Whether you are a self-employed sole trader or a larger business that employs staff, getting your tax returns right is essential

Doing what you need to, when you need to in this key business area will avoid any penalties or hassle.

Of course, paying attention to tax will also ensure you keep up to date with the latest changes to thresholds and rates that HMRC may bring in. As we head into the new 2019/20 tax year, it's certainly worthwhile taking a few minutes to do this.

Information for businesses that employ staff

Any business that employs people to work for them will need to make note of the tax bandings and thresholds for 2019/20. One important point to note for any VAT registered company is that the making tax digital initiative means their returns must be made in a digital format from 1st April 2019.

But what about the various business tax thresholds in 2019/20 for employers? The below gives an outline of the main ones:

Corporation tax rate - 19%
VAT registration threshold - £85,000
Standard VAT rate to apply to goods or services - 20%
Employers NI contributions - Secondary threshold set at a figure of £166 weekly
Employee NI contributions - The lower earnings limit is £118 per week
Primary earnings limit = £166 per week
Upper earnings limit = £962 per week

2019/20 tax information for self-employed people

If you are self-employed as a sole trader, then the tax arrangements are a little different. Your personal tax allowance is maybe the most important to note. For 2019/20, this has been set at £12,500. The other main pieces of information to take on-board are:

Income tax rates:

Basic rate = 20%
Higher rate = 40%
Additional rate = 45%

National Insurance Contributions - Small profits threshold = £6,365

Class 2 NI contribution = £3.00 per week
Lower profit limit = £8,632 (only Class 2 NICs applicable up to this figure)
Upper profit limit = £50,000 (Class 2 and 4 NICS applied up to and over this)

While this is not an exhaustive list of every tax guideline released by HMRC for 2019/20, it gives a flavour of the key ones you will find most useful. It's also worth noting that companies who are not VAT registered do not need to submit their returns digitally as yet - although this will happen in the near future it seems.

Let us help make it easier

The UK is known for having one of the most complex tax systems around. This can make looking after it yourself stressful and tricky. Rather than risk getting it wrong, why not let an expert accountant help? Based in Melton Mowbray, we always keep up to date with the latest HMRC changes, so you don't have to. Give us a call today to find out more on 01664 503681.