Author - PMC Partnership

Self employed Versus Limited company

We are asked many times, with tax free dividends now at just £2,000 whether it is best to be self employed or Limited. Now the upper rate of tax starts at £50,000 we will use this as an example. If you earn £50,000 of self employed profits you will pay £11999.74 in personal tax and NI. If you earn £12,500 PAYE and take £37,500 of dividends through your Limited company then you will pay £3705 in personal tax + £7,125 in Corporation [...]

Cars and Benefits in Kind

If you have personal use of a Limited company car you should declare the benefit in kind received to HMRC. This is calculated by the list price of the car x CO2 emissions % and then added to your taxable salary. If the car is a pool car – paid for and insured for all employees to use and remains at the company premises overnight then there is NO benefit in kind received and therefore no additional tax due.

Self assessment – paying your tax

Remember to pay your personal self assessment tax by the 31st January 2019. But you do actually have 30 days from this date to pay until you receive a 5% surcharge of tax owed for non payment. The easiest way to pay is to go to www.hmrc.gov.uk and follow the pay self assessment tab, making sure you put your tax reference into the payment reference box.

National insurance

National Insurance (NI) types. If you are PAYE you pay Class 1 NI at 12% of earnings between £168-£892 per week. If you are self-employed you pay Class 2 NI at £2.95 per week if earning over £6,205 as well as Class 4 NI at 9% on profits over £8,424 up to profits of £46,350, when it goes to 2%. If you are PAYE and self employed then you pay both but HMRC do contact you if you have [...]

Making Tax Digital (MTD)

Making Tax Digital (MTD) is introduced by HMRC from April 2019. This means that from April every VAT return must be submitted using HMRC approved software along with all the files used to complete the VAT return. This means that clients and Accountants can no longer file their VAT returns on line after compiling their returns using excel or a book. This obviously means HMRC receive all of your information on a quarterly basis and can now start checking [...]