Are you eligible for Connection Vouchers for Broadband? £100m up for grabs
This was first announced in December 2013 and £100m of funding has been allocated.
Broadband Connection Vouchers will be available in 22 SuperConnected Cities across the UK. Click here to see where they are. If your city isn’t offering vouchers yet, use our Register your Interest form to let us know that you are.
- Connection Vouchers help your business connect to a better broadband service.
- You can apply if you are a small business and you are located in an eligible area. See more in our Can I apply? section and try the postcode checker.
- The Connection Voucher will pay towards the fixed cost of getting you connected -between £250 and £3,000 – you pay the ongoing line rental charge.
- Not sure if you need to upgrade your broadband? See why other businesses have made the decision to upgrade.
- You can choose from a list of registered suppliers. Take a look a the link on the right to the suppliers in your city.
- You can find out how to apply from your local city pages – use the links on the right of the page.
- Want to be a supplier? Read more and find out how to register.
steve@bicknells.net
Micro Entity Accounts – who can file them?
Micro-entity accounts are a new type of accounts that can be submitted to Companies House. They will provide the smallest companies with the opportunity to prepare and publish simplified financial statements (profit & loss account; and balance sheet) if they wish.
A micro-entity is defined as meeting two of the following criteria:
- Balance sheet total: £316,000
- Net turnover: £632,000
- Average number of employees during the financial year: 10 (or fewer)
Micro Entities are exempt from filing their profit and loss with Companies House.
Business Minister Jo Swinson said:
“Thriving micro-businesses are a vital ingredient for a stronger economy. However, because of their size they don’t always have dedicated finance teams behind them. We therefore need to make sure that they can focus on growing their business – rather than completing unnecessarily detailed paperwork.”
There are approximately 1.56 million micro-entities in the UK, as compared with a total number of companies on the UK register of approximately 2.8 million.
I don’t think this is going to help much? Micro Businesses still need to file corporation tax returns, deal with PAYE, RTI, VAT, minimum wage, Auto Enrolment Pensions, and a wide range of other requirements
steve@bicknells.net
HMRC demand payment from Landlords
HMRC launched the ‘Let Property Campaign‘ on the 10th December 2013.
If you’re a landlord who has undisclosed income you must tell HMRC about any unpaid tax now. You will then have 3 months to calculate and pay what you owe.
The Let Property Campaign is an opportunity open to all residential property landlords with undisclosed taxes. This includes:
- those that have multiple properties
- landlords with single rentals
- specialist landlords with student or workforce rentals
- holiday lettings
- anyone renting out a room in their main home for more than £4,250 per year, or £2,125 if the property was let jointly, but has not told HMRC about this income
- those who live abroad or intend to live abroad for more than 6 months and rent out a property in the UK as you may still be liable to UK taxes
According to the Telegraph….
Fewer than 500,000 taxpayers are registered with HMRC as owning properties other than their home. And yet other sources put the number of Britain’s growing army of landlords at between 1.2million and 1.4million.
Why the discrepancy? No one can say for sure, but the taxman has his answer: not enough people are declaring – and paying tax on – their property incomes and gains.
HMRC will identify those who they believe should have made a disclosure by:
- comparing the information already in their possession with customers’ UK tax histories
- continuing to use their powers to obtain further detailed information about payments made to and from landlords
Where additional taxes are due HMRC will usually charge higher penalties than those available under the Let Property Campaign. The penalties could be up to 100% of the unpaid liabilities, or up to 200% for offshore related income.
If you owe tax, you must tell HMRC of your intention to make a disclosure. You need to do this as soon as you become aware that you owe tax on your letting income.
At this stage, you only need to tell HMRC that you will be making a disclosure.
You do not need to provide any details of the undisclosed income or the tax you believe you owe.
steve@bicknells.net
Are you coding your VAT entries correctly?
