FAQs

You may want to consider the option of taking on an outsourced consultant to fulfill this extremely valuable responsibility, who can work alongside the owners or managing directors as a non-executive Finance Director, outlining, implementing and ensuring the achievement of their financial strategies as part of your overall corporate goals. This is a service that LWA can offer.

If you want to start working as self-employed, you must register with HM Revenue & Customs (HMRC), and ensure that you have a National Insurance Number. After the registration, you will receive your Unique Taxpayer Reference (UTR) and HMRC will set up the right tax and National Insurance contributions records.

Corporation Tax is a tax on the taxable profits of limited companies and other organisations including clubs, societies, associations and other unincorporated bodies.

You can adjust your current VAT account to correct errors on past returns if the error:

• was below the reporting threshold (broadly, less than £10,000, or up to 1% of your box 6 figure (up to a maximum of £50,000);
• was not deliberate; and
• relates to an accounting period that ended less than 4 years ago.

When you submit your next return, add the net value to box 1 for tax due to HMRC, or to box 4 for tax due to you. Make sure you keep good accurate records relating to the adjustment.

Class 3A is a voluntary type of national insurance contribution (NIC) that is being introduced from 12 October 2015. Broadly, between then and 5 April 2017 certain people will be able to make a contribution to top up their state pension by up to £25 per week. Men born before 6 April 1951 and women born before 6 April 1953 will be eligible to make top up payments. The cost of the contribution will depend on how much extra pension the applicant wants to qualify for (between £1 and £25 per week), and how old they are when they make the contribution.nnA top up calculator is available on the GOV.uk website at gov.uk/state-pension-topup/y. The calculator will help you work out whether it is worthwhile for you to make Class 3A contributions.

You make a tax refund claim using one of the online forms on the GOV.UK website designed specifically for this situation (form P55, P50Z or P53Z). The form you need to use depends on whether you have other income or not and whether you have taken money out of your entire pension pot or not. We can advise you on which tax reclaim form is right for your individual circumstances.

Assuming the company makes sufficient profits you can take out dividends of £2,000 tax free during the current tax year. The taxable rates and tax-free dividend amount can change each tax year so it is best to check what the optimum salary and dividend breakdown would be for your individual circumstance.

Generally, a corporate health plan is cheaper than several individual health plans, but that would depend on the number of employees involved and their ages. The cost of the corporate policy must be divided between the employees covered and reported as a benefit in kind on their P11D forms. The company will pay class 1A national insurance contributions (NIC) at 13.8% on the value of the P11D reported benefit, and each employee will pay income tax on the reported value of the health plan. If the company pays the premiums for the personal policies of the employees, those amounts are taxed as additional pay of the employees. Thus the company must pay class 1 NIC due from employers at 13.8%. The employees must pay income tax, as well as the employees’ NIC payable at the employees relevant rate of 12%, or 2% if the maximum earnings threshold is exceeded on the amount paid for the policy premiums. The employer’s class 1 NIC may be off-set against any available employment allowance for the year.

You can simply close the PAYE scheme by submitting an Employer Payment Summary (EPS) or full payment submission (FPS) indicating that it is the ‘final’ submission for the year and tick the box to indicate the PAYE scheme has ceased. You should complete the end of year questions on the EPS as if you were at the end of the tax year, and that’s it – job done!