Mr Hammond will be giving us the the new budget on Wednesday. Any thoughts has to what is likely to be in it? I can see a potential reduction in the threshold of VAT, which has been mooted of late. Think they might have a stab of reducing it down by 10k a year over 5-6 years, thus bringing more and more businesses into the VAT threshold each year. It would also help in their quest to bring more people into the MTD realm.
Another possibility is class 4 NI up 1% a year for 3 - 4 years and bring it closer to class 1.
Also I've seen mooted a possible freeze/slight rise in the Corporation Tax Rate.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Oh gawd, I cant even think about it now. Ive been bombarded by emails for the last 10 days about it, although thanks youve just reminded me to sign up to Tolley's update so at least if I end up in a fog on Wednesday I wont miss all the fun! Although I have just thought of a corking job for you John - you can be the BKN budget correspondent.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I am expecting the VAT registration threshold to be reduced. As you say, it may be staggered over a few years, mainly to enable HMRC to cope with many more registrations. I hope MTD moves forward as this will help those businesses.
If they stick with it as part of VAT then it should be no more strenuous than completing a quarterly VAT return. That said, we don't know yet what software will need to be used, but IF they allow data to be fed into something like Taxfiler then it shouldn't be a major problem. However, if they insist that the software you compile the data on submits the info then it'll mean replacement software for a fair few businesses. 16 months away and we still don't know yet.
I'll post a few bits later tomorrow if I get chance Joanne, but it coincides with my monthly Doncaster trip so I'll probably listen to it on the way down.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
My first big beef (and I have a fair few) - they are looking at returns being completed by the month end. That means we have to fit the VAT return into a whole 7 days less than before. May not sound like much but for some of mine thats nigh on impossible (eg particularly the margin scheme clients I have!)
Indications are that the data has to be in a specific format with all points (so far) that it means extra cash being spent by all business customers and for what? It brings no benefits to HMRC except perhaps irons out their lumpy cashflow, assuming you ignore the massive 'kickbacks' they are (hoping) to get via fines and penalties. What exactly has RTI brought us, except more cost, more red take and hassle. The only ones who will really gain are the software houses.
Enjoy your trip to Doncaster John
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
My first big beef (and I have a fair few) - they are looking at returns being completed by the month end. That means we have to fit the VAT return into a whole 7 days less than before. May not sound like much but for some of mine thats nigh on impossible (eg particularly the margin scheme clients I have!)
Enjoy your trip to Doncaster John
Fair point. I don't have any VAT clients at the moment, but when I did, it would be near the deadline, so I know where you're coming from there.
Thanks, I will
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
It annoys me that I make separate declarations for VAT, CT, PAYE, all based on the same monthly/quarterly income and expense data. Many SMEs are in the same position. I hope (very, very optimistically) that HMRC will move towards a MTD system that allows such reporting, even if it were provisional, and then corrected at Year End.
Since I don't do payroll, or year end accounts/taxation, only VAT, there would be no benefit for me in any kind of rolling up of them. If anything (unless such a thing was optional, to allow use cases like mine) it would be a pain. However, MTD itself is set to be a pain, so I wouldn't rule out what you hope for, Les.
So what can we expect in this budget? Here's my prediction: "This budget speech is going to be very short. To summarise what has happened, 52% of you have basically chosen to screw the country's economy, so it's all gone down hill and we have yet to reach the bottom, and some of us in government are doing our damnedest to make sure there are either rocks or sharks at the bottom, to maximise the amount of pain. Good luck, plebs. Oh, by the way, here are some numbers to make it look like we're doing something sensible..."
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
And who says the economy isn't screwed anyway? Austerity is a BAD THING (tm) and has reduced the spending power of the low and middle income earners. There's a big crash coming, and whilst Brexit has played a small part (not helped by the ridiculous dithering from the ruling party) its the lack of money in the economy that will have played the biggest part.
And whilst I have absolutely no problem with being in a trading union with the EU (which is what was actually voted for in 1973) I don't want our laws to be dictated by EU bureaucrats, which is my reason for not wanting to be in the EU. (I didn't actually vote but only because I was on holiday at the time)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Clear hints the VAT threshold will be brought down to a more realistic level. Frozen for the next 2 years. Talk of how it's the highest in Europe. Germany being £15K (I might have got that bit wrong). Talk of unfair advantage and cliff edge because it is so high.
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Never buy black socks from a normal shop. They shaft you every time.
Yes, I guess VAT could come down in the future, and certainly a 2 year freeze could indicate that, was a bit surprised he didn't announce a reduction, Small businesses will be hit by a double whammy of a 2% increase in pension provision and a 4.4% increase in the NLW. Whilst I'm in agreement with the principle of the NLW (and it's under the actual living wage by some margin) it is going to affect my core market. I would like to have seen more effort put into making a clear definition between what constitutes employment and genuine self employment, and heavily penalising those (usually big firms) that flaunt the grey area that currently exists.
Personal allowance has gone up in line with inflation, no changes (unless I've missed them) to any other employment taxes.
More help with business rates, and a change from RPI to CPI when calculating rises in line with inflation, so both a good thing.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
But on the basis Ive called you a nutter already this week, I had better not. Plus this is supposed to be a serious thread about the budget - what a damp squib (no surprise) there then!
Good news for my son - he can extend his young persons railcard - just one thing wrong with that - it makes not a blind bit of difference as he cannot use it to travel during peak times!
Im surprised there wasnt some kind of knock down on the VAT reg limit
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
But on the basis Ive called you a nutter already this week, I had better not. Plus this is supposed to be a serious thread about the budget - what a damp squib (no surprise) there then!
Ouch then double ouch
You can go off people pretty quickly you know, flipping good job you redeemed yourself in the VT thread is all I can say!!!
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
