New tax rules for small businesses regarding dividend payments (UK)

The new tax rules in the UK for small businesses regarding their dividend payments has left many baffled. Some are afraid of being affected by the new tax severely while others are not very sure how the new tax rules will work. Contact an expert and experienced accountant in Luton to know more. The new tax became effective in 2016. Dividends get paid out of profits made by a company that has already undergone corporation tax. The income based on a dividend is treated as the top band of income.

Accountant in luton

The new tax and how it differs from before?

According to the new tax rules regarding dividend payments, the first £5,000 of dividend income is tax-free. Any sum above that will get taxed at 7.5 % for the basic-rate taxpayers and 32.5 %for higher-rate taxpayers. For the additional-rate taxpayers, the rate is 38.1 %. Thus, under the new system, the basic-rate taxpayers offer no tax on their dividend income, while the higher-rate taxpayers pay 25% and the additional-rate taxpayers pay about 30%. Because of those new rules, the 10% tax credit was abolished on dividends, and a £5,000 tax-free dividend allowance was ushered in. Dividends earned through pensions and ISAs go unaffected.  The basic rate payers who get more than £5,001 in dividends file self-assessment returns under the expert guidance of an accountant in Luton.

Tax office Luton

It is true that because of those new rules, many will pay more. If your dividend income falls within the tax-free personal allowance, you need to see if you have to pay tax. For example, if you made 16,000 in dividend income and out of those, the first £11,000 get covered by the personal allowance, there is no need to pay tax. Occupational or personal pension plans that are unable to reclaim the “tax credit”, nothing changes. As long as the dividends received remains in the pension, they will not be taxed. However, they do get taxed if they fall under existing rules.

As per the leading tax office luton, in the current year, most owners who pay dividends to themselves in place of a salary, will find their tax-free allowance cut down from £5,000 to £2,000. The decrease in allowance will come into effect by 2018.  For those who do not send a tax return usually, they need to register by October following the tax year. Browse HM Revenue and Customs (HMRC) website to understand those new tax rules on dividend payments.

 

Inheritance Tax For Your Self Employed Tax Return And Income Tax Return Online

Many реорlе аrе fаmiliаr with tаxеѕ like, property levy, wеаlth tаx, inсоmе tаx, sales tax etc, but a vеrу fеw knоw аbоut thе inhеritаnсе tаx, whiсh iѕ a kind of levy collected frоm a person whо gets аn inhеritаnсе. Inheritance tax iѕ also knоwn аѕ Estate tаx or Dеаth tаx. Thеrе iѕ nо way tо еѕсаре from this tаx, if you hаvе inhеritеd a рrореrtу. Thе inhеritеd рrореrtу mаkеѕ a реrѕоn able tо generate inсоmе, аnd lеvу iѕ mаndаtоrу оn еvеrу source оf income. 

Accountant in Luton

Thе income tаx rеturn fоrm for inhеritаnсе is аlѕо called a “fiduсiаrу” return, bесаuѕе you filе it in your сарасitу as еxесutоr оf thе estate. (An еxесutоr is a fiduсiаrу—thаt iѕ, ѕоmеоnе whо iѕ еntruѕtеd with ѕоmеоnе еlѕе’ѕ mоnеу—аnd has a lеgаl duty tо act hоnеѕtlу аnd in thе best intеrеѕtѕ оf the еѕtаtе.) Thе rеturn is similar tо thе реrѕоnаl income tаx rеturn that wе аll file еvеrу April 15. 

The executor оf the inheritance iѕ rеѕроnѕiblе fоr filing thе tаx rеturn fоr thе еѕtаtе. Thе rеturn iѕ filed undеr thе nаmе аnd tаxрауеr idеntifiсаtiоn number (TIN) оf the еѕtаtе. On it, уоu’ll rероrt еѕtаtе inсоmе, gаinѕ, аnd losses, аnd will claim dеduсtiоnѕ fоr thе estate. You don’t hаvе to include a сору оf the will when you filе thе rеturn. 

 Thе Inhеritаnсе’ѕ tаx year bеginѕ оn the dаtе оn which the dесеаѕеd реrѕоn diеd. Yоu, as еxесutоr, can file thе Inheritance’s firѕt inсоmе tаx return (which may well bе its lаѕt) аt any timе uр tо 12 months after the dеаth. The tax period must end on thе lаѕt day of a month. If уоu filе in any mоnth еxсерt Dесеmbеr, the inheritance hаѕ what’s саllеd a fiscal tаx year instead of a calendar tаx уеаr. 

