Filing your tax return as early as possible comes with several advantages. It removes the stress of last-minute submissions, allowing you to focus entirely on running your business. The self-assessment deadline of 31st January remains unchanged every year, yet HMRC reported that 2.6 million people had not filed their tax returns just two days before the deadline last year.

Missing the deadline results in an automatic £100 fine, with additional penalties for further delays. If your return is more than three months late, daily fines of £10 start accumulating—leading to significant penalties you’ll want to avoid.

You can submit your tax return as soon as April 6th, and filing early comes with a major advantage: you don’t have to pay your tax bill immediately. The payment deadline remains in January, giving you plenty of time to budget for what you owe. Plus, if you’re due a tax refund, filing early ensures you receive it much sooner—unlike those who file in January, when HMRC experiences delays due to high demand.

With a little organisation, you can get your paperwork sorted and your tax return submitted well in advance—leaving you free to enjoy the festive season stress-free. Filing correctly is crucial, as you don’t want to risk overpaying or underpaying your taxes. Seeking professional advice can help ensure accuracy and peace of mind.

Contact us on www.crossaccountingservice.co.uk if you have any concerns regarding your tax return as we are always here to help.

As we step closer to April 2025, change is on the horizon. This is when the new financial year starts and we discuss what could impact our business in the coming months. We’ll explore what is ahead and how to prepare effectively.

National Minimum Wage

The most notable one is the rise in National Living Wage and National Minimum Wage. We are probably familiar with this rising every April.

Take a look at the table below for the hourly rate changes.

The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship.

Personal Allowance

The freeze continues on personal tax thresholds. Your personal allowance is the amount you can earn until you start to pay income tax. The personal allowance is currently £12,570 and set to be until April 2028 where the government will look to review.

Employer’s NI

Employers NI is also set to rise from 1 April 2025. Currently employers pay NI on employees wages at 13.8% when it hits the threshold of £9,100 however, from April the rate increases to 15% and the threshold falls to £5,000.

 To combat against this, the government have increased the employment allowance. The employment allowance is a credit against the Employer’s NI. Currently it is £5,000 for the year and will increase to £10,500. Once you have used up your Employment Allowance, then you will start to pay Employer’s NI.

Corporation Tax

There are no changes in the rates of Corporation Tax. This means that, from April 2025, the small profits rate will stay at 19% and will be payable by companies with profits of £50,000 or less.

Companies with over £250,000 profit will pay corporation tax at 25%.

Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective Corporation Tax rate.

If you're concerned about budgeting for the latest tax changes, let us know! We are experts in managing budgets and identifying trends to help you make the most of your resources. We can work out whether the Employment Allowance is going to save you money, or cost you money and provide insights and solutions tailored to your needs. Additionally, if you require any extra services, don’t hesitate to reach out—we’re here to accommodate your requests and provide the best possible support. We’re always ready to assist in any way we can!

As the clock ticks towards 01 April 2024, businesses across the nation are bracing themselves for the significant minimum wage increase set to come into effect. With no accompanying support from governments in these challenging times, the burden falls on the shoulders of businesses to adapt and plan effectively.

The Rise of Minimum Wage

As with every year, April 1st marks a pivotal moment as the minimum wage sees a substantial increase. Workers aged 21 and over will be entitled to the National Living Wage where currently it was workers aged 23 and over. While the intention behind such adjustments is to uplift low-wage workers and tackle income inequality, the reality for businesses is starkly different. For many, this hike presents a formidable challenge, with limited government assistance.

A couple of weeks ago we highlighted main aspects of the previous chancellors mini-budget. A lot has happened in the house of parliament recently and the new chancellor, Jeremy Hunt reverses most of the mini-budget tax cuts.

Below you can find the updated version from Jeremy Hunts statement.

National Insurance

One of the few things that is staying, is the reversal of the National Insurance social care levy. From 6^th November 2022, the extra 1.25% will no longer be added to National Insurance contributions. This means a saving of £330 per year for nearly 28 million people.

Originally the extra 1.25% was introduced to fund the NHS, however, this will now be funded through general taxation.

Income Tax

The biggest reversal is in the rates of income tax. The ex-chancellor said that income tax will be down to 19% from April 2023, however, this will now not go ahead. It will remain at 20% for now.

