Tax Free Savings Income

Grab a Grand

interest free tax allowanceJust a reminder that a tax-free allowance of £1,000 is now available for the interest that basic rate taxpayers earn on their savings.

Higher rate taxpayer earning between £43,000 and £150,000 are eligible for a £500 tax-free savings allowance.

People with income in excess of £150,000 a year will be taxed in full on their interest income.

The changes to the tax-free allowance mean that banks and building societies will pay interest gross from 6 April 2016.

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

Call 01384 235549 or email info@lewissmith.com to arrange an appointment

 

Lewis Smith & Co. – Accounting services for Stourbridge businesses

Image courtesy of Stewart Miles/ FreeDigitalPhotos.net

Budget 2016

Small Business Highlights

Impact of the Budget 2016 on dudley businessThe 2016 Budget got underway against a backdrop of economic uncertainty and suggestions from many commentators that Chancellor George Osborne is facing a black hole in the public finances.

It isn’t always easy to pull the facts from the rhetoric but here is Lewis Smith & Co’s list of Budget announcements that most directly affect the small business sector.

Fuel duty
Slightly surprisingly but very welcome was the news that fuel duty rates will be frozen through the next tax year.

Stamp Duty
It was confirmed that there will be a 3% increase in Stamp Duty for buy-to-let properties and second homes above £40,000 from 6th April 2016.

This applies to companies and individuals.

The way stamp duty on freehold commercial property and leasehold premium transactions is calculated will change. Currently, these rates apply to the whole transaction value. From 17 March 2016 the rates will apply to the value of the property over each tax band.  According to HMRC this means that buyers of commercial property worth up to £1.05 million will pay less in stamp duty.

Business rates
Of particular interest to many Lewis Smith & Co. clients is the news that small business rate relief will increase from 50% to 100% on a permanent basis.

If your business property has a rateable value of £12,000 or below you will receive 100% relief. If your business property has a rateable value of £12,000 to £15,000 then relief will be tapered.

A further bonus is that the measure of inflation used to calculate business rates will be switched from the retail price index (RPI) to the consumer price index (CPI) from April 2020. RPI includes housing costs, which has inflated the rate.

Corporation and Capital Gains Tax
Corporation tax will be reduced to 17%, from 20%, by 2020.

From April 2016 the basic rate of capital gains tax will br reduced from 18% to 10% while the higher rate will fall from 28% to 20%.

Class 2 NICs scrapped
Class 2 National Insurance Contributions (NICs) for the self-employed will be scrapped from April 2018.

That means if you are self-employed you only need to pay Class 4 NICs as and when your profit exceeds £5, 965. Class 4 NICs will be reformed so self-employed people can continue to build benefit entitlement.

New Tax Free Allowances
There are two new £1,000 allowances designed to support the on-line, sharing economy.

The first allowance is for part-time business owners who sell goods or provide services – occasional selling on eBay or child care for instance.

The second covers income made from property that you own such as letting out rooms on airbnb.

Personal Tax
There was a reminder that the tax-free Personal Allowance will increase to £11,500 in April 2017 while the higher rate threshold will rise to £45,000 at the same time.

A Lifetime ISA will be launched in April 2017 allowing adults under 40 to save up to £4,000 each year and receive a 25% bonus from the government.

Money put into this account can be saved until you are over 60 and used as retirement income, or you can withdraw it to help buy your first home.

The total amount you can save each year into all ISAs will also be increased from £15,240 to £20,000 from April 2017.

Unsure What This Means for You?
As always the “devil is in the detail”and the impact of the Budget on your business and personal finances will be influenced by a range of parameters.

If you need help sorting it all out why not speak to Lewis Smith & Co.

Simply call 01384 235549 or email info@lewissmith.com and set-up a free, no-obligation discussion today.

 

Lewis Smith & Co. – Local accountants for West Bromwich businesses.

 

Photo courtesy of M.Holland under Creative Commons license

KashFlow Accounting Software

Kontrol Your KashFlow?

kashflow-accounting-softwareYou may already know that Lewis Smith & Co. were the first qualified partner for the Xero accounting package in the Black Country.

Now we would like to introduce a new piece of technology to our toolkit.

KashFlow from Iris is designed for small businesses who need help managing their accounts but not all the bells and whistles.

It’s a web-based tool, which means you don’t need any special hardware, take back-ups or go through complicated installations.

The starter version KashFlow will help you with;

  • Banking
  • Quotes and estimates
  • Invoicing
  • Customer and Supplier data
  • Purchase tracking

Further functionality is available to you as your business grows and you can share data directly with us.  That makes it easier for us to provide services to our clients and means you can get help at the touch of a button.

Here’s the best part.  Qualifying clients who use KashFlow will get their fees paid: by us.

Find out about the benefits of using KashFlow today.