When you enter transactions its important to use the right tax code otherwise your VAT returns are likely to either need adjustment or contain errors, but often when entering transactions your software won’t tell you what the codes mean, here is a list of Sage codes:
| T0 | Zero rated transactions |
| T1 | Standard rate |
| T2 | Exempt transactions |
| T4 | Sales of goods to VAT registered customers in EC |
| T5 | Lower rate |
| T7 | Zero-rated purchases of goods from suppliers in EC |
| T8 | Standard-rated purchases of goods from suppliers in EC |
| T9 | Transactions not involving VAT |
| T20 | Sales and purchases of reverse charges |
| T22 | Sales of services to VAT registered customers in EC |
| T23 | Zero-rated purchases of services from suppliers in EC |
| T24 | Standard-rated purchases of services from suppliers in EC |
| T25 | Flat rate accounting scheme, purchase and sale of individual capital items > £2,000 |
There are different rates of VAT, depending on the type of goods or services your business provides. At the moment there are three different rates. They are:
- standard rate – 20 per cent
- reduced rate – 5 per cent
- zero rate – 0 per cent
You can check which rate to use on the HMRC Website http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm
UK supplier who aren’t VAT registered would use T9 in Sage.
steve@bicknells.net
Garden bagging – profit from property development in your back yard
The rate of new housing required to meet demand in England is now estimated at between 240,000 and 245,000 units a year, an increase of 10,000 new homes annually on previously accepted figures.
Gazumping and other nasties that flourished in the last property boom are making a return, as competition for homes increases with the bringing forward of the second phase of Help to Buy.
So now could be the time to sell off your garden:
- Its a way of building homes without building on the Green Belt
- It can be a zero risk way to make money if you sell the plot
Garden Bagging works as follows:
- Home Owners with suitable land approach a local builder
- The builder buys the right to seek planning permission for a nominal fee
- If the application is successful the builder will pay up to 85% of the open market value of the consented plot less his costs
Alternatively you could develop the plot yourself for a typical self build its estimated that 35% would be the land cost, 40% build cost and 25% profit margin.
steve@bicknells.net
Tax Free Childcare will the new rules be better or worse?
The Government wants to help working families and currently if you are an employee your employer can help with childcare and could for example buy childcare vouchers of up to £55 per week, the vouchers would be a tax free benefit to the employee. However, if you’re self employed you aren’t an employee so the rules don’t apply.
So recently there has been a consultation on what should be be done in the future.
The key proposals are:
- New Scheme to go live in Autumn 2015
- Working Families will open Voucher Accounts (self employed or employed)
- As parents pay in the government tops up the account with 20p for every 80p paid in
- Top up capped at £1,200
- To be eligible all parent must work and not receive tax credits or be an additional rate tax payer
The chart below shows how it should work:
steve@bicknells.net
Not all accountants are the same!
Watch this video to see how we are different…
steve@bicknells.net
Repay your debts sooner and save money
Order your debts
My advice is straightforward and you will have seen it before, but it is probably one of the easiest ways for individuals and companies to save money. If you have any debts make sure you know which has the highest rate of interest. If you are in a position to repay debt, you should pay off your most expensive loans first. For individuals this is likely to be store cards or credit cards, followed by other unsecured lending to banks in the form of an overdraft.
Even with historically low base rate from the Bank of England, you can pay between 30% and 40% interest a year on store card and credit card purchases.
Maintain minimum payments
For the remainder of your debt, make sure you keep up your minimum payments. Failure to do this may mean additional charges are added to the debt and may affect your credit score.
Check for forgotten accounts
If you have a balance in your PayPal account or your energy supplier you are lending money free of charge. You might be relaxed about this, but while you are paying interest on your own debts you are much better getting the balances transferred to your lenders. Clear out any long term balance from PayPal etc and check your statements from your energy suppliers and any other suppliers to arrange for overpayments to be refunded.
