Xero is now one of the leading names in accounting software and they had one of the largest stands at this years Accountex exhibition. 
Sage take to the major stage once again this year to showcase new cloud software at Accountex in the Excell london. I was welcomed and invited into there VIP area and given a demo into there new Cloud control panel which inter grates more of your day to day office overview into one program. features included email, twitter feed, support and more.
he 2015/16 tax year begins on 6th April and that means a raft of changes to both taxes and benefits.
Here’s a round-up of the major changes that will affect our finances.
Income tax
The tax-free personal allowance will increase from £10,000 to £10,600. This will also be the first year people born between 6th April 1938 and 5th April 1948 will have the same allowance as working age people, as their allowance has only risen by £100.
The higher rate (40%) tax threshold is increasing to £42,385.
And the starting rate of income tax on savings will be cut from 10% to 0% on savings income of up to £5,000.
The new couple’s allowance means people who are married or in a civil partnership can transfer up to £1,060 of their tax-free allowance to their partner, but only if both partners don’t pay more than the basic rate of income tax.
And the married couple’s allowance, which is only available if one partner was born before 6th April 1935, is increased to a maximum of £8,355 and a minimum of £3,220.
National Insurance
The Class 2 rate of contributions is increasing from £2.75 a week to £2.80. The Class 3 rate is increasing from £13.90 a week to £14.10.
Tax Credits and Child Benefit
Elements of the Working Tax Credit are increasing, but only by small amounts, in line with Government policy.
| Element | Annual amount (14/15) | Annual amount (15/16) |
| Basic element | £1,940 | £1,960 |
| Couple and lone parent element | £1,990 | £2,010 |
| 30 hour element | £800 | £810 |
| Disabled worker element | £2,935 | £2,970 |
| Severe disability element | £1,255 | £1,275 |
Meanwhile, the childcare element is frozen at £175 per week for one child and £300 per week for two or more children.
In terms of Child Tax Credits, the family element is frozen at £545 a year.
But there are small changes to other elements.
| Element | Annual amount (14/15) | Annual amount (15/16) |
| Child element | £2,750 | £2,780 |
| Disabled child element | £3,100 | £3,140 |
| Severely disabled child element | £1,255 | £1,275 |
Child Benefit is increasing by just 20p a week to £20.70 for the first child and by 15p a week to £13.70 for second and subsequent children. Meanwhile, guardian’s allowance is increasing by 20p a week to £16.55.
ISA allowances
The tax-free annual ISA allowance will increase from £15,000 to £15,240. In addition, the Junior ISA annual allowance is increasing from £4,000 to £4,080.
The Child Trust Fund allowance is also increasing to £4,080, although you will be able to switch Child Trust Funds into Junior ISAs from 6th April.
State Pension
The Basic State Pension is increasing by 2.5%, or £2.85 a week, to a maximum of £115.95 a week. The maximum amount pensioners on low incomes can receive with the addition of the standard minimum guarantee of Pension Credit is £151.20 for a single couple or £230.85 for a couple.
Tax on pension lump sums
If you decided to withdraw your pension in one go under new pension freedoms coming into force, from 6th April it will be taxed at your marginal rate of Income Tax (eg 20%, 40% or 45%) rather than at 55% as was the case before.
Tax on inherited pensions
Tax on inherited pensions is being scrapped if the pension holder dies before they reach 75.
Maternity and paternity pay
The statutory rate of maternity and paternity pay is increasing from £138.18 to £139.58 a week.
f you are married or in a civil partnership, and born on or after 6 April 1935 you can now apply for the new marriage allowance. This is not an extra amount of tax free allowance, but a transfer of £1,060 of unused personal allowance from one spouse or civil partner to the other. It will save the couple tax of £212 for 2015/16.
The marriage allowance can only be claimed where one person has unused personal allowance and the other partner/spouse is taxed at no more than 20%. The transferred allowance is treated as belonging to the recipient for the whole of the tax year for which it is claimed.
The claim for the marriage allowance must be done online through the GOV.UK website, by the person who is surrendering part of their allowance. If the taxpayer can’t use the online service HMRC is supposed to provide additional support.
Once the marriage allowance is claimed, the couples’ PAYE codes will be altered to reflect the change in allowances with the following suffix letters used in the place of L:
M – for the person who receives the extra allowance
N – for the person who has surrendered £1,060 of their personal allowance
The existing married couple’s allowance (worth up to £835.50) continues to apply for couples who were born before 6 April 1935.
