Because of the coronavirus pandemic, you can delay paying VAT normally due before June 2020. It now has to be paid by March 2022.
Sole trader class 2 NI contributions are now part of the self-assessment (tax return) process, alongside income tax and class 4 NI contributions.
Class 2 NI contributions are £3.05 per week for 2020-21. (£3.00 per week, 2019-20.) The proposed abolition of Class 2 has now been abandoned.
Class 4 NI will stay at 9% for the moment, but the Chancellor might try to increase it in 2022.
For the years 2019-20, 2020-21 and 2021-22 the personal allowance (i.e. free of income tax) is £12,500.
The higher income tax rate of 40% kicks in after £50,000 (2020-21) for England, Wales and NI. The income tax bands for residents of Scotland are now very different. Check help sheet 3.
VAT threshold is £85,000 from 1 April 2017. So you have to be VAT registered if your turnover in any 12 months hits that level. This threshold has been frozen until 2022.
The Annual Investment Allowance (to buy kit and machinery) is £1m per year in 2019, 2020 and 2021.
Corporation Tax is 19% for all Limited Company profits since April 2017.
Change to HMRC phone numbers
Worried about paying tax as a result of coronavirus pandemic? Phone: 08000 241222
The most important thing is to keep a sharp eye on your cash and don't throw money around. You might also be able to get a loan or grant from some of these places:
If you're VAT registered in the UK you need to be sure whether or not to account for VAT yourself, or whether your client has to account for it.
The rules vary, broadly based on
whether the client is based within the EU or not
whether they are VAT registered in their own country or not
This is not the place to go into detail - especially as we don't yet know what will happen with Brexit - but you can find out more on GOV.uk:
HMRC - VAT and Supply of Services
You may well need professional advice from an accountant who is used to working with international clients.
Please note:
Although every effort has been made to provide accurate tips and information, David Thomas Media Ltd accepts no responsibility for any errors, omissions or out-of-date facts. Trainees are advised to seek up-to-date professional advice on all financial and tax matters before making decisions relating to these subjects. Nothing in our notes, courses, webinars, downloads or social media should be considered as financial advice. We believe our tips are useful - but they are only tips!
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