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What is the personal tax allowance for 2023/24

As we are now well into the 2023/24 tax year, some of the biggest questions on many people’s minds are around personal tax allowance (PTA) – how much is it, and how does it impact me as a UK taxpayer? Let’s delve deep into understanding the PTA for 2023/24.

Personal Tax Allowance: An Overview

The personal tax allowance is a threshold set by the UK government under which an individual doesn’t have to pay any income tax. It’s a specific portion of your income that you’re allowed to earn tax-free each year. Any amount earned over this allowance is subject to taxation at the stipulated rates.

Although you may not be required to pay tax under the personal tax allowance, keep in mind that you may still be required to submit a tax return. 

Personal Tax Allowance for 2023/24

For the tax year 2023/24, the personal tax allowance is £12,570. 

This essentially means that if your annual income is up to £12,570, you won’t have to pay any income tax. However, for income exceeding this threshold, the excess amount is taxable. Depending on the tax band you fall into, you’ll be charged at different rates.

Tax Bands for 2023/24:

  1. Basic rate: If your income is over the PTA but under £50,270, the excess amount is charged at 20%.
  2. Higher rate: If your income is between £50,271 and £125,140, the excess over £50,271 is taxed at 40%.
  3. Additional rate: If your income exceeds £125,140, anything over this amount is taxed at 45%.

Remember, these rates apply to your income over the PTA, not your total income. 

Income over £100,000

One point to keep in mind is the income limit of £100,000. If your adjusted net income exceeds this amount your PTA will be reduced. For every £2 of income over £100,000, your allowance is reduced by £1. Therefore, the allowance may be nullified entirely if your income is considerably above this threshold. This means your allowance is zero if your income is £125,140 or above. 

Special Circumstances

There are several circumstances where your Personal Allowance may be higher.

  1. If you claim Marriage Allowance you can transfer £1,260 of your personal allowance to your husband, wife or civil partner. This reduces their tax by up to £252 in the tax year. Find out more.
  2.  Blind Person’s Allowance is an amount added to your yearly personal allowance. For 2023 to 2024, it’s an additional £2,870. Find out more

Tax Bands Frozen until 2028

The PTA historically was increased annually to account for inflation and ensure that most low-income individuals remain tax-free. However, the personal allowance has remained the same for three years in a row. 

In 2021, it was announced the allowance would be frozen at £12,570 from the 2021/22 tax year, through to April 2028. Also, the additional rate threshold was lowered and again frozen from £150,000 to £125,140 from April 2023. 

These measures mean that, as wages rise, people will pay tax on a larger proportion of their earnings, and more people will move into higher tax brackets, potentially raising £25.5bn more a year in tax by 2027-28.

Know your limits

The personal tax allowance is a cornerstone of UK tax policies, ensuring that low to middle-income individuals are not unduly burdened by taxes. It’s essential to be aware of the thresholds and understand their implications on your tax liabilities, especially with tax bands now being frozen.

As always, while this blog post offers a general overview of the personal tax allowance for 2023/24, individual circumstances can vary. To get a tailored understanding of how PTA impacts your finances, don’t hesitate to get in touch. Remember, efficient tax planning is key to maximising your hard-earned money. Stay informed, plan ahead, and ensure you make the most of any allowances and reliefs available.

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What is a SA302 form?

If you’ve ever sat down to sort out some tax matters or tried getting a loan, you might have heard about the SA302 form. If you’re feeling a little lost, read on for our simple guide to the what, why and when of the SA302 form. 

What is the SA302?

An SA302 form is a tax calculation produced by HMRC for those who file a Self-assessment tax return. It details your income for a particular tax year and the tax that you owe or are due. Think of this as a report card that shows your tax position and explains how it was calculated. If you’ve used an accountant to complete your return, you’ll get an SA302 (also known as a Tax Calculation) on the back of the return.

Why Would I Need an SA302?

