MARTIN LEVIN & CO

Taxation Practitioners - Accountants & Auditors

Office Hours: 10am to 2pm Mon/Fri

E-Mail MartinLevin@HotMail.co.uk

6 Gordon Avenue - Highams Park - London E4 9QU

Telephone (Skype): Martin.Levin1066

Mobile 0794-648-1209

Web Site www.MartinLevinABC.co.uk

 

News as at April 2022


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Making Tax Digital - for VAT  - its scope will expand in 2022. VAT-registered businesses with a taxable turnover below £85,000 will need to follow Making Tax Digital rules for their first VAT return starting on or after April 2022.

                                     for Income Tax Self Assessment will be introduced in 2024. It will require self-employed businesses and landlords with annual business or property income above £10,000 to follow the rules for MTD for Income Tax Self-Assessment from 6th April 2024.

                                     for Corporation Tax is expected to be the next phase in the initiative. However, HMRC has advised that MTD for Corporation Tax rules won’t come into effect until at least 2026.

Digital Record-Keeping – (Goodbye to the free ABC Accounts Book?)

Over the past three years, since Making Tax Digital was proposed, and subsequently introduced, we have been looking, but not convinced, at the multiple software houses trying to develop and introduce this.  Much media advertising has been used – and currently this is ongoing.  Our opinion is that one should not be swayed by this advertising, but to look at each and select one that suits YOU.  For the past 12 months, we have been working with one client who took up the FreeAgent option of “No cost” as he is with NatWest Bank.  This has given us access to his “bank feed”, and working with him, he and us have produced up-to-date, and meaningful, analysis of his records. He can also view more meaningful information.  Our time costs - for checking his entries for the categories, and writing up into QuickBooks Old Version - have been greatly reduced.  For clients who don’t qualify for FreeAgent’s free costs as they bank with other banks, perhaps, the current charges quoted to us can be discounted down from around £20 a month to £10 a month (plus VAT), a small cost as compared with the accountancy costs.   Other packages that we have been looking at our MyFirmsApp; Coconut; etc.  These seem to involve using a smartphone to “click and upload”, as well as “Bank Feeds”.  At the May 2022 exhibition at Docklands (Accountex), we shall be looking at all these rivals.

Basis Period Reform

In the Autumn 2021 Budget the Government announced that it would reform income tax 'basis periods' so businesses' profit or loss for a tax year would be the profit or loss arising in the tax year itself, regardless of its accounting date.  In short, the reform aims to move from taxing sole traders and partnerships that are subject to income tax from the current method, which is generally to tax profits arising to an accounting date (basis period) ending in a tax year, to taxing such businesses on the profits arising in a tax year.  Opinions in the Accountancy and Taxation profession are varied, and we will be monitoring it on behalf of our Practice’s Clients for whom we prepare a set of Financial Accounts to a date other than 5 April

National Insurance – for Employees – although there has been an announcement that the threshold would be increased, it was as from July 2022.  That means, and very few in the media appears to have picked it up, is that National Insurance payable is not cumulative as is Income Tax.  In short, there is no section in law that will result in a repayment of Class 1 (Employees) National Insurance deducted between April and June 2022.

Other tax proposals - Every year the one “person” self-employed and small businesses become foisted with fresh regulations, conditions, and anything else that Her Majesty’s Treasury and Government seem to foist upon this sector.  Naturally, as active accountants, we have always tried to be on top of things with each new piece of legislation foisted upon this group.  Keeping up-to-date has always figured prominently in our Practice, and this has taken up an increasing amount of time in reading, attending, and participating in tax movement, so that you, as clients, can be assured of a high-class service.