Home » Articles posted by Steve Bicknell (Page 27)
Author Archives: Steve Bicknell
Will Trading Standards be able to end Government “Copycat” websites
HMRC had a number of copycats trying to offer self assessment returns, here is an extract from the Tax Agents Blog in January…
With the 31 January deadline for filing SA returns fast approaching, the media has been asking us for our view on ‘copycat websites’, where companies offer to file returns for customers in return for large fees – sometimes up to £400. These companies pay to advertise their link at the top of search engines, so customers find them first when searching for ‘HMRC’, ‘tax return’ and so on.
I thought I’d let you know that our view on this hasn’t changed. It costs nothing to file a tax return. It’s important that anyone thinking of using a tax return agent is clear in advance about fees payable – and can satisfy themselves that they will receive the service they are signing up for.
Misleading websites that try and palm themselves off as legitimate government services are to come under the spotlight from Trading Standards (4 March 2014) as Consumer Minister Jenny Willott confirmed extra funding for them to help tackle these rogue traders.
The Minister has committed an additional £120,000 this financial year to National Trading Standards Board (NTSB) so they can investigate these websites. This money will help NTSB also tackle websites that exaggerate the nature of the services they provide or deliberately underplay that people can get them for free or at a lower cost from official sources.
Further details from TSI http://www.tradingstandards.gov.uk/extra/news-item.cfm/newsid/1429
Will this end copycats?
steve@bicknells.net
Are you ready for your first RTI year end?
Basically you will need to:
- Prepare P60′s (but no P14 and P35) by 31st May
- Submit your final FPS or EPS
- Update your Payroll Software for the New Tax Year
You can order your P60′s for free from HMRC http://www.hmrc.gov.uk/payerti/forms-updates/forms-publications/onlineorder.htm
Here is a great video from HMRC
HM Revenue & Customs (HMRC) plans to make its Basic PAYE Tools product for the 2014-15 tax year available on 3 April 2014.
The 2014-15 version of Basic PAYE Tools will be provided as an update to the existing version rather than a separate download, so existing users do not need to go to the HMRC website to get the update.
steve@bicknells.net
VAT Returns may soon be monthly…
From January 2017 the European Commission would like to make VAT returns monthly in all member states. Currently most UK businesses file quarterly, they only file monthly if they get regular refunds.
The European Commission see this as cutting red tape, but I am not sure how going from 4 returns to 12 returns cuts red tape?
The Commission say they have received complaints from companies who do business across Europe about confusion over the frequency of returns.
The EC is hoping to introduce a single format return, with just five mandatory boxes. This will include:
- input VAT;
- output VAT;
- net VAT payable;
- value of input transactions; and
- value of output transactions.
and there could be a concession for small businesses allowing them to continue to do quarterly returns.
Do you think monthly returns would be better or worse for UK Business?
steve@bicknells.net
Do you think National Insurance should be merged with Income Tax? it could happen soon
The Tax Payer’s Alliance have been campaigning and it looks like the Chancellor, George Osborne, has agreed that the first step is to re-name National Insurance as “Earnings Tax”. The change is to be proposed in legislation this week.
This story was reported in the Telegraph on 23rd February. There is also an interesting article on Tax Research UK (Richard Murphy).
You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension.
You pay National Insurance if you’re:
- 16 or over
- an employee earning above £149 a week
- self employed and making a profit over £7,755 a year (Class 4) plus £2.70 per week Class 2 NI (you may not have to pay any Class 2 NI if your profits are below £5,725)
If you’re employed, you stop paying Class 1 National Insurance when you reach the State Pension age.
If you’re self-employed you stop paying:
- Class 2 National Insurance when you reach State Pension age (or up to 4 months after this to pay off any contributions you owe)
- Class 4 National Insurance from the start of the tax year after the one in which you reach State Pension age
Income Tax is whole different ball game. Whilst I can see its simpler to have one tax the changes that would be required to achieve it would be huge!