The abolition of the 45% higher rate income tax has also been reversed. The 45% higher rate income tax band now means that the higher rate earners will pay income tax on earnings over £150,000

Corporation Tax

The reversal on corporation tax for companies means that the increase from 19% to 25% will go ahead after all. This will come into action from April 2023. Only businesses with profits of £250,000 or greater will be taxed at the full 25% rate - about 10% of companies in the UK.

Any companies with profits of £50,000 or lower, will pay at the 19% rate

Benefits

Rules around the benefit system will remain and unchanged. Benefits can be reduced if people don’t actively search for job commitments. Around 120,000 more people on universal credit to be encouraged to actively seek more work, the over 50’s to be given extra time to work with coaches to help them in the return to work.

What else has been cancelled?

Other measures that have been cancelled include:

·         VAT-free shopping for overseas visitors,

• A freeze on alcohol duty. Planned increases in the duty rates for beer, cider, wine and spirits will now go ahead
• Cuts to the tax paid on shareholders' dividends - the increase introduced in April will now stay in place

Energy

A typical household using both gas and electricity would pay no more than £2,500 annually for two years the government said. However, the energy price guarantee now only covers this winter. It will be in place until April next year. A review will look at what measures should be put in place after this date.

Stamp Duty

Stamp duty will remain in place. In England, no stamp duty is paid on first £250,000 and for first time buyers, this is increased to £425,000. To check out Wales’ stamp duty rates, please click here

These rules seem like they will stay in place now but, as always, we will keep you up to date with the latest

The chancellor Kwasi Kwarteng has claimed that he has made the biggest tax cuts in a generation. So, what is in his mini-budget?

National Insurance

With the cost of living on the rise it is paramount that the Government step in to help. The biggest announcement from this mini budget is the reversal of National Insurance levy that was introduced in April 2022 by ex-chancellor Rishi Sunak. The extra 1.25% increase was going to be used to help fund health and social care. With the latest turnaround, the funding for health and social care will now come from general taxation. 

The reversal means an extra £330 per year for nearly 28 million people and will start from 6^th November 2022. National Insurance is a tax paid by employees, employers and the self-employed. Employees pay National Insurance on their wages as well as income tax, employers pay extra NI contributions for staff, and the self-employed pay National Insurance on their profits.

Income Tax

There are also cuts in basic rate of income tax. Currently at 20% for everyone that earns above the personal allowance, from April 2023 this will be down to 19% Government estimates 31 million people will be getting an extra £170 a year in their pay packets.

45% higher rate of income tax abolished for England, Wales, and Northern Ireland taxpayers and a one single higher rate of income tax of 40% from April 2023.

Corporation Tax

Companies will also benefit as the rise in corporation tax has been cancelled. Corporation tax was due to be increased from 19% to 25% in April 2023, however, now this will not go ahead.

Benefits

Rules around the benefit system have also been changed. Benefits can be reduced if people don’t actively search for job commitments. Around 120,000 more people on universal credit to be encouraged to actively seek more work, the over 50’s to be given extra time to work with coaches to help them in the return to work.

Shopping

Overseas visitors will also benefit as VAT-free shopping to be introduced. This will encourage visitors to spend more while in the UK. Planned increases in the duties on beer, cider, wine, and for spirits have also been cancelled.

Stamp Duty

Stamp duty is paid when people buy a property. No stamp duty is paid currently on first £250,000 and for first time buyers, this is increased to £425,000. This is currently for England, we will have to wait and see what the Welsh Government do for us.

Energy

Energy bills was the one that worried most homeowners. There will be a freeze on energy bills which the government claims will reduce inflation by 5%

Total cost for the energy package to be expected around £60bn for the 6 months from October.

Click here to find out all the other information covered in the mini-budget.

The chancellor, Rishi Sunak announced the Autumn Budget on Wednesday. A ‘New economy’ as it was branded to help us get through the winter. We digest the budget and give the main highlights and what it means for you. If you did want to read the full budget, please click here 

National Living Wage

There is a lot to get through and one of the notable changes in the Chancellors budget was the increase in the National Living Wage. We will see an increase in pay to £9.50 per hour for anyone aged 23+ from April 2022. That’s an increase of 6% from the current £8.91 and the pay rise worth extra £1,000 for full time workers.

