Personal Savings Allowance

A little bonus for your tax return?

personal savings allowance - impact on your tax returnBack in April we highlighted that HMRC had introduced a tax-free allowance of £1,000 on savings interest.

Since many of you will be busy preparing your tax returns (you are doing that aren’t you?) it is worth reiterating some of the details of the allowance.

Basic rate taxpayers are entitled to the full £1,000 personal savings allowance, which is equivalent to the interest you would receive on £75,000 in some of the top savings accounts.

Higher rate taxpayers (earning £43,000 to £150,000) will be able to earn £500 interest with no tax, while those of you with income over £150,000 a year will be taxed in full on their interest income.

Interest income from most current and savings accounts from banks, building societies and credit unions is counted towards your allowance. Other less common sources include bonds, gilts, life annuity payments and interest distribution for some forms of investment like unit trusts.

Interest from tax free mechanisms such as ISAs and Premium Bonds isn’t included in your allowance.

The personal savings allowance is generally quite straightforward.  However your tax calculations might be a little more difficult if your savings income added to non-savings income takes you into a higher rate tax band or if your partner is already on a higher rate.

If you are unsure how the personal tax allowance affects your tax position then talk to Lewis Smith & Co. today.

Set up an appointment by calling 01384 235549 or email info@lewissmith.com.

 

Lewis Smith & Co – Providing accountancy services for Kingswinford businesses for more than 30 years.

Tax on Children’s Income

Children’s income is theirs, but…

For taxation purposes a child’s income (where children refers to stepchildren, illegitimate and adopted children) is theirs regardless of their age. In addition they benefit from a full personal tax allowance and are subject to all of the normal tax bands and rates.

Here comes the “but”.expert tax planning giving money to children

For unmarried children under the age of 18 income that comes directly or indirectly from a parent is treated as the parent’s own income, and tax is applied appropriate to that parent.  That means just “splashing the cash” on your offspring may have some unpleasant tax consequences

Fortunately there are some exceptions to the rule that you can take advantage of including;

  • Each parent can give monetary gifts to each child and provided any income generated from the gift is less than £100 for each child from each parent, then the income is taxed as the child’s.  If the income (interest from bank accounts for instance) exceeds £100, the whole amount and not just the excess over £100 will be taxed on the parent.
  • The return on National Savings ‘children’s bonds’ for under 16 year olds is tax exempt.
  • Personal pension contributions of up to £3,600 a year on behalf of a child are allowable.
  • Child Trust Fund Accounts can be established by parents for their children.

Interestingly grandparents aren’t treated as strictly as parents where it comes to helping out the children. So it might be worth a few conversations.

If you want to understand more about the tax implications of giving money to your children, why not talk to Lewis Smith & Co.?

Set up an appointment today by calling 01384 235549 or emailing info@lewissmith.com.

 

Lewis Smith & Co. – Expert tax planning in Dudley

 

 

 

Charity Quiz Success

And the winner is…The Friends of Alfie Johnson

The Annual Quiz 2016 fundraiser for Black Country charity The Friends of Alfie Johnson passed in great style on Friday October 14th.

With a record 50 teams entering there was an air of anticipation in the hall of Dudley College of Technology. Anticipation from participants about who would win and by the organisers about how much would be raised.

As defending champions and event sponsors, Lewis Smith & Co. had high hopes on both points.  We won’t go into the performance of our teams in the quiz but happily our expectations on fundraising were more than exceeded. Lewis Smith & Co sponsored the Annual Quiz night held at Dudley College of Technology

In fact the evening raised a whopping £2,330 including a generous surprise cheque for £300 from local TSB branches ( Old Hill, Merry Hill and Stourbridge) who are supporting the charity this year.

Alfie Johnson’s Dad, Paul, made an emotional introduction to the evening to highlight just what help the money raised by the charity is doing for disabled kids across the Black Country.  He was joined on stage by Dudley Mayor, Councillor Mohammed Hanif, who explained why the charity was on his list of causes and highlighted his on-going commitment to fundraising during his term of office.

We must also congratulate local company Wilkes Tranter on wresting the Annual Quiz trophy from us (it’s just temporary of course).

Lewis Smith & Co. are proud to have sponsored the event and we wish every to success to The Friends of Alfie Johnson as they continue to raise funds and help those kids.

If you need to contact us simply call 01384 235549 or email info@lewissmith.com.

 

Lewis Smith & Co. – Accountants for Dudley businesses

Annual Quiz – Sold Out

Plenty of contenders for our Quiz Night crown

Lewis Smith & Co are sponsoring the sold out Friends of Alfie Johnson annual quiz nightThe Friends of Alfie Johnson charity trustees have announced they have sold all of the tickets for their fundraising Annual Quiz 2016.

This means means that over 50 tables have been booked with around 200 people taking part.  The charity is expecting the 2016 quiz to beat all fundraising records with money coming in from tickets sales, a raffle and proceeds from “Alfie’s Arms” – serving drinks and snacks.

There are quite a number of business entrants this year with TSB, Higgs & Sons, Thursfields, SuperFast IT and Arrowsmith Marketing all taking part.

As current holders of the coveted Annual Quiz Night trophy the Lewis Smith & Co. stance is “Come and have a go if you think you are smart enough.”

We’ll be reporting on how successful we have been after the event, which takes place on October 14th at the Dudley College of Technology.  To get an idea of the types of questions being posed at the Quiz why  not follow us on Twitter or Facebook.

