Month: January 2014

Will HMRC extend the Self Assessment deadline? £2m yet to file returns

Tax Money

There have been calls from Accounting Bodies to push back Friday’s deadline for Self Assessment returns because nearly 2 million tax payers have not yet filed their returns.

It was reported on Your Money .Com

Chas Roy-Chowdhury, ACCA head of taxation, said: “HMRC has a common-sense decision to make. Either it can stick to the deadline and penalise all those families and self-employed people who are struggling to get to grips with the self-assessment process, or it can do the right thing and give them a lifeline by extending the deadline. Self-assessment is not easy and there are fines starting at £100 for missing the deadline even if you don’t owe any tax.

“The circumstances around this year’s deadline are different in that there will be a high number of people who will never have done self-assessment in their lives. They are going to miss the deadline not because they have been putting it off, but because they are newcomers. If reports are to be believed that 2 million have yet to meet the deadline just two days before it closes, then it is likely a lot of people will miss it.”

The reason why there are so many newcomers this year is because of changes to Child Benefit and an increase in the number of those self employed.

So should HMRC extend the deadline?

steve@bicknells.net

Do you know a business that could claim growth vouchers?

Gardener

The Government have been keen to promote Growth Vouchers but I think its almost impossible to qualify, see what you think…

This government programme helps small businesses get expert advice on:

  • finance and cash flow
  • recruiting and developing staff
  • improving leadership and management skills
  • marketing, attracting and keeping customers
  • making the most of digital technology

Some businesses will be randomly chosen to get a voucher for up to £2,000 to help finance specialist business support. You’ll have to match the amount with your own funds.

Eligibility

Your business must:

  • have 49 employees or less (including any employees of companies that own a stake in your business)
  • be registered in England
  • have been trading for at least one year
  • not have paid for business advice in the last 3 years
  • be independent (ie no more than 25% is owned by other businesses or organisations)

So you even if you are eligible and you haven’t paid for any business advice you then have to be randomly chosen, that doesn’t make it easy to claim? or am I missing something? and its match funding

steve@bicknells.net

From April what could I take in wages and still be below the thresholds?

Pay

On the 6th April 2014 the personal allowance will increase to £10,000 (up £560) which means you can earn £10,000 before you pay income tax.

But you might want to keep your earnings below the NI Threshold, in previous years the employers and employee’s NI thresholds have been out of alignment but from 6th April 2014 they will be aligned, which means that earnings over £153 per week (£7,956 per year) will attract both 12% employees’ NI and 13.8% employers’ NI. For earnings above £805 per week (£41,865 per year), the employees’ NI rate drops to 2% but the employers’ NI rate remains unchanged.

So to avoid Income Tax and NI you would need to earn below £7,956.

But, there is some good news, from April 2014 there is a new ’employment allowance’ of £2,000 which you can offset against your employers NI.

steve@bicknells.net

3 Self Assessment Life Savers – Estimates, Provisional and Corrections

Tax Return Due Now

There are only a few days left to file your Self Assessment Return for 2013 and if you haven’t done it you might be starting to panic! a common reason for last minute filing is being unable to get the information to enter on the return, so what can you do?

Returns which include provisional or estimated figures should be accepted provided they can be regarded as satisfying the filing requirement.

  • A provisional figure is one which the taxpayer / agent has supplied pending the submission of the final / accurate figure
  • An estimated figure is one which the taxpayer / agent wishes to be accepted as the final figure because it is not possible to provide an accurate figure for example where the records have been lost. The taxpayer is not required to tick box 20 of the Finishing your Tax Return section of the return page TR 6 (or equivalent in a return for an earlier year) where estimated figures have been used

HMRC SAM121190

Correcting your return

If you make a mistake on your tax return, you’ve normally got 12 months from 31 January after the end of the tax year to correct or amend it. For example, if you send your 2012-13 online tax return by 31 January 2014, you have until 31 January 2015 to amendment it.

How to amend an online return

If you sent your tax return online by 31 January, it’s easy to amend it online too. You just need to log into your Self Assessment online account, go to the ‘at a glance’ page and choose the option to amend your tax return.

HMRC Correcting your Tax Return

steve@bicknells.net

Do you think it should be compulsory to pay into a pension?

Pension Scheme

A government think thank, Policy Exchange, have urged the government to make it compulsory that people save for their retirement. Their proposal the ‘Help to Save’ Scheme is aimed at avoiding 11 million people ending up in ‘Pension Poverty’. In a BBC article….

James Barty, author of the report, said the lack of people saving for their retirement was putting an “intolerable burden on the state” which “needs to be addressed sooner rather than later”.

He said: “With an ageing population, putting money aside for later life should be seen in the same context as National Insurance contributions, taxes and even education – an obligation that falls on everyone in society.

“‘Help to Save’ will prevent the state from having to pick up the tab for people who haven’t put aside enough money for later life.”

Under the plans, the opt-out in the Government’s auto-enrolment scheme would be removed making it obligatory for people to save for their retirement

Individual pension contributions would also increase as incomes rise over time.

According to the report, someone earning the average wage – £27,000 – will need to save over six and a half times more than they currently do to generate the Government’s recommended retirement income of £16,200.

The average pension pot is estimated to be just £36,800, which on current annuity rates is enough to generate a retirement income of £1,340.

The paper said that an average earner would need a pot of £240,000, assuming they receive the full single tier pension.

Are you saving enough for your retirement? should saving be compulsory?

steve@bicknells.net

 

Maybe it’s because I’m a Londoner…that I leave tax so late

Big Ben with city bus and flag of England, London

Around one in nine (11%) of the 560,000 people in Inner London who had to send in a tax return last year didn’t do so by the relevant deadline – 31 October for paper returns and 31 January for online submissions.