There are a few primary reasons why someone might need an SA302:

  1. Proof of Income: If you’re self-employed or have several sources of income, proving your income can be slightly more complicated than just presenting a payslip. Many lenders or financial institutions will request an SA302 as evidence of earnings.
  2. Mortgage Applications: Mortgage lenders often ask for the SA302 form as it provides a detailed breakdown of income over the tax year. It’s not uncommon for lenders to ask for SA302 forms spanning several years to gauge consistency in earnings. It gives them an idea of how much you earn, helping them decide how much they can lend you.
  3. Renting a Property: Some landlords or letting agents might request an SA302 to ensure potential tenants have a stable income.
  4. Personal Records: It’s always good practice to keep a record of your earnings and taxes paid. The SA302 is a comprehensive document that can be part of your financial records.

What’s on the SA302 Form?

The SA302 form contains:

  • Your total income for the tax year.
  • Breakdown of sources of income (e.g. from employment, property rental, dividends).
  • Total tax owed or refunded.
  • Personal Allowance and other tax adjustments.

It’s worth noting that the SA302 reflects what has been reported to HMRC. So, ensure all your income sources are declared accurately on your Self-assessment tax return.

But There’s a Catch

Here’s where things can get tricky. A tax return can be created without sending it to the tax office (HMRC). So, it’s possible to bump up the profit to make it look like you earn more than you actually do. The idea is to make lenders think you’re a safe bet.

But there’s a system in place to catch this.

Enter: The Tax Year Overview

To make sure everything’s above board, lenders also ask for another document called the Tax Year Overview. This can be obtained online by your accountant or by you if you have an HMRC account.

What’s it for? It shows your tax position with HMRC. Lenders will compare the numbers on this overview with those on the SA302. If they match up, it means the tax return was sent off with the numbers shown on the SA302, and the tax office is okay with it. The lender can then move forward.

What If Things Don’t Add Up?

If the numbers on the SA302 and the Tax Year Overview don’t match, it could cause problems. There might be different reasons for this mismatch, and lenders might stop everything until it’s sorted out. They just want to be sure they have the right information.

How to Get Your SA302 Tax Calculation

You can get evidence of your earnings (your SA302) once you’ve submitted your Self-Assessment tax return. You can also get a tax year overview for any year. To access both, log in to your HMRC online account, go to ‘Self-Assessment’, then ‘More Self-Assessment details’. If you or your accountant use commercial software to do your return, you’ll need to use that software to print your tax calculation. It might be called something different in the software – for example, ‘tax computation’.

If you’ve used an accountant to handle your tax affairs, they can obtain and provide you with the SA302 form.

In Short

The SA302 is basically a snapshot of your tax situation. When teamed up with the Tax Year Overview, it makes sure everything is transparent and above board.

If all this tax talk is making your head spin, don’t hesitate to get in touch for help. It’s always better to be in the know, especially when money is involved.

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Income Tax Explained For Sole Traders

Navigating the world of income tax can be daunting, especially for sole traders with no colleagues to turn to. Whether you’ve recently ventured into self-employment or have been flying solo for a while, understanding your tax obligations is crucial. In this blog, we’ll simplify income tax for sole traders, helping you gain clarity and confidence in tackling your tax head-on.

Who is a Sole Trader?

First and foremost, let’s understand what it means to be a sole trader. A sole trader is an individual who runs their own business and is considered self-employed. Unlike limited companies, sole traders don’t have a separate legal identity from their business. This means the business’s profits and losses directly affect the individual’s finances.

Income tax basics

Income tax is the tax you pay on your earnings. For sole traders, this means the turnover you make from your business minus allowable expenses. The amount you owe is calculated annually through the Self-Assessment tax system.

Every year, by the 5th of October for paper returns and the 31st of January for online returns, sole traders must complete and submit a Self-Assessment tax return to HMRC. This outlines your earnings and expenses for the previous tax year (from 6th April to the following 5th April).

Allowable expenses

One advantage of being a sole trader is that you can deduct certain costs, known as “allowable expenses”, from your turnover before tax. Common allowable expenses include:

  • Office costs (e.g., phone bills, stationery)
  • Travel costs (e.g., fuel, public transport)
  • Clothing expenses (e.g., uniforms)
  • Staff costs (e.g., salaries, freelance work)
  • Things you buy to sell on (e.g., stock, raw materials)
  • Financial costs (e.g., insurance, bank charges)
  • Advertising or marketing (e.g., website costs)

Remember to keep a detailed record of these expenses, as HMRC may ask you to prove them.

How much income tax do I pay?

