Tax Blog

Accountants Chester: Maximising Your Savings

Our tax blog is dedicated to sharing the latest UK tax news and developments. We also feature tax tips for sole traders, employed individuals, limited company directors, and partners in a partnership. Feel free to get in touch to discuss any of the subjects in our tax blog.

If you would like to receive our free, no-obligation tax tip emails, please sign up here.

Maximise inheritance tax allowances

Maximise Inheritance Tax Allowances

It is often said that inheritance tax (IHT) is a voluntary tax, and one that can be avoided if you give away sufficient assets at least seven years before you die so the value of your estate is sheltered by your available nil rate bands.

read more
Understanding your tax code: a key to accurate tax payments

Understanding Your Tax Code: A Key to Accurate Tax Payments

As a taxpayer in the UK, understanding your tax code is essential for ensuring you pay the correct amount of tax throughout the year. Your tax code is a combination of letters and numbers that directly influence how your income tax is calculated under the Pay As You Earn (PAYE) system. An incorrect tax code could mean overpaying or underpaying taxes, both of which you likely want to avoid.

read more
Selling online: when to tell hmrc

Selling Online: When to Tell HMRC

Recent headlines about changing tax rules for online sellers may have caused some confusion. While there are no immediate changes to how online sellers are taxed, there are new reporting requirements for digital platforms.

read more
Extracting further profits in 2023/24

Extracting Further Profits in 2023/24

As the end of the tax year approaches, it is prudent for those operating their business as a personal or family company to review the profits extracted so far in the tax year and to consider whether it is beneficial to take further profits before the end of the tax year.

read more
Capital gains tax year-end planning

Capital Gains Tax Year-End Planning

No one wants to pay more tax than they need to and, where possible, disposals should be timed to ensure that the best result is achieved from a tax perspective. Where a disposal is made around the end of the tax year, accelerating or delaying the disposal date can impact on the tax that is paid. This is particularly true this year, as the capital gains tax annual exempt amount falls from £6,000 for 2023/24 to £3,000 for 2024/25.

read more
Cash basis extended

Cash Basis Extended

If you are running an unincorporated business, either as a sole trader or as a partnership comprising only partners who are individuals, you can use the accruals basis to prepare your accounts or, if you are eligible, the cash basis.

read more
Depreciation vs capital allowances

Depreciation vs Capital Allowances

Tax and accounting rules are not identical and it is sometimes necessary to adjust the accounting profit to arrive at the profit for tax purposes. One area where the rules differ is in the write-off of capital expenditure.

read more
Autumn statement 2023

Autumn Statement 2023

In an effort to boost the UK economy, Chancellor Jeremy Hunt unveiled a package of measures that includes business tax cuts and reforms to national insurance contributions.

read more
Common minimum wage errors to avoid

Common Minimum Wage Errors to Avoid

Workers are entitled to be paid the National Living Wage (NLW) or Minimum Wage (NMW) for their age. Employers who fail to do this run the risk of financial penalties and of being ‘named and shamed’. To help employers avoid mistakes, HMRC have produced a checklist of 18 common errors.

read more
Relief for pre-trading expenses

Relief for Pre-Trading Expenses

In setting up a trade it is inevitable that expenses will be incurred before the trade actually commences. Expenses may be incurred on acquiring premises and kitting them out, on buying stock, on office supplies, on professional advice, on marketing, on software, on setting up a website, on legal fees and suchlike.

read more
Tax & influencers

Tax & Influencers

Earlier this year, HMRC sent ‘nudge’ letters to social influencers who they suspect may not have declared the tax that they owe. They have also cracked down on gifts provided to influencers in return for promoting brands.

read more
Do i need to complete a tax return?

Do I Need to Complete a Tax Return?

Even if you pay all your tax through PAYE, you may still need to complete a Self-Assessment tax return if you are a high earner. For 2022/23 and earlier tax years, this is the case if your income is more than £100,000. However, for 2023/24 onwards, the trigger threshold is increased to £150,000.

read more
Should i file my tax return early?

Should I File My Tax Return Early?

If you need to file a Self Assessment tax return for 2022/23, you have until midnight on 31 January 2024 in which to do this, as long as you file online. However, HMRC have been encouraging taxpayers to file their tax return early. Is this worthwhile and what are the benefits?

read more
Making tax-free mileage payments

Making Tax-Free Mileage Payments

If you have employees in Chester, who use either their own car or a company car for business mileage, you can pay mileage allowances tax-free up to certain limit. However, if you pay more than the permitted amount, the excess is taxable and liable to Class 1 National Insurance

read more
How to appeal a tax penalty

How to Appeal a Tax Penalty

There are various reasons why HMRC may issue a tax penalty. You may receive a penalty if you file your tax return late, your tax return is inaccurate, you are late paying tax that you owe or you fail to keep accurate records.

read more
Tax and tips

Tax and Tips

The Employment (Allocation of Tips) Act 2023 sets out a new legal framework for the fair allocation of tips. A new Code of Practice is to be introduced and employers will have a legal obligation to adhere to the Code.

read more
Beware of gift aid clawback

Beware of gift aid clawback

If you have not paid sufficient tax to cover that reclaimed by charities on your gift aid donations, HMRC may look to you to pick up the bill. Read this article to find out how to avoid falling into this trap.

read more
Should i hire an accountant?

