Hi all! Many individual entrepreneurs operating in the small business sector have long applied a single tax on imputed income. But tax legislation is constantly changing and now we have to switch to other taxation systems.

The photo shows a tax return form. The photo shows a tax return form.

I am the owner of several small retail outlets that sell computer and mobile parts/accessories. Previously, I successfully used “imputation” and everything was fine. Recently the tax office called and warned that you need to switch to a patent or automatically switch to the general tax system from January 1, 2021. The application must be submitted by December 17, 2020, as it must be submitted ten days in advance.

The photo shows a patent application form. The photo shows a patent application form.

What will change now? If we take a superficial approach to this issue, then the changes are minimal. Let’s try to look at the main differences and what will change now. This issue concerns me very much, and I think many other individual entrepreneurs as well.

• The first thing that will change is the amount payable in taxes. The tax rate will depend on the region in which you operate. In some regions, the total amount payable will become less than it was, in others, on the contrary, it will increase. There is a special formula by which the calculation will be made, but at this point in time it needs to be refined, since in my opinion, it is not entirely accurate.
• Second, there will be a turnover limit. If earlier there were no limits or restrictions on UTII, then on the patent system it is 60 million per year. This limit does not affect me, such turnover does not occur at retail outlets and I doubt that it will ever happen. But those whose turnover reaches such amounts will have to think about it.
• Third, with UTII the area of ​​the sales area should not exceed 150 sq.m., but with a patent it should not exceed 50 sq.m. And this is already a significant factor for many. Personally, it will not affect me, since the area is less than 50 sq.m.
• Fourth, accounting will be different. Previously, a tax return was simply filed for UTII once a quarter. The numbers usually did not change in it unless your sales area increased or decreased. For a patent, you do not need to submit a declaration, but you will need to keep an income book. I can’t explain anything about this book yet, an accountant will do this, I think there is some kind of standard and simple scheme for filling out such books.

The photo shows a tax return form. The photo shows a tax return form.

• Fifth – payment terms. With UTII it was necessary to pay quarterly or for the entire calendar year. Paying once a year may not be right, but many put off this issue and accumulate debts. I am one of these people and there were years when I paid everything at the end of the year. Recently I stopped this practice and tried to pay every quarter. In case of delays, the tax inspectorate imposed fines or penalties. With a patent, it will need to be purchased for each type of activity, for a period of 1 to 12 months. Pay the full amount on the date of the issued tax and no later than the time of its validity. If you don’t pay, you may lose the right to use the patent and switch to a general tax regime, which will become less profitable.
• Sixth, there is a limitation on the number of employees; now the staff must have no more than 15 people. There will be more employees, and it will be impossible to use the patent system. Under UTII, there could be up to 100 people on staff.

Write the main differences that you would like to talk about, that you forgot about or made inaccuracies about, in the comments for discussion. Thank you all for your attention, subscribe to the channel and like it.