Lewis Smith & Co. has provided informal support for the Friends of Alfie Johnson for some years. This year we are proud sponsors of the Annual Quiz Night.  The charity raises money to purchase specialised equipment or services to improve the lives of disabled children around the Black Country.

To find out more about Lewis Smith & Co. call 01384 235549 or email info@lewissmith.com

 

Lewis Smith & Co. – Serving the Dudley business community for more than 30 years

Making tax digital

HMRC wants you to be software savvy

Although Lewis Smith & Co. supports a variety of accountancy software products (PC and Cloud-based) we understand many of you are perfectly happy using spreadsheets to do your accounts with.

The taxman, however, isn’t so keen.HMRC wants SMEs to use software to manage their accounts

HMRC has published a paper called “Making Tax Digital” (PDF download), which sets out its vision for the future. This very clearly states:

“…businesses will be required to use digital tools, such as software or apps, to keep records of their income and expenditure.  HMRC will ensure that free apps and software products are available, but many businesses and their advisers will choose to use commercially-available tax software packages.”

If you want to keep using MS Excel then you can do so, but you you might need to let us submit the final results.

Or you could get software savvy.

Lewis Smith & Co. recommends the web-based accounting tool Kashflow for its small business clients.  Kashflow provides everything you need to manage your accounts – if you want more bells and whistles then we are a partner for both Xero and Sage.

We can help you get started on Kashflow and manage the transition from your beloved spreadsheets. To get started just get in contact today and book an appointment.

Call 01384 235549 or email info@lewismith.com.

 

Lewis Smith & Co. – Dudley accountants for 30 years

 

 

Advisory Fuel Rate for Company Cars

Changes on some engine/fuel bands

The suggested reimbursement rates for employees’ private mileage using their company car have been changed by HMRC as of September 1st 2016. The previous rate is shown in brackets.

 Engine Size Petrol Diesel LPG
 1400cc or less 10p 7p
 1600cc or less 9p (8p)
 1401cc to 2000cc 13p (12p) 9p (8p)
 1601 to 2000cc 10p
 Over 2000cc 20p (19p) 12p (11p) 13p

The rates can also be used if you ask your staff to repay the cost of fuel used for private travel but are not applicable to vans.

If you have any queries on how to handle reimbursements just give Lewis Smith & Co. a call on 01384 235549 or email info@lewissmith.com.

 

Lewis Smith & Co. – Supporting Stourbridge businesses for more than 30 years

HMRC targets salary sacrifice

Taxman goes after benefits in kind offered as part of salary sacrifice schemes.

HMRC targeting salary sacrifice schemeSalary sacrifice schemes are agreements between an employer and employee where salary is given up in return for a non-cash benefit.

The reduction in pay means that people pay less tax and National Insurance (NI), while employers also see a reduction in their NI commitment.

Initially schemes were used to offer benefits that the government encouraged; pension saving, employer-supported childcare and the cycle to work scheme.  However over time companies have taken advantage of the arrangements to offer attractive benefits essentially for free.

HMRC is now sufficiently concerned about the reduction in tax and NI receipts to have issue a consultation paper – “Consultation on salary sacrifice for the provision of benefits in kind” – which sets out proposals for revising the rules for salary sacrifice schemes.

The essence of the proposals is that only the core benefits identified above will be funded through the scheme.  Benefits such as gym membership or mobile phones can still be part of salary sacrifice but the tax and NI advantages will be removed.

The consultation is open until October 19th 2016, which gives you a short time to provide feedback.  If the changes are incorporated into the tax code as envisaged then there are implications to consider whether or not you currently use salary sacrifice schemes.

If you do use them then you might need to check employment contracts to ensure that you aren’t committed to providing benefits if tax savings are removed.

If you don’t use them then you may need to investigate a different way of offering benefits in future.

Lewis Smith & Co. will keep you posted on the status of salary sacrifice over the coming months.

In the meantime if you need advice on the implications of potential changes on your tax and NI position (personal or corporate) then get in contact with us today.

Call 01384 235549 or email info@lewissmith.com to book a confidential, no-obligation discussion.

 

Lewis Smith & Co. – Providing accountancy expertise to Stourbridge businesses.

 

Friends of Alfie Johnson Quiz Night 2016

Lewis Smith & Co. is delighted to announce its sponsorship of a great charity fundraiser

Friends of Alfie Johnson Quiz Night 2016 sponsored by Lewis Smith & CoThe Friends of Alfie Johnson charity is well known for its efforts in raising money for disabled children across the Black Country.

The annual Quiz Night is one of their main fundraising activities of the year.  In 2015 the event attracted over 150 contestants and this year the charity is hoping to break the 200 contestant barrier.

As the current trophy holders of the quiz, and keen supporters of the charity, Lewis Smith & Co. has decided to offer its backing to help reach the new target.

Lewis Smith & Co. director Andrew Smith has thrown down a challenge to local businesses;

“Our team was way ahead of the rest last year.

So to paraphrase that famous football chant ‘Come and have a go if you think you are smart enough.'”

The event takes place on October 14th at Dudley College of Technology.  Teams are a maximum of 4 people with tickets at £10 pp, including fish and chips.

To book your team in email info@friendsofalfiejohnson.org.uk or phone 07863 145801 or 07766 262430.

We can’t promise to get every question right at the quiz but if you need to solve problems about tax contact us today.  Call 01384 235549 or email info@lewissmith.com for assistance.

 

Lewis Smith & Co. – Accountants for businesses in Kingswinford.