Tax Advice for Business

There are a number of areas of business taxes which we will be able to assist you in, including Corporation Tax, VAT and Payroll taxes.

Please Contact Us if you require any of our services or require any further information.

 

Corporation Tax

If your company or organisation is liable for Corporation Tax, you must tell HM Revenue & Customs that it's liable, pay any Corporation Tax that's due and file a Company Tax Return on time.

You may have to meet these deadlines and requirements even if your company or organisation is not active or is dormant, or has no Corporation Tax to pay. If you don't, your company or organisation may have to pay a penalty or may be charged interest.

We can help you to prepare and time your corporation tax returns. Please contact us for further information.

 Further information on corporation tax is on the HMRC website at: http://www.hmrc.gov.uk/ct/index.htm

 

VAT (Value Added Tax)

When your turnover rises above £83,000 per year, or when you believe that this level will be exceeded, VAT returns will need to be submitted and the tax will need to be collected to be passed over to the HMRC.

VAT returns usually need to be submitted every quarter (i.e. every three months) and calculations need to be made to calculate the amount of VAT that has been paid in inputs and collected as outputs, as well as the general amount of sales and purchases that have been made. There are a number of ways in which the VAT costs of administration and payment can be simplified and reduced, such as the cash method of VAT collection, flat rate scheme and annual accounting scheme.

We can help you prepare and administrate your VAT requirements. Please contact us for further information.

Further information on VAT is on the HMRC website at : http://www.hmrc.gov.uk/vat/start/schemes/index.htm

 

Payroll Taxes

As an organisation grows managing the requirements of the payroll taxes necessary becomes more and more complex. There are a huge number of rules and taxes that need to be complied with including PAYE tax, Class 1 National Insurance Contributions and statutory maternity pay. Many of the PAYE taxes need to be sumbitted two weeks after the end of the month the pay relates to, so for example if employee payments are made in November then payroll taxes including need to be paid by December the 14th. 

 

We can help you prepare and administer your payroll requirements, to make sure that payments are made in an way that reduces the administrative burden on you. Please contact us for further information.

Further information on payroll taxes is on the HMRC website at : http://www.hmrc.gov.uk/paye/index.htm

A summary of the important rates for employees is summaried below for the year 2018/2019, meaning from 6th April 2018 to 5th April 2019;

 

Rates and thresholds for employers (in UK not including Scotland)

 

The tables below show the rates and thresholds that apply when you operate your payroll or provide expenses and benefits to your employees. Unless otherwise stated, the figures quoted apply between 6 April 2018 and 5 April 2019.

 

PAYE tax rates and thresholds2018 to 2019
Employee personal allowance £228 per week
£988 per month
£11,850 per year
UK basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £34,500
UK higher tax rate 40% on annual earnings from £34,501 to £150,000
UK additional tax rate 45% on annual earnings above £150,000

 

Class 1 National Insurance thresholds

You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).

Class 1 National Insurance thresholds2018 to 2019
LEL £116 per week
£503 per month
£6,032 per year
Primary Threshold (PT) £162 per week
£702 per month
£8,424 per year
Secondary Threshold (ST) £162 per week
£702 per month
£8,424 per year
Upper Secondary Threshold (under 21) (UST) £892 per week
£3,863 per month
£46,350 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £892 per week
£3,863 per month
£46,350 per year
Upper Earnings Limit (UEL) £892 per week
£3,863 per month
£46,350 per year

 

Class 1 National Insurance rates

Employee (primary) contribution rates

Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.

National Insurance category letterEarnings at or above LEL up to and including PTEarnings above the PT up to and including UELBalance of earnings above UEL
A 0% 12% 2%
B 0% 5.85% 2%
C nil nil nil
H (Apprentice under 25) 0% 12% 2%
J 0% 2% 2%
M (under 21) 0% 12% 2%
Z (under 21 - deferment) 0% 2% 2%

 

Employer (secondary) contribution rates

You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill.

