For small businesses thinking of investing in computer hardware and/or software note that the 100% write off ends this month. So you can accelerate tax relief if you spend now.
The 100% capital allowance for low emission cars (120g/km) that was introduced last year is worth considering if you are planning to change your car.
All sole traders and partnerships should by now have considered whether to trade as limited companies or not. If you have not done so or are still undecided we recommend that you contact us ASAP.
Review your accounts position and dividend policy before the end of your accounting year to ensure you make the most of the reduced rates of corporation tax.
All NI rates go up by 1% from 6 April (except Class 2 – frozen at £2 per week) and income above the Class 1 and Class 4 upper threshold now becomes subject to NI at 1%.
If your company intends paying you a bonus make sure that this is put through the 2002/2003 payroll so that it is not subject to these new NI rules.
Also consider the following.
In 2003/04 a salary of £3,900 will get you full NI credit for the Second State Pension.
Allowable pension contributions are calculated as a percentage of earnings (but income in one year can be used to justify such contributions for the next 5 years).
If you receive an official looking letter or a visit from someone, saying that you need to register under the terms of the Data Protection Act and demanding a fee for this, be very wary as there are several bogus organisations using this to try to obtain money from people.
It is worth checking to see if the organisation represented appears on a list of bogus ones known to be running this type of scam, this is available on www.dataprotection.gov.uk/dpars.htm ( if you cannot do this yourself contact us and we will do it for you).
Also be wary of any other organisation that does not appear on this list especially if the fee demanded is any more than £35 or where VAT is being charged.
Before you act please consider the possible tax implications of your return date and seek advice on the matter.
The Children’s Tax Credit ends on 5 April 2003.
If you have had the credit in your code it will mean a reduction of your code number for 2003/2004 and your tax liability / tax deducted under PAYE for the year will increase by up to £529.
This is available from 6 April 2003 but you must apply for it. It will not be paid automatically, even if you were previously claiming Children’s Tax Credit.
It is available in respect of children up to the age of 19 at the beginning of the tax year (born after 6 April 1984) and preschool or in full time education up to NVQ Level 3 or equivalent or registered with Connexions Service.
You could receive up to £545 family element and £1,445 per eligible child. Applications will only be backdated a maximum of three months so don’t delay applying.
You may have to pay penalties if you fail to notify the Inland Revenue of increases in you income that total more than £2,500. Read the small print on the award notification.
Last few weeks to make the most of your ISA allowance for 2002/03.
Maximum annual investment currently ~ Maxi ISA - £7000, Mini ISA - £3,000.
As soon as possible after your year end, (for many this means 31 March or 5 April), get together everything you know or think may be needed to complete your accounts and tax return. Once you have everything get it all to us. The sooner we receive it the sooner we are likely to start work on it and let you know if anything is missing.
If you have disposed of any capital assets since 5 April 2002 (e.g. shares, property etc.) please contact us for a capital gains tax review before the end of the financial year.
| 2002/03 | 2003/04 | |
|---|---|---|
| Personal Allowance (under 65) | 4,615 | 4,615 |
| Personal Allowance (65 – 74) | 6,100 | 6,610 |
| Personal Allowance (75 & over) | 6,370 | 6,720 |
| Blind Persons Allowance | 1,480 | 1,510 |
| Married Couples Allowance (under 75 & DOB before 6/4/35) | 5,465 | 5,565 |
| Married Couples Allowance (75 & over) | 5,535 | 5,635 |
| Married Couples Allowance (minimum amount) | 2,110 | 2,150 |
| Age Income Limit | 17,900 | 18,300 |
| Capital Gains Tax Annual Exemption | 7,700 | To be announced |
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