Accounting in Scotland – Scottish Accounting

In the UK too, it is crucial for a company or a self employed to have an efficient accounting of their finances and to comply with the law in all respects. We provide assistance to our clients with our well-prepared colleagues and many years of experience. You can contact us as a Self Employed or a larger company owner.

Tax from claim back to labor law

Although the Scottish tax system is in many ways simpler than other countries, there are, of course, some serious mails in the bureaucracy of the island country. In addition, administration is conducted in a foreign language, which imposes additional burdens on employees and business owners.

And in what cases can you contact us? Our services include self employed, accounting for all L-letter companies (LP, LLP, LTD, PLC, LBG), tax refund, account management, employee and tax law, registration, VAT (VAT), tax returns and business development. Advising employers, employees on labor law, leave and sickness rights.

Accounting in Scotland:

In Scotland, businesses (whether self employed or companies) are required to report on their activities once a year. The reporting period is 12 months. It takes 9 months to prepare the report and pay the tax.

The tax period for self employed is from 6 April each year to 5 April the following year, with the submission of the accounts by 31 January of the following year. At that time, they must pay both the tax and the NI contribution for their activity at the latest.
For companies, the beginning of the first tax period is the date of their formation and the end of the tax period is the last day of the 12th month following. You have 9 months to file your tax return and pay your tax. Example Explanation: An Scottish company was established on May 15, 2016, for example. End of tax year: May 14, 2017 The first full tax year therefore runs from May 15, 2016 to May 14, 2017. The tax year for the fraction runs from May 15, 2017 to May 31, 2017. The accounting for a fraction of a period is counted separately, but there is no need to contract for that period if we contract for the first tax year. From now on, every subsequent accounting tax year will be adjusted to this date. So, for each company, the tax year runs from June 1 to May 31 of the following year.

Depending on your activity and operation, you may need to register for PAYE (Becoming Employer, or Employee Employee) or VAT (for VAT registration).

PAYE registered companies have a monthly payroll reporting obligation.

VAT registered companies in England are required to report VAT on a quarterly basis.

Taxation in Scotland:

Employees: They are paid Income Tax on their income, which is equivalent to Scottish personal income tax. The scale is determined by a band:

Tax Tracks:

	Taxable income	Tax rate
Personal Allowance	Up to £12,500	0%
Basic rate	£12,501 to £50,000	20%
Higher rate	£50,001 to £150,000	40%
Additional rate	over £150,000	45%

In addition to income tax, the employees’ wages are also deducted from the National Insurance (Class1). The rate is reduced to 0% up to £ 9500, and 12% for the remainder.

Self-employed people: “self-employed” also pay Income tax and they are subject to the tax bandwidth. On the other hand, they are required to pay Class 2 and Class 4 NI contributions. Class2 Contribution If the annual income of the self employed activity exceeds £ 6,475, the rate is £ 3.05 per week and is not required to be paid. The Class4 contribution rate is 9% of self-employed income over £ 9500.

Companies: Companies pay a corporation tax on their positive earnings. The rate is 19%. Their employees are required to pay NI contributions at the rate of 13.8%. Employers can apply for Employment Allowance support if they meet the statutory requirements, which exempts them from paying their employer NI up to £ 3,000 a year.

Tax Change Dates:

National Minimum Wage: (Minimum Wage Change for All Ages) Every year in early October
National Living Wage: (Minimum Hourly Wage Above Minimum Age Under 25) April Every Year
Personal Allowance: In April of each year
Change in VAT registration threshold Every year April 1st (from 01.04.2019 £ 85.000)
Corporation Tax Rate: 19% – Every April 1

Employees:

Incoming and Incoming Employees: An Incoming Employee can only be called if he or she already has an NI Number. If the successful candidate does not have one, he / she cannot be notified. To do so, you need to make an appointment by calling +44 (0) 300 200 3500 or the paid online site: https://ninoapply.org.uk

As soon as the employee is able to present the English NI Number, he will be eligible for employment from that date. In addition to the NINO number, you must declare, in addition to the basic information, your marital status, the number of children you live with, whether you have this voluntary pension fund, life insurance, etc.

The recruited employee can receive a weekly, fortnightly or four-weekly salary, which must be paid by the employer each time accompanied by Payslip.

The employee’s tax period lasts from April 6 to April 5 of the following year. Tax Year 2023/24 runs from 06.04.2023 to 05.04.2024.

For those over 25, the new minimum hourly rate is £ 8.91.

Year	Age over 25 years	21-24	18-20	18 under	students in industry
April 2018 (Valid until)	£ 7.83	£ 7.38	£ 5.90	£ 4.20	£ 3.70
April 2019 (Valid from)	£ 8.21	£ 7.70	£ 6.15	£ 4.35	£ 3.90
April 2020 (Valid from)	£ 8.72	£ 8.20	£ 6.45	£ 4.55	£ 4.15
April 2021 (Valid from)	£ 8.91	£ 8.36	£ 6.56	£ 4.62	£ 4.30
April 2022 (Valid from)	£ 9.50	£ 9.18	£ 6.83	£ 4.81	£ 4.81
April 2023 (Valid from)	£ 10.42	£ 10.18	£ 7.49	£ 5.28	£ 5.28

Income Boundaries:

In the 2023/2024 tax year, Personal Allowance increased to £ 12570 annually, representing annual income of £ 12570; tax-free!

