12/05/2017 – VAT – LIMITED COST TRADER

Are you now qualified as a 'limited cost trader'? 

From April 2017, many small limited companies which have low annual costs will face a higher VAT liability if they use the Flat Rate scheme.

According to the HMRC, this is defined as a business which has a VAT-inclusive expenditure on relevant goods of either:

  • Less than 2% of their VAT inclusive turnover in a prescribed accounting period

 

  • Greater than 2% of their VAT inclusive turnover but less than £1,000 per annum if the prescribed accounting period is on year.

Goods, for the purposes of this measure, must be used exclusively for the purpose of the business but exclude the following items:

  • capital expenditure
  • food or drink for consumption by the flat rate business or its employees
  • vehicles, vehicle parts and fuel (except where the business is one that carries out transport services - for example a taxi business - and uses its own or a leased vehicle to carry out those services)

 

These exclusions are part of the test to prevent traders buying either low value everyday items or one off purchases in order to inflate their costs beyond 2%.

 

MINIMUM WAGE

Are you paying the correct rates of pay to your employees?

The rates from 1 April 2017 are:

  • £7.50 per hour – 25 yrs old and over
  • £7.05 per hour – 21-24 yrs old
  • £5.60 per hour – 18-20 yrs old
  • £4.05 per hour – 16-17 yrs old
  • £3.50 per hour for apprentices under 19 or 19 & over who are in the first year of apprenticeship.

Previous rates

  • The following rates were for the National Living Wage and the National Minimum Wage from October 2016.

 

Year

25 and over

21 to 24

18 to 20

Under 18

Apprentice

October 2016 to March 2017

£7.20

£6.95

£5.55

£4.00

£3.40

 

 

 

 

 

 

 

Our commentary on the Chancellor's Autumn Statement for 2014 is now available in the downloads section of the web site as a pdf.  Download here.

Peter Jackson stands proudly by one of his two water colours which now hang in the waiting room at Dalton Pardoe chartered accountants in Kingswinford.

Read more: Water Colours of the Black Country