tax doctor - food blogger & content creators guide to tax
TRANSCRIPT
FOOD BLOGGERS GUIDE TO TAXKAREN MCDONAGH & IZABELA SUCHOMSKA
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Who Are We?
IZABELA SUCHOMSKA
Izabela’s role as a tax consultant involves her advising a wide range of businesses,
from self employed start ups to Hollywood actors, entrepreneurial
businesses and established organisations. She combines all of this with being a
proud mum involving many hours at the side of tennis courts watching her
daughter compete.
She passed her Association of Taxation Technicians (ATT) exams and was the winner of the prestigious President’s
medal awarded by the Association. She is also a Chartered Tax Adviser. Not bad, especially when English is your second
language!
Izabela graduated with a Masters in Foreign Trade (Faculty of International
Relations) at Poland’s Cracow University of Economics in 2007 before joining
Nyman Libson Paul in 2008.
KAREN MCDONAGH
Karen advises on a range of tax issues and has amassed over 20 years worth of skills,
knowledge and experience as a tax consultant.
Her breadth of knowledge is complimented by the broad range of
clients seeking her expertise, not only self employed individuals and entrepreneurial
businesses but also a touch of glamour with sports personalities, through to
theatre, film and TV.
In her daily role at Nyman Libson Paul each situation requires its own approach
and advice needs to be tailored to the client, which ensures her day is always
interesting.
Outside work, Karen is a busy mum and her family life provides the perfect
counter balance to the technical demands of daily tax advice.
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A Wealth of Experience
Ever since Nyman Libson founded the firm in 1933, our goal has been to provide our clients with a first rate service.
We have a varied portfolio of clients operating across most business sectors. From the early days, many have been involved in all aspects of the entertainment industry, including theatre, film and television.
Whilst we have a leading understanding of private and business taxation, we also have considerable experience working within the property and charity sectors.
Exploiting the financial potential of your business or personal assets is not simply a question of crunching the right numbers or understanding the latest technical and regulatory developments. You also need the support of an experienced and imaginative firm of Chartered Accountants that understands every detail of your personal circumstances.
That is why so many individuals and businesses have turned to NLP over the last 80+ years – and stayed with us.
Our clients know they will receive the care, speed and quality of advice that they need to flourish in an increasingly complex world along with a service level and delivery standards that always exceed expectations.
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Our POA
• BUSINESS OR HOBBY
• OBLIGATIONS TO HM REVENUE & CUSTOMS
• TAXABLE / NON TAXABLE ITEMS
• DEDUCTIBLE EXPENSES
• PROFIT OR LOSS
• RECORD KEEPING
• Q & A SESSION
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Business or Hobby?
FACTORS TO CONSIDER:
• MOTIVE
• FREQUENCY
• TRANSITION FROM HOBBY TO TRADE
• INTERACTION WITH PAYE IF YOU ARE ALSO AN EMPLOYEE
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HM Revenue & Customs REGISTRATION COMPLETION OF TAX RETURNS VAT CHILD BENEFIT & TAX CREDITSHM REVENUE & CUSTOMS
• REGISTRATION
• COMPLETION OF TAX RETURNS
• VAT
• CHILD BENEFIT & TAX CREDITS
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Registration FORM CWF1 - WITHIN 3 MONTHS OF COMMENCEMENT OF TRADE (5 OCTOBER - NOTIFY HMRC REQUIREMENT TO COMPLETE A TAX RETURN) PENALTIES FOR LATE REGISTRATION
COMPLETION OF TAX RETURNS VAT CHILD BENEFIT & TAX CREDITSHM REVENUE & CUSTOMS
• FORM CWF1 – NOTIFY WITHIN 3 MONTHS OF COMMENCEMENT OF TRADE
• PENALTIES FOR LATE REGISTRATION
• VAT
• TAX CREDITS
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Self Assessment Tax Returns
TAX YEAR 6 APRIL - 5 APRIL
ANNUAL TAX RETURN - FILING DEADLINE:
PAPER - 31 October following the end of the tax year ONLINE - 31 January following the end of the tax year
