Last week marked the beginning of the new tax year and some significant changes to the tax system.
Many of the changes have been introduced as a way of helping with the Government's efforts at budget deficit reduction.
Among many changes, one of the biggest differences people will experience is in income tax. As from 6 April, the personal allowance, which marks the point at which income tax becomes payable, rises by £1,000 to £7,475.
However, the threshold at which higher earners become liable for the 40 per cent tax rate falls to £42,475.
The employee national insurance contribution for those who qualify climbs from 11 per cent to 12 per cent.
Anyone who pays NI over the upper earnings limit sees their charge rise by 2 per cent.
A land tax stamp duty rate of 5 per cent is to be charged on residential property transactions worth more than £1 million.
Pension contributions that are entitled to tax relief now have an allowance of £50,000, down from the previous figure of £225,000.
There is no longer a requirement to purchase a pension annuity by the age of 75.
Now is the time to consider your own tax situation. Why not drop me an email and arrange a free meeting?
mitch@ljd.uk.com
Thursday 14 April 2011
Friday 1 April 2011
Paying The Penalty
GET YOUR TAX RETURN IN EARLY THIS YEAR !
I say it every year but this coming tax year it may be more important than ever to get your tax return submitted before the deadline because HMRC have just announced the new penalty regime.
Where as in the past if you submitted a tax return late you would be subject to £100 fine and then have a month to pay outstanding tax before a 5% surcharge. Now from this year the old fine of £100 is to be replaced because, the tax authority says, the previous penalty rate was not enough of a deterrent. The new penalty regime for late filing and late payment of self assessment income tax starts in April 2011 and applies to the tax year 2010/11.
Taxpayers who fill in self assessment tax returns will shortly receive their 2010/11 notices and paper returns. These will include information on the new penalty framework and how it will significantly increase penalties for those who file and pay late. A tax return filed six months late could attract a penalty of at least £1,300.
HMRC's Stephen Banyard said: "The vast majority of people don't have to pay penalties because they send in their return and pay on time. But there are always a small number of people who have avoided filing or paying on time. HMRC spends a lot of time pursuing late returns and getting involved in unnecessary appeals work.
The new penalty regime does not look nice.
One day late will mean an initial penalty of £100, even if there is no tax to pay or all the tax owed has been paid.
Three months late will mean an automatic daily penalty of £10 per day, up to a maximum of £900.
Six months late will mean further penalties, which are the greater of 5 per cent of tax due or £300.
Twelve months late will mean yet more penalties, which are the greatest of 5 per cent of tax due or £300. In serious cases, there could be a higher penalty of up to 100 per cent of the tax due.
Penalties for late payment of tax are:
Thirty days late will involve an initial penalty of 5 per cent of the tax unpaid at that date.
Six months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
Twelve months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
I suggest gather all your information in April and get it to your accountant so they have plenty of time to complete your return. Not only will you guarantee your return being filed on time, you can also plan your tax payments. Act now !
If you need help with your tax return please do not hesitate to contact me mitch@ljd.uk.com
I say it every year but this coming tax year it may be more important than ever to get your tax return submitted before the deadline because HMRC have just announced the new penalty regime.
Where as in the past if you submitted a tax return late you would be subject to £100 fine and then have a month to pay outstanding tax before a 5% surcharge. Now from this year the old fine of £100 is to be replaced because, the tax authority says, the previous penalty rate was not enough of a deterrent. The new penalty regime for late filing and late payment of self assessment income tax starts in April 2011 and applies to the tax year 2010/11.
Taxpayers who fill in self assessment tax returns will shortly receive their 2010/11 notices and paper returns. These will include information on the new penalty framework and how it will significantly increase penalties for those who file and pay late. A tax return filed six months late could attract a penalty of at least £1,300.
HMRC's Stephen Banyard said: "The vast majority of people don't have to pay penalties because they send in their return and pay on time. But there are always a small number of people who have avoided filing or paying on time. HMRC spends a lot of time pursuing late returns and getting involved in unnecessary appeals work.
The new penalty regime does not look nice.
One day late will mean an initial penalty of £100, even if there is no tax to pay or all the tax owed has been paid.
Three months late will mean an automatic daily penalty of £10 per day, up to a maximum of £900.
Six months late will mean further penalties, which are the greater of 5 per cent of tax due or £300.
Twelve months late will mean yet more penalties, which are the greatest of 5 per cent of tax due or £300. In serious cases, there could be a higher penalty of up to 100 per cent of the tax due.
Penalties for late payment of tax are:
Thirty days late will involve an initial penalty of 5 per cent of the tax unpaid at that date.
Six months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
Twelve months late will involve a further penalty of 5 per cent of the tax that is still unpaid.
I suggest gather all your information in April and get it to your accountant so they have plenty of time to complete your return. Not only will you guarantee your return being filed on time, you can also plan your tax payments. Act now !
If you need help with your tax return please do not hesitate to contact me mitch@ljd.uk.com
Subscribe to:
Posts (Atom)