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Half way through the year!

About the new tax year

Catherine Chapman :: Tuesday 22nd May 2018 :: Latest Blog Posts


It's nearly half way through the year! And where has that time gone?

We have now moved to the start of a new Tax Year... just to remind you the new tax rates and personal allowances from 6 April 2018 are as follows:

Taxable income above - Main Rate - Rate on Dividends - Why, what and who

£0 - £34,500 - 20% - 7.5% - Basic rate and personal allowance used
£34,501 - £150,000 - 40% - 32.5% - Higher rate for other taxpayers
£150,001 - 45% - 38.1% - Additional rate

Income above £45,000:

  • marriage allowance not available
  • savings allowance is cut from £1,000 to £500
  • capital gains taxed at 20% rather than 10%

Income above £100,000:

  • Income between £100,000 to £123,700 will have a tax rate of 60% because the personal allowance is lost.
  • It is advisable to seek professional assistance if your income exceeds £100,000 to establish whether there is any tax planning that could be undertaken to reduce your income to below £100,000

Income exceeding £150,000:

  • pensions annual allowance is tapered down to £10,000
  • saving allowance is nil

Simple assessment and PAYE coding

HMRC had planned on issuing simple assessments. This is where HMRC will use the information held to issue an income tax calculation thereby avoiding the need for the submission of a tax return.

In addition to this the PAYE coding with the use of Real Time information was going to adjust the PAYE Coding automatically.

Both have been put on hold at the moment, due to resources being spent on Brexit and other matters.

Making tax digital (MTD)

As you may recall, I have mentioned MTD on previous articles.

The roll out for MTD for Business has been amended to ensure ALL businesses have plenty of time to adapt to the changes.

Businesses will not now be mandated to use the Making Tax Digital for Business system until April 2019 and then only to meet their VAT obligations. This will apply to businesses who have a turnover above the VAT threshold (currently £85,000) – the smallest businesses will not be required to use the system, although they can chose to do so voluntarily.

HMRC have set out the four foundations of MTD:

  1. Better use of information
    Businesses will not have to give HMRC information that it already holds e.g. from employers, banks, building societies etc.
    Digital tax accounts for all will mean that you can see the information that HMRC holds and will be able to check at any time that your details are complete and correct.
    Again, just a reminder - have you registered for your own Personal Tax Account (PTA)? By receiving your own PTA you are able to check and change your address through to completing your self-assessment tax return if you do not have an accountant or manger your tax credits. It is quick and straight forward. Go to: https://www.gov.uk/government/publications/your-personal-tax-account/your-personal-tax-account
  2. Tax in real time
    You should not have to wait until the end of the year to know how much tax you will need to pay.
  3. A single financial account
    By 2020, taxpayers, will be able to see a comprehensive financial picture in their digital account, similar to your online banking.
  4. Interacting digitally
    If you have an advisor, they will also be able to interact with HMRC digitally.

General Data Protection Regulation (GDPR)

GDPR replaces The Data Protection Act 1998 on 25 May 2018, and I am sure you have all by now received countless emails relating to this. As I sit here writing this, on my wall I have a picture which says "Say GDPR one more time ..." and the picture is someone with a gun!

Just to recap – if as a business you hold anyone's personal data, even if it is just their name, address and telephone number, you need to write to the individual advising what information you hold, the purposes you hold their data for, the methods you are using to hold their data securely and what you will be using their data for. GDPR has been designed to give individuals enhanced personal privacy rights and imposes an increased duty on businesses to protect their data.

GDPR and The Data Protection Act 1998 requires every data controller (organisation or sole trader) who processes personal information to register with the Information Commissioner's Office (ICO) unless they are exempt. If you are unsure whether you need to register with the ICO, please check on their website – www.ico.org.uk

It is also a requirement of GDPR to have your privacy policy and cookie policy clearly displayed on your website.

Please contact Catherine at CBA Services Limited on 01258 840306 or 01725 552955, if you have any queries regarding the above or, if you need assistance with your bookkeeping, accountancy or tax issues.

Whilst care has been taken in preparing this publication it is for information only. It is not, and should not be construed, as advice and accordingly no reliance should be placed on the information contained herein.