The Government has decided to tidy up some of the areas of VAT law where a different rate of VAT may be charged on very similar goods or services. Food & drink All food eaten on the supplier's premises; 'eat-in' purchases, are subject to standard rate VAT (20%). However, the consumption area for the food may be a communal area shared with...

There has been a certain amount of panic in the contractor community about a statement buried deep in the Budget documents about the reform of IR35. It says: "The Government is bringing forward a package of measures to tighten up on avoidance through the use of personal service companies and to make the existing IR35 legislation easier to under...

If you are self-employed your business may well be based at your home address, although you perform the majority of your work at your customers' sites. This can apply to a range of trades from plumbers to computer consultants, and even medical professionals. In order to claim the costs of travelling to your customers' sites against your taxab...

As the director and shareholder of your own company you can decide how much salary to pay yourself each month, in order to use your personal allowance in the most tax efficient way. As a director of your personal company you do not have to pay yourself the national minimum wage unless you have an employment contract with your company. From 6 ...

Personal Allowances The big news for individuals is that the personal allowance will increase to £9,205 from 6 April 2013, so you have to wait another year for that extra tax-free income. The personal allowance has already been increased by £630 from 6 April 2012 to £8,105, and the other allowances are increased as indicated b...

The VAT rates remain unchanged at... Lower rate: 0% Reduced rate: 5% Standard rate: 20% The registration and deregistration limits from 1 April 2012 are... Registration turnover: £77,000 (1 April 2011 - £73,000) Deregistration turnover: £75,000 (1 April 2011 - £71,000) Changes from 2013 The following changes to the VAT rule...

NI For 2012/13 the main rates and thresholds for NI contributions are: Lower Earnings Limit (LEL) for Class 1 NICs - £107/week Employer's class 1 above £144/week not contracted out - 13.8% Employee's class 1 not contracted out from £146 to £817/week - 12% Employee's additional class 1 above £817/week - 2% Self-employed...

Simplification The Government wants to simplify the accounts small businesses (partnerships and sole-traders) have to prepare for tax purposes. It is consulting on whether preparing accounts on a cash basis would be easier, and standard allowances could be used for the business use of vehicles and the proprietor's home. Any changes are likely t...

CGT There has been no change in the rates or thresholds for capital gains tax (CGT): The rates for 2012/13 are... Annual exemption - £10,600 Annual exemption for most trustees - £5,300 Rate for gains in basic rate band - 18% Rate for gains above basic rate band - 28% Rate for gains subject to entrepreneurs' relief - 10% Lifetime limit ...

Enterprise Investment Schemes From 6 April 2012 there are two schemes which you can use to achieve tax relief for investing in small unquoted companies: the seed enterprise investment scheme (SEIS) and the enterprise investment scheme (EIS). The tax relief given under each scheme is shown below for 2012/13: Rate of income tax relief: SEIS - 50%,...