National Minimum Wage and National Living Wage Rates 2019-20

The National Living Wage is applicable to all employees aged 25 and over.  The rate increased to £8.21 from 1st April 2019.  The National Minimum Wage applies to all other employees under 25.  The table below summarises the National Minimum Wage and Living Wage rates for the year commencing on 1 April 2019 and these are the minimum hourly rates that employees are entitled to by law:

Date 25 and over 21 – 24 18 – 20 Under 18 Apprentice
1 April 2019 £8.21 £7.70 £6.15 £4.35 £3.90

The apprentice rate applies to apprentices under the age of 19, or to those aged 19 and over but in their first year of apprenticeship.

Note that the above rates do not apply to the self-employed.

Budget Update – October 2018

As always there were many scare stories before the Budget but thankfully most of those didn’t materialise…for now anyway. Here is our round up of the key tax announcements affecting individuals, small businesses and landlords.  Overall, we think small businesses can breathe a huge sigh of relief as many of the mooted tax changes won’t take place, at least for another couple of years and possibly not at all for the smallest of businesses.

Personal Tax

The Chancellor left the best news until the end but we’ll start with it.  A year earlier than the Conservative manifesto commitment, from April 2019 the personal allowance will increase to £12,500 (from the current level of £11,850) and the higher rate threshold will increase to £50,000 (from £46,350).  These thresholds will remain the same in 2019-20 and 2020-21 and increase in line with CPI thereafter.  The increased thresholds from April 2019 represent an annual tax saving of £130 for a typical basic rate taxpayer and £860 for those earning £50,000 to £100,000. Continue reading

Do I need to complete a self assessment?

You will need to complete a self assessment or personal tax return if any of the following apply to you:

C– You are self-employed

– Your annual earnings from all sources are £100,000 or more

– You are a director of a limited company

– You have income of £10,000 or more from savings or investments

– You receive £2,500 or more from renting out property

– You have £10,000 or more income from savings or investments

– Your income is £50,000 or more and you or your partner receive child benefit

Further details about each of these circumstances are provided below. There are also other situations in which a self assessment may need to be completed but those listed above are the most common reasons that individuals are brought into the self assessment net.

If one of the above applied to you for the first time during the 2017/18 tax year (i.e., from 6 April 2017 to 5 April 2018) then you must notify HMRC of the need to complete a self assessment as soon as possible and by 5 October 2018 at the latest.  This can be done on HMRC’s website here.Continue reading

What do I need to consider when choosing an accountant?

Anyone can call themselves an ‘Accountant’ or ‘Tax Advisor’ as these terms are unregulated.  Even HMRC do not currently require any specific qualifications for a person to become a tax ‘agent’.  This means that it is up to the client to ensure that they choose an accountant or tax advisor who is professional, technically able and with strong ethical standards.

The first thing to look out for is whether they have a professional qualification and belong to a professional supervisory body.  Many of the stronger qualifications require years of studying and experience with a commitment to maintain and refresh that knowledge regularly if they are to keep the right to that qualification. If an accountant has any qualifications this should be obvious from their business stationery and/or website.  There are all sorts of accountancy bodies and various initials that you will come across but it is essential to look for a qualification and membership of one of the following professional bodies:  Institute of Chartered Accountants in England & Wales (ICAEW), Association of Chartered Certified Accountants (ACCA) or the Chartered Institute of Management Accountants (CIMA).  Membership of these bodies can be identified with the ACA, ACCA or CIMA initials after the accountant’s name.Continue reading

How the VAT flat rate scheme has changed

VAT Flat Rate Scheme and Service BusinessesIn the Autumn Statement on 23 November 2016 a surprise announcement was made about the VAT flat rate scheme with the introduction from 1 April 2017 of a new flat rate of 16.5% for those businesses with very low costs. The new rate has been introduced to target micro-businesses who were using the flat rate scheme for financial gain rather than to genuinely save on administration time, but it unfortunately also catches out businesses that are legitimately using the scheme.  Businesses either currently using the flat rate VAT scheme or thinking of doing so in the future will therefore need to consider whether the new 16.5% rate will apply to them and what the implications of this would be. Continue reading