Social Care Levy

A new health and social care levy is to be introduced on all of us. It is a 1.25% charge on 

National Insurance from April 2022.  The rate also affects Employers National Insurance, and the dividend rates will also change in line with the new social care levy of 1.25%

• Employees National insurance will change from 12% to 13.25%

• Employers National Insurance will change from 13.8% to 15.05%

• Sole traders National Insurance will rise from 9% to 10.25%

Dividend rates as follows:

• Lowest rate 8.75% from April 2022

• Mid-rate 33.75%

• High rate 39.35%

From April 2023 the 1.25% social care levy will show as a separate section of the tax rate system. National Insurance will revert to where it was.

Why is this social care levy coming in?

The funds from the social care levy will be used for care homes and funding for pensioners. This includes several reforms to how people pay for adult social care in England, supported by £5.4 billion of investment over the next three years.

The reforms include:

• From October 2023 a cap on personal care costs of £86,000.

• The threshold above which somebody is not eligible for local authority support towards their social care costs (upper capital limit) is increasing from £23,250 to £100,000 from October 2023.

• The threshold below which somebody does not have to contribute towards their care costs from their capital (lower capital limit) is increasing from £14,250 to £20,000.

• If somebody has capital between £20,000 and £100,000 the local authority may fund some of their care, but they may have to contribute up to 20% of their chargeable assets per year (in addition to their income).

• Increasing the amount of income that care recipients can retain after contributing towards their care costs (the Minimum Income Guarantee and the Personal Expenses Allowance) in line with inflation from April 2022.

Corporation Tax

From April 2023 changes to corporation tax are coming in place. The reintroduction of the marginal rate system which has been done away with for several years. 

Corporation tax rates for business with:

• Profit £50,000 or below – 19% rate

• Profit between £50,000 to £250,000 - 25% rate (less marginal relief calculation)

• Profit above £250,000 - 25% rate

Super deduction for purchase of equipment and allowance capital allowances will bring tax relief of 130% applies to incorporated (Limited companies, PLC’s) business only and is in place for two years. 1 April 2021 to 31 March 2023

The £1 million annual investment allowance is still available to every company including sole traders.

Business Rates

A new one year 50% business rates discount for retail, hospitality, & leisure businesses for England. Wales already have a discount in place until April next year. We will have to see what the Welsh government say in December for the updates of business rates in Wales. 

Small business rates relief still apply.

Universal Credit

Universal Credit taper rate is cut by 8%, as of now for every £1 earned, 63p gets taken off. With the new rate cut, for every £1 earned, 55p will be deducted. Allowing lower paid people to keep hold of more benefit when they are working. The target date for this is 1st December.

Alcohol Duty

The tax on some alcoholic drinks such as beer, cider and wine will be slashed. The drinks with lower-level percentage of alcohol will mean a lower rate of tax. This means that next time you go to the pub and order a pint or on a night out, a glass of prosecco, will be a little bit cheaper.

It doesn’t matter if it is UK produced or imported. Tax relief for small brewers that produce under 8% alcohol. 

The budget brings about optimism boosted by prediction of higher growth for the UK after Covid. The Chancellor hit an upbeat tone as he talks up building a “stronger economy of the future”. Again, if you want the full version of the budget, please click here

The UK Government announced a new capital allowances relief. From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

• 130% super-deduction capital allowance on qualifying plant and machinery investments
• 50% first-year allowance for qualifying special rate assets

This super-deduction is designed to promote companies to invest in productivity enhancing plant and machinery. It is important businesses understand and take advantage of these generous new reliefs while they are available.

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive. There is no upper limit set for the expenditure, so as long the expenditure is incurred between 1 April 2021 – 31 March 2023. The enhanced relief also does not allow for plant and machinery that will be made available for leasing (including landlord fixtures within rented property) and excludes cars.

The pandemic has been a big blow for a lot of businesses, if you have been looking at equipment to help you grow, now may be the time to use this relief. If you are not sure on whether it is the right time to make a purchase, or if the equipment qualifies for the super-deduction relief, message us on nicola@crossaccountingservice.co.uk or if you would prefer to chat, call Cardiff: 02920 653 995 or Bridgend: 01656 530 063. Our team is always happy to help.

All the important rates and threshold for the tax year 2021/2022

National Minimum Wage

This takes effect from 01 April 2021 and all workers are entitled to.

Please note the age rate bracket has changed from previous years also.

PAYE Tax Rates and Threshold

These rates depend on the amount of income you earn.

Employment Allowance

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to the annual allowance amount.

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’ they work each week.

Dividend Allowance

You also get a dividend allowance each year. You only pay tax on any dividend income above the dividend allowance.

Mileage Allowance

The allowed deductible rate per mile for business use.