The Salary Calculator

Who needs a UTR number anyway?

by Admin

** 25/01/21 HMRC updated their guidance to state that they would not be issuing fines for late self-assessment tax return submissions until 28th February 2021. However, the deadline of 31st January remains for payments and any late payments will incur interest at 2.6%.

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If you are a self-employed sole trader, partnership or limited company in the UK a Unique Taxpayer Reference (UTR) number is required. The number is unique to the individual or organisation and will never change.

You will also need a UTR if you have other forms of income or expenses that require you to file a Self-Assessment tax return.

Should you not yet have a UTR you will be unable to submit your self-assessment tax return and could run the risk of upsetting HMRC. Penalties are introduced by HMRC for late filing**.

So, to help reiterate the importance of UTR numbers and how to correctly acquire your own, we’ve asked Mike Parkes from GoSimpleTax to shed some light on their role in tax return submissions.

What is a UTR?

A UTR helps HMRC identify and process tax returns against the correct taxpayer’s records.

If you have income outside of PAYE or own a business and don’t act compliantly when it comes to your Self-Assessment tax return, you could face criminal prosecution.

Who uses them? 

Any individual with self-employed income or income from rental property probably forms the biggest group that will need a UTR.

These individuals will need to perform a Self-Assessment tax return. For other taxpayers, it may also be relevant when registering for the Construction Industry Scheme or working with an accountant.

How can I get one?

As you won’t receive a UTR number unless you’re registered as either self-employed or a new business, you’ll need to do so on HMRC’s website. Alternatively, you can call them on 0300 200 3310. There is no cost to doing either.

Be careful if you have already started trading. HMRC expects you to register within at least three months of the end of your first month in business. They will consider strict penalties if you fail to do so.

To avoid these fines, register as soon as you can with all the below information to hand:

• Full name
• Date of birth
• Email address
• Home address
• Phone number
• National Insurance number
• The date you started self-employment

Double-check that you have fully completed the process if you’re still waiting on your UTR following registration.

What if I’m already registered?

You should already have a UTR code somewhere. If you’ve misplaced it, start by checking any correspondence that you may have received from HMRC. All previous tax returns will reference it, along with any notices you may have had to file a return, payment reminders or statements of account.

In addition, your HMRC online account will also display the code, provided you can access it. If none of these options prove fruitful, contact the Self-Assessment helpline.

About GoSimpleTax   

​GoSimpleTax software submits directly to HMRC and is the solution for freelancers and the self-employed alike to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.

Get started today, it is free to try – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.

Tags: HMRC, income tax, Self Assessment, self employed, self employment, tax return

What the SEISS extension means for you

by Admin

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In the early stages of lockdown, the government announced support for sole traders in the form of the Self-Employment Income Support Scheme, or SEISS.

Just a month after its announcement, 2 million claims were made, totalling £6.1 billion in government support. And now, with a second grant opening in August 2020, a number of sole traders are set to benefit from further financial assistance.

We’ve asked Mike Parkes from GoSimpleTax to explain the terms and help you claim.

How does SEISS work?

The scheme is available to all self-employed individuals that have been adversely affected by COVID-19. This is provided that they:

• Earn the majority of their income through self-employment
• Have average annual trading profits of less than £50,000
• Have filed a tax return for the 2018/19 tax year
• Have traded during the 2019/20 tax year and intend to continue trading in 2020/21

To determine whether or not you were affected by COVID-19, any of the following must apply:

• Government orders have meant that your trade or industry had to close or be restricted in such a way that your trade closed – or is otherwise adversely affected
• You cannot organise your work, or your workplace, to allow staff to work safely
• Your staff or customers are no longer able to purchase from you due to restrictions
• Social distancing has meant that you are not able to safely serve customers
• You’ve had contracts cancelled as a result of COVID-19
• You have either had to care for others since lockdown or have been self-isolating
  

The first grant ended on 13th July 2020, and claimants could receive either £7,500 or 80% of their average monthly profits over the 2016/17, 2017/18 and 2018/19 tax years (whichever is the lower amount). Applications for the second grant will open on 17th August 2020, but you must have confirmed by 14th July 2020 that you have been adversely affected by COVID-19.

