To help pay for the NHS and social care from April 2022 1.25% will be added to all National Insurance rates – employee, employer and dividend tax. From April 2023 this will show as a seperate item on your payslip or tax return
The best way to pay yourself is through your own Limited company. You go on your own payroll which reduces company tax and then top up your personal income each month with a dividend paid from profits. This dividend is free of National Insurance (NI) and taxed at a lower rate than normal income. You should always check that your NI is fully up to date at hmrc.gov.uk.
Go to www.tax.service.gov.uk/pay – pick what tax you wish to pay, do not sign in, insert your reference for that particular tax and then pay by card or bank transfer. If you wish to still pay by cheque you can forward an HMRC payable cheque via your Accountant. If you cannot pay your taxes on time you need to telephone HMRC on their time to pay help line on 0800 0159 559 and discuss payment terms.
If anyone has had to work from home during the 20/21 tax year for even one day, HMRC are allowing you to claim £6 per week for every week as an allowable expense, saving the basic rate tax payer £62 in tax. This should be claimed via your personal 2021 tax return.
Directors Loans – If a director takes non PAYE wages from a Limited company either as a loan or if the profits are not there to pay a Dividend, then the Director has received a loan. If the loan was greater than £10,000 and the loan is not repaid within 9 months of your year end, then the company is taxed at 32.5% on the outstanding loan and the Director is taxed as having taken a Dividend. A Directors loan [...]
Remember there is a 5% unpaid tax surcharge if your personal tax remains unpaid at the end of February, July and the following January. There is also a £10 daily penalty if your personal tax return is not filed by 30th April of the following year up to a maximum £900. There is then an additional 5% or £300 (whichever the greater) charged if your tax return is still not filed by the end of July and again by [...]
HMRC have announced that all 2020 personal tax owed, less than £30,000, may be paid over a year by monthly installments, penalty free if you contact them and agree the plan before 31st March 2021. The same plan is on offer for all companies that cannot pay the deferred VAT quarter due to Coronavirus last year. Contact HMRC using your online account to agree the plan or telephone them.