Millions to get Tax Cut from April 2020

Tax changes for new tax year 2020/2021: Tax Cut from April 2020

New legislation introduced in January 2020 will see millions of taxpayers save around £100 in the financial year 2020-21. This is following the increase in the National Insurance Contributions threshold to £9,500 from April 2020. The previous threshold was £8,632 for the financial year 2019-20.  

Chancellor of the Exchequer Sajid Javid said: 

We’re determined to do what we promised and put more money into the pockets of ordinary hard-working people. That’s why we’re starting this government as we mean to go on, by cutting their bills. 

We want everyone to feel that they can contribute to the new chapter we are opening for the economy and our country because under this Government work will always pay. 

This is certainly good news for taxpayers and especially the self-employed. It is the equivalent of receiving an extra £100 in your pocket. Tell us – what would you do with an extra £100? We would love to find out. Leave your comments on our website

Changes For VAT Registered Businesses Post Brexit

VAT Registered businesses post Brexit 

The UK left the European Union on 31 January 2020. From 1 February 2020, the UK enters a transition period that lasts until 31 December 2020.  

VAT registered businesses who trade with the European Union are required to register for an Economic Operator Registration and Identification (EORI) number. This application can be done online via this website www.gov.uk/eori 

There will also be a requirement to make customs declarations following the end of the transition period. Businesses are advised to start planning for this e.g. buy appointing someone to deal with customs on their behalf. 

More information about these changes can be found on HMRC website. Let us know if this affects your business and we can provide further assistance. 

Off-payroll working (IR35) rules affecting the private sector

Tax changes for new tax year 2020/202: Off-payroll working

From 6th April 2020, contractors working through a Personal Service Company, or Recruitment Agency providing services to Medium and Large businesses will be at risk of being deemed to work as an employee.  

The end client is responsible for determining whether a contract is inside or outside of IR35. This change in legislation does not affect small businesses. According to Companies Act 2006 a small business is defined as one which meets two or more of the following criteria:  

  • Annual turnover is no more than £10.2 million 
  • Balance sheet total is no more than £5.1 million 
  • No more than 50 employees 

The government has produced two fact sheets 1) to explain why the changes have been introduced and 2) for Contractors to explain what to do if you are affected. 

At gHawk Accounting, we partner with tax experts and can advice on any complex tax changes. We can review your existing contract and advice whether it is caught by IR35 and what you can do to protect yourself. If this affects you, please contact us urgently