Month: September 2016

When do you do your Self Assessment Return?

sa-monthly-online-figures-2011-12

2014-15 Self Assessment facts summary:

  • 11.26 million SA returns due
  • 10.39 million returns were received in total
  • Around 870,000 SA returns not submitted by 31st January 2016
  • 10.39 million returns received by midnight on 31 January (92% of total issued)
  • 9.24 million returns filed online (89%)
  • 1.14 million returns filed on paper (11%)
  • More than 4.45 million returns received in January 2016 (43% of total received)
  • 823,000 returns received on 30 and 31 January (18% of total returns received in January)
  • Busiest hour: 14:00 – 15:00 on 29 January – 50,358 returns received (839.3 per minute; 13.9 per second).
  • N.B. The figures are sourced from Self Assessment management information from the Computerised Environment for Self Assessment as at 01 February 2016 for the 2014-15 tax year.

Procrastination - do it now or tomorrow sticky note

There are three different types of penalties that can be charged if a return is outstanding after the return due date or is filed late. These are

  • Late filing fixed penalty (see SAM61220)
  • Daily penalties (see SAM61230)
  • Late filing (tax geared) penalty (see SAM61240)

HMRC even have a calculator to help work out how much the penalty might be…

https://www.gov.uk/estimate-self-assessment-penalties

Here are 10 of the most common problems, issues and errors that come up.

  1. Not leaving enough time to register for Self Assessment – It can take 20 working days (this is usually 4 weeks) to complete the registration process, then for online returns, allow 10 working days (21 if you’re abroad) to register because HM Revenue and Customs (HMRC) posts you an activation code.
  2. Lost Login details – Your account will be locked for 2 hours if you enter the wrong user ID or password 3 times.If you’ve lost both your user ID and password:
  3. Leaving it too late to get help – If you need help from an accountant don’t leave it too late as they will need to carryout AML and other checks before they can file your return, they will also need your UTR
  4. Failing to complete all the parts of the return – For example leaving out PAYE information
  5. Failing to press ‘submit’ – you would be surprised how many people complete the return and then stop without submitting or leave submission and then forget to do it
  6. Missing out details of your Pension Provider
  7. Failing to check the calculation – Most people do a rough calculation of what they owe but fail to check the HMRC calculation only to find out they have made a mistake
  8. Using invalid characters such as # ‘ ” in boxes where these are not allowed
  9. Not paying the tax they owe by 31st January
  10. Failing to explain where estimates and provisional sums have been used

Why leave till January! do it now

steve@bicknells.net

Have you Auto Enrolled your employees in a Pension?

group of successes people

Over 100,000 small and micro employers reach their staging date by the end of the year.

So what do you need to do before you stage?

  1. Find out your staging date, this the date when your obligation under Auto Enrolment will start, the Pension Regulator calculator is a good place to start
  2. Nominate a person to be the Pension Regulators key contact and register their name with the Regulator
  3. Draw up a Project Plan and consider whether you need help (60% of companies currently staging have decided they do need help! and most businesses will start by asking their accountant to help with project management)
  4. Choose a Pension Provider – Nest, Now Pensions and The Peoples Pension are the 3 largest

The fine for small employers with 1 to 4 staff who fail to comply with an EPN is £50 per day and for those with 5 to 49 it is £500 per day.

The Pension Regulator statistics for the first quarter of 2016 show that the number of fixed penalties were 806 compared to the penalties for the whole year of 2015 which were 1,250, so penalties are increasing, partly due to increasing numbers of small businesses being required to enrol.

The Pensions Regulator (TPR) has highlighted the following problem areas:

  1. Employer forgeting to do the declaration of compliance within 5 months of staging, many employers wrongly assumed that registering on the Government Gateway was enough.
  2. Confusion caused by running multiple payrolls for the same employer for example weekly and monthly
  3. Completing the declaration of compliance but without choosing a pension provider
  4. Omitting self employed workers who have a contract to provide work personally

 

steve@bicknells.net

Are you making the most of tax free benefits?

I want you

Have you considered giving your employees or yourself benefits in kind that are tax free, here are some to choose from:

  1. Pensions – Up to £40k can be paid in to your pension scheme by your employer (2015/16)  and you can use carry forward to pay in even more
  2. Childcare – Up to £55 per week but check the rules to makesure your childcare complies (HMRC Leaflet IR115)
  3. Mobile Phone – One per employee
  4. Lunch – Tax Free Lunch Blog
  5. Cycle Schemes – Cycle to Work Blog
  6. Fitness – Fitness Blog
  7. Parties and Gifts – Christmas Blog
  8. Parking – Parking Blog
  9. Business Mileage Allowance – 45p for the first 10,000 miles then 25p
  10. Long Service Award – A bit restrictive as you need 20 years service, the tax free amount is £50 x the number of years
  11. Eye Tests and Spectacles – The Eye Test must be needed under the Health & Safety at Work Act
  12. Suggestion Schemes – Suggestion Scheme Blog
  13. Insurance such and Death in Service and Income Protection – Medical Insurance Blog
  14. Travel Expenses – Travel Blog
  15. Working From Home – Working from Home Blog
  16. Clothing – Tax Allowances
  17. Trivial Benefits – Trivial Blog
  18. Training – Training and Salary Sacrifice CPD
  19. Relocation Costs
  20. IPad or Laptop – IPad used for Business
  21. Rent a Room to another employee – Rent a room blog

steve@bicknells.net

Why is international VAT so complicated!

Stress business woman

EU VAT is a nightmare.

Here is an example of why its complicated…

Before 1st January 2015 all businesses supplying telecommunications, broadcasting and e-services such as downloaded ‘apps’, music, gaming, e-books and similar services to private consumers located in other EU Member States (referred to as ‘B2C’ supplies) were taxed where the business supplier was established, which is simple to understand and implement.

Since 1st January 2015 VAT is now charged in the country where the customer has ‘use and enjoyment’ of the services.

So lets say you are an American (normally zero rated) on holiday in France, even though you pay with an American credit card and buy from a UK supplier because you are reading your ebook in France, French VAT will apply. Sounds like a nightmare, doesn’t it.

To help with this HMRC introduced the VAT MOSS (Mini One Stop Shop).

Then there is is the VAT return….

Box 2 Acquisition Tax is calculated as UK VAT due on VAT free purchase of goods from other Member States, i.e. 20% x Box 9 figure, the same amount is then entered in Box 4 (as noted below by HMRC) so the net effect is Zero.

Box 9 Total EU Purchases are the value of goods bought from other EU Member States on a VAT free basis.

The following are HMRC’s instructions:

Box 2: VAT due from you (but not paid) on acquisitions from other EU countries

You need to work out the VAT due – but not yet paid by you – on goods that you buy from other EU countries, and any services directly related to those goods (such as delivery charges). Put the figure in Box 2. You may be able to reclaim this amount, and if so remember to include this figure in your total in Box 4.

Box 4: VAT reclaimable on your purchases

This is the VAT you have been charged on your purchases for use in your business. You should also include:

  • VAT due (but not paid) on goods from other EU countries and services directly related to those goods (such as delivery charges) – this is the figure you put in Box 2

http://www.hmrc.gov.uk/vat/managing/returns-accounts/completing-returns.htm#4

If you trade regularly with the EU you may be required to do Intrastat Returns

Here is a useful guide from Sage.

http://www.sage.co.uk/~/media/markets/uk/images/business-advice/infographic-international-vat-share.png

steve@bicknells.net

Business Connections Newsletter – September

newsletter-4

 

Did you see our September Newsletter:

  • Free Sage One Start Software for new Bicknell Business Advisers clients
  • How much tax can you save by working from home?
  • How can you save tax by going on a course?
  • 10 ways to pay less VAT
  • Do you need to declare income? HMRC will find you!
  • Do you have 47 minutes to hold on to speak to HMRC?

Click on this link to get a copy http://eepurl.com/cfWoGz

Sign up to our mailing list http://eepurl.com/b6k7HH

Why are Freelance workers so popular with businesses?

Why is it attractive to use Freelancers?

  1. Skill is more important than location in many business sectors – we live in world where the internet can allow you to work with anyone at anytime, you can now track down the best person to work with even if they live thousands of miles away
  2. Lower fixed costs – Using Freelancers will lower your fixed costs (in similar way to Zero Hours Contracts), you employ them for a specific project and only pay for what you need so there isn’t any surplus capacity
  3. Tax advantages – Freelancers run their own business and that means they pay less tax than employees. Employers save tax too, such as Employers NI.
  4. Competitive Advantage – You can put together a team for a contract rather than finding contracts that fit your workforce, this means you can hire the best.
  5. 110% Commitment – A Freelancers success and future work depends on them performing to the highest level on every contract, failure is not an option for a successful contractor.

 

invoice2go_freelance_stats_x2_v03

Graphic created by https://invoice.2go.com/en-us/
https://invoice.2go.com/en-us/

steve@bicknells.net

Will Making Tax Digital (MTD) make life easier for you?

mtd

 

One of the big areas of concern has been over the quarterly tax reporting requirements and concerns over data accuracy, as a result, the government has given exemptions for small businesses which will mean 5.4 million small businesses won’t now need to report quarterly.

Data accuracy is going to be critical, are most businesses up to providing data in real time? RTI has worked for payroll but could it really work for accounting information? many businesses rely on their accountants and book keepers to get the information correct.

steve