I decided to start writing a monthly blog because I wanted to show that accountancy and bookkeeping need not be the scary complicated world some people believe it to be. Each month I hope to take an area of accountancy or bookkeeping and explain it in a straightforward way in order to help individuals, sole traders and small businesses.
Last week the headlines from George Osborne’s latest budget mainly focused on the pension shake up but today I wanted to write about two other things that came up. The first was the announcement that from 1st July 2014 the annual investment into ISAs (Individual Savings Account) will increase to £15,000. The NISAs (New Investment Savings Account) will allow savers to pay in up to £15,000 cash per year in to a NISA without having to pay tax on it. Previously only £5,760 cash a year could be paid into an ISA and another £5760 could be invested through a stocks and shares ISA (investing on the stock market). This is good news for savers as it means that they can now invest £15,000 cash per year tax free safe in the knowledge of the return that a fixed rate cash NISA offers.
The second area affects VAT charges. From 1st January 2015 products purchased on line (e.g. Amazon, Apple etc) will have to have VAT charged at 20%. Currently suppliers based in low VAT rate countries (E.g. Luxembourg at 3%) only charge VAT at the lower rate but this will now end as the VAT charged will be the rate of the country where the customer is purchasing from. This means that prices may well rise as online suppliers chose whether to pass on the increase in VAT on their prices to the customer.
Next month I will be looking in more detail about business expenses you can claim as a company or a sole trader.