Wokingham Accountants
When starting a business, there are a number of ways in which this can be done. Options include operating as a sole trader, forming a partnership or setting up a limited company. Of these, operating as a sole trader is the simplest. Taxes you must pay If you run an unincorporated business as a sole … Read more
The way in which you operate your business determines the taxes that you pay and also your reporting obligations. If you work for yourself and run your business on your own as an individual other than through a limited company, you are a sole trader. By contrast, if you operate your business through a personal … Read more
Many people earn small amounts of money from self-employment, often as a side hustle. For example, this may be from craft or baking activities, tuition, or the provision of services, such as babysitting. If you earn money in this way, it is important to understand the associated tax and National Insurance implications. Tax consequences A … Read more
The Employment Allowance is an allowance that eligible employers can claim to set against their secondary (employer’s) Class 1 National Insurance liability. The employment allowance is set at £5,000 for 2023/24, capped at the employer’s secondary Class 1 National Insurance for the year where this is less. It is not given automatically and must be … Read more
The National Insurance increases that came into effect from April 2022 have been reversed. How does this affect you if you are self-employed?
If their profits are high enough, the self-employed pay two classes of National Insurance contribution – Class 2 and Class 4. Class 2 contributions are flat rate contributions of £3.15 per week for 2022/23. It is the payment of Class 2 contributions that enables a self-employed earner to build up entitlement to the state pension … Read more
Although the National Insurance rates and thresholds for 2022/23 had already been set, at the time of the Spring Statement in March 2022, the Chancellor announced increases in the primary threshold which would align the starting point for National Insurance with the personal allowance from 6 July 2022. However, as the increase does not take … Read more
For 2022/23 only, the rates of Class 1 (employer and employee) National Insurance contributions are increased by 1.25 percentage points, along with the rates of Class 1A, Class 1B and Class 4 contributions. The NIC increases are a temporary increase pending the introduction of the Health and Social Care Levy from 6 April 2023. The … Read more
The Employment Allowance is a National Insurance allowance that eligible employers can claim and set against their secondary Class 1 National Insurance liability. The allowance is set at £4,000 for 2021/22 (capped at the employer’s secondary National Insurance liability for the year where this is lower). Can you claim it? Not all employers are able … Read more
To help meet the costs of health and adult social care, a new levy, the Health and Social Care Levy, is introduced from 6 April 2023. Payment of the levy, which is set at the rate of 1.25% of qualifying earnings, is linked to the payment of National Insurance contributions. Prior to the introduction of … Read more
