Frequently Asked Accountancy Questions

Below are some of the most common questions we get asked. If you need help with any aspect of accountancy please give us a call on 0141 204 0930 and we’ll do our best to help.

You should register with HMRC by 5th October following the year in which you have to complete a tax return.

You will generally still be given 3 months to complete a tax return, however the due date for tax will remain the same – 31 January following the year the liability arose.

You pay tax on 31 January following the year in which the tax arose, I.e. if a liability arose of £3,000 in the tax year ended 5 April 2019, you pay the tax on 31 January 2020.

A payment on account is a payment in advance of the following year; if the liability is in excess of £1,000, HMRC will look for 2 payments on account,  one in January and another in July. Using the example above, you would have 2 payments on account for tax year ended 5 April 2020; the first £1,500 would also be due on 31 January 2020 and the second on 31 July 2020. Both would sit as a credit against your overall tax bill for the 2019/20 year.

You pay both Class 2 and Class 4 NIC, both are due through self assessment when the tax is due.

When you live in a household that claims child benefit, the higher earner must declare the benefit if their income exceeds £50,000. The child benefit is then repaid at around 1% for every £100 until your earnings exceed £60,000.

Yes, as long as the liability is under £3,000 and you have sufficient income to have the tax recovered using this method. This generally starts the year after you submit your tax return.

You must submit the tax return by 30th December to have an underpayment collected through your tax code.

Yes, there is an automatic penalty of £100. If you do not submit the form by 30th April, you will incur daily penalties of £10 per day for 3 months, there will be further penalties to follow. We offer a full range of accountancy services that will ensure your business finances and tax returns are always submitted on time.

Yes, interest is charged on all late payment. There is also a 5% surcharge if the tax has not been paid by the 28th February. 

Yes, you can reduce the payments if you believe that your tax and NI is going to be lower in the following year. But be wary as HMRC will charge interest if you reduce them to a level that is lower than the eventual liability.

HMRC introduced the dividend allowance in April 2016 to replace the 10% notional tax credit available on Dividends prior to April 2016.  The allowance for the first 2 years was £5,000 and sin e April 2018 has been reduced to £2,000. The first £2,000 of dividend income is taxed at 0%.

Yes, there are 3 rates of tax for dividends. 7.5% for basic rate, 32.5% for higher rate and 38.1% for additional rate tax payers.

Yes, in Scotland we have several different rates of tax with different thresholds, these generally change, always check the latest rates, in the UK it is generally 20%, 40% and 45%. In Scotland we have 19%, 20%, 21%, 41% and 46%.
The higher rate threshold changes each year and the additional rate threshold remains unchanged at £150,000.

All UK residents are entitled to the personal allowance, this covers the first part of your income with no tax charged in this amount.

It is available to all unless your income ex weds £100,000, once your income exceeds this level, you lose your personal allowance by £1 for every £2 above this level.

Yes, importantly you should always return any payment to charity under gift aid, higher rate tax relief is available on the gift. Similarly with pension payments made into a personal pension, or personal payments made not of tax if through salary.

This is a very complex area, but generally yes, if your contributions are in excess of £40,000 in a year then you must seek advice, in particular if your income exceeds £150,000. There are lower levels that may also cause issues, so always take advice if you are a higher earner.

Capital gains tax is charged in the disposal of an asset, this can be from the sale or giving it away.

Yes, we each have an annual exemption to set against a gain.

Generally it is the disposal proceeds or market value less the cost and any allowable costs. 

Yes, basic rate tax is at 10% with the higher rate at 20%, however residential properties attract rates of 18% and 28% respectively.

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