Example Explanation:

In the 2023/2024 tax year, the wage payable to a full-time employee, calculated at 37.5 hours per week, with a minimum wage of £ 10.42, is as follows:

Annual gross wages and salaries: £ 20.319.-
Annual tax payable: £ 1.548.-
Payable NI contribution deducted annually from employee: £ 929.88.-
NI Contribution payable annually to the company after employment: £ 1.548.22.-

Annual net wages and salaries of the employee: £ 17.841.12.-
Monthly gross salary: £ 1.693.25.-
Monthly tax payable: £ 129.-
Monthly NI contribution payable by employee: £ 77.49.-
Monthly NI contribution to the company for the employee: £ 129.02.-
Monthly wages and salaries: £ 1.486.76.-

Total monthly salary expenses for the company: £ 1.822.27.-

Working hours, employment, sick leave, holidays:

The weekly working time of full-time workers is 37.5. hours / week. If you work more than one week in England, we are talking about overtime.

If you work less than that, you are part-time (Part Time) The part-time work of a part-time worker is always subject to a contract, which may be 2.4 or 6 hours a day, but there may also be zero hours time of contracted employment. In this case, he should always be available and only get paid if he is given a job…

Full-time workers are entitled to a minimum of 28 days’ annual leave, which also includes public holidays. If one is employed on a part-time basis, the daily working hours should be proportionate. Thus, a worker who works 4 hours only has 14 days leave per year.

Statutory Sick (SSP) can be given for up to 28 weeks on an annual basis. The first 7 days of sick leave are self-certified by the worker and only during this period can you receive a medical certificate.

The amount of sick pay is currently £ 96.35.- / week.

Supports:

Personal Allowance: All employees have no income tax deduction on their wages up to £ 12570. Any excess amount is taxed only.

Marriage Allowance: Spouses can share Personal Allowance with each other.

Low-income employees can apply for Working Tax Credit, Child Benefit, or Universal Credit from HMRC.

Pension:

In England, it is enough to justify 10 years of work to qualify for a basic pension. Today, that means £ 155 a week, which comes to £ 620 a month.

Depending on the exchange rate, this means about 260.000 HUF. Read more here

Dividend:

Dividend tax rate:

No change in dividend tax rate in 2023/2024:

The tax-free dividend subsidy is £ 2000
Basic-rate taxpayers pay 7.5% of the dividend
Higher rate taxpayers pay 32.5% of the dividend
Additional rate payers pay 38.1% of the dividend.

Registrations:

The following registrations are required in England:

Gateway registration
Corporation Tax registration
Paye registration
Data registration
GDPR Regulation
Self Assessment registration
VAT registration
MLR registration
EORI registration

Returns:

In England the following declarations must be submitted to the Authority:

Confirmation Statement
Annual Account
Corporation Tax (CT600)
Self Assessment

Clever Interpretation:

Our English accounting firm is waiting for you, and here’s how to interpret the terms most commonly used in the Island:

Self Employed: English law is very flexible against private business, so you can become accountable within 2 weeks of registering.
Ltd: Limited Company with at least 1 director and at least 1 owner. These two positions can be filled by 1 person.
Self Assessment report: Paper by October 31st each year and online by January 31st each year
Payroll: English equivalent of payroll. If your company wants to retain employees, PAYE registration is required to officially become an employer.
VAT: VAT in Hungary, VAT in England. Currently, there are three tax rates at 20% for the standard rate (Most goods and services), a reduced rate of 5% (for some goods and services such as child car seats and home energy), and 0% ( eg. Most Food & Childrenswear) Companies need to be registered for VAT only if they have an annual turnover of £ 85,000 or can be on a voluntary basis whenever the activity requires it.
CIS: The Construction Industry Scheme, which is a tax deduction system that includes the deduction of a tax advance on payments related to construction work. The system defines the rules for payments to subcontractors for construction work in the construction industry and certain other businesses. The scheme requires payments from contractors to subcontractors to take into account the subcontracting tax status determined by HMRC. This may require the contractor to deduct the amount paid to HMRC from that portion of the payment that does not represent the subcontractor’s material costs. This also applies to companies that operate in other countries but carry out construction activities in the UK. Registration is via the CIS Helpline.
Corporation Tax: Corporate income tax must be filed within 9 months of the end of the fiscal year.
Annual Account: The company’s annual report.
Confirmation Statement: Confirmation Statement must be filed with the company court at least once a year by any company. Any change to the company must be brought to the attention of the authority with this statement.
HMRC: HM Revenue and Customs is the English tax office. All returns come to them, and they currently employ nearly 56,000 employees.
PAYE: The term Pay As You Earn refers to the payroll system. Under English accounting rules, taxes and contributions are to be fixed in proportion to the salary.
PAYSLIP: Payroll or payroll that a worker receives after each payment. The payslip includes, in addition to the employee’s personal information (name, address, employee and NI number) and employer information, the current month’s gross salary and deductions and net wages and salaries, as well as the annual rolled-up data. This is essential for tax returns.
P45: This is the name used to justify leaving the employer. So, when an employee leaves his / her job, he / she must receive this form from his / her former employer to justify his / her exit.
P60: This is the name of the annual employer’s certificate. This form must be received by all employees who are employed by an English company no later than May 31st each year. If someone does not receive this, you should ask or ask for our help.

Accounting Package Price:

Accounting for Individual Businesses: You can view our Comparative Price chart here
Accounting for Start-ups: You can view our Comparative Price chart here
Accounting for Businesses: You can view our Comparative price chart here

Additional Services:

Apostille Certified Company Statement (To open a foreign bank account. Price £ 220. Two weeks before it arrives and is only valid for 30 days.)
Headquarters (London, Leeds, Doncaster)
Pension account management