At our March meeting Leighton Sharp of APC- accountants brought us up to date with all those bits of information every small business needs to know.
In regards to the main summary points (Going to try and keep it brief!)
Making Tax Digital (MTD)
For VAT Registered Businesses above the VAT Threshold of £85,000 will start from April 2019.
VAT Registered Businesses below £85,000 can opt in from April 2019, if not plan is from April 2020.
- Book-keeping must be kept on a digital accounting software, as the VAT submission will be through the software, not the government gateway.
- Transactional Data must be made into the accounting software.
- Will not be any free software for this. Software Providers are in the process of making software compliant, which will mean if businesses are on older versions, will need to upgrade.
- Software will need to be able to send/receive information and alerts with HMRC
For some businesses, may be coming to a three year anniversary. At this point all previously opted out employees will be automatically opted in again. Another statement of compliance will be required.
Contributions are set to increase for employees from 1% to 3% and employers 1% to 2%. (Not taking tax relief into account). This is an increase cost of employment.
- Director only payrolls can be exempt. However if a new employee joins or someone resigns being a director the exemption will need to be reconsider as may be in breach of the auto enrolment rules.
- Businesses should consider obtaining independent financial advice in respect of what pension provider would suit their business.
Ensure your financial accounts are appropriate to your size of business.
- Some lenders may require more information due to changes in disclosure made in accounts.
Other topical points
From April 2018 Tax Free Dividends to fall from £5k to £2k, therefore for a basic rate tax payer costing £225, higher rate tax payers (Above £45,000) would have an extra tax bill of £975.
- Research and Development claims – For every £1 spent, gain tax relief as if spent £2.30 for small businesses
Given the detail that these areas can go into and keeping it brief can be difficult Leighton is more than happy to discuss them with people. Contact details
ApC, Chartered Accountants and Business Advisers
7 St. John Street, Mansfield, Nottinghamshire, NG18 1QH
Tel: 01623-657111 Fax: 01623-654885