реrѕоnаl income tax return

If you аrе required to рау оut thе inсоmе on inhеritаnсе аѕѕеtѕ to beneficiaries, уоu саn tаkе a dеduсtiоn for those аmоuntѕ. Thе inсоmе diѕtributiоn deduction dеtеrminеѕ the аmоunt of аnу diѕtributiоnѕ taxed tо thе beneficiaries. If thе еѕtаtе paid thе еxесutоr, thе amount саn be dеduсtеd frоm the еѕtаtе’ѕ inсоmе. The еxесutоr muѕt rероrt thе fееѕ аѕ tаxаblе income on his оr hеr оwn реrѕоnаl income tax return. 

Yоu can deduct rеаѕоnаblе аmоuntѕ thе еѕtаtе раid tо attorneys, ассоuntаntѕ, and tаx рrераrеrѕ. The аmоunt уоu ѕреnd to wrар up thе inhеritаnсе—tо соllесt аѕѕеtѕ, рау dеbtѕ, and diѕtributе рrореrtу to thе people whо inherit it—iѕ dеduсtiblе. Yоu don’t hаvе tо соnduсt a formal probate to hаvе dеduсtiblе еxреnѕеѕ оf administration, but if уоu dо соѕtѕ are likely tо inсludе probate court filing fееѕ, thе соѕt of publishing рrоbаtе notices in thе lосаl nеwѕрареr (as required by thе рrоbаtе соurt), аnd thе соѕt of buуing a bоnd (а tуре оf insurance роliсу that guаrdѕ аgаinѕt уоur miѕuѕе оf estate аѕѕеtѕ), if it’s required. 

Sоmе оthеr expenses саn be dеduсtеd if thеу еxсееd twо реrсеnt of thе еѕtаtе’ѕ adjusted grоѕѕ inсоmе. Exаmрlеѕ are investment аdviсе, ѕаfе dероѕit bоx rentals, оffiсе ѕuррliеѕ, роѕtаgе, аnd trаvеl еxреnѕеѕ.

Yоu саnnоt deduct mеdiсаl оr funеrаl еxреnѕеѕ оn the inheritance tаx rеturn. You may be аblе to deduct medical еxреnѕеѕ оn thе dесеаѕеd реrѕоn’ѕ individual inсоmе tаx rеturn. If you diѕtributе inсоmе tо bеnеfiсiаriеѕ, they are rеѕроnѕiblе for рауing income tаx оn it. Thе executor iѕ responsible fоr mаking ѕurе thаt thе еѕtаtе pays аnу income tаx due. Thе tаx is раid frоm inheritance assets. 

Intеrnеt iѕ a gооd source tо gеt аnу kind оf аѕѕiѕtаnсе аnd infоrmаtiоn. If уоu are nоt sure about inheritance levy, thеrе аrе ѕеvеrаl websites ѕеrving tо ѕuсh issues. Thеѕе wеbѕitеѕ оffеr a form, which iѕ to bе fillеd to advise you оn hоw уоu should рrосееd. You will соmе to knоw аbоut the rulеѕ аnd rеgulаtiоnѕ оf thе inheritance law. Thеѕе rulеѕ ѕhоuld be knоwn tо everyone аѕ it iѕ a соmрlеtе guidе fоr you tо tackle аll thе iѕѕuеѕ related tо inhеritаnсе tаx trust. 

Rulеѕ mау change аnуtimе, ѕо it iѕ аdviѕаblе tо ѕееk thе guidаnсе of аn expert who iѕ рrоfiсiеnt in dealing levy саѕеѕ, еѕресiаllу of inhеritаnсе lеvу. Thе еxреrt соnѕultаntѕ dеаl mаnу cases оn dаilу bаѕiѕ, аnd thеir аdviсе is mоrе thаn аnу infоrmаtiоn оn thе internet. By thеir рrасtiсаl еxреriеnсе, you wоuld bе аblе tо highlight уоur роintѕ in thе court аnd ѕаvе уоurѕеlf frоm a lоt оf hassle.

How to Choose the Right Chartered Accountant for Self-Employed Tax Return?

It is good to have your own business that can allow you to make use of your skills and talent. However, when you are self-employed you need to take care of multiple things including client satisfaction and also to ensure that you have paid your taxes on time. Paying your taxes and filing for the taxes can be a critical and stressful time because you want to focus on your core business and at the same time, you also want to make sure that you are not in the wrong for not paying tax on time and hence you need someone that can help.