Should I hire an accountant?

The answer to the question, Should I hire an accountant?, depends upon a number of factors, including the size and complexity of your business, your own financial knowledge and experience, and your budget.

If you are a small business owner with a relatively simple financial situation, you may be able to handle your own accounting without too much difficulty.

read more
Capital gains tax on separation and divorce

Capital gains tax on separation and divorce

Spouses and civil partners enjoy certain tax breaks, including the ability to transfer assets between them at a value that gives rise to neither a gain nor a loss. Prior to 6 April 2023, a couple are only able to benefit from no gain/no loss transfers until the end of the tax year in which they separate. However, from 6 April 2023, the rules are relaxed in certain situations.

read more
How do i find a good accountant uk?

How do I find a good accountant UK?

Our tips on how to find a good personal accountant in the UK, include:

Get recommendations from friends, family, or colleagues. First-hand feedback from people who have used the accountant’s services, is one of the best ways to find a new accountant.
Do your research online. There are a number of websites that list accountants in the UK, along with reviews to read. This can be an excellent way of narrowing down your options.

read more
Why is my accountant so expensive?

Why is my accountant so expensive?

The cost of hiring an accountant can depend on:

Experience: More experienced accountants typically charge a higher rate per hour as they have a deeper understanding of accounting principles and tax laws, and can provide more comprehensive advice and services.

Location: Accountants in cities, such as London, will charge more per hour than those in smaller towns or rural areas.

read more
Are accountants worth it?

Are accountants worth it?

Whether or not an accountant is worth engaging depends on your individual circumstances. If you are not comfortable with your finances or have complex tax issues, then engaging an accountant can be a wise investment.

read more
How much is an accountant per hour uk?

How much is an accountant per hour UK?

The average hourly rate for an accountant in the UK is £25-35. However, this may vary depending on the accountant’s experience, location, and the type of services they offer. For example, accountants who specialise in tax planning may charge more per hour than those who only offer basic bookkeeping services.

read more
Pension changes

Pension changes

In his March Budget, the Chancellor announced a number of changes to the pension tax rules, including an increase in the annual allowance and the abolition of the lifetime allowance.

read more
How to claim a tax refund

How to claim a tax refund

If you have paid too much tax, you will be able to get a refund from HMRC. The mechanics for obtaining your refund depending on how the overpayment arose. Claims must be made within four years from the end of the tax year to which the refund relates.

read more
Beat the reduction in the additional rate tax threshold

Beat the reduction in the additional rate tax threshold

For a brief period it seemed that the days were numbered for the additional rate of tax following the announcement in the ill-fated mini Budget that it was to be scrapped. Like much of the mini Budget, its planned abolition was swiftly reversed. However, this was not the end of the additional rate tax saga; the Autumn Statement delivered a further plot twist with the announcement that the additional rate threshold is to fall to £125,140 from 6 April 2023.

read more
7 accountancy software packages best for mtd

7 Accountancy Software Packages Best for MTD

As ACCA-qualified accountants with countless years of experience, we’re well-versed in what can work and for who. For example, if you’re a sole trader with only a few receipts in the year, you’ll only need a fairly simple software package with a super-friendly user interface.

read more

Disclaimer:

This website’s information is for guidance only. It reflects our understanding of current laws, which may change. We are not liable for any actions you take based on this information. Always seek professional advice tailored to your specific situation. We are not responsible for the content or reliability of any external websites linked from here.

Simplifying tax and accounting for Chester businesses – check out our FAQs for quick answers.

Factors Influencing Your Tax Bill:

  • Income Level: The more you earn, the higher tax rate you may fall into.
  • Taxable Income: Not all income is taxed the same. Dividends, savings interest, etc. have different rules.
  • Allowances & Reliefs: You might be eligible for reductions like the Personal Allowance (tax-free income) or deductions for business expenses.

UK Income Tax Brackets (2023/24):

  • Personal Allowance: Up to £12,570 (tax-free)
  • Basic Rate: £12,571 to £50,270 (20%)
  • Higher Rate: £50,271 to £125,140 (40%)
  • Additional Rate: Over £125,140 (45%)

Important Notes:

  • Scotland: Has slightly different tax rates.
  • Other Taxes: You may also owe National Insurance, Capital Gains Tax, etc.

