Accountancy Place

Accountancy Place

Preparing for Your Financial Year End

www.accountancyplace.co.uk

Tax Year End

• The tax year ends on 5th April 2014

• Tax Year 6th April 2013 to 5th April 2014


Tax Return

• HMRCAlso known as the Inland Revenue or

Tax Man!!!

Issues you a Tax ReturnSoon after the 5th April 2014


Tax Return - Self Assessment

• Requires Tax Payer to complete a tax return

• Tax payer calculates the tax payable

• Tax must be paid on set dates

• Errors and there are penalties!


Tax Return Information• Self employment• Employment• Interest received • Dividends received• Pension contributions• Charity donations• Rents received• Capital gains (selling of

shares/investments etc..)


Time Scale

• Receive Tax Return soon after 6th April 2014

• This requires to be completed and submitted to the HMCE (Inland Revenue) by 31st January 2015

• Tax Return information is for one year 6th April 2013 to 5th April 2014


Tax Payment Dates

• 31st January 2015• &

• 31st July 2015


How we help you!

• April 2014 – we send our checklist

• June 2014 onwards - you start receiving letters/emails/phone calls

• We remind you about Tax payment deadlines



Self EmployedOn the Profits of our Business we pay

• Income Tax

&• National Insurance


Income Tax

• For the Tax Year ending 5th April 2014 the first £9,440 is tax free – this is known as the “Personal Allowance”

• After this?


Income Tax Rates

After the first £ 9,440

20% between £0 & £32,010

40% between £ 32,010 &

£ 150,000

50% over £ 150,000


National Insurance

Class 2 - £2.70 per week Class 4 – 9% on profits

between £7,755 and £41,450

plus 2% on profits above £41,450


How is the tax calculated?

Example

A N Other starts self employment on the 6th April 2013.

To the 5th April 2014- Fees earned are £77,000.

To the 5th April 2014 – Expenses are £7,000.

Profit £70,000 (£77,000 - £7,000)


Profit £70,000

Less Personal allowance £ 9,440

£60,560

First £ 32,010@20% = £ 6,402

Next £ 28,550@40% = £ 11,420

Total £60,560 £ 17,822

Income Tax


National InsuranceClass 4 NIC

9% profits between £7,755 -£41,450 plus 2% on profits above £43,875(41,450 – 7,755)

£33,695 @ 9% £ 3,032.55(70,000 – 41,450)

£28,550 @ 2% £ 571.00

Total £ 3,603.55

National Insurance


To Pay on 31 Jan 2015

Income Tax £ 17,822.00

Class 4 NIC £ 3,603.55

Total £ 21,725.55

Is that all?


Income Tax & Class 4 NIC

For year ended 5th April 2014

£ 21,725.55

PLUS ADVANCE (on account)

For Y/E 5th April 2015

(1/2 of tax due for 5th April 2015)(£21725.55 x ½)

£ 10,862.78

TOTAL PAYMENT ON

31 JAN 2015 - £ 32,588.33


Next Tax Payment

31st July 2015

(2nd payment on account)

£10,862.78


Whats Next?

5th April 2015 arrives

• Accounts produced • Tax Calculated

Example

For the year ended 5th April 2015

Income Tax & Class 4 NIC is

£ 28,000.00


Tax Payment 31 Jan 2016

Tax for the Year 5th April 2015

£ 28,000.00

Paid 31/01/15 ( £ 10,862.78)

Paid 31/07/15 ( £ 10,862.78)

£ 6274.45

Plus 1st POA £ 14,000.00(28000 x ½)

Total £20,274.45


Good News

We do the tax calculations for you

& ensure you pay them on time

But in order to do so we need information from you.


Record Keeping• all amounts received and expended in

the course of the trade, profession or business and the matters in respect of which the receipts and expenditure take place, and

• in the case of a trade involving dealing in goods, all sales and purchases of goods made in the course of the trade.

“HMRC extract”


• Accountancy Place guidance to fulfill the rules is;

• The storage (filed or otherwise) of the following documents:

• Schedules of payment received/invoices issued

• Certificate detailing amount paid for pension

• Bank statements• Registration fees paid• Indemnity Insurance payment receipt


• Subscription receipts

• Receipts for the purchase of any equipment

• Receipts of CPD and/or Course fees paid

• Travel log (if travel log is not maintained, then petrol receipts will need to be retained)

• Receipts of any other business related expenditure


Saving for Tax

Tax is payable on due dates

31st Jan & 31st July

Therefore it is essential you save

1/3 of your income for this


Student Loans• HMRC ask you to make student loan

repayments at the same time as you pay your tax.

• You won't have to make any repayments if, in the tax year, your profit is less than £15,000.

• Usually the amount you will pay back is calculated as 9% of your profit over the starting limit.


Other TaxesOther taxes we also need to consider are

• Inheritance Tax

• Capital Gains Tax


Profit & Loss Account

Fees £ 90,890

Less ExpensesSecretarial fees 4200Indeminity Ins 1501Prof subs 285Prof registration fee 409Books 200Tools & renewals 1642


Phone 391

Print, post & stat 29

Course fees 9394

Travel 121

Motor exp 2211

Cleaning 390

Sundry 107

Comp exp 216

Legal & prof 552


Accountancy 300

Use of home as office 494---------------------------------

Net Profit 68,448


Thank You


Documents

Accountancy Place