George Osborne revealed a shake-up in the way dividend income is taxed in the summer budget.
All taxpayers will have a tax-free dividend allowance of £5,000 a year - which makes life better for many small investors seeking income from their shareholding.
After this, the rate of tax payable on dividends will depend on taxable income. If your dividend income takes you from one income tax band into the next, you will then pay the higher dividend rate (to a maximum of 38.1 per cent) on that portion of income and will hit wealthier small investors, large-scale investors and directors with share options.
In the light of these tax changes KEYPrime affords the opportunity to allow the highest rate taxpayer a lucrative advantage in the fact that they can extend their year end (if they haven’t already in the last three years) to April 16. This potentially means a few more months of profit charged at current rate equivalent of 30.56 per cent versus 38.1 per cent.
Both KEY32 and KEYPrime can respond to any change in your year end, allowing you complete flexibility to manage your company’s affairs in the most rewarding way. Our programmes will produce full audits for any start and end date of a new financial period. The system is date driven.
At the touch of the ‘Year End’ button you can close your accounts. This utility will close your financial Year whether that is 18months or 9months, creating a new Opening Trial Balance as at the New Year start date. When the year end is run you will be asked to make a backup of the data. Browse to enter the directory and name of the backup. Another copy is automatically made of the current year’s data, this is moved into a newly created database named according to the month and year of the year-start.
Before actual processing, the banks are checked to ensure that at least one bank reconciliation has been done for each bank account and it will generate an error message if not. There are also reminders about backing up and running reports. In the unlikely event that your data should be out of balance you will get a warning before the year end is run. The problem should be resolved before re-running.
The year end will cause the Closing Balance sheet to be transferred to the Opening Balance sheet and Profit/Loss needs to be allocated to the relevant Capital code. There is no restriction as to how many months’ worth of data needs to be entered prior to running a year end. Reports for the previous year may be generated purely by selecting the correct account and defining the relevant date range within the reporting options.