The amount of self-employment tax you’ll pay depends on your income and any business expenses. The government allocates a personal allowance, which is the amount you can earn tax-free in a financial year. For the 2023/24 tax year, the personal allowance is set at £12,570*.

But once you’ve exceeded your personal allowance, you’ll pay tax on your income earned above this at the following rates:

  • Basic rate: £12,571 to £50,270 – 20%.*
  • Higher rate: £50,271 to £125,140 – 40%.*
  • Additional rate: Over £125,140 – 45%.*

For instance, if you made a profit of £40,000 (after deducting allowable expenses), you’d owe no tax on the first £12,570 and 20% on the remaining £27,430.

How do I pay my income tax?

Being self-employed, you’ll pay tax on your sole trader profits through the government’s self-assessment scheme. This means completing a self-assessment tax return and submitting it to HM Revenue and Customs (HMRC) annually.

The deadline for submitting your online self-assessment tax return is 31st January of every year. It’s important to note that, if you miss the deadline, you could be liable for a penalty.

Sign up or sign in and file your Self Assessment tax return here.

Payments on Account

This is a system used by HMRC to collect tax in advance from those who owe tax from the previous year. If your tax bill from the previous year was over £1,000 and only a small amount was deducted at source (e.g., from wages or pensions), you’d likely have to make “payments on account”.

You make these payments in two instalments: by midnight on 31st January (covering the first half of the tax year) and 31st July (covering the second half). Each payment is half of your previous year’s tax bill.

What if I make a loss?

If your business makes a loss, as some sole traders do, the loss is carried forward to the following financial year and used to offset future profits. The result is you won’t have to pay tax on any future profits until you’ve recouped the loss of the previous year.

National Insurance

As well as income tax, sole traders also need to pay National Insurance contributions. There are two types relevant to sole traders:

  • Class 2 National Insurance: A flat weekly rate of £3.45 if your profits are £12,570 or more a year (for the 2023/24 tax year*). Even if your profits are under the threshold, it’s a good idea to keep paying your Class 2 National Insurance to make sure you qualify for certain state benefits, including the state pension.
  • Class 4 National Insurance: 9% on profits between £12,570 and £50,270
    2% on profits over £50,270 (for the 2023/24 tax year*)

Tips for managing your taxes

  • Stay Organised: Keep a detailed record of your income and expenses. Use accounting software or hire an accountant if necessary.
  • Save Regularly: Put aside a percentage of your income for taxes to avoid a last-minute scramble.
  • Stay Updated: Tax rules and rates can change. Regularly check the HMRC website or speak to your accountant.

So, while income tax obligations might seem overwhelming at first, understanding the basics is the first step to efficient and stress-free tax management for sole traders. With organisation, diligence, and possibly some professional guidance, you can master your taxes and focus on running your business.

If you still have questions about taxes as a sole trader or need a hand to complete your tax return, get in touch or contact us online here. Don’t forget – we’re all about tax returns with stress deducted. 

* Remember, these figures can change annually based on government decisions

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What is IR35 and How Do the Rules Affect You?

Have you heard about IR35 and wondered what it is? Or, maybe you’re a freelancer or contractor who knows a little bit about it but are unsure if it applies to you.

If you want to find out the ins and outs of IR35, let’s look at what it means and how the tax rules around it affect you.

Decoding IR35

IR35, often called ‘off-payroll working rules,’ is tax legislation introduced in the UK in 2000. 

Its primary aim was to prevent ‘disguised employment’. This is where individuals who operate like regular employees use an intermediary to be paid for their services, reducing their income tax and National Insurance Contributions (NICs). An intermediary in this instance is often a personal service company (PSC). A PSC isn’t defined in law but is typically a limited company that a worker controls and has some interest in, through which the worker provides their services.

The legislation ensures that if a contractor functions similarly to an employee, they pay roughly the same Income Tax and NICs as employees.

IR35 Changes from April 2021:

Significant changes to IR35 rules were introduced in April 2021 for private-sector employers. Before these changes, it was up to the contractor’s intermediary to determine their IR35 status. Now, for medium and large businesses, it’s the responsibility of the hiring organisation to determine the IR35 status of a contractor.

Whom Does IR35 Affect?

