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You might have heard that earlier this year, the tax deadline for Self Assessment was extended by the government. Sounds great, right? After all, nobody actually likes paying taxes, so the fact that HMRC gave everyone more time to file and pay their tax returns was an added bonus! But that change now has many people wondering… will the tax deadline be extended again in 2023? If you’re due to file a Self Assessment tax return, you must be DYING to know the answer. So let’s delve into what we know so far. Hang on, when is the tax deadline usually? If you’re new to the world of taxes, let’s give you a quick overview of everything you need to know about Self Assessment tax deadlines. There are two key deadlines that you need to know about for tax returns, which are: The deadline to register for Self Assessment – which is 5th of October in any given year. If you’ve never done a tax return before, this is essentially how you tell HMRC that you’re earning untaxed income. The Self Assessment deadline – which is 31st of January the year after the tax year you’re paying for. So, if you were paying your 2022/2023 tax return, this should be paid before the 31st of January 2024. It was the latter that was extended in 2022, and the one that’s got people wondering whether HMRC will extend it again next year. Why was the tax deadline extended in 2022? Earlier this year, HMRC decided to waive late filing and late payment penalties for everyone who needed to complete their 2020/2021 tax returns. Instead of filing and paying their tax return before the usual 31st January deadline, this meant that Self Assessment taxpayers didn’t: Receive a late filing penalty if they filed online before 28th February 2022 Receive a late payment penalty if they paid their tax in full, or set up a Time to Pay arrangement before 1st April So why exactly was the Self Assessment deadline extended? Well, it was mostly thanks to the Covid-19 pandemic. That and the effect it had on Self Assessment taxpayers to meet their tax obligations in time. As a result, HMRC extended the deadline to relieve some of that pressure by giving them more time to file and pay their tax. Without them having to worry about being fined! So will the tax deadline be extended again? Nope. Well, at least we don’t think so. Unless anything changes, it’s looking highly unlikely that HMRC will extend the deadline again. In fact, on their website, HMRC even states that for the 2021/22 tax year, they must receive tax returns and any money owed by midnight on 31st January 2023. So if you have untaxed income that you made between 6th April 2021 and 6th April 2022, you’ll have to file and pay your tax return before the usual deadline! Who will have to file a tax return in 2023? Wondering whether you’ll have to file and pay a Self Assessment tax return next year? This depends on whether you have any untaxed income you made between 6th April 2021 and 6th April 2022. There are various reasons that you might have earned untaxed income, such as: You’re self-employed You earn more than £100,000 You have a side gig alongside your full-time job You’re a landlord You have capital gains from investments You make a profit from selling assets (e.g. a house) You’re claiming pension tax relief That’s me! What do I need to do? Don’t panic! If you’ve never filed a tax return before, then you first need to register for Self Assessment on HMRC’s website before 5th October 2022. They’ll give you a Unique Taxpayer Reference (UTR) number, which you’ll use to pay your tax bill. Once you’ve registered you’ll then need to fill out your Self Assessment form online and pay the tax you owe before 31st January 2023. There are a few options for how you actually do this: Do it yourself on HMRC’s website: for free, although it’s not super easy to understand how to use it Find an accountant and pay them to help you: this can be pretty pricey! Give Account-Ease a go: we’re £55 per month, all in and it doesn’t matter how many sources of income you have, or how complicated your tax situation is. Plus, we’ll give you your own personal accountant too!

