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Accountancy Place

Accountancy Place. Preparing for Your Financial Year End. Tax Year End. The tax year ends on 5 th April 2014 Tax Year 6 th April 2013 to 5 th April 2014. Tax Return. HMRC Also known as the Inland Revenue or Tax Man!!! Issues you a Tax Return Soon after the 5 th April 2014.

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Accountancy Place

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  1. Accountancy Place Preparing for Your Financial Year End

  2. Tax Year End • The tax year ends on 5th April 2014 • Tax Year 6th April 2013 to 5th April 2014 www.accountancyplace.co.uk

  3. Tax Return • HMRC Also known as the Inland Revenue or Tax Man!!! Issues you a Tax Return Soon after the 5th April 2014 www.accountancyplace.co.uk

  4. 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! www.accountancyplace.co.uk

  5. Tax Return Information • Self employment • Employment • Interest received • Dividends received • Pension contributions • Charity donations • Rents received • Capital gains (selling of shares/investments etc..) www.accountancyplace.co.uk

  6. 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 www.accountancyplace.co.uk

  7. Tax Payment Dates • 31st January 2015 • & • 31st July 2015 www.accountancyplace.co.uk

  8. 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 www.accountancyplace.co.uk

  9. www.accountancyplace.co.uk

  10. Self Employed On the Profits of our Business we pay • Income Tax & • National Insurance www.accountancyplace.co.uk

  11. 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? www.accountancyplace.co.uk

  12. Income Tax Rates After the first £9,440 20% between £0 & £32,010 40% between £ 32,010 & £ 150,000 50% over £ 150,000 www.accountancyplace.co.uk

  13. 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 www.accountancyplace.co.uk

  14. 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) www.accountancyplace.co.uk

  15. 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 www.accountancyplace.co.uk

  16. National Insurance Class 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 www.accountancyplace.co.uk

  17. To Pay on 31 Jan 2015 Income Tax £ 17,822.00 Class 4 NIC £ 3,603.55 Total £ 21,725.55 Is that all? www.accountancyplace.co.uk

  18. 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 www.accountancyplace.co.uk

  19. Next Tax Payment 31st July 2015 (2nd payment on account) £10,862.78 www.accountancyplace.co.uk

  20. 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 www.accountancyplace.co.uk

  21. 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 www.accountancyplace.co.uk

  22. 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. www.accountancyplace.co.uk

  23. 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” www.accountancyplace.co.uk

  24. 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 www.accountancyplace.co.uk

  25. 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 www.accountancyplace.co.uk

  26. 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 www.accountancyplace.co.uk

  27. 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. www.accountancyplace.co.uk

  28. Other Taxes Other taxes we also need to consider are • Inheritance Tax • Capital Gains Tax www.accountancyplace.co.uk

  29. Profit & Loss Account Fees £ 90,890 Less Expenses Secretarial fees 4200 Indeminity Ins 1501 Prof subs 285 Prof registration fee 409 Books 200 Tools & renewals 1642 www.accountancyplace.co.uk

  30. Phone 391 Print, post & stat 29 Course fees 9394 Travel 121 Motor exp 2211 Cleaning 390 Sundry 107 Comp exp 216 Legal & prof 552 www.accountancyplace.co.uk

  31. Accountancy 300 Use of home as office 494 --------------------------------- Net Profit 68,448 www.accountancyplace.co.uk

  32. Thank Youwww.accountancyplace.co.uk www.accountancyplace.co.uk

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