You might be thinking, “Well, I’m not a contractor, so this doesn’t affect me.” However, IR35 has a broader reach. It impacts:

  1. Workers, Contractors and Freelancers – Especially those who provide services via an intermediary (like PSC, a partnership, or even another individual). If you’re partnered with an umbrella company as an employee, IR35 might not affect you directly.
  2. Employers (or Clients) – This includes anyone who uses the services of a contractor. They could be the engager, hirer, or end client.
  3. Agencies – Any entity that helps place workers in roles where they provide their services through an intermediary.

When Does IR35 Kick in?

IR35 rules become relevant when the worker (contractor) who provides services to a client through their intermediary would have been an employee if they provide their services directly to that client. 

Who gets to decide if a contractor falls under the scope of IR35 depends on the client’s sector and size:

  • Public Sector: The client makes the determination.
  • Private & Voluntary Sectors: Typically, the client decides. However, if the client is a small business, the onus is on the worker’s intermediary.
  • Agencies: Regardless of size, agencies have specific responsibilities under the IR35 rules.

How Does it Work?

The key is understanding the concept of ‘inside IR35’ and ‘outside IR35’:

  • Inside IR35: If your working arrangement is similar to traditional employment, you’re ‘inside IR35’. You may need to pay the same tax and NICs as an employee. However, you won’t necessarily receive traditional employee benefits, such as pension contributions or paid leave.
  • Outside IR35: If your arrangement is genuinely that of a business providing services, you’re ‘outside IR35’, meaning you can be paid gross and manage your own taxes.

If a client determines that a contractor falls within the IR35 rules, they must:

  • Produce a Status Determination Statement (SDS) detailing the reasons for this determination.
  • Deduct Income Tax and employee National Insurance contributions from the fees given to the contractor’s intermediary.
  • Pay Employer National Insurance contributions and, if applicable, the Apprenticeship Levy to HMRC.

Factors Determining IR35 Status

These aren’t the only determinants but are some of the most pivotal:

  1. Supervision, Direction, and Control: How much say does your client have over how, when, and where you complete the work?
  2. Substitution: Can someone else replace you, or are you personally required to provide the services?
  3. Mutuality of Obligation (MOO): Is the client obliged to offer you work, and are you obliged to accept it?

Navigating the IR35 Maze

If you’re puzzled about a worker’s employment status for tax, the government provides the Check Employment Status for Tax (CEST) tool to give you clarity.

Another critical point is that the IR35 assessment is on a contract-by-contract basis. This means a contractor could have multiple assignments, some under IR35 and some outside its ambit.

How Do The Rules Affect You?

  1. Financial Implications: As a contractor, being ‘inside IR35’ could significantly increase the tax and NICs you owe. Some contractors have seen their net income reduced by up to 25%.
  2. Contractual Changes: Companies wary of the IR35 legislation might change how they engage with freelancers and contractors, opting for short-term engagements or using umbrella companies.
  3. Administrative Burden: There’s an increased administrative load, especially for employers who need to determine the IR35 status of every contractor they engage.
  4. Potential for Disputes: As with any tax matter, disagreements can arise over whether a contractor is genuinely ‘inside’ or ‘outside’ IR35. It’s crucial to ensure all contractual agreements are clear and to seek expert advice if you need more clarification.

Understanding IR35 rules: extra tips

The IR35 rules can be complex, so here are our extra tips for contractors affected by IR35:

  • Keep good records. Keep good records of contractors’ work, including their contracts, invoices and timesheets. This demonstrates they are not your employees and are not subject to the IR35 rules.
  • Review your contract. If you’re working through a PSC, review your contract to ensure it’s IR35 compliant. If not, you may need to renegotiate the contract with the company.
  • Get professional advice. If you’re unsure whether the IR35 rules apply to you, always seek professional advice from an accountant or tax advisor. They’ll be able to help you understand the rules and make sure you are compliant.

Here to help

If you’re a contractor, or an employer or agency working with contractors, it’s essential to understand the IR35 rules and how they may affect you. 

We hope you found this article useful and that it has helped clear up any questions you have, but if there are areas you’d like more information on, or for any other matters around tax and payroll, we’re always here to help.