Tax evasion – it’s becoming increasingly common in the UK. From celebrities to big corporations, there have been multiple high-profile cases on the news of HMRC being short-changed. But how much have HMRC really lost to tax evasion? Read to find out more! First of all, what exactly is tax evasion? Tax evasion, tax avoidance, tax efficiency – it can all become a huge blur. But to keep it short and simple, tax evasion is purposely not paying or underpaying the tax you owe. This is illegal and most likely HMRC’s biggest “pet peeve”. What are some common instances of tax avoidance within the UK? Paying or not paying tax isn’t just about not bothering to report tax-deductible income to HMRC. There are a variety of ways in which individuals end up being in the tax department’s black book. This could be done by: Maintaining your business out of the financial books (so using cash) The ability to hide money shares, money or other assets in accounts at banks located offshore The writing off of personal expenses is a taxes-deductible expenses for business Utilizing the property of the company to use for personal purposes (yes it’s not legal) Even with all these examples of tax evasions, the most expensive and difficult problem for HMRC is in fact strategies to avoid tax. What is the purpose of tax-evasion schemes within the UK? Schemes to avoid tax are firms that have been designed to help taxpayers pay less than the fair amount of NICs and tax. A lot of these schemes take the form of umbrella companies that are not compliant that claim they can assist you in keeping more of you money through paying less taxes. They may offer your wages as an advance loan, salary or grant, or a set life-time amount of money. HMRC define tax avoidance to mean “bending tax laws in order to get an advantage in taxation that the Parliament never planned.’ They also declare that “most tax avoidance strategies simply don’t work and those who employ these strategies could end up having to pay a lot higher than what they were trying to avoid, which includes penalties.’ The shade. It is safe to affirm that HMRC isn’t in the business of tax avoidance schemes in any way despite the claims of many promoters that HMRC actually supports the tax-evasion schemes. What is the impact of tax avoidance (UK)? Tax evasion is an offense. And , as is the norm, crime results in consequences. Particularly when it comes to messing up with HMRC. For tax evasion, you can face anywhere between a few months to seven years in prison (depending on the severity of the situation).  Also, you can be penalized anywhere from £ 5,000 to an unlimitable amount. The consequences of participating in tax-evasion schemes can be quite severe, too. If you do fall victim to what seems like a harmless “want to reduce tax’ advertisement online and you’re required to pay any tax you owe, and could be subject to an extra charge. It’s like lots… Yup. That’s the reason HMRC have put forth a myriad of attempts to stop taxpayers using tax-evasion schemes. For instance the don’t be caught out campaign (and incessant pleas to the public to avoid using the schemes, regardless of the opinions of Jimmy Carr says). They’ve used their rights under the Finance Act 2022 to publish details about the tax-evasion schemes as well as their promotors. As per the law they also have the ability to directly seek information from promoters regarding their activities. HMRC vs UK tax avoidance schemes The outcome of HMRC’s work? It’s true that the tax-payer’s use of avoidance strategies has decreased since 2017/2018. In the past the number was at an all-time high. (And after that, naturally there was news in the press that Take That band member Gary Barlow was forced to pay £ 20 million in tax due to participating in a tax-evasion scheme that was in place for four years before (yikes!) In the year 2020/21, HMRC estimated that 31,000 taxpayers and 1,000 individuals employed tax avoidance schemes. This represented a massive drop in comparison to previous years.

‘New Year, New Me’ is something you hear a lot during December. As we over-indulge on festive food, drinks at the office Christmas party, treats with friends and family and maybe spend a little longer than usual down the pub, it’s no surprise that many of us vow to make a change as soon as January hits. New Year’s resolutions are notoriously hard to keep, but if realistic goals are set, you could find that making changes both in your personal and professional life are much easier to do than you might think. As a business owner, a new year is filled with new opportunities, whether that be the chance to take on new clients, learn new skills or expand on the foundations you built in 2022. It’s the perfect time to reflect on the year you’ve just had, plan activities and set goals that you’d like to achieve. Taking a step back and assessing your profits, growth and partnerships are a great foundation for a prosperous year to come. No matter what industry you work within, there are always things that you can change or develop to ensure you have a prosperous 2023. Read on to see what you should be doing, ready to hit the ground running this January. Review 2022’s past and make changes to what didn’t work. Resolving any issues that