Why is there a phase two?

While the government set a three-month cap on the support, it has since been agreed that  COVID-19 is still impacting the earnings of some sole traders. As a result, it is necessary for them to receive another grant in order to stay afloat.

It will also help to support those who may not have initially been affected by lockdown (and so did not claim the first grant) but have subsequently suffered a loss of business.

What’s the difference? 

The differences between phase one and two are limited, although the second grant will be worth 70% of your average monthly trading profits. It’ll still be paid out in a single instalment that covers three months’ worth of profits, but will be capped at £6,750 total – almost £1,000 less than the phase one grant.

Additionally, you can only claim the second grant if your business was adversely affected on or after 14th July.

Can I continue working and still claim? 

Yes, you can continue to work as long as you intend to continue trading in 2020/21 in the self-employed role you’re claiming for. You can even take up other employment if necessary, provided that the SEISS payments still cover the majority of your income. HMRC will not penalise you for topping up your income with a little additional earnings to sustain your household.

Phase two will have a deadline of 19th October 2020. You can find out more about it on the GOV.UK site. If you are still losing out on income or opportunities to earn, we massively recommend you claim the second grant. This is unprecedented levels of government support and could make the difference between staying afloat or falling behind.

About GoSimpleTax

Right now, you can’t afford to be careless with your Self Assessment tax return. And with GoSimpleTax’s free trial, you don’t need to be. Their cloud-based software enables you to take stock of your earnings in real time, meaning you can get a complete overview of your tax obligations for the year. Once you’re certain all your affairs are in order, upgrade your account for just £46 and file your tax return with complete confidence.

Tags: coronavirus, covid-19, Economy, Employed and Self Employed, income tax, Jobs, self employed

New – Maternity and Paternity pay calculations

by Admin

You may remember that a short while ago, I added a calculator for sick pay and unpaid leave. It was natural for me to consider the effects of maternity / paternity pay, too, as this can have a similar effect on your take-home pay – and Statutory Maternity Pay and Statutory Sick Pay are calculated in quite similar ways. I have now added this option to the maternity pay salary calculator.

You will notice that this is the same calculator – the Sick Pay Calculator has been expanded to include statutory parental pay as an option. If you will be taking some maternity or paternity leave, you can estimate the effect on your payslip by entering the details of your salary, days per week that you work, and how many days in the pay period you will be taking as leave. If your employer offers some of your leave at full pay then you don’t need to enter these days. If you are receiving some leave at 90% pay (you are normally entitled to this for the first 6 weeks of maternity leave) then use the % pay fields to handle those days. And for any days in the pay period that you will be receiving Statutory Maternity (or Paternity) Pay, currently £151.20 per week, use the Statutory Parental Leave field.

Important note! All calculations provided are estimates and indicative only. Different employers have different leave policies (for sick pay and for parental pay), they also calculate leave in different ways. You may not be entitled to statutory pay. The calculator does not know what you are entitled to, only what you have entered. If you are paid monthly, or have an irregular work schedule, Statutory Pay can fluctuate from pay period to pay period, which the calculator does not allow for. More information about maternity pay is available from Gov.UK.

Tags: HMRC, income tax, maternity pay, national insurance, parental leave, paternity pay, Pay As You Earn, sick pay, SMP, SSP, statutory maternity pay, statutory pay, statutory sick pay, The Salary Calculator

The salary calculator you need for Australia

by Admin

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The idea of working in Australia is a dream for many Britons and a reality for many more. Naturally though, the employment system – and more importantly, the wage payment system – is not always the same as that in the UK. In some cases, it’s just a matter of terminology, but in other areas it is more substantial.

However, thanks to one of the most popular and trusted finance organisations in Australia, figuring out what you can expect in your pay packet when you work Down Under, has been made a whole lot easier.

The Industry Super group (more about them later) recently added a simple, reliable salary calculator to their website. Its simplicity reflects the streamlined wage system in Australia and takes into account current tax rates – including whether you’re a resident or a visitor – and the Medicare Levy, as well as providing an estimate of the minimum superannuation (pension) payment from an employer. Let’s look at this one first.

