Business news and opinion from Evans Weir | Page 10

So, now we know who the winner of the Conservative Party Leadership race and new Prime Minister is, what can we expect from them in terms of tax and spending?

Just when we thought that Covid might have been the final nail in the coffin for cash, it would appear that the cost of living crisis has given it somewhat of a reprieve, even a chance for revival. Data from the Post Office suggests that the amount of cash deposits and withdrawals in July 2022, was the highest it’s been in five years.

In a slightly bizarre twist, as the Bank of England was announcing its recent interest rate increase of half-of-one-percent, it was also scrapping a key affordability test that lenders had to conduct to ensure borrowers could afford… an interest rate increase!

If you’re thinking of becoming self-employed, you may be weighing up the choice between incorporating a Limited Company or trading as a sole trader. One of the key things to consider is the amount of personal tax you’ll end up paying, how it is calculated and when you have to pay it. It is subtly different in each case and you also need to be aware of other taxes which apply.

Changes to the rules around IR35 and the legislation being applied rigorously by HMRC is resulting in a number of high profile cases making headlines.

As the runners and riders begin to line up, one thing is for sure, the subject of taxation will play a key part in the election process as each candidate tries to woo their colleagues and prove that they truly are a Conservative Prime Minister.

So far in June every piece of news seems to have been reporting record highs or lows in economic data. Interest rate rises, low unemployment, rising inflation, high job vacancies, negative wage growth and slow or negative GDP growth tell their own stories but collectively give a very mixed picture pointing to a faltering economy.

Yes, a salary of 100k + does still put you in a relatively select group at the top of the UK earners list. Whilst those at the very top of that heap are touching seven-figure salaries, the proportion of those on more than £100k continues to grow.
But with a cost of living crisis, slow growth and record amounts of government borrowing needing to be paid back, if you’re earning £100k or more in the UK, you may find yourself in the spotlight if there are any changes to the income tax bands.

It’s a fair question, especially if you’re on a fixed salary. It would be easy to think that you should just receive a set amount each month based on the total salary, less tax, divided by 12 for monthly pay or 53 for weekly payrolls. But the way tax is calculated is not that straightforward and there are various factors which mean your salary will vary by month. Needless to say, the overall salary amount you get paid over the year evens out to that net figure but it won’t arrive in neat even chunks, and here’s why.

The simple answer to this question is yes, but as with anything accounting related it’s not entirely straightforward…

Making Tax Digital (MTD) for VAT became mandatory for all companies from April 2022. But despite the impending deadlines for registration and first returns to be made under the new scheme, many companies are still not ready, with some suggesting the figure could be as high as 80% of companies not prepared.