Is it worthwhile?
steve@bicknells.net
Maximising Gift Aid Donations
The end of the tax year is just a few weeks away.
Gift Aid donations are regarded as having basic rate tax deducted by the donor. Charities or CASCs take your donation – which is money you’ve already paid tax on – and reclaim the basic rate tax from HM Revenue & Customs (HMRC) on its ‘gross’ equivalent – the amount before basic rate tax was deducted.
Basic rate tax is 20 per cent, so this means that if you give £10 using Gift Aid, it’s worth £12.50 to the charity.
A Gift Aid declaration must include:
- your full name
- your home address
- the name of the charity
- details of your donation, and it should say that it’s a Gift Aid donation
If you pay higher rate tax, you can claim the difference between the higher rate of tax 40 and/or 45 per cent and the basic rate of tax 20 per cent on the total ‘gross’ value of your donation to the charity or CASC.
For example, if you donate £100, the total value of your donation to the charity is £125 – so you can claim back:
- £25 – if you pay tax at 40 per cent (£125 × 20%)
- £31.25 – if you pay tax at 45 per cent (£125 × 20%) plus (£125 × 5%)
You can make this claim on your Self Assessment tax return
If you are a higher rate tax payer donations made in 2013/14 will save tax at 45 percent, but in 2012/13 the rate was 50 per cent.
You can ask for Gift Aid donations to be treated as being paid in the previous tax year if you paid enough tax that year to cover both any Gift Aid gifts you made that year and the ones you want to backdate.
So if you want to donate now (before the end of the tax year) you could claim back extra tax by carrying it back into the previous tax year.
steve@bicknells.net
Why would you liquidate a solvent company?
If you have a company which is no longer needed you have the following options:
- You can just keep it as a Dormant company
- You could strike it off at Companies House
- You could carryout a Members Voluntary Liquidation
If the company has assets the shareholders will want to release the assets and get hold of the money, so keeping it Dormant isn’t going to help.
Since March 2012, in the case of Strike Offs, ESC C16 has allowed the distribution of up to £25,000 as a Capital Distribution rather than as Income.
However, if you have assets in excess of £25,000 distributions can only be treated a Capital if the distributions are made through a formal liquidation.
With Entrepreneur’s relief, money paid to shareholders will only be subject to tax at 10% on the capital gain.
There could also be other benefits too.
steve@bicknells.net
Doctor help my Travel Expense has been disallowed
On the 16th December 2013 Dr Samad Samadian v HMRC had his appeal on Travel heard by The honourable Mr Justice Sales and it was decided to uphold the previous decision of the First Tier Tribunal.
After an enquiry lasting more than seven years and three tribunal hearings, the First-tier Tribunal led by Judge Kevin Poole acknowledged Dr Samad Samadian had a dedicated office in his home which was necessary for his professional activity.
So in summary:
- Home to Hospitals – Disallowed
- Hospital to Hospital – Disallowed as Business Expenses (but could be allowed against Employment)
- Visits to Patients – Allowed
Now would be a good time to check your tavel mileage claims to makesure they are valid.
steve@bicknells.net
Karren likes the Employment Allowance – £2000 will be very NIC(E)
This is what Karren Brady said…..
She has a point, £2,000 will be a big help to many SME’s.
The Employment Allowance is available from 6 April 2014. If you are eligible you can reduce your employer Class 1 NICs by up to £2,000 each tax year.
You can claim the Employment Allowance if you are a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on your employees’ or directors’ earnings.
If your company belongs to a group of companies or your charity is part of a charities structure, only one company or charity can claim the allowance. It is up to you to decide which company or charity will claim the allowance.
You can only claim the £2,000 Employment Allowance against one PAYE scheme – even if your business runs multiple schemes.
