FOOD BLOGGERS GUIDE TO TAXKAREN MCDONAGH & IZABELA SUCHOMSKA

www.nlpca.co.uk2

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.

www.nlpca.co.uk3

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.

www.nlpca.co.uk4

Our POA

• BUSINESS OR HOBBY

• OBLIGATIONS TO HM REVENUE & CUSTOMS

• TAXABLE / NON TAXABLE ITEMS

• DEDUCTIBLE EXPENSES

• PROFIT OR LOSS

• RECORD KEEPING

• Q & A SESSION

www.nlpca.co.uk5

Business or Hobby?

FACTORS TO CONSIDER:

• MOTIVE

• FREQUENCY

• TRANSITION FROM HOBBY TO TRADE

• INTERACTION WITH PAYE IF YOU ARE ALSO AN EMPLOYEE

www.nlpca.co.uk6

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

www.nlpca.co.uk7

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

www.nlpca.co.uk8

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

www.nlpca.co.uk9

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

www.nlpca.co.uk10

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

www.nlpca.co.uk11

VAT

• REGISTRATION THRESHOLD – £82,000

• NOTIFYING HMRC

• PENALTIES

• SCHEMES AVAILABLE:

- Flat Rate - Annual Accounting

www.nlpca.co.uk12

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

www.nlpca.co.uk13

Taxable Income

• ADVERTISING

• SPONSORED POSTS

• COMMISSION

• PAYMENTS IN KIND

• ENDORSEMENT

• SALE OF OWN PRODUCTS OR PRODUCTS RECEIVED

www.nlpca.co.uk14

Non-Taxable Income

• GOODIE BAGS

• ENTERTAINMENT

• ITEMS RECEIVED FOR UNBIASED REVIEWS

 

www.nlpca.co.uk15

Expenses

• REVENUE EXPENDITURE

• CAPITAL EXPENDITURE

• USE OF HOME AS OFFICE

 

www.nlpca.co.uk16

Allowable Revenue Expenditure

• FOOD & DRINK (used in the trade)

• WEB HOSTING & UPDATING

• MARKETING & ADVERTISING COSTS

• BUSINESS CARDS

• POSTAGE & STATIONERY

• PHONE & INTERNET CHARGES

www.nlpca.co.uk17

Allowable Revenue Expenditure

• TRAVEL

• MOTOR EXPENSES

• RESEARCH COSTS

• PROFESSIONAL COSTS

• BANK CHARGES

• LEGAL & ACCOUNTANCY FEES

• PROFESSIONAL SUBSCRIPTIONS

• PRIVATE USE ADJUSTMENTS

www.nlpca.co.uk18

Expenses That Are Not Tax Deductible

• CAPITAL ITEMS:LaptopsHard DrivesCamerasCars/Bikes

These are covered by capital allowances

• ENTERTAINING

• NON BUSINESS TRAVEL COSTS

www.nlpca.co.uk19

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

www.nlpca.co.uk20

Use Of Home As Office

PROPORTION OF THE FOLLOWING COSTS:

• HEAT

• LIGHT

• WATER

• COUNCIL TAX

• INSURANCE

• MORTGAGE INTEREST/RENT  

www.nlpca.co.uk21

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

www.nlpca.co.uk22

Profit or Loss?

PROFIT:

• REPORTABLE ON TAX RETURN

• INCOME TAX/NIC PAYABLE  LOSS:

• REPORTABLE ON TAX RETURN

• INCOME & CAPITAL GAINS TAX RELIEFS AVAILABLE   

www.nlpca.co.uk23

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

mail@nlpca.co.ukwww.nlpca.co.uk

www.linkedin.com/nlpcawww.twitter.com/nlpca

Address

TelephoneFax

EmailWeb

LinkedInTwitter

Questions & Answers Session karen.mcdonagh@nlpca.co.uk020 7433 2447

izabela.suchomska@nlpca.co.uk

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.