Recent Articles
The Energy Crisis
By: Principal Partner
The new government has recently given an ‘energy price guarantee' to consumers. The government’s ‘energy price guarantee’ for businesses means that the price per unit of their energy usage will be capped. But this guarantee will only last for six months which is in contrast to the two years given to households.
It is very unlikely that those businesses that currently have a contract will be able to renegotiate on those terms when their current contract comes to an end. Many business energy contracts will come up for renewal on 1 October and it is unlikely that the government will do anything concrete about it by then. New contracts are unlikely going to be fixed as uncertainty persists in the energy sector. The inability of businesses to estimate their energy bills means that they will not be able to budget effectively and this will affect their cash flow.
The result of a recent poll by UKHospitality Lobby Group indicates that one in five (20%) business does not expect to survive the winter. This is mainly due to the energy crisis.
Liz Truss has hinted on supporting businesses in the hospitality sector. However, she has said that businesses should, in general, improve their energy efficiency measures. It is expected that further information on the energy package by the government will be unveiled in a mini-budget by the new chancellor, Kwasi Kwarteng. The mini-budget is expected to be on 14 or 21 September. At the moment, the government's energy plan for businesses is unclear as it poses more questions than answers. In the long term, the government intends to negotiate with energy companies to reduce the price they charge for energy. In addition, the government intends to explore other avenues of increasing energy supply.
Other News
In the last two months the construction industry has witnessed a drop in activities. This is due mainly to global high prices in building materials caused by inflation. Workers in the construction industry are bound to face shortage of work for some time to come.
MTD for ITSA
By: Principal Partner
Gain expertise in glass-forming tech
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) MTD for ITSA will start in April 2024 for self-employed and those with income from property. For partnerships, MTD for ITSA will start in April 2025.
An individual will only be required to register for MTD ITSA if the total of their income is above £10,000 per year. Income and expenses for individuals are required to be provided on a quarterly basis and there is a quarterly filing deadline date.
Penalties will be levied on individuals who failed to submit accounts by their deadline date. With effect from 6 April 2025, penalties will apply to individuals who are currently making self-assessment returns. Penalty points (like driving license penalty points) build up for MTDITSA. Penalties are charged once certain amount of penalty points are reached.
Free software are available on .gov site for reporting MTD ITSA.
MTD for VAT
By: Principal Partner
Making Tax Digital for VAT (MTD VAT) is the same as filing a Vat return as before except that this now has to be done using any of the approved software by HMRC. Businesses were required to file their first MTD returns for the VAT quarter starting on or after 1 April 2022 MTD was introduced in April 2019 and it affects all businesses registered for vat.
Currently, the Vat threshold for businesses is £85000. Where your business turnover is above this for the last 12 months, your business ought to register for Vat. To sign up for MTD VAT, you must have the following:
i) A compatible software
ii) Your business email address
iii) Your Government Gateway ID
There are other documents to have to hand depending on whether or not your business is a registered company.
Digital records are expected to be kept up to date at least quarterly. It is important to note that businesses that currently submit their quarterly/monthly VAT returns online will have their online accounts closed by HMRC on 31 October 2022. This means that they will have to start using a MTDVAT software from 1 November 2022. However, this rule does not affect businesses that submit their VAT returns annually. The rule will become applicable to this group of businesses from 15 May 2023.
Where a business does not change to MTD VAT by 1 November 2022 they will be subject to a penalty. A penalty is also charged where a business does not use an approved/compatible software. Penalties could be up to £400 per return.
The new Vat penalty system will not take effect until 1 January 2023
There are exemptions for businesses where the individuals involved cannot practically use or have access to a computer/internet in order to file their returns.
There is a list of free software approved by HMRC (listed on .gov website) and available to use by businesses for MTD for VAT.
More articles to follow
....The new tax assessment system
....How to optimise your SEO
More articles to follow
....The new tax assessment system
....How to optimise your SEO
More articles to follow
....The new tax assessment system
....How to optimise your SEO
Print