If you have any clients that are VAT Registered and offer any form of seating or a place to eat in their premise, then they will need to ask each individual customer if they will be eating in or out of the establishment.
If they opt to eat in, then VAT will need to be applied regardless of whether the food served is hot or cold and also even if it is normally zero rated; for example a cold sandwich.
To read the full HMRC article please see the link below:
There is good news for limited companies with patents. HMRC introduced the ‘Patent Box’ which offers a 10% corporation tax rate on profits attributable to qualifying patents. This has applied for limited companies with profits arising after 1 April 2013.
The reduced tax rate not only applies to royalty income but also includes profits derived from patented products or patented processes. HMRC have confirmed that there only has to be one patented and UK managed invention embodied in a product for the entire product to be within the patent box. So the scope of the relief is very wide and many companies will be able to qualify for this lower rate of tax
An online trial has been launched by HM Revenue and Customs (HMRC), allowing company car drivers to make changes to car and fuel benefits that will affect their tax codes.
This means that Pay As You Earn (PAYE) customers who have company cars will be able to make any changes online to their company cars and will no longer have to wait for HMRC to update their tax code for them.
To read the article in full please use the link below:
https://www.gov.uk/government/news/company-car-drivers-can-report-changes-to-hmrc-online
When a business incorporates and transfers its trade and assets to a company controlled by the seller, the assets must be transferred at open market value for tax purposes. The assets may include “goodwill” which is defined as the business reputation or customer relationships, including the value of continuing contracts.
The transfer of the assets may generate a taxable capital gain in the hands of the seller, as the assets will have appreciated in value during the time they were used or created by the first business.
Capital gains tax will arise on those gains, but there are various tax reliefs that can be used to postpone or reduce any tax payable. One of those reliefs is entrepreneurs’ relief, which can reduce the tax payable to only 10%.
The use of entrepreneur’ relief has been blocked for gains arising on the transfer of goodwill as part of an incorporation on or after 3 December 2014. Entrepreneurs’ relief is still available to reduce tax from gains arising on other transferred assets, but not from the goodwill.
If you are thinking of incorporating your business, we should talk about which assets you want to transfer to the company, and which you want to leave in your own name. Transferring land and buildings will often carry an additional cost of stamp duty land tax. Planning the transaction well in advance is the best way to reduce any tax payable.
Stamp Duty Land Tax (‘SDLT’) has been changed and a progressive tax rate will apply to residential sales completed after midnight on Wednesday 3rd December. The ‘break even’ point is £935,000, purchases below that will be subject to lower SDLT than before whereas purchases above that will be subject to higher SDLT.
Research & Development Tax Credits paid to small and medium sized companies will increase from 125% to 130% of ‘qualifying expenditure’ incurred after 1 April 2015. The credit for large companies will also increase from 10% to 11%.
Income Tax Personal Allowance will increase to £10,600 for the 2015/16 tax year – this is higher than previously advised by the government.
Resident non-domiciles will see an increase in the annual charge payable if they wish to retain the remittance basis of taxation. A new scale will apply from £30,000 for those resident in 7 out of 9 tax years up to £90,000 for those resident 17 out of 20 tax years. A consultation is also being proposed to make the election apply for a minimum of three years.
Diverted profits tax is a new tax to counter the use of aggressive tax planning techniques used to divert profits away from the UK. The tax will be levied at 25% from 1 April 2015 although exact details on how this will be applied have not yet been released.
Air Passenger Duty is being scrapped on economy flights for those under 12 years old with effect from 1 May 2015. The relief will extend to under 16’s from 1 March 2016 and tickets will be expected to display the amount of duty payable to ensure that the savings are passed on.
The amount held in an ISA at the time of death of an individual can now be used by a surviving spouse to invest into their own ISA. Although no IHT was payable on the transfer of assets between spouses on death the funds can now be reinvested in full into an ISA.
Entrepreneurs’ Relief will be removed for individuals in respect of the transfer of goodwill to their own company and Corporation Tax reliefs will be restricted for payments in respect of these intangible assets.
National Insurance employers contributions are abolished for apprentices under 25 with effect from 1 April 2016 (unless the apprentice earns more than circa £42,000).
A new ‘aggravated’ penalty loading of 50% will apply in addition to existing behavior related penalties for individuals who move hidden funds to circumvent tax transparency agreements