 Superannuation

In Australia, the two main sources of income an employee can expect in retirement are the government age pension (much like the UK State Pension) and payments from their ‘superannuation’ (similar to our occupational or personal pensions).

By law, all businesses must make contributions to their employees’ superannuation (pension) account. This is called the Superannuation Guarantee, and currently, employers must contribute at least 9.5% of an employee’s wage on top of their salary. It is compulsory and cannot be bargained out of.

The theory is that businesses make regular payments into the fund, and when it comes time to retire, the worker has a healthy nest egg waiting for them, since super can’t be touched early and all funds try and achieve a good return on investment for their account-holders.

Every full-time and part-time employee is eligible for super, as are casual workers who are 18 years or over and earning more than $450 in a single calendar month. (The same rules apply for casuals under 18 who work more than 30 hours per week). This means that even those on a working holiday can be entitled to super.

There are two main types of super fund in Australia.

‘Retail’ funds are those owned and managed by banks and other financial services companies.

‘Industry’ funds are member-owned super funds with profits going to members, and for the past decade have tended to outperform their retail counterparts (source: Money Management Australia). As the name implies, industry super funds were originally set up for workers in specific industries, however nowadays, almost all of them are open to anyone.  Industry Super is the peak body for industry funds in Australia.

Tax rates and brackets

Australia’s tax system is managed by the Australian Taxation Office, usually just called the ATO. It looks after all aspects of national tax and also manages employers’ Superannuation Guarantee compliance.

Tax rates vary as a person earns more. There are also different tax rates depending on whether you are an Australian resident, a foreign resident or there on a working holiday. Thankfully, the Industry Super salary calculator can be customised to take your specific circumstance into account by clicking the ‘Adjust your situation’ button.

Medicare

An amount under ‘Medicare Levy’ is included in calculations.

Like the NHS, Australia has a modern, reliable and highly-regarded public health system through its universal health care insurance scheme called ‘Medicare’ (not to be confused with the US ‘Medicare’)

Instead of being funded through regular taxation however, it is primarily subsidised through the Medicare Levy, which is added to a person’s annual tax bill each year, based on their income.

Non-residents and those on a working holiday are generally exempt from paying the Medicare Levy, and again, this is recognised by the customisable calculator, and shown when you choose the ‘View tax breakdown’ option.

Other factors

The calculator also takes into account certain tax offsets that the Australian Government offers to low and middle income-earners once they submit their annual tax return, and also offers suggestions on reducing annual tax by making voluntary contributions to superannuation.

Tags: ATO, Australia, Industry Super, medicare, salary calculator, super, superannuation

Plans for re-starting the economy

by Admin

It has been a turbulent few months for many of us, with jobs being cut, furloughing schemes, working from home and closure of many businesses (small and large). Last week, Chancellor Rishi Sunak announced a number of measures which are designed to help us along the road to recovery. It is going to take several months (or even longer) and things may never quite be the same – but here are a few of the measures which have been announced:

A cut in VAT on hospitality – restaurants and hotels will see the VAT on their goods reduced from 20% to 5%. For consumers, it is possible that this will mean lower prices but businesses are under no obligation to pass this saving on. They may keep their prices the same and use the VAT saving to try to repair some of the damage caused by their enforced closure over the last few months, or to try to allow for fewer customers as social distancing regulations mean that they can’t seat as many people as before.

A temporary removal of stamp duty on house purchases under £500,000 – if you were planning to move house before March 2021, this may well save you a significant amount of money. Previously, any house sold for more than £125,000 attracted stamp duty (often thousands or tens of thousands of pounds) which the buyer had to pay on top of the purchase price. Until March of next year, the threshold has been increased to £500,000, in an attempt to encourage people to buy and re-energise the housing market.

A bonus paid to employers who retain furloughed employees – if an employer keeps an employee who was furloughed on the payroll until the end of January 2021, they will be eligible for a one-off £1000 bonus. This is to encourage employers to keep people on and prevent unemployment, even if business doesn’t pick up immediately now that lockdown has been loosened.

There were several schemes announced which are intended to encourage employers to employ 16-24 year olds.

A full run-down of the measures announced is available from the BBC.

Tags: budget, coronavirus, covid-19, Economy, house prices, houses, Jobs, recession, recovery, VAT