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Tax Rates and Thresholds for years 2020/21

Posted on by Monica Jervis

Income Tax

Employment Income/Self Employed Income/Income from Property Rentals/Other untaxed income.

  • The personal allowance is £12,500
  • Income tax on earnings between £12,500 to £37,500 is 20%
  • Income tax on earnings between £37,501 – £150,000 is 40%
  • Income tax on earnings between £150,001 and above is 45%

Savings Income Tax

  • ISA’s are tax free
  • There is a £5,000 zero rate of tax for savings if your other earnings are £12,500 or less. This is your starting rate for savings.
  • You will still be eligible for the 0% starting rate if your other earnings are less that £17,500 but it will be reduced.
  • You may also get up to £1,000 of interest tax-free depending on which Income Tax band you’re in. This is your Personal Savings Allowance.

Dividend Tax

  • The first £2,000 is tax free
  • Dividend tax on earnings between £12,500 to £37,500 is 7.5%
  • Dividend tax on earnings between £37,501 – £150,000 is 32.5%
  • Income tax on earnings between £150,001 and above is 38.1%

National Insurance – Employees

In most cases…

  • The first £9,500 is free from National Insurance
  • National Insurance on earnings from £9,501 – £50,000 is 12%
  • National Insurance on earnings from £50,001 is 2%

National Insurance – Employers

In most cases..

  • The first £8,788 is free from National Insurance
  • National Insurance on earnings from £8,789 is 13.8%

National Insurance – Self Employed

In most cases…

  • The first £9,500 is free from National Insurance
  • Class 4 National Insurance on earnings from £9,501 – £50,000 is 9%
  • Class 2 National Insurance is £158.60 per year.

There are many other thresholds for other circumstances not mentioned here. You can read more about them on the HMRC website:
https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past#tax-rates-and-bands

It’s always best to check with your accountant to make sure that you are paying the right amount of tax. Of course you also want to make sure that you are claiming back the most you can. At The Fishbourne Accountant we pride ourselves in saving people in tax. Contact us today!

Last Updated 07/08/2020

Tax Rates and Thresholds for years 2019/20

Posted on by Monica Jervis

Income Tax

Employment Income/Self Employed Income/Income from Property Rentals/Other untaxed income.

  • The personal allowance is £12,500
  • Income tax on earnings between £12,500 to £37,500 is 20%
  • Income tax on earnings between £37,501 – £150,000 is 40%
  • Income tax on earnings between £150,001 and above is 45%

Savings Income Tax

  • ISA’s are tax free
  • There is a £5,000 zero rate of tax for savings if your other earnings are £12,500 or less. This is your starting rate for savings.
  • You will still be eligible for the 0% starting rate if your other earnings are less that £17,500 but it will be reduced.
  • You will still be eligible for the 0% starting rate if your other earnings are less that £17,500 but it will be reduced.

Dividend Tax

  • The first £2,000 is tax free
  • Dividend tax on earnings between £12,500 to £37,500 is 7.5%
  • Dividend tax on earnings between £37,501 – £150,000 is 32.5%
  • Income tax on earnings between £150,001 and above is 38.1%

National Insurance – Employees

In most cases…

  • The first £8,632 is free from National Insurance
  • National Insurance on earnings from £8,633 – £50,000 is 12%
  • National Insurance on earnings from £50,001 is 2%

National Insurance – Employers

In most cases..

  • The first £8,632 is free from National Insurance
  • National Insurance on earnings from £8,633 is 13.8%

National Insurance – Self Employed

In most cases…

  • The first £8,632 is free from National Insurance
  • Class 4 National Insurance on earnings from £8,633 – £50,000 is 9%
  • Class 2 National Insurance is £156 per year.

There are many other thresholds for other circumstances not mentioned here. You can read more about them on the HMRC website:
https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past#tax-rates-and-bands

It’s always best to check with your accountant to make sure that you are paying the right amount of tax. Of course you also want to make sure that you are claiming back the most you can. At The Fishbourne Accountant we pride ourselves in saving people in tax. Contact us today!

Last Updated 07/09/2020

Do I need to file a VAT return and how?

Posted on by Monica Jervis

The threshold for VAT registration remains at £85,000 in 2019/20. If your annual turnover is above the threshold then you are required to file VAT returns.

If you are VAT registered then you must file your returns using the Making Tax Digital Service (MTD). You can sign up for this here: https://www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat

It is also important that you make sure that you file your VAT returns in time, we have a helpful timetable for when you need to file your VAT returns here.

If you are unsure of how to file your VAT return or would prefer to have someone else do it then make sure to get in contact! We will be happy to help!

When’s my VAT return due?

Posted on by Monica Jervis

Filing your VAT return in time is very important if you are not looking to spend money on fines from the HMRC. You have a month and week from the end of your VAT quarter to file your VAT return.

This is made much easier with the introduction of Making Tax Digital, which you can find out more about here.

Below is a list of VAT Quarters along with their deadlines for returns. People will be aligned differently so it is important that you know when your quarters are.

Start Date End Date Deadline
1st January 31st March 7th May
1st Febuary 30th April 7th June
1st March 31st May 7th July
1st April 30th June 7th August
1st May 31st July 7th September
1st June 31st August 7th October
1st July 30th September 7th November
1st August 31st October 7th December
1st September 30th November 7th January
1st October 31st December 7th Febuary
1st November 31st January 7th March
1st December 28th Febuary 7th April

Note: You can also arrange to submit your vat returns monthly for example if you usually expect a VAT repaymentor you can arrange an annual VAT return but make payments on account throughout the year until you submit the final VAT return.

The best way to relax about when your VAT return is to get an accountant! Here at The Fishbourne Accountants we will do all the worrying for you. We will make sure your books are all up to date and the return filed within good time.

Save Yourself The Headache

Contact The Fishbourne Accountant and let us worry about your VAT returns.
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What expenses can I claim for tax and how do I prove them

With different rules for Limited Companies and sole traders, flat rates for simplified accounting, cash accounting, accruals accounting and restrictions on property businesses depending on the type it’s not surprising that business owners get confused about what counts for an expense and what doesn’t in their particular business.

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