PENALTIES FOR LATE FILING:
£100 - 1 February following the end of the tax year£ 10 - Further daily penalties for a max of 90 days (£900)£100 - 31 July
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Income Tax
PERSONAL ALLOWANCE - 2015/16 £10,600 (tax free) restricted on income > £100k
TAX RATES:
£0 - £31,785 20%£31,786 - £150,000 40%OVER £150,000 45%
PAYMENT DATES:
31 January during the tax year31 July following the end of the tax year
INTEREST & SURCHARGES
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National Insurance
• CLASS 2 – FLAT RATE OF £2.80 A WEEK ON PROFITS OF £5,965 OR MORE
• CLASS 4 – 9% ON PROFITS BETWEEN £8,060 AND £42,385 2% ON PROFITS OVER £42,385
• COLLECTION
• CLASS 3 VOLUNTARY - £14.10 PER WEEK
• DEFERMENT
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VAT
• REGISTRATION THRESHOLD – £82,000
• NOTIFYING HMRC
• PENALTIES
• SCHEMES AVAILABLE:
- Flat Rate - Annual Accounting
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Child Benefit & Tax Credits
• ASSESSED ON THE HIGHER EARNER (regardless of who receives the benefit)
• AFFECTS INDIVIDUALS WITH TAXABLE INCOME IN EXCESS OF £50,000
• EARNINGS FROM BLOGGING WILL AFFECT THE LEVEL OF CHILD TAX CREDITS AND WORKING TAX CREDITS
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Taxable Income
• ADVERTISING
• SPONSORED POSTS
• COMMISSION
• PAYMENTS IN KIND
• ENDORSEMENT
• SALE OF OWN PRODUCTS OR PRODUCTS RECEIVED
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Non-Taxable Income
• GOODIE BAGS
• ENTERTAINMENT
• ITEMS RECEIVED FOR UNBIASED REVIEWS
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Expenses
• REVENUE EXPENDITURE
• CAPITAL EXPENDITURE
• USE OF HOME AS OFFICE
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Allowable Revenue Expenditure
• FOOD & DRINK (used in the trade)
• WEB HOSTING & UPDATING
• MARKETING & ADVERTISING COSTS
• BUSINESS CARDS
• POSTAGE & STATIONERY
• PHONE & INTERNET CHARGES
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Allowable Revenue Expenditure
• TRAVEL
• MOTOR EXPENSES
• RESEARCH COSTS
• PROFESSIONAL COSTS
• BANK CHARGES
• LEGAL & ACCOUNTANCY FEES
• PROFESSIONAL SUBSCRIPTIONS
• PRIVATE USE ADJUSTMENTS
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Expenses That Are Not Tax Deductible
• CAPITAL ITEMS:LaptopsHard DrivesCamerasCars/Bikes
These are covered by capital allowances
• ENTERTAINING
• NON BUSINESS TRAVEL COSTS
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Capital Expenditure
• DOMAIN NAME, DESIGN, HARDWARE & OPERATING SOFTWARE (Functionality of website & creation of an enduring asset)
• IT EQUIPMENT – Laptops/Printers etc
• CAMERAS
• COOKING EQUIPMENT
• CARS
• PRIVATE USE ADJUSTMENT
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Use Of Home As Office
PROPORTION OF THE FOLLOWING COSTS:
• HEAT
• LIGHT
• WATER
• COUNCIL TAX
• INSURANCE
• MORTGAGE INTEREST/RENT
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Use Of Home As Office
SIMPLIFIED FLAT RATES
Based on business use per month:
HOURS MONTHLY DEDUCTIONS25 to 50 £10
51 to 100 £18101 and over £26
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Profit or Loss?
PROFIT:
• REPORTABLE ON TAX RETURN
• INCOME TAX/NIC PAYABLE LOSS:
• REPORTABLE ON TAX RETURN
• INCOME & CAPITAL GAINS TAX RELIEFS AVAILABLE
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Record Keeping
• BROADLY 6 YEARS
• 2015/16 RETURN FILED BY 31 JANUARY 2017 – RECORDS MUST BE KEPT UNTIL AT LEAST FEBRUARY 2022
Nyman Libson Paul
Regina House124 Finchley Road
LondonUnited Kingdom
NW3 5JS
+0044 ( 20 ) 7433 2400+0044 ( 20 ) 7433 2401
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Questions & Answers Session [email protected] 7433 2447
020 7433 2483• Contents of this presentation are for INFORMATION PURPOSES only and DO NOT constitute professional advice.
• You should ALWAYS TAKE independent professional advice before acting on any of the information presented here.
• Nyman Libson Paul CANNOT be held responsible for any loss or damage resulting from action taken or refrained from as a result of
information given during this presentation.
• Tax information is based on current legislation and this MAY CHANGE in future.