have arisen throughout the years is crucial in ensuring you don’t have any issues hindering your business’s growth in 2023. Fixing any issues with your process and making sure everything runs as smoothly as it can is something you should consider as a top priority when you begin the new year. Encourage your staff to recognize factors that could cause problems in their daily tasks. Finding out from people who work day in, day out, on the problems which needs to be addressed can give you a greater insight into how you can bring about a positive change. Improved control on company’s finances Financial management is crucial in predicting how your business will perform. With your accountant, review your incomings as well as expenditures, and ensure that your books are in order. The process of tracking your cashflow to ensure that expenses are paid for and your goals are attainable will ensure a profitable new year. When you have a plan set up, you are able to modify it monthly to ensure your company is thriving, even under difficult times. Make use of FreeAgent to keep track of your receipts and expenses We are accountants for contractors, Limited Companies and  collaborate and we use FreeAgent to ensure that, during tax time you don’t have to rummage through drawers filled with invoices and receipts in order to prepare your self-assessment tax return that you submit to HMRC. Making Tax Digital has been popular with so many simply because of this. It removes the risk of confusion, which results in less stress and fewer mistakes which can lead to larger problems. FreeAgent bookkeeping software comes as standard when you are a client of Account-Ease. It will help you, as well as your accountant, keep track of everything you need concerning your financials. Many small-scale entrepreneurs, contractors,zzzz sole traders, and locums benefit from it, as it offers immediate access, which helps both you and your accountant make educated decisions while on the move because it is able to be accessed from any location, at any time. FreeAgent can be used to keep your receipts expenses, invoices and transactions easily accessible and organized making self-assessment or filing your corporate tax is simple. Check the technology you are using within your business. Alongside FreeAgent There are many other software for business that can assist in boosting your company’s performance. They can help your employees in terms of productivity, or assist staff to save time by making certain tasks automated instead of being done manually by your employees or you. The identification of areas that could be improved can assist you in deciding whether a particular software is required, and if it is economically feasible to invest in it. Schedule regular meetings with partners, including your accountant If your accounting professional understands your business and its needs more knowledgeable they’ll be able to assist you in the area of your financials. Making good connections with partners and suppliers all around is vital to the success of your business. They can assist in the development of concepts and help you navigate the right paths. Make sure to communicate frequently, whether on the phone or using Zoom even if you aren’t able to meet face-to-face is vital. Your accountant can assist you to get a handle on any aspect of your financials that are difficult to comprehend as well as provide advice and valuable information in times of need. This will help your business’s to grow and sustain itself. Accept, and sign more contracts Growing your portfolio through 2023 may be another option it is time to take either as an individual contractor or as an individual company. A new venture means that you will have several sources of income. This gives an extra level of protection in the event that a client decides to leave you. It allows you to increase your portfolio. Make sure you have the money to keep your commitments! However, how do you approach getting new customers, particularly when your industry is flooded with competition. This leads us to the next step… Be sure to have a solid brand and have a solid online presence It’s a lot much more complicated than it sounds particularly if your experience is limited in this field. It is becoming more essential to have a presence online that your customers and potential clients can connect with you. If you don’t have web presence, it may be time to consider investing in. Making sure that you’re prominent on the social networks is increasing important than ever before. If you are looking to acquire new clients, consider investing in online marketing assistance for those who really want to be more prominent online. They can guide you on the best steps to take for your business to focus