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What Your Accountant Needs To File Your Individual Tax Return

Filing a tax return isn’t everybody’s idea of fun. But you must get it right and filed on time. While it can seem like a tedious task, you can choose to use an accountant to file your tax return if you don’t have time to do it yourself, you have complex financial arrangements, or you want to make sure that you’re taking advantage of all of the deductions and credits that you’re eligible for. That means you’re not tied up with tax and are free to spend time on the things you’d rather be doing.

If you choose to use an accountant, they’ll need a variety of information from you to file your tax return. This information will help them determine your taxable income and calculate your tax liability. And, perhaps most importantly, show you how to reduce your tax bill. 

Read on for a comprehensive guide to what your accountant needs from you to file your tax return successfully. From essential documents and financial records to specific details about your income and expenses, we’ll walk you through the key information that will enable your accountant to prepare your taxes accurately, maximise deductions, and minimise your tax liability. 

Information About You and Your Income

Identification information: Your accountant will need your name, address, National Insurance number, and date of birth. They may also need the identification information for your spouse and dependents.

Copy of your most recent tax return: This will help your accountant determine your filing status, income and deductions from previous years, and any credits you may be eligible for.

Wage statements: If you have any employment income on top of your self-employed earnings, you’ll need to provide your accountant with your wage statements from your employer(s). These statements will show your gross income, deductions, and your tax withholding. You’ll also need to provide your P60, or P45 if that employment income ceased during the year, together with your P11d, which outlines any benefits in kind you received from your employment.

Additional income statements: If you have any other sources of income, such as rental income, or investment income, you’ll need to provide your accountant with statements showing this. You must include any bank interest, dividends, and savings interest received during the year (excluding ISAs).  

Particulars of your rental property If you own property, you’ll need to provide your accountant with documents showing your rental income, mortgage interest, property taxes, and all expenses relating to the property. These include statements from your letting agent if you use one. Whilst previously there was mortgage rate relief, since April 2020, all buy-to-let landlords must pay tax on the entirety of their rental income. However, they can receive a tax credit worth 20% of their mortgage interest rates.

Private pension payments: You’ll need to supply details of any pension payments you’ve made in the previous year, as these can give you additional tax relief if you qualify.

Information About Your Business

All sales income: You’ll need to provide all your sales invoices for the year or details outlining your daily takings if, for example, you’re a shop that doesn’t issue invoices. One question we are often asked is whether you need to provide invoices that haven’t yet been paid. The short answer is yes; you must provide all the invoices issued in the given tax year. 

Proof of expenses: If you’re claiming any deductions or credits, you’ll need to provide your accountant with proof of these expenses. This proof could include receipts, invoices, or other documentation.

Bank statements: Providing bank statements for your business allows your accountant to cross-check everything going in and coming out and acts as evidence of these. While you may only have one business bank account, if you have a deposit account or reserve account, make sure to include these statements too.

Business credit card: You might put everything for your business on a business credit card, and you’ll need to give your accountant these statements. If you occasionally use a personal card to pay business expenses, include these with the business-related costs highlighted. 

Loan statements: If you have any business loans, your accountant will need to see the statements. This will mean that the closing balance is included in the accounts correctly and that the correct amount of interest has been included as a deductible expense.

Finance agreements: Provide copies of any new finance agreement contracts signed in the past year. The interest on the payments is tax-deductible, and the asset bought could qualify for the annual investment or other capital allowances.

Petty cash receipts: If your business carries cash, your accountant will need to know how much money is in cash at the end of the year. They need to balance your money, so these records are very important.

Payroll records: Your accountant may operate your payroll, but if not, you’ll need to supply copies of each month’s pay run. This is so your accountant can check to ensure all wage and national insurance amounts are included.

Stock value: If relevant, you must supply a valuation of any stock held at the year-end. This should include information about what it costs, or its value if lower.

Making Tax Digital

In the past, all information was sent to accountants on paper, which, unsurprisingly, was difficult to keep track of. Things would be lost, and a lot of time wasted. Most information can now be supplied online, and as we move closer to Making Tax Digital, you should consider moving to online bookkeeping software. This will automatically organise your records and keep them all in one place. As a result, you won’t need to worry about missing anything, and it also means you can give your accountant access to your online records throughout the year. 