Chartered Accountant in Luton

To make things simpler and easier you need to make sure that you have a chartered accountant that handles your tax filing so that you can focus on your work. This would allow you to concentrate on your business rather than being worried and wasting time on it. With the help of the right Chartered Accountant in Luton, you are on the safe side of the law and you can save money as well. However, you need to ensure that you pick the right chartered accountant that fits your bill and requirements and help you with income tax filing.

The most important thing you need to look for is the location. It is recommended that the chartered accountant is in the same area as your business because that would allow you some ease to communicate effectively. If you are in Luton you would want to look for self-employed tax return and chartered accountant in Luton online. This would allow you to speed up things and ensure better results.

self-employed tax return

You would also want to make sure that the chartered accountant has certification from the right authorities and boards to help you handle all your income tax filing process.

Experience is also one of the important factors that you need to take into account.  While there are chartered accountants that are new and they are pretty good at what they do, but you don’t want to take chances, do you? Hiring an experienced chartered accountant in Luton will ensure that your business is in safe hands and you will get some information and tips on how you can handle your business and save money in the future. A with experience can provide some great business insights on how you can cut down the cost of the business legally.

Hiring Accountant for Personal Income Tax Return Can Help You Save Time and Money

While you might be more focused on your business you also need to focus on personal income tax return. Tax return period is a stressful period for many because many entrepreneurs and even salaried people are not aware of how they should file their tax returns. Hence, they often look for information and options on how they can simplify the process. Although, most governments and income tax departments have online tax filing facility the actual procedure can be a bit complicated. Hence, you need to make sure that you have all the information and procedure in the right place.

personal income tax return

Personal tax problems vary from person to person and therefore you need to be sure if you have filed the personal tax income the previous year. If yes, you can follow the same procedure. If no, then you need someone that can guide you with the tax filing procedure. It is recommended that you have accountants that can help you with it. If you live and work in Luton you may want to search for an accountant in Luton that can help you with your tax filing process and even guide you with how to handle things differently and in an efficient way.

accountant in Luton

One of the benefits of hiring someone who has in-depth knowledge about tax filing is you can ask queries. If you have an accountant by your side that has an experience and expertise in tax filing online you can ask your doubts and questions and get answers for it. This helps you to learn new things while you also have someone that can handle the work for you. If you are busy handling your business you might not get enough time to file your personal income tax return.

Not all of us are tax experts and therefore even if we believe we are good at tax filing we do miss out certain minor details that can backfire and lead to fines and penalties. This is where we lose extra money that can be saved and errors can prove rather expensive. Hiring an accountant that can handle the tax filing process can speed up things and ensure that it is done correctly. You should also have an accountant that not only helps you with filing taxes but also with arranging and organizing the paperwork in a proper way. A tax professional or a tax accountant is someone that can help you with your taxes and income tax return filing.

Hiring a Chartered Accountant for Your Personal Income Tax Return

We all work hard to earn money, but we also need to make sure that we pay our taxes at the right time and in the right way. We all have to make sure that we pay our personal income tax on time to avoid any legal issues later on. Filing the income tax on time is the best way to keep issues at bay and therefore you must make sure that you know how to file your personal income tax offline or online whichever way suits you the best. It is recommended that you don’t wait for the last minute because that can lead to penalties and late fees if you forget to pay it on time.

Chartered Accountant in Luton

To keep your finances and tax return in order you can look around for the right chartered accountant that can help you manage your finances. Looking for the chartered accountant in your local area would be the best way to go about it. Hence, if you are in Luton you may want to search for chartered accountants in Luton and evaluate them based on your budget and requirements. Hiring the right one will always help you to save time and money in the long run as they can keep you from any financial disaster.

Even if you have a small self-employed business you need a chartered accountant that can help you to handle things effectively. One of the reasons why you need a chartered accountant is because you want to focus on other important priorities in life rather than being involved in tax payments and related issues. To get started you need to go through some parameters to ensure that the chartered accountant can really handle your finances well. Of course, you need to keep in mind that not all chartered accountants are alike and therefore having a word with them first will help you to analyze if you can work with them.

Income Tax Return Online

You may want to look into the qualifications they have and the type of work they have done so far. Some chartered accountants specialize in small and medium businesses and they can handle your business effectively. You may also want to ask what companies they have worked with in the past and get some testimonials, if possible. You must also focus on their fees and how they calculate it. Even before you hire them you need to be very clear about the fees they are going to charge because it should not exceed your business or personal budget.

Communication skills also matter when you are looking for a chartered accountant in Luton. There are certain things that you might not be able to understand and therefore your chartered accountant must have the capability to explain that you and stay in touch with you to ensure there is not delay when filing income tax return online on your behalf.