If you’re running a small business, or you’re self-employed, there are a number of things that you need to be aware of as we enter 2023. As a new year begins, there is so much to look forward to, with plans for the year fresh and at the forefront of your mind. You may have already kicked things off on a high, with business already booming, or you could be getting geared up for a busy Spring/Summer. Either way, keeping on top of your finances from the beginning of the year is incredibly important. Understanding just how much tax you will need to pay when it comes to your self-assessment will help you manage your cash flow throughout the year and keeping track of this through a Making Tax Digital compliant software, like FreeAgent, which comes as part of the package when you sign up to Account-Ease, will help you be more aware of your incomings and outgoings. You can access everything at the touch of a button, wherever you are. If you’re operating a smaller company, or are self-employed, here’s what you should be aware of in relation to your financials, as well as the dates that you should be aware of. 2022 was a memorable year in the world of politics that we’ll never forget in the near future. After witnessing a string of U-turns in the last year by previous chancellor Kwasi Kwarteng, Liz Truss and the present chancellor Jeremy Hunt, there are significant changes that are yet to be in effect starting with the tax year 2023/24, which will begin on the 6 April. Tax rates for income As confirmed in the budget of Jeremy Hunt in the October 2022 budget, the threshold at which people have to pay the higher rate of tax on income is set to be decreased from   £150,000 to £125140. Apart from that your personal allowance is expected to be set at £12,570 and the tax rate threshold for higher rates will be at £ 50,270 and will remain in place until April 28th at most. In the future, this will result in more people paying the highest tax rate on income, as wages rise this will force an increasing proportion of the earnings to the tax rate higher band. Reduction in dividends allowance Also , as announced in the budget was the dividend rate band will be reduced from £2,000 in the tax year 2022/23 to £1,000 by 2023/24’s tax year, and £500 for the tax year 2024/25. year. Anyone who wants to take advantage of these allowances, especially during the current tax year, must ensure that dividends are officially declared by 5 of April in 2023. The rate that dividends are taxed will remain the same as they are now. Basis price (income as high as £50,270) — 8.75 percent More expensive percentage (Income that exceeds £ 125,140) Higher rate (up to £125,140) 33.75 percent Additional rate (income higher than £125,141) + 39.35 percent Corporation tax In March 2021, the announcement was originally made by the chancellor Rishi Sunak, and later slated to continue according to the original plan, starting April 2023, the primary corporation tax rate increases from 19 percent to 25 percent. But, it will only be applicable to companies which earn a profit of more than £ 250,000. Profits of £ 50,000 or less will be required with corporation tax payments at 19%, which is referred to “the “Small Profits Rate”. Between the two levels of £50,000 and £250,000 the lower marginal tax rate of 26.5 percent will be in effect. The upper and lower limits will be reduced proportionally in the event of smaller accounting periods or associate companies to be considered. Associate companies are companies that are under common control. Capital Gains Tax In April 2023, the tax-free capital gains allowance for tax-free capital gains will be reduced from £12,300 down to £ 6,000, and on April 24, it will decrease to £3,000. If you are married and live with each other, assets can be transferred between them with the condition of “no gain or loss’ that is something to think about. You can make use of the tax-free capital gains allowance for each individual when trying to sell assets, like shares that are not part within an ISA as well as property which can soften the blow of the decrease in tax-free allowance. MTD ITSA The Making Tax Digital (MTD) for Self-Assessment of Income Tax was initially set to start in April 2024. However, it has been delayed for another two years, and will come in April 2026. MTD “Making Tax Digital” is designed to move toward an increasingly digital tax system. After the rollout of VAT The next phase will apply to taxpayers who are required to file self-assessment tax returns for self-employment earnings, and rental revenue. Alongside this delay, the threshold of income for individuals who have to adhere to the rules has been raised between £10,00 and £50,000, and this will take effect from April 2026. Beginning in April 2027, all with a £30,000 income or more in self-employment earnings or rental income will be required to meet the requirements. While the extension and delay in the thresholds for minimum thresholds has been well-received from many people, when you think that you’ll have to follow the new changes in law starting in April 2026, it might be wise to take the step to a more electronic method of keeping your documents now. It is possible to do this using MTD compatible bookkeeping software like FreeAgent, sage and QuickBooks, as of April 2026, you will be in the best position to start making submissions. Important Dates in the Diary 1 January, 2023 The deadline for filing Self-Assessment tax returns on the internet for the 2021-2022 tax year. 31st January, 2023 First payment tax due for tax year 2022/23 due. 5 April , 2023 Tax year 2022/23 closes. 6 April , 2023 Tax year 2023/24 starts. 19 April 2023 Send your Employer’s Payment summary for the fiscal year that ended 5 April 2023.