At Norwich Accountancy, we offer clients access to and full training on Xero, the online cloud-based accounting software for small and medium-sized businesses.  

All in the timing 

The deadline for sending your online self-assessment tax returns to HMRC and paying any taxes owed is 31st January each year for the previous tax year. So, on the 31st of January 2024, you’ll have submitted all your information for the tax year from the 6th of April 2022 to the 5th of April 2023. 

If you have chosen to use an accountant to file your taxes, getting everything in order well ahead of these deadlines will give you plenty of time to plan for any tax liabilities. If you need help completing your tax return, get in touch or contact us online here. After all, we’re all about tax returns, stress deducted. 

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What is a UTR Number

If you’ve been asked for your UTR number but don’t know what it means, you’re not alone. Perhaps you know it’s the number printed on a bit of paper somewhere at the back of a cupboard and have never given it much thought. Maybe you want to know how it’s used and why. From self-assessment to registering for the Construction Industry Scheme (CIS), your UTR is an important component of our UK tax system. Find out what it is, why you need it, and what to do if you’ve misplaced yours. 

What is a UTR?

A Unique Taxpayer Reference (UTR) number is a 10-digit identification number used by HMRC (now His rather than Her Majesty’s Revenue and Customs) to identify you as a taxpayer. It does what it says on the tin; it acts as a unique identifier for tax purposes and helps HMRC keep track of taxpayers and their tax-related activities. Your UTR number is sometimes called your tax reference.

Why do I need a UTR?

Your UTR number is essential for HMRC to identify and communicate with you regarding tax matters. Whether claiming a tax rebate or filing a Self-Assessment return, your UTR ensures the taxman (or woman) knows who they’re dealing with.

Who needs a UTR? 

If you’re self-employed you must register with HMRC to fulfil your tax obligations. Once registered, you’ll receive a personal UTR number, which you’ll use to file your annual self-assessment tax return. Like your National Insurance number, your UTR stays with you for life.

For those working in the construction industry as subcontractors, you’ll also need a UTR to register for the Construction Industry Scheme (CIS). The CIS deducts money from a subcontractor’s payments and passes it to HMRC. While contractors must register for the scheme, it’s not mandatory for subcontractors. However, if you don’t register deductions are taken at a higher rate.

When setting up a limited company, you’ll receive a company UTR number to register for and pay Corporation Tax.

Where can I find my UTR?

Once you’ve registered for Self Assessment, your UTR will be sent to you by post within 10 days. However, you can also find it in your Personal Tax Account or the HMRC app, and it’s likely to be available there before it arrives by post. 

If you’ve set up a limited company, you must register the company with Companies House. Your company UTR will be posted to your company address within 14 days of registering.

The HMRC app

The HMRC app is a handy tool for keeping track of all your personal taxes. As well as telling you your personal UTR number, you can also use the app to check:

  • Your tax code and National Insurance number
  • Your income and benefits
  • Tax credit information
  • How much self-assessment tax you owe

You can also use the app to:

  • Estimate the tax you need to pay
  • Make a self-assessment payment
  • Track forms and letters sent to HMRC
  • Claim any refunds due
  • Update your address

Download the app here

What if I lose my UTR number?

If you misplace your personal UTR number, don’t worry. You can always retrieve it from your Personal Tax Account, the HMRC app, or on previous tax returns and other HMRC documents. If you have trouble accessing any of these resources, you can use the Government’s Self-Assessment chat function and ask for help. This chat function is a useful resource for anything related to self-assessment, and you can find it here.

If you need a copy of your Corporation Tax UTR, you might find it in your online business tax account or previous letters from HMRC. If those options don’t work, you can ask HMRC to send a copy by post to your company’s registered address. To use the request service, you’ll need your company registration number and your registered company name. 

Both personal and company UTR numbers are vital for HMRC to identify taxpayers and handle tax matters efficiently. Without a UTR, you won’t be able to file your tax returns, and you may find them chasing you once payment deadlines pass. 

Tax comes hand in hand with many codes and acronyms, so we hope you’ve found this article useful and that it’s answered everything you need to know about Unique Taxpayer Reference numbers. As always, if you need to know more, get in touch, and we’ll be happy to help.

