Fines and penalties are not a tax deductible expenses, meaning the business will not receive tax deduction when incurring them. Read on to find out whether or not your business can reclaim VAT on parking fines.
We are now in the new 2018/19 tax year and a number of changes have been made to tax thresholds and rules which affect contractors, freelancers and small business owners. It is important to keep up with changes in order to manage your finances and remain tax efficient. To help, we’ve put together a quick guide to some of the changes for this financial year.
Value Added Tax, VAT for short, is levied on the sale of nearly all goods and services by businesses. VAT for goods and services is charged at differing levels. The standard VAT rate of 20% is charged on most goods and services. In principle working out how much VAT to pay HMRC seems simple, but it can more complex than you think.
If you use a car for legitimate business journeys then you are able to claim related motor expenses against your business profits, which will help reduce your overall tax bill. There are a couple of methods for doing this. One is to claim back the business related percentage of your total costs. The other is to complete a business mileage claim. Here we compare the two methods and provide a free tool to record your mileage.
Not all contractors know when starting out, that you can actually earn extra money from using the VAT Flat Rate Scheme. It works in the way that you charge your customer the standard rate of VAT at 20 percent, but you are only required to pay HMRC a lower, flat rate; 14.5 percent for IT Contractors, as an example.
If you are a contractor or freelancer, or own a small business, you may be liable for VAT. If your income reaches the threshold of £83,000 in any given tax year then you are required by law to register. The VAT Flat Rate Scheme for small businesses often works out a good option, as you get to keep some of the VAT you charge to your customers, and limit the paperwork involved with VAT return filing.