By AC Accounts Business News • Insights • Tax Advice 0 Comments

Second finance bill this autumn

It has also been announced that the second Finance Bill will legislate for all policies that were included in the pre-election Finance Bill but had to be dropped in order to rush through the Finance Act 2017 before the snap general election in June.

The Government has re-confirmed that all policies originally announced to start from April 2017 will be effective from that date.

This means that the planned changes to corporation tax such as the new losses rules, will take effect from 1 April 2017 after all, as will the changes to deemed domicile which will take effect from  6 April 2017.

 

By AC Accounts Business News • Insights • Making Tax Digital • Tax Advice 0 Comments

Making tax digital for business delayed

The Government has responded to pressure from accountants and other interested parties and announced the delay of Making Tax Digital for Business to 2020 at the earliest.

 Quarterly VAT reporting using the new system will be mandatory from 2019.

In a further U-turn, three million small businesses and buy to let landlords below the VAT threshold will now not be required to keep digital accounting records but will be able to move to the new system for keeping tax records at a pace that is right for them.  For such businesses, Making Tax Digital will be voluntary.

Mel Stride, the new Financial Secretary to the Treasury and Paymaster General, announced that the roll out for Making Tax Digital has been amended to ensure businesses have plenty of time to adapt to the changes.  Under the revised timetable:

  • only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, and initially only for VAT purposes from 2019
  • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020

As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.

All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes. This deferral will give much more time for businesses, supported by their advisers, to identify for themselves, at their own pace, the benefits of digital record keeping. It will also ensure that many more software products can be developed and tested before the system is mandatory.

 

By Katie Tax Advice 0 Comments

TAX DEADLINES IN DECEMBER

VAT
If you have a November year-end, file your RTD Return by 23rd December 2016.

Delays may prevent VAT refunds being processed in a timely manner by Revenue.

November/December 2016

Bi-monthly VAT return – pay and file on ROS by 23rd January 2017.

PAYE and RCT

November returns due by 23rd December 2016.

Corporation Tax

March 2016 Returns are due by 23rd December 2016. Please note that preliminary tax for January 2017 year-ends is also due by this date.

By Katie Tax Advice 0 Comments

HAVE YOU DECLARED YOUR OVERSEAS INCOME AND GAINS?

Where an individual is resident in the UK, he or she is generally taxable on worldwide income and gains whether or not it is brought back into the UK. Again, there can be significant interest and penalties on top of the unpaid tax if HMRC find out.

HMRC now exchange information involving savings and investments overseas with about 90 other countries and again match that data with individuals’ tax returns.

There is a special HMRC worldwide disclosure facility to allow taxpayers to bring their tax affairs up to date.

Note that there are special rules for individuals who are resident but not domiciled in the UK and those people’s tax status is likely to change from April 2017. Please contact us if you need advice on this matter.

By Katie Tax Advice 0 Comments

HAVE YOU DECLARED ALL OF YOUR CREDIT CARD SALES?

Where credit card sales have been omitted from business takings, HMRC are encouraging taxpayers to come forward and make a disclosure of the income that has been omitted to avoid incurring interest and penalties on top of the unpaid tax.

As you may be aware HMRC now receive information from third parties such as banks and credit card companies and will then match that data with business accounts, and will then open detailed enquiries if the figures appear to be inconsistent. They can go back up to 20 years and the more serious cases can lead to criminal prosecution.

If you have other undeclared income or gains that don’t relate to credit card sales, there are other HMRC  disclosure facilities to enable you to bring your tax affairs up to date.

By Katie Tax Advice 0 Comments

CHRISTMAS IS COMING! – NEW RULES FOR GIFTS TO STAFF

From 6 April 2016 new rules were introduced to allow employers to provide their directors and employees with certain “trivial” benefits in kind, tax-free.

The new rules are a simplification measure so that certain benefits in kind will not need to be reported to HMRC, as well as being tax free for the employee. There are of course a number of conditions that need to be satisfied to qualify for the exemption.

CONDITIONS FOR THE EXEMPTION TO APPLY:

  • the cost of providing the benefit does not exceed £50
  • the benefit is not cash or a cash voucher
  • the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
  • the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)

So this exemption will generally apply to small gifts to staff at Christmas or on their birthday.

Prior to this change in the rules, the benefit in kind would have had to be reported on the employee’s P11D form at the end of the year, or alternatively the employer would have dealt with the tax and national insurance under a PAYE settlement agreement. Under such an arrangement a £50 Christmas turkey to a higher rate taxpayer could end up costing the employer nearly £95!

Note that where the employer is a “close” company and the benefit is provided to an individual who is a director or other office holder of the company, the exemption is capped at a total cost of £300 in the tax year.

Please feel free to contact us if you are considering taking advantage of this new exemption.

By Katie Tax Advice 0 Comments

DIARY OF MAIN TAX EVENTS OCTOBER / NOVEMBER 2016

Date What’s Due

1/10 Corporation tax for year to 31/12/15

5/10 Deadline for notifying HMRC of chargeability for 2015/16 if not within Self-Assessment and receive income or gains on which tax is due

19/10 PAYE & NIC deductions, and CIS return and tax, for month to 5/10/16 (due 22/10 if you pay electronically)

1/11 Corporation tax for year to 31/01/16

19/11 PAYE & NIC deductions, and CIS return and tax, for month to 5/11/16 (due 22/11 if you pay electronically)

By Katie Tax Advice 0 Comments

VAT Implications of Employee Mileage Claims

Note that where employers reimburse their employees 45p per mile for using their own cars they are able to reclaim input VAT based on the amounts shown in the table.

In the case of a 1600cc diesel car that would be 1.5 pence per mile. (9p x 20/120). Such a claim needs to be supported by a receipt from the filling station.

By Katie Tax Advice 0 Comments

ADVISORY FUEL RATE FOR COMPANY CARS

These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2016. Where there has been a change the previous rate is shown in brackets.

Engine Size Petrol Diesel LPG
1400cc or less
10p 7p
1600cc or less
9p (8p)
1401cc to 2000cc
13p (12p) 9p (8p)
1601 to 2000cc
10p
Over 2000cc
20p (19p) 12p (11p) 13p

You can continue to use the previous rates for up to 1 month from the date the new rates apply.