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How to MAKE sure You’re Not Overpaying on Tax

Getting your head around tax can be overwhelming and you may be tempted to bump it to the bottom of your to-do list. But, as this could mean you end up paying more than you need to, it’s important you take the time to tackle your tax. So, we’ve put together our top tips on making sure you’re not overpaying tax in the UK.

  1. Understand your tax code. This is your personal tax code; the number tells your employer how much tax they need to deduct from your pay. If you’re unsure of your tax code, you’ll find it on your payslip or your personal tax account. Alternatively, contact HM Revenue and Customs (HMRC), and they can tell you.
  2. Claim all your tax breaks. There are lots of well-known and lesser-known tax breaks available for UK taxpayers, such as the personal allowance, the married couple’s allowance and the child tax credit. 
  3. Make use of tax-efficient savings and investments. UK taxpayers may be eligible for certain tax-efficient savings and investments, like ISAs, pensions and National Savings & Investments (NS&I) products. 
  4. Get professional help if you need it. If you’re unsure about anything to do with tax, whether you’re self-employed, employed or the owner of a business, we can help you understand your tax obligations. We can make sure you’re not paying you more than you need to so you’ll have more money to spend on growing your business.

Extra tips to avoid overpaying on your tax

Here are some extra tips that may help you reduce your tax bill:

  • Gift money to charity. Donations by individuals to charity or to community amateur sports clubs (CASCs) are tax free. 
  • Make a pension contribution. Top up your pension fund and get tax relief on your contributions. You’re allowed to save up to £60,000 per year into a personal pension in the UK.
  • Invest in shares. Think about investing in shares through a stocks and shares ISA or a SIPP. These investments can grow over time and potentially provide you with a tax-free income in retirement.
  • Take advantage of tax breaks for businesses. If you’re self-employed or run a business, take advantage of the tax breaks available. These can help reduce your tax bill so you can keep more of your hard-earned money.

As you can see, there are lots of ways to make the most of your money when it comes to reducing the amount of tax you have to hand over. If you’re finding your tax complicated or don’t know what tax breaks might apply to you, for example, get in touch today. 

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How to Claim the Working from Home Tax Relief

If you’ve been working from home since the COVID-19 pandemic, you may be eligible to claim tax relief on your expenses. The government offers a flat rate of £6 per week, which is available to all employees who work from home for at least one day during the tax year because it’s required by your employer. You can only claim for things to do with your work, for example, business phone calls or gas and electricity specifically for your work area. You can’t claim for things that you use for both private and business use, like your broadband.

Can I claim?

Employees can apply directly for tax relief for working from home via GOV.UK for free.  If you use the online service, you’ll need to create a Government Gateway account (if you don’t already have one) and give basic information about your employment. You’ll also need to provide evidence of your working from home expenses, such as receipts or bills. You can claim through your self-assessment tax return, online or by filling in a P87 form. 

Not everyone who works from home is eligible to claim tax relief. To be eligible, you must meet certain criteria, including;

  • You must have been required to work from home by your employer if they don’t have a place of work, such as an office.
  • You must have incurred additional household costs as a result of working from home.
  • You must not be receiving expenses directly from your employer to cover the extra costs of working from home.

The deadline for claiming the tax relief for working from home is 31 January, following the end of the tax year. For example, the deadline for claiming tax relief for the 2022/23 tax year is 31 January 2024.

How to claim

The steps to claim the working from home tax relief in the UK are:

  • Check if you’re eligible. You’re eligible to claim if you work from home at least part of the time and are not self-employed.
  • Calculate your expenses. Don’t forget you can claim for expenses you incur as a result of working from home but not for things that you use for both personal and private use. So business calls – yes, Netflix – no. 
  • Keep evidence of your expenses. Keep all receipts or bills to support your claim.
  • Claim online or through your self-assessment tax return. You can use the HMRC online service or submit your claim through your self-assessment tax return.

Claiming tax relief for working from home helps you save money on your tax bill. If you’re eligible, make sure you claim what you’re owed. If you’re unsure of whether you’re eligible or what expenses you can claim for, or any other tax-related query, we’re always here to help.

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The Difference Between Personal Accountants and Bookkeepers in the UK

If you’re a business owner in the UK it’s likely you know there are many different financial experts to turn to. Two of the most common are accountants and bookkeepers, but do you know the difference between the two?

