Tuesday, 11 December 2012

Your Tax - A Quick Read

Autumn Statement 2012 Update
Personal Allowance
The tax free allowance will now increase to £9,440 from April 2013 up from the current £8,105.

Higher Rate Tax Threshold
From April 2014, the higher rate threshold will increase to £41,865 and then to £42,285 in April 2015. The current threshold is £34,370 moving to £32,245 in 2013-2014. 

Fuel Duty
The 3p per litre increase set for 1st January 2013 has been cancelled. Additionally, increases scheduled for April 2013 has been deferred to September 2013.

Capital Gains Tax
The annual exempt amount will increase by 1% each year from £11,000 in 2014-2015 then to £11,100 from 2015-2016. 

Pension Tax Relief
The lifetime allowance will be reduced from £1.5M to £1.25M from 2014-2015. The annual allowance will also be reduced from £50,000 to £40,000 from that period.

Income Tax Relief
As announced at Budget 2012, all previously unlimited income tax relief will now be capped at the greater of £50,000 or 25% of the individual’s income. Charitable reliefs will be exempt from this cap.

Operational Integration of Income Tax & NIC
The Government will wait for further progress on planned operational changes to the tax system before formally consulting on the operational integration of income tax and NICs.

Corporation Tax
The main rate of corporation tax will be reduced to 23% from April 2013 and reduced even further to 21% from April 2014.

Capital Allowances
The government will increase the Annual Investment Allowance from £25,000 to £250,000 for all qualifying investments on Plant & Machinery made on or after January 2013.

Property Taxes
Small business rate relief of 100% will be extended for a further year from 1st April 2013. This relief is not automatic and therefore should be applied for.

Tax Simplification
Cash basis for calculating tax – The Government confirms introduction of a new cash
basis for small, unincorporated businesses to calculate their tax from April 2013. Businesses with
receipts of up to £77,000 will be eligible and will be able to continue to use the cash basis until
receipts reach £154,000.

Simplified expenses – Unincorporated businesses will also be able to use flat rates to
calculate some types of expenses rather than having to calculate actual amounts.

Wednesday, 5 December 2012

VAT Secret: No VAT Invoice Required

Issue 8: Full VAT Invoice Not Required

This one is easy so I will get straight to it.

As a supplier if you are issuing an invoice with a total value of no more than £250 then a full VAT invoice is not required. 

More specifically, you do not have to itemize the VAT value. The invoice could simply read “Total £250 including 20% VAT”

This is quite acceptable to HMRC. Alternatively you could just treat it as a full VAT invoice whichever is easier for you. I told you this was easy.

Law: VAT Regulations 1995 (SI 1995/2518), reg. 16(1)

Marlon Appleton
Tax Partner 
Harvey Edwards LLP