You cannot claim the Employment Allowance, for example if you:
- employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener, care support worker
- already claim the allowance through a connected company or charity
- are a public authority, this includes; local, district, town and parish councils
- carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
- NHS services
- General Practitioner services
- the managing of housing stock owned by or for a local council
- providing a meals on wheels service for a local council
- refuse collection for a local council
- prison services
- collecting debt for a government department
You do not carry out a function of a public nature, if you are:
- providing security and cleaning services for a public building, such as government or local council offices
- supplying IT services for a government department or local council
Personal and Managed Service Companies who pay contract fees instead of a wage or salary, may not be able to claim the Employment Allowance, as you cannot claim the allowance for any deemed payments of employment income.
Service companies can only claim the allowance, if you pay earnings and have an employer Class 1 NICs liability on these earnings.
You can use your own payroll software (see your software provider’s instructions), or HM Revenue and Customs’ (HMRC’s) Basic PAYE Tools to claim the Employment Allowance.
When you make your claim (using the software of your choice), you must reduce your employer Class 1 NICs payment by an amount of Employment Allowance equal to your employer Class 1 NICs due, but not more than £2,000 per year.
You can read the full guidance here
Will the Employment Allowance be NICE for your business?
steve@bicknells.net
Have you claimed capital allowances on your building? time is running out…
FA2008 introduced a new classification of integral features of a building or structure, expenditure on the provision or replacement of which qualifies for WDAs at the 10% special rate. The new classification applies to qualifying expenditure incurred on or after 1 April 2008 (CT) or 6 April 2008 (IT).
http://www.hmrc.gov.uk/manuals/camanual/CA22300.htm
The rules on integral features apply where a person carrying on a qualifying activity incurs expenditure on the provision or replacement of an integral feature for the purposes of that qualifying activity. Each of the following is an integral feature of a building or structure –
- an electrical system (including a lighting system),
- a cold water system,
- a space or water heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling comprised in such a system,
- a lift, an escalator or a moving walkway,
- external solar shading
Only assets that are on the list are integral features for PMA purposes; if an asset is not one of those included in the list, the integral features rules are not in point.
However, Plant and Machinery includes….
other building fixtures, such as shop fittings, kitchen and bathroom fittings
Many businesses have never claimed capital allowances for these items.
Paragraph 13 of Schedule 10 FA2012 introduced transitional provisions for making claims.
The provisions mean that where the current owner incurs expenditure on acquiring fixtures from a past owner before 1 (or 6) April 2014 and the past owner has not claimed allowances or pooled their expenditure in respect of a qualifying fixture, the current owner may claim PMA on the part of the price the paid which is attributable to that fixture….. CA26470
It is possible for the buyer to use apportionment of the sale price (usually done by an RICS Surveyor) to determine the value of the fixtures. But this risks clawback of balancing charges for the seller.
A alternative option is to claim a Section 198 election which can be entered into within 2 years of the date of the property sale. It must be signed by the buyer and the seller and must identify the items covered. The elected value can be between £1 and the price paid, but makesure you undertand the implications of the price choosen.
As a Section 198 requires agreement you may wish to take legal advice.
The Section 198 needs to made in writing to HMRC.
The following can’t claim a Section 198:
- Property Traders
- Developers
- Pension Funds
- Charities
But if you can claim you need to claim now as there are only a few weeks left until April 2014.
steve@bicknells.net
Not all accounting is the same
Management accounting combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.
In addition to strong accounting fundamentals, CIMA teaches strategic business and management skills:
- Analysis – understanding the story behind the numbers and using it to make business decisions
- Strategy – using the insight from analysis to help formulate business strategy to create wealth and shareholder value.
- Risk – applying analytical skills to look at end-to-end business processes to identify and manage risk.
- Planning – using accounting techniques to plan and budget.
- Communication – knowing what information management needs and explaining the numbers to non-financial managers.
You can trust CIMA members
CIMA members and students are required to comply with the CIMA code of ethics and to adopt the fundamental principles to their working lives. CIMA members are at the heart of business as its conscience, adding judgment, independence and objectivity to their professional qualification.
Every year, CIMA audits its members to ensure they uphold these ethics and will take action if members have been less than true to them.
Business Accountant 