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Tag Archives for: "tax bomb"
 The fallout from 2015’s tax bomb – part 2
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By Michael
In Uncategorized
Posted March 9, 2016

The fallout from 2015’s tax bomb – part 2

Incorporated businesses have been coming under fire from the current government since 2014. That year’s autumn statement meant that from 3rd December 2014, small businesses were disallowed [...]

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 The fallout from 2015’s tax bomb – part 1
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By Michael
In Uncategorized
Posted March 9, 2016

The fallout from 2015’s tax bomb – part 1

The 2015 budget included several tax changes with major long-term implications for small businesses. One of these concerned the issue of dividends. All taxpayers now have a tax-free allowance of [...]

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Assumptions

  • Based on a contractor working 37.5 hours per week.
  • Full employee personal tax allowance of £11,000 per year (tax code 1100L).
  • Contractor has no additional income during the tax year.
  • Subsistence based on the HMRC’s benchmark scale rates model.
  • Annual business mileage calculated at 45p/mile for the first 10,000 miles and at 25p/mile thereafter.
  • Expenses calculated between £3.16 and £355 and is restricted by allowable expenses and expenses reasonably incurred by an employee working and staying away from home.
  • Weekly calculation based on 52 weeks per full tax year.
  • Monthly calculation based on 12 months per full tax year.
  • All Tax, NIC’s and employers NIC’s based on 16/17 tax year.

Additional assumptions for Crystal calculation

  • SDC (Supervision, Direction or Control) does not apply during any contract assignment throughout the tax year.
  • All legitimate business expenses incurred during each assignment will be paid as part of your regular Crystal payment package. Any incurred expenses over the pre-agreed amount can be received as a tax refund from HMRC after the tax year-end on 5th April.
  • All Crystal payments include holiday pay.
  • All Crystal payments do not include pension contributions.

Additional assumptions for Pocked Accounts calculation

  • All assignments fall outside the scope of IR35.
  • Director’s wage of £8,060 per year.
  • Pocket Accounts Premium package is used for the purpose of this calculation.
  • Only one owner and director is involved in the company.

Please note, you may be eligible for the HMRC’s flat rate VAT scheme. Our consultants would be happy to discuss this with you.