P60 – A P60 is a record of the amount earned and tax that an employee has paid that year. Each employee needs a P60 at end of every tax year; these are typically given out with the employees’ next payslip after the end of year – generally April’s payslip.

A P60 may be needed to apply for tax credits, claim back overpaid tax or complete a self-assessment tax return.

P45 – A P45 is given when an employee leaves … Continue Reading

Pay As You Earn (PAYE) is the way that HM Revenue and Customs (HMRC) charges income tax and national insurance to UK taxpayers on their earnings. In simple terms it means HMRC takes a percentage of earnings every time an employee gets paid.

Employers deduct the income tax and national insurance percentage from employees’ wages each time they are paid.  The employer then has to make payments on behalf of the employees to HMRC every month or quarterly.

Setting up a PAYE system

When a business becomes an employer, they have to register with HMRC for PAYE, which may be done online … Continue Reading

It doesn’t happen very often, but last month the Chairman of HMRC apologised to taxpayers for the way they have been treated over the last year or so. The apology came after Mike Clasper, HMRC Chairman faced criticism from a committee of MPs.

The inquiry found that HMRC’s service to UK taxpayers had dropped to unacceptable levels during the last tax year (April 2010 – March 2011). MPs said the inquiry’s findings were “disturbing”. The Treasury Select Committee stated that the public had lost confidence in the tax system.

When examining HMRC’s performance, the committee stated that “poor service standards have been … Continue Reading

Record keeping isn’t an exciting part of business, but it is an essential one if you want to stay trading smoothly and on the right side of the taxman.

In this guide, we cover the bookkeeping basics that every small business owner should know, from simple steps like keeping receipts together, to the more complex business of categorising your financial records.

The three files you must keep

As a minimum, you should keep a cash book, a sales invoice file and a purchase invoice file. Your cash book details payments in and out of your bank account, your sales invoice file details … Continue Reading