What’s a bookkeeper’s role?

Bookkeepers keep your financial records in order. They’ll track your income and expenses, prepare financial statements and balance the books, like income statements and P&Ls. They can also help with invoicing, payroll and tax preparation.

What’s an accountant’s role?

An accountant provides more specialised financial accounting services, like tax planning, financial forecasting and business analysis. They’ll also represent you with tax authorities to fight your case.

In summary…

Bookkeepers look after the books on a day-to-day basis, dealing with the financial operations of a business.

An accountant looks after more strategic matters and provides long-term financial advice.

Which should you choose?

To answer a question with a question; it depends on your specific needs. For small business owners that are financially savvy, a bookkeeper to manage your books on a day-to-day basis is probably all you need. But for a larger business, or if you’re not that good with finances, or want specialist advice, an accountant will be a better option.

It’s worth noting that there is sometimes a crossover between the two roles. Some bookkeepers offer accounting services as well, albeit limited, and some accountants offer bookkeeping services. So, when choosing your financial professional, make sure you dig deep into their financial qualifications and experience.

Top tips for choosing a financial professional

Here are some top tips to help you make pick the right person to help with everything from balancing your books to keeping on top of your taxes:

● Ask friends, family or colleagues for their recommendations. You don’t have to take their advice, but it may help you decide.

● Don’t pick the first one you meet; shop around first.
● Find out about their qualifications and experience that is relatable to your business and industry. Don’t be afraid to ask questions.
● Get quotes and find out exactly what’s covered in their cost.

Choosing the right financial professional for your needs can be tricky. But follow these tips, and you’re in a much better position to make the right decision. There are lots of brilliant bookkeepers out there and impressive accountants, and we’re proud of what we think are some of the best in the business. So get in touch to find out how we can help.

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Top 5 Ways an Accountant Can Save You Money

Here are our top 5 ways in which our tax accountants in Norwich can help you reduce your personal tax bill in the UK.

1. Identify tax reliefs and deductions

There are a number of tax reliefs and deductions available to UK taxpayers but it can sometimes be difficult to know which ones you may be eligible for. A personal tax accountant will help you identify which tax reliefs and deductions may be applicable to you, and then make sure you claim them correctly.

2. Prepare your personal tax returns accurately

Because the UK’s tax system is so complex, just the smallest mistake on your tax return can leave you facing added interest fees or even incur penalties. Our tax accountants in Norwich will help you prepare your personal tax returns correctly, as well as make sure they are submitted on time. This gives you complete reassurance and peace of mind that you are meeting your tax obligations. 

3. Advise on tax planning

Tax planning is the process of taking the right steps to reduce your tax liability. But if you’re not sure how to do this, a tax accountant will help you develop a tax plan that is tailored to your own individual situation. They will also be able to help you make better informed decisions about your financial circumstances.

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4. Represent you at an HMRC enquiry

Being contacted by HMRC about a tax enquiry can be very daunting and scary. In these situations, it’s important you seek financial advice and support. This is where a personal tax accountant can help by representing you at the HMRC enquiry and, therefore, resolving the problem as quickly and efficiently as possible.

5. Provide tax advice

An accountant has the necessary knowledge and experience to give you general tax advice on a wide range of topics, including pensions, investments and inheritance tax. This can help you reduce your tax liability and that you are able to make informed decisions about financial matters personal to you.

As well as these top 5 ways an accountant can help you with your tax, here are some extra tips for reducing your personal tax bill:

  • Make sure you are claiming all the tax-free allowances and reliefs you are entitled to.
  • Keep detailed records of your income and expenses.
  • Think about using a tax-efficient savings or investment product.
  • Make sure you are aware of the latest changes to the UK’s tax system.

Follow our tips and you will be able to reduce your personal tax account. By identifying the right reliefs and deductions applicable to you, you can make sure your tax returns are accurately completed and on time and an accountant can help you keep more of your hard-earned money.

Are you looking to reduce your personal tax bill but not sure where to start? Norwich Accountancy’s tax advisors and accountants are on hand to help you with all your personal tax obligations. Let us take care of it for you so that you can spend more time with family and friends and less time tackling taxes.

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