Accountants Chester Are Essential

Accountants Chester specialise in UK tax law. They can:

  • Calculate your precise tax liability
  • Maximise your deductions and allowances
  • Ensure you file returns accurately and on time

Accountants Chester Tax Blog

  • HMRC Website: The official source is the HMRC (Her Majesty's Revenue and Customs) website. Search for "UK tax rates" or "income tax rates" on https://www.gov.uk/.
  • Reputable News Sources: Major financial websites and news outlets often summarise current tax rates and any recent changes.

How Accountants Chester Can Help

  • Personalised Advice: Tax laws can be complex. Accountants Chester understand the latest rates and how they apply to your specific income, business, and circumstances.
  • Proactive Planning: They don't just calculate your taxes, but help you with strategies to potentially minimise your tax burden legally.
  • Peace of Mind: Accountants Chester ensure you're compliant and avoid unnecessary penalties or interest.

Important: Tax rates can change, especially around budget announcements. Always verify with official sources like HMRC.

Accountants Chester Tax Blog

The UK has a progressive tax system, meaning you don't pay a flat 20% on all your income. Here's a basic breakdown:

  • Personal Allowance: Most people can earn up to £12,570 tax-free each tax year.
  • Basic Rate (20%): You'll pay 20% on a portion of your income if you earn between £12,571 and £50,270.
  • Higher Rate (40%): This applies to earnings between £50,271 and £125,140.
  • Additional Rate (45%): For earnings over £125,140.

Important Notes:

  • These are income tax rates for England, Wales, and Northern Ireland. Scotland has slightly different tax bands.
  • There are other taxes: Such as National Insurance, Capital Gains Tax, and VAT, which may also apply to you.

Accountants Chester can help

Calculating your taxes can be complicated. Accountants Chester specialise in UK tax laws and can provide the following:

  • Accurate tax calculations: Ensure you pay the correct amount, avoiding penalties.
  • Tax planning: Help you take advantage of legal deductions and allowances.
  • Peace of mind: Knowing your tax affairs are handled correctly.

Accountants Chester Tax Blog

The amount you can earn before paying 40% tax in the UK depends on the current tax year's thresholds. For the 2023/24 tax year, the breakdown is as follows:

  • Personal Allowance: The first £12,570 you earn is tax-free.
  • Basic Rate (20%): You'll pay 20% tax on earnings between £12,571 and £50,270.
  • Higher Rate (40%): You'll pay 40% tax on earnings between £50,271 and £125,140
  • Additional Rate (45%): Earnings over £125,140 are taxed at 45%.

Important Note: These thresholds apply to most people in the UK. Scotland has slightly different tax rates.

Example: If you earn £60,000 annually:

  • £12,570 is tax-free (Personal Allowance)
  • £37,699 is taxed at 20%
  • £9,731 is taxed at 40%

Accountants Chester Can Help

Tax rules can be complex. Accountants Chester specialise in tax planning and can help you understand your obligations and maximise your income within the different tax brackets.

Accountants Chester Tax Blog

UK tax rates can get quite complex, with different rates and thresholds depending on your income type and circumstances. Here's a simplified overview for the current tax year (2023/2024):

Income Tax

  • Personal Allowance: The first £12,570 of your income is tax-free.
  • Basic Rate: 20% on income between £12,571 and £50,270
  • Higher Rate: 40% on income between £50,271 and £125,140.
  • Additional Rate: 45% on income over £125,140.

Other Important Taxes

  • National Insurance: Charged on earnings. Rates vary depending on your income and employment status.
  • Dividend Tax: Applies to income from company shares. Rates depend on your income tax band.

Things to Note:

  • Scotland: Has slightly different income tax rates and bands.
  • Tax-free Savings: ISAs and some pensions offer tax-advantaged ways to save.
  • Changes: Tax rates can change annually, so it's best to check the HMRC website (https://www.gov.uk/) for the latest information.

How Accountants Chester Can Help

Accountants Chester specialise in understanding the complexities of UK tax law. They can:

  • Help you calculate your exact tax liability.
  • Identify tax deductions and allowances to minimise what you owe.
  • Ensure you file your tax returns correctly and on time.

Accountants Chester Tax Blog

The three main taxes in the UK are:

  • Income Tax: You pay income tax on your earnings, including salary, self-employment income, pensions, and some state benefits.
  • National Insurance Contributions (NICs): NICs are deducted from your earnings and help fund state benefits like pensions and unemployment support.
  • Value Added Tax (VAT): VAT is a tax charged on most goods and services. It's usually included in the price you pay.

