Accountancy Place
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Transcript of Accountancy Place
Accountancy Place
Preparing for Your Financial Year End
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Tax Year End
• The tax year ends on 5th April 2014
• Tax Year 6th April 2013 to 5th April 2014
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Tax Return
• HMRCAlso known as the Inland Revenue or
Tax Man!!!
Issues you a Tax ReturnSoon after the 5th April 2014
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Tax Return - Self Assessment
• Requires Tax Payer to complete a tax return
• Tax payer calculates the tax payable
• Tax must be paid on set dates
• Errors and there are penalties!
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Tax Return Information• Self employment• Employment• Interest received • Dividends received• Pension contributions• Charity donations• Rents received• Capital gains (selling of
shares/investments etc..)
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Time Scale
• Receive Tax Return soon after 6th April 2014
• This requires to be completed and submitted to the HMCE (Inland Revenue) by 31st January 2015
• Tax Return information is for one year 6th April 2013 to 5th April 2014
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Tax Payment Dates
• 31st January 2015• &
• 31st July 2015
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How we help you!
• April 2014 – we send our checklist
• June 2014 onwards - you start receiving letters/emails/phone calls
• We remind you about Tax payment deadlines
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Self EmployedOn the Profits of our Business we pay
• Income Tax
&• National Insurance
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Income Tax
• For the Tax Year ending 5th April 2014 the first £9,440 is tax free – this is known as the “Personal Allowance”
• After this?
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Income Tax Rates
After the first £ 9,440
20% between £0 & £32,010
40% between £ 32,010 &
£ 150,000
50% over £ 150,000
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National Insurance
Class 2 - £2.70 per week Class 4 – 9% on profits
between £7,755 and £41,450
plus 2% on profits above £41,450
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How is the tax calculated?
Example
A N Other starts self employment on the 6th April 2013.
To the 5th April 2014- Fees earned are £77,000.
To the 5th April 2014 – Expenses are £7,000.
Profit £70,000 (£77,000 - £7,000)
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Profit £70,000
Less Personal allowance £ 9,440
£60,560
First £ 32,010@20% = £ 6,402
Next £ 28,550@40% = £ 11,420
Total £60,560 £ 17,822
Income Tax
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National InsuranceClass 4 NIC
9% profits between £7,755 -£41,450 plus 2% on profits above £43,875(41,450 – 7,755)
£33,695 @ 9% £ 3,032.55(70,000 – 41,450)
£28,550 @ 2% £ 571.00
Total £ 3,603.55
National Insurance
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To Pay on 31 Jan 2015
Income Tax £ 17,822.00
Class 4 NIC £ 3,603.55
Total £ 21,725.55
Is that all?
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Income Tax & Class 4 NIC
For year ended 5th April 2014
£ 21,725.55
PLUS ADVANCE (on account)
For Y/E 5th April 2015
(1/2 of tax due for 5th April 2015)(£21725.55 x ½)
£ 10,862.78
TOTAL PAYMENT ON
31 JAN 2015 - £ 32,588.33
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Next Tax Payment
31st July 2015
(2nd payment on account)
£10,862.78
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Whats Next?
5th April 2015 arrives
• Accounts produced • Tax Calculated
Example
For the year ended 5th April 2015
Income Tax & Class 4 NIC is
£ 28,000.00
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Tax Payment 31 Jan 2016
Tax for the Year 5th April 2015
£ 28,000.00
Paid 31/01/15 ( £ 10,862.78)
Paid 31/07/15 ( £ 10,862.78)
£ 6274.45
Plus 1st POA £ 14,000.00(28000 x ½)
Total £20,274.45
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Good News
We do the tax calculations for you
& ensure you pay them on time
But in order to do so we need information from you.
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Record Keeping• all amounts received and expended in
the course of the trade, profession or business and the matters in respect of which the receipts and expenditure take place, and
• in the case of a trade involving dealing in goods, all sales and purchases of goods made in the course of the trade.
“HMRC extract”
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• Accountancy Place guidance to fulfill the rules is;
• The storage (filed or otherwise) of the following documents:
• Schedules of payment received/invoices issued
• Certificate detailing amount paid for pension
• Bank statements• Registration fees paid• Indemnity Insurance payment receipt
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• Subscription receipts
• Receipts for the purchase of any equipment
• Receipts of CPD and/or Course fees paid
• Travel log (if travel log is not maintained, then petrol receipts will need to be retained)
• Receipts of any other business related expenditure
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Saving for Tax
Tax is payable on due dates
31st Jan & 31st July
Therefore it is essential you save
1/3 of your income for this
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Student Loans• HMRC ask you to make student loan
repayments at the same time as you pay your tax.
• You won't have to make any repayments if, in the tax year, your profit is less than £15,000.
• Usually the amount you will pay back is calculated as 9% of your profit over the starting limit.
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Other TaxesOther taxes we also need to consider are
• Inheritance Tax
• Capital Gains Tax
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Profit & Loss Account
Fees £ 90,890
Less ExpensesSecretarial fees 4200Indeminity Ins 1501Prof subs 285Prof registration fee 409Books 200Tools & renewals 1642
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Phone 391
Print, post & stat 29
Course fees 9394
Travel 121
Motor exp 2211
Cleaning 390
Sundry 107
Comp exp 216
Legal & prof 552
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Accountancy 300
Use of home as office 494---------------------------------
Net Profit 68,448
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Thank You
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