The one million taxpayers in Outer London were more punctual, with one in 11 (9%) failing to meet the deadline, but they were still the second worst offenders. The tardiest taxpayers outside of London were in the North West of England, with 8% of their 890,000 returns failing to meet the deadline.

Taxpayers in the rest of the English regions fared better. The most punctual were in the South West, with only 6% of their one million tax returns arriving late. The other English regions, as well as Wales, Scotland and Northern Ireland, all registered 7% of late tax returns, which was the UK national average.

HM Revenue and Custom’s (HMRC) Director General of Personal Tax, Ruth Owen, said:

Whether you’re from London, Livingston, Lisburn or Llandudno, the consequences of missing the tax return deadline are the same – an automatic £100 late-filing penalty.

The longer you delay, the more you have to pay. So if you still have to send us your tax return, take action now.

Anyone with an outstanding 2012 to 2013 tax return must send it online, and pay any tax they owe, by 31 January.

Re-blogged from Gov.uk

steve@bicknells.net

Do you use Interns? watch out for NMW

hübsche brünette studentin

At the end of last year there was a clamp down on the Fashion Industry, the main target was companies that advertise for unpaid trainees (interns). Its likely this will lead to an even bigger campaign in 2014.

Current minimum wages rates are

    21 Plus     18 to 20   Under 18      Apprentice
£6.31 £5.03 £3.72 £2.68

If you take on unpaid trainees without a contract you could be at risk of a £5,000 fine. The penalty can also apply if you are paying below the minimum wage.

If you find that you are paying below NMW you need to correct the rate of pay now and back date it to avoid the risk of a penalty.

steve@bicknells.net

 

 

How changing your year end can help cash flow

Revenue and Customs

Basically if your company makes a loss you carry it forward.

The amount of trading loss available to be carried forward is the loss sustained less any loss relieved in the current year or surrendered as group relief.

Carry forward a corporation tax loss is automatic, therefore as no claim is required there is no time limit.

The legislative reference for a trading loss carried forward is: CTA 2010 s45) [old reference ICTA 1988 s393(1)].

You can also make a claim to carry a loss back 12 months.

The legislative reference for carry back loss relief is: CTA 2010 s37(s)(b)(6)(8) and s38 [old reference ICTA 1988 s393A(1)(b)(2)-(2C)].

But there is another option, to help improve your cash flow, lets say you have been making profits and you have just come to the end of your accounting period, the next few months are going to be tough and you will make a loss. If you change your year end by extending it or having a shorter period you could help your cash flow.

Corporation Tax is payable 9 months and 1 day after your year end, so you will have a return for 12 months and have tax to pay but if you had a 6 month return to follow it you could reduce the time before you claim relief for the loss.

If you extended your accounting period to 18 months the figures might even look better for credit rating.

You can shorten as much as you want but not beyond the start date of the accounting period being changed.

You can only extend once every 5 years.

See the Companies House Checklist for details

steve@bicknells.net

Are you benefiting from the Online Sales Boom?

Online Shopping

Just in case you haven’t been watching the BBC News….

A record amount of online shopping was done in December 2013, says the British Retail Consortium (BRC).

Close to one in five non-food items was bought online last month, according to the BRC survey.

There was also a 19.2% growth in internet purchases from a year earlier, the fastest increase in four years……..

The online retail boom was very much in evidence in late 2013, with many High Street chains expanding their internet offerings, and some shops reporting record figures for the amount customers purchased online around Christmas.

In a recent AccountingWEB survey on average survey respondents said more than 80% of their customers use a smartphones or a tablet and almost all expect this number to increase over the next 12 months.

Without an online presence your business is likely to be become invisible to your customers.

Its not just about having a website either, there needs to be something that will keep your customers visiting your website and you probably need an app….

steve@bicknells.net

Business Disclosure – do it right or risk a penalty

Young woman with checklist over shoulder shot

Displaying the right information on the right documents is important, so here is a quick reminder…
LetterheadThe rules for companies are set out in The Companies (Trading Disclosures) Regulations 2008

The key sections is…

6.  (1)  Every company shall disclose its registered name on—

(a)its business letters, notices and other official publications;

(b)its bills of exchange, promissory notes, endorsements and order forms;

(c)cheques purporting to be signed by or on behalf of the company;

(d)orders for money, goods or services purporting to be signed by or on behalf of the company;

(e)its bills of parcels, invoices and other demands for payment, receipts and letters of credit;

(f)its applications for licences to carry on a trade or activity; and

(g)all other forms of its business correspondence and documentation.

(2) Every company shall disclose its registered name on its websites.

Companies House enforce the regulations and can levy penalties of £1000 for non compliance.

Sole Traders can trade under their own name or a “trading as” name provided its not offensive, contains sensitive or resticted words, includes PLC, Limited Company, LLP or is similar to another business (check the internet for potential conflicts).

Partnerships should show all the partners names or if there are more than 20 partners it may keep a list of names at its principle place of business.

steve@bicknells.net

include the terms public limited company (plc), limited (ltd), limited liability partnership (LLP) – See more at: http://www.nibusinessinfo.co.uk/content/names-sole-traders-partnerships-and-limited-partnerships#sthash.7qxBYEey.dpuf
include the terms public limited company (plc), limited (ltd), limited liability partnership (LLP) – See more at: http://www.nibusinessinfo.co.uk/content/names-sole-traders-partnerships-and-limited-partnerships#sthash.7qxBYEey.dpuf