The New Year is started, and as we’ve seen in previous years with the likes of IR35 and Making Tax Digital, new changes from HMRC affecting contractors are paramount to get on top to remain on the right side of the Revenue. All change from January for VAT penalties From January 2023, VAT requirements will see a new penalty regime being introduced for any registered business owners who miss the VAT submission deadline – and as with any update from HMRC, there is a wide range of factors to consider. Despite this new regime changing the ways in which VAT-registered businesses are charged late payment penalties, it’s important to remember that proactive tax planning and ensuring VAT returns are submitted and paid on time will avoid unnecessary penalty fees and mean that many business owners may never need to worry about the new penalty regime at all!. What do VAT penalties from HMRC look like currently?  Currently, VAT-registered businesses that do not submit their VAT return by the required deadline will be subject to the default surcharge regime. This means that a ‘default’ will be recorded against their account by HMRC. The amount of surcharge that is currently due depends on whether a business turns over more or less than £150,000 per year and will be based on a percentage of the amount of VAT owed. The more times VAT returns are submitted late within a 12-month period, the higher the default surcharge. However, it must be noted that under the current default scheme, there is no surcharge payable on a late VAT return if there is no liability to pay, or a refund is due. One-time offenders are also not required to pay the charge the first time, but if they miss the deadline and register another default within 12 months, they may be required to pay a penalty on top of the VAT they owe. The default surcharge is a penalty introduced by HMRC to encourage VAT registered to submit their VAT returns on time and avoid unnecessary penalties. Admittedly, the current system is a bit of a ‘one-size-fits-all’ approach, whereby VAT-registered businesses that seldom miss the deadline receive the same treatment and punishment as those who consistently submit late payments. How are VAT penalties from HMRC changing in the New Year? From January 2023, late submission penalties will work on a points-based system for late submissions and payments. For VAT returns periods that start on or following January 1st 2023, businesses will receive a penalty ‘point’ for each time a VAT return is submitted late. Depending on the frequency of VAT submissions (annual, quarterly, or monthly), different businesses will have a set number of points they can accrue before a penalty is charged by HMRC. Upon reaching this point threshold, VAT-registered businesses will be fined a £200 penalty fee, with an additional £200 being charged for any subsequent late submissions. Despite additional financial penalties for any additional late submissions, no further points will be added. At the first default, under the new regime, the business will enter a period of “compliance.” VAT-registered businesses can reset their penalty point threshold to return the total penalty points to zero, but HMRC must have received all VAT returns from the previous 24 months and must submit all future VAT returns on time, within their relevant period of compliance. The compliance period is a great way of helping to encourage businesses to adhere to their statutory filing and payment requirements and avoid future late penalties. The submission frequency, penalty thresholds and accompanying periods of compliance are: Submission frequency Penalty points threshold Period of compliance Annually 2 24 months Quarterly 4 12 months Monthly 5 6 months What penalties and interest will be charged for late payments moving forward?  For VAT return periods that start after the introduction of the new penalty regime on January 1st 2023, late payments will accrue both interest and penalties. Late payments will attract interest from the due date until full payment has been submitted. This is charged at the Bank of England base rate — (currently) + 2.5%, and will be charged even when a Time To Pay (TTP) arrangement has been arranged. For any repayments made within 14 days of the due date, the business will not receive a penalty. If no payment has been made by day 15, a penalty will be charged at the rate of 2% of the outstanding VAT owed to HMRC, with a further 2% added to the VAT still outstanding on day 30. From day 31, the VAT-registered business will incur a daily interest rate of 4% per annum until the VAT is repaid in full. What about businesses with a Time To Pay arrangement?  For businesses with a TTP, whereby a company is awarded extra time by HMRC to bring their tax arrears up-to-date, the TTP must have been applied for by day 15 to avoid a late payment penalty charge. HMRC does not need to have awarded the agreement, but the application must have been submitted by this point. This suspension will only remain in place if the VAT-registered business complies with the requirements outlined in the TTP arrangement. TTP agreements are an essential way of supporting VAT-registered businesses that have made genuine mistakes when it comes to organising their tax affairs. However, it must be stressed that adhering to the requirements of the TTP agreement and ensuring payments are made on time is crucial. Missing one agreed payment could result in full penalties being charged, even in instances where all previous repayments have been made on schedule. When do these VAT penalty changes from HMRC officially take effect? The new VAT penalty regime scheme comes into force from January 1st 2023. But in a welcome concession for contractors, no first late payment penalties will be charged in 2023 (provided businesses pay their VAT in full within 30 days of the due date), to offer VAT-registered businesses time to familiarise themselves with the changes. Our take? These