Financial Advice

TAX & ACCOUNTANCY TIPS

A happy new year to all members and readers.

TAX RETURN DEADLINES

The 31st January 2018 marks the deadline for online submission of self-assessment tax returns and is also the date that all tax and national insurance liabilities for the 5th April 2017 have to be settled by. Failure to file on time will result in penalties being issued and failure to pay on time will result in HMR&C charging interest and potentially very high surcharges. It is strongly recommended that you communicate with your professional advisors as soon as possible if you have not already. The new-year often signals the busiest month for many accountants and tax advisers so please do not leave everything to the last minute.

AUTO ENROLMENT AND PENSION INCREASES

The government’s auto enrolment legislation has now been with us for some time and it is hoped that all employers now understand their responsibilities and compliance obligations. With effect from April 2018 the minimum contribution rates will increase to 2% for employers and 3% for employees. It is recommended that you ensure that your staff are aware of these changes and that your payroll software is ready to accommodate the new rates.

BUDGET CHANGES

Phillip Hammond presented his first Autumn Budget on November 22nd. I think it is fair to say that there were no ground breaking changes within the tax system but there were some items that may be of interest.

VAT THRESHOLD

The VAT registration threshold has been frozen for the next few years. It has been typical for the registration limit to increase on occasion to reflect the impact of inflation but this freezing of the threshold represents

Dean Flood, Chartered Certified Accountant and Partner at Rowland Hall

www.rowlandhall.co.uk Tel: 01375 373 828 / 01268 696 878

a slight change in approach. There have been some recommendations that the UK VAT registration threshold should be reduced to the comparable levels of some of our European counterparts. As an example the threshold in France is just over €33,000. There are no indications that we will follow suit to that extent, but the freezing of the limit may indicate a future downward pressure on the threshold.

CORPORATION TAX

In the corporate environment, businesses will no longer enjoy any further indexation on certain asset base costs with effect from 1st January 2018. Historical indexation up to that point will still be permitted but subsequent appreciation of assets will no longer receive this modest chargeable gains protection against inflation. To counter that bad news the corporation tax rate will reduce to 19% for all profits accrued after 1st April 2018.

DIVIDEND TAX

The Nil % rate of tax on dividend income is currently restricted to the first £5,000 but this will reduce to £2,000 with effect from 6th April 2018. It is recommended that owner managed companies ensure they fully explore their options for available dividend payments before that date of change to ensure maximum efficiency of profit extraction from the company.