How Accountants Chester Can Help

Accountants Chester specialise in understanding and navigating the UK tax system. They can help you:

  • Calculate your tax liabilities: Ensure you're paying the correct amount of tax.
  • Minimise your tax burden: Find legal strategies to reduce your taxes.
  • File your tax returns on time: Stay compliant and avoid penalties.

Accountants Chester Tax Blog

The UK has a progressive income tax system. Here's a simplified breakdown:

  • Personal Allowance: Most people get a tax-free Personal Allowance (£12,570 for the 2023/24 tax year). You don't pay tax on income below this amount.

  • Tax Bands: Income above your Personal Allowance is taxed at different rates:

    • Basic rate (20%): For income between £12,571 and £50,270
    • Higher rate (40%): For income between £50,271 and £125,140.
    • Additional rate (45%): For income above £125,140.
  • Other taxable income: This might include:

    • Dividends from investments
    • Savings interest (above certain allowances)
    • Rental income
  • National Insurance: A separate tax based on earnings, important to factor in alongside income tax.

Accountants Chester can help!

Calculating your tax liability can be complex, especially if you have multiple income sources or run a business. Accountants Chester can:

  • Help you understand specific tax rules that apply to you
  • Ensure you claim all eligible deductions and allowances
  • File your tax returns to HMRC on time
  • Provide year-round tax planning advice

Accountants Chester Tax Blog

Calculating your tax can be complex, especially if you have multiple income sources or run a business. Here's a basic overview of the steps involved:

  1. Gather your income information: This includes employment income (P60), self-employment profits, dividends, interest from savings, and any other sources.
  2. Determine your allowable deductions: Certain expenses can reduce your taxable income (e.g., pension contributions, business expenses).
  3. Calculate your taxable income: Subtract your allowable deductions from your total income.
  4. Understand tax rates and bands: The UK has a progressive tax system. Find the tax bands your income falls into and the corresponding rates.
  5. Apply tax rates: Calculate the tax owed on each portion of your income based on the different tax bands.
  6. Factor in tax credits: You may be eligible for tax credits that reduce your final tax bill.

How Accountants Chester Can Help

  • Accuracy: Accountants Chester understand the complexities of UK tax laws, ensuring you pay the right amount and avoid penalties.
  • Maximise deductions: They can help you identify all the legal deductions you're entitled to, potentially saving you money.
  • Stress-free compliance: Accountants Chester manage deadlines and file your tax returns on time, giving you peace of mind.

Online Tools

While there are online tax calculators, seeking professional guidance from Accountants Chester is often advisable for complex tax situations or if you want comprehensive support.

Accountants Chester Tax Blog

While there are no magic tricks to eliminate tax, there are legal ways to reduce your tax burden in the UK. Here are some key strategies:

  • Utilise tax allowances: Make sure you're taking advantage of all available allowances:
    • Personal Allowance (income you can earn tax-free)
    • Marriage Allowance (if applicable)
    • Savings Allowances
  • Contribute to a pension: Pension contributions offer tax relief, reducing your taxable income.
  • Use ISAs: Earnings within ISAs (Individual Savings Accounts) are tax-free.
  • Claim deductions and expenses: If you're self-employed or a business owner, deduct legitimate business expenses.
  • Consider charitable giving: Donations to registered charities qualify for Gift Aid, providing tax benefits.

Where Accountants Chester Come In

Accountants Chester can be invaluable in maximising your tax savings. They can:

  • Identify all deductions and allowances you might be eligible for.
  • Advise on tax-efficient business structures.
  • Help you plan proactively to minimise your tax liability throughout the year.
  • Handle complex tax returns and ensure HMRC compliance.

Important Note: Tax laws can be intricate. Seek professional advice to ensure you're optimising your tax position while remaining compliant.

Accountants Chester Tax Blog

It's complex to say definitively who pays the "most" tax in the UK. Here's why:

  • Income Tax: Top earners generally pay the highest amount of income tax. However, their tax rate might be a lower percentage of their overall income compared to someone earning less.
  • Other Taxes: Don't forget about VAT (sales tax), corporation tax, and other levies. Businesses and high-spending individuals can contribute significantly to these.
  • Wealth vs. Income: Someone with vast wealth (property, investments) may have potential future tax liabilities, even if their current income isn't the highest.

Where Accountants Chester Come In

Accountants Chester can help individuals and businesses understand the UK tax system and minimise their tax burdens within the law. However, determining the absolute "top taxpayer" requires broader economic analysis.

Accountants Chester Tax Blog

Accountants Chester: Boost Your Business with Expert Support!

Get a FREE Consultation & Tailored Accounting Solutions

Call/WhatsApp: +44(1244) 220-062