Marriage allowance – now worth £432 for many people

It is now over two years since the Marriage Allowance was introduced and perhaps it is no surprise to learn that most people who are eligible have not claimed the allowance. The allowance lets certain individuals transfer 10% of their personal allowance to their spouse or civil partner. This reduces the tax bill of the recipient of the transfer by up to £212 in 2015/16 and up to £220 in 2016/17. So for anyone who hasn’t claimed it yet, they may be due a tax repayment of up to £432.

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Top 6 Points to take away from the Spring Budget

  1. Tax-Free Childcare will soon be available to working parents

Tax-Free Childcare will provide up to £2,000 a year in childcare support for each child under 12.

Parents will be able to receive up to £4,000 for disabled children up to the age of 17.

Parents of younger children will be able to apply for the scheme first, with all eligible parents able to access the scheme by the end of the year.

Working parents in England will also be able to apply for an additional 15 hours of free childcare for three and four year olds, bringing the total to 30 hours a week.
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State Pension entitlements – check now

The state pension is clearly a worthwhile thing to have, particularly for the self-employed who will receive a pension through the new ‘flat rate’ pension. However, there have been numerous changes to the qualification criteria over recent years and now may be a good time to check your entitlement.

One thing which is worth bearing in mind is that it is the individual’s obligation to keep track of their own entitlement and ensure that it is correct, although most people do not appreciate that. Keeping track of this over a working life is difficult but rectifying problems with the state pension at the point of retirement can be even more difficult, so a quick check of your position once every four or five years is time well spent.

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Does my business need a business bank account?

Yes, to a separate/dedicated bank account

The simplest answer is no it does not have to be a ‘business’ bank account, that will depend on the individual bank’s criteria for bank accounts. However, the business should be operated from a separate/dedicated bank account from your personal finances. At the beginning of a new business venture it may be tempting to leave this aspect until a point when the level of financial transactions taking place would justify a separate bank account, this might not be the best of choices. As your business grows and expands, it’s extremely important to separate your business finances from your personal, day-to-day living. The beginning of a business can be a time where all your business transactions can be expenses. Ideally, you would open a separate bank account and pay in any funding received either via grants, loans or your investment. This clearly shows the capital being input into the company and then the expenses will also be clearly identified in the outgoings of the account.

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VAT Flat Rate Scheme changes

The VAT Flat Rate Scheme (FRS) is designed to simplify the calculation of VAT due for small businesses. VAT is calculated by applying a predetermined flat rate percentage to the business turnover. The flat rate is lower than the 20% standard rate of VAT but businesses can’t reclaim VAT on purchases except for certain capital assets over £2,000. The flat rates are determined according to the trade sector of the business and currently range from 4% to 14.5%.

As well as simplifying the calculation, the FRS may also save the business money, particularly if the business supplies services rather than goods. This is because businesses charge their customers VAT at 20% on the services they supply but only pay over VAT at the appropriate flat rate. Continue reading VAT Flat Rate Scheme changes

Some good news for companies!

There was some welcome news from Philip Hammond’s Autumn Statement for small and medium sized companies regarding the tax relief available if a company makes a loss.


Historically, corporation tax loss reliefs have mirrored the principles upon which income tax loss reliefs have been based – if a loss is incurred in a trading business, those losses can be offset against other types of income arising in the same year as the loss, and may be carried back against income of the previous year. But if a loss is not relieved at that point, the use of a carried forward loss is generally restricted to being used against future profits from the same trade only.

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