National Insurance category letterEarnings at or above LEL up to and including STEarnings above ST up to and including UEL/UST/AUSTBalance of earnings above UEL/UST/AUST
A 0% 13.80% 13.80%
B 0% 13.80% 13.80%
C 0% 13.80% 13.80%
H (Apprentice under 25) 0% 0% 13.80%
J 0% 13.80% 13.80%
M (under 21) 0% 0% 13.80%
Z (under 21 - deferment) 0% 0% 13.80%

Class 1A and Class 1B National Insurance: expenses and benefits

You must pay Class 1A National Insurance on work benefits you give to your employees, example a company mobile phone. You report and pay Class 1A at the end of each tax year.

National Insurance class2018 to 2019 rate
Class 1A 13.8%

National Minimum Wage

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. Use the National Minimum Wage calculator to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years.

The rates below apply from 1 April 2018.

Category of workerHourly rate
Aged 25 and above (national living wage rate) £7.83
Aged 21 to 24 inclusive £7.38
Aged 18 to 20 inclusive £5.90
Aged under 18 (but above compulsory school leaving age) £4.20
Apprentices aged under 19 £3.70
Apprentices aged 19 and over, but in the first year of their apprenticeship £3.70

 

Statutory Maternity, Paternity, Adoption and Shared Parental Pay

Use the maternity and paternity calculator for employers to calculate your employee’s Statutory Maternity Pay (SMP), paternity or adoption pay, their qualifying week, average weekly earnings and leave period.

Type of payment or recovery2018 to 2019 rate
SMP - weekly rate for first 6 weeks 90% of the employee’s average weekly earnings
SMP - weekly rate for remaining weeks £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Paternity Pay (SPP) - weekly rate £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Adoption Pay (SAP) - weekly rate for first 6 weeks 90% of employee’s average weekly earnings
SAP - weekly rate for remaining weeks £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Shared Parental Pay (ShPP) - weekly rate £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
SMP/SPP/ShPP/SAP - proportion of your payments you can recover from HMRC 92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year

103% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower

 

Statutory Sick Pay (SSP)

The same weekly SSP rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ (QDs) they work each week.

Use the SSP calculator to work out your employee’s sick pay, or use the rates below.

Unrounded daily ratesNumber of QDs in week1 day to pay2 days to pay3 days to pay4 days to pay5 days to pay6 days to pay7 days to pay
£13.1500 7 £13.15 £26.30 £39.45 £52.60 £65.75 £78.90 £92.05
£15.3416 6 £15.35 £30.69 £46.03 £61.37 £76.71 £92.05  
£18.4100 5 £18.41 £36.82 £55.23 £73.64 £92.05    
£23.0125 4 £23.02 £46.03 £69.04 £92.05      
£30.6833 3 £30.69 £61.37 £92.05        
£46.0250 2 £46.03 £92.05          
£92.0500 1 £92.05            

 

Student loan recovery

If your employees’ earnings are above the earnings threshold, record their student loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.

Rate or threshold2018 to 2019 rate
Employee earnings threshold for Plan 1 £18,330 per year
£1,527.50 per month
£352.50 per week
Employee earnings threshold for Plan 2 £25,000 per year
£2,083.33 per month
£480.76 per week
Student loan deductions 9%

Company cars: Advisory Fuel Rates (AFRs)

Use AFRs to work out mileage costs if you provide company cars to your employees.

The rates below apply from 1 December 2018.

Engine sizePetrol - amount per mileLPG - amount per mile
1400cc or less 12 pence 8 pence
1401cc to 2000cc 15 pence 10 pence
Over 2000cc 22 pence 15 pence
Engine sizeDiesel - amount per mile
1600cc or less 10 pence
1601cc to 2000cc 12 pence
Over 2000cc 14 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Fuel Rates for previous periods.

Advisory Electricity Rate for fully electric cars

Amount per mile - 4 pence.

Electricity is not a fuel for car fuel benefit purposes.

 

Employee vehicles: Mileage Allowance Payments (MAPs)

MAPs are what you pay your employees for using their own vehicle for business journeys.

You can pay your employees an approved amount of MAPs each year without having to report them to HMRC. To work out the approved amount, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.

Find out more about reporting and paying MAPs.

Type of vehicleRate per business mile 2018 to 2019
Car For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile

For National Insurance purposes: 45 pence for all business miles
Motorcycle 24 pence for both tax and National Insurance purposes and for all business miles
Cycle 20 pence for both tax and National Insurance purposes and for all business miles