Today is the start of a new tax year and yesterday Stephen Paul from Vauled accountancy delivered a training session to MINT members highlighting some of the key changes.
The chancellor gave his spring statement on March 23 – setting out changes and potential changes for the next fiscal year, 6 April 2022 to 5 April 2023 (and beyond). You can read more about the chancellor’s statement here!
Here are our top five takeaways from Stephens’s session. Remember MINTies can watch the replay on the members’ website.
1. National Insurance
The rate of national insurance employers must pay is going up by 1.25%. Employers are being encouraged to separate their employees’ NI contributions on payslips by showing the extra 1.25% as a payment to the NHS.
Thresholds and lower limits are also changing. For the self-employed, from July, you won’t start to pay NI unless you earn £12,570 a year.
DID YOU KNOW?
There is an employers’ allowance of 5£,000 where up to this amount is paid to employers as a grant. Many employers are not claiming this. Find out if you’re eligible here.
2. Income Tax
Income tax rates are set to come down for the self-employed by 2024, from 20% to 19%.
3. Making Tax Digital (MTD)
All VAT registered companies need to be submitting digital returns now.
From 2024, anyone who is self-employed and earning over £10,000 a year has to register for MTD. Once registered, you need to submit income and expenses reports every three months and then a final adjustment submission. Five returns a year.
A MINT MEMBER ASKED:
Does the same apply to landlords? Yes, anyone earning £10k+ from properties will need to do the same. This is not yet confirmed, but landlords could have to submit property income separate to other income.
By 2025, all limited companies will need to be registered for MTD.
Use one of the many electronic accounting systems that are out there (QuickBooks, Zero, Sage, FreeAgent) as this will make your quarterly return much easier.
4. Corporation Tax
People have heard that all corporation tax is going up to 25%. This is not accurate.
Here’s a statement we found on this:
From 1 April 2023, the Corporation Tax main rate for non-ring fenced profits will be increased to 25% applying to profits over £250,000. A small profits rate (SPR) will also be introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.
5. Annual Investment Allowance (AIA)
Many business owners still don’t know that you can invest money into equipment and those investments can be taken off your profit.
AIA used to be known as Capital Allowance.
The AIA amount has temporarily increased to £1 million between 1 January 2019 and 31 March 2023.
You can read Valued Accountancy’s blog about the spring statement here.
If you’re self-employed or a small business owner, and this is the sort of information you perhaps struggle to digest, then being a MINT member is for you. We run weekly training sessions, on a multitude of topics like this, many with professionals in their fields like Stephen. Book an informal chat with our membership manager Suzanne here and keep an eye out for our next free taster session.