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.

22nd April, 2023 Pay your tax bill for the month/ quarter of the tax year 2022/23 .

8 May: An additional Bank Holiday to commemorate the coronation of King Charles III, to be held on Saturday , 6 May.

30 May 2023 • Give a  £ 60 to each employee on your payroll employed by your company on the day that is the end of tax season.

June 6, 2023 Deadline to report of benefits and expenses for employees through P11d.

22 July, 2023 Pay your tax bill from PAYE for the third month/ one-quarter of the tax year.

21 July 2023 2nd payment on account (POA) for income tax for 2022/23 due.

5 Oct 2023 Deadline for Self-Assessment registration to inform that Income Tax/Capital Gains are subject to chargeability Taxes for 2022/23

22 ^22nd Oct 2023 Pay your tax bill on PAYE for the 6th month of the two-thirds of the tax year.

30 October 2023 Deadline for the postal self-assessment tax returns for the tax year that ended 5 April 2023, to get them to HMRC.

30 December 2023 Due date to file company accounts with Companies House for limited companies with 31 close.

Have a brilliant 2023, with Account-Ease Accounting

As the new year begins, making sure you have a plan, and people around you that you trust to guide you into making the correct decisions, is so important.

At Account-Ease, we pride ourselves on our all-inclusive package, so you’ll never get an unexpected bill from us. Your own expert accountant will support you throughout a prosperous 2023.

If you don’t use Account-Ease already, now is the perfect time to switch. Switching is so easy – fill in our online form here, or learn more about switching to Account-Ease by visiting our website.