Call 01384 235549 or email info@lewissmith.com and make an appointment.

Dividend Allowance Advice

There’s No Single Right Answer

dividend allowance allowanceWe provided a reminder recently about the forthcoming change to dividend taxation.

The new Dividend Allowance is likely to make a difference to many small business owners.  How big that difference is and whether it is positive or negative is highly dependent on your specific circumstances.

It is already clear that the new rules provide some flexibility.

  • There are opportunities to transfer shareholdings to spouses and civil partners for instance.
  • Higher rate tax payers with children aged 16 or over can use discretionary trusts to offset some of the tax liability.

For many small business owners the key to minimising total tax liability lies in the way that the Dividend Allowance affects other areas of the tax and benefits system, particularly if you receive Tax Credits or Child Benefit payments, or have other dividend income.

They best advice that Lewis Smith & Co. can give you at the moment is “Let’s talk”.

Why not book a short appointment with us to discuss your circumstances.  We’ll be able to tell you very quickly whether more detailed tax planning is required.

Call 01384 235549 or email info@lewissmith.com today.

 

Lewis Smith & Co. – Accountants for Midlands manufacturers.

 

On or Before Reporting

HMRC tightens up the rules

Relaxed rules for PAYE reporting have been removedHMRC has confirmed that the temporary relaxation of when PAYE information is reported will end as planned on April 5th 2016.

The relaxation allowed businesses with 9 employees or less to report PAYE information ‘on or before’ the last payday in the tax month.

This means that PAYE reporting must take place ‘on or before’ each payday in the new tax year.

More details can be found on the Running Payroll section of the HMRC website.

If you find managing all the of the PAYE rule changes a hassle why not use our Payroll Bureau service?  It’s a low-cost way to make your life easier and ensure you stay compliant.

Set up an appointment to discuss your needs today. Call 01384 235549 or email info@lewissmith.com.

 

Lewis Smith & Co. – Accountants for Pensnett businesses.

Dividend Allowance

A Major Change to Dividend Taxation

dividend allowanceHMRC has now clarified the structure and tax rates of its new Dividend Allowance.

From April 6th 2016 the new tax regime will replace the Dividend Tax Credit and many limited company owners will see a significant tax increase.

The changes are designed to reduce “tax motivated incorporation” where small companies pay a salary within the tax free band and then use dividends to minimise NI payments.

Under the new rules there is a £5,000 tax free Dividend Allowance but 3 new bands will apply to dividend income above that amount.

  • 7.5% (basic rate)
  • 32.5% (higher rate)
  • 38.1% (additional rate)

Unfortunately the new Dividend Allowance also applies to dividends from investments (unless they are protected by an ISA).

If you are unsure of the impact on the changes on your business talk to Lewis Smith & Co. today.  We offer a free, no-obligation initial consultation.

Call 01384 235549 or email info@lewissmith.com to book an appointment.

 

Lewis Smith & Co. – Full taxation planning service available. CT to VAT

 

Photo courtesy of Alan Carver on Flickr

2016 Alfie Johnson Summer Ball

Saturday 2nd July is the big day

friends of alfie johnson supported by Lewis Smith & Co. Dudley accountantsThe annual Friends of Alfie Johnson Summer Ball will take place on Saturday 2nd July at its spiritual home: Earls Suite at the Copthorne Hotel, Merry Hill.

Tickets are £40 per person or 375 for a table of 10.  The evening features many opportunities for dance, revelry and fun as our very own Stephen Duffen knows all too well (we still have the pictures Stephen so behave).

Lewis Smith & Co. will be supporting the event as usual by filling a table with carefully selected members of staff and handpicked clients.

More details of activities and how to book your tickets are available on the Friends of Alfie Johnson website.  Take a look today and we look forward to seeing you on the 2nd.

 

 

Record Returns Returned

Everybody crossed the line on time

tax planning to get better returnsIn another record-breaking year Lewis Smith & Co. succeeded in getting all of its clients self assessment returns filed ahead of the January 31st deadline.

In fact this year there was  noticeable increase in people providing their paperwork well ahead of time.  That has its benefits for both parties as Lewis Smith & Co. Director Andrew Smith explains:

“Earlier filing certainly makes our life easier from a resourcing perspective but the real advantages are for our clients.

Apart from reducing the stress and minimising the chance of getting a penalty, it really means that we get chance to plan people’s tax affairs.  There are still tax breaks available.  The greater the forewarning the more we can use!”

It’s never too soon to start planning for your next self assessment return.  If you haven’t yet considered changes in pension legislation, new rules for landlords or the proposals for small business taxation then maybe you should get in contact with us today.

Call 01384 235549 to arrange an appointment or email us at info@lewissmith.com.

 

Lewis Smith & Co – Accountants for businesses in Tipton