Example
Let’s say you have a balance on your credit card of £200, which you are repaying at £5 a month. The table below shows the total interest you will pay and the time taken to repay the entire balance. At an annual interest rate of 32% (2.34% monthly interest) you will pay nearly £395 in interest on your original purchase of £200 and it will take nearly 10 years to pay the whole balance back. If the annual interest rate rises to 35% you monthly interest would be more than the £5 monthly payment and you would never pay your original £200 off.
| Annual Interest | Total Interest £ | No of months to repay loan |
| 32% | 394.82 | 119 |
| 29% | 259.65 | 92 |
| 20% | 111.85 | 63 |
| 14.9% | 70.75 | 55 |
So – if you happen to have £200 in your PayPal account that you had forgotten about at the same time as a £200 credit card balance, you could transfer the cash, pay off your credit card balance and save yourself between £70 and £395!
Manage your cashflow
Work out how much cash you actually need for your day-to-day needs. It is likely that you are receiving little or no interest on cash in the bank. If you are confident that you have surplus cash, use it to pay down any debts you have – but start with the expensive debt don’t share it out equally between the different debts you have.
For support and advice on restructuring and paying off debt contact Alterledger or visit the website alterledger.com.
No more Class 1NI for Self Employed Entertainers
Following 18 months of extensive engagement with representatives from all fields of the entertainment industry, HMRC published on 15 May 2013 a public consultation document: ‘National Insurance and Self-Employed Entertainers’, which discussed the precise difficulties being caused by the current application of the Regulations. The consultation presented four possible options for simplifying the NICs treatment of entertainers going forwards.
The consultation ran for 12 weeks receiving 11,814 individual responses of which 99.1% supported the option of repealing the Social Security (Categorisation of Earners) Regulations in relation to the entertainers. On 23 October 2013 HMRC published a summary of the consultation responses which included the announcement of the Government’s decision to repeal these Regulations insofar as they relate to entertainers from 6 April 2014 and a first draft of the legislation implementing this.
From 6 April 2014, producers engaging entertainment performance services will not be required to deduct Class 1 NICs contributions from any payments they make to you. This includes additional use payments such as royalties. The engager will make payments to the entertainer gross of tax and NICs and the entertainer must declare these earnings as part of their normal self-employed Self-Assessment return.
Please note that this guidance does not apply if you are an entertainer on an employment contract, and receive a regular salary from your engager with tax and NICs deducted at source under the Pay As You Earn (PAYE) system.
If you engage the services of entertainers
From 6 April 2014, you will not be required to operate Class 1 NICs for the entertainers you engage. If you are currently deducting employees’ Class 1 NICs from the payments you make to your entertainers (including additional use payments such as royalties), and paying the respective employers’ Class 1 NICs on these payments, you should continue to do so up until 5 April 2014. From 6 April 2014 however you should cease to do this.
The changes will be of interest to all national broadcasters, film companies, theatre managers, independent production companies, their representative bodies and agents in the Film & TV Production Industries, Equity, individual entertainers, companies engaging entertainers, and any other interested parties.
See HMRC Brief 35/13 for more details
steve@bicknells.net
Loan Notes – A Seller’s Dilemma
When you sell your company your buyer may wish to pay part in cash and part in loan notes to be paid off from future profits. The Loan Notes are known as Qualifying Corporate Bonds (QCB’s), the dilemma is whether to claim Entrepreneurs Tax at 10% now or pay full Capital Gains Tax later.
To obtain Entrepreneurs’ Relief on a disposal of the shares (the “old asset”) at the time of the exchange, the individual may make an election for the gain not to be deferred by TCGA92/S116 (10). The effect of an election is that the gain is brought into charge at the time of the exchange so that Entrepreneurs’ Relief can be claimed in order to benefit from the 10% rate – TCGA92/S169R (2).
In the absence of an election the gain is deferred and will be charged to CGT when it accrues under TCGA92/S116 (10) (b). It would be unusual for the qualifying conditions for Entrepreneurs’ Relief to be met at the later date when the gain comes into charge.
An election under this section, like the claim for Entrepreneurs’ Relief, must be made on or before the first anniversary of the 31 January following the tax year in which the relevant transaction takes place – TCGA92/S169R (4).
So would you claim the Entrepreneurs Tax Relief and pay 10% now or possibly pay 28% later?
You could try selling your shares in stages but that might not suit either you or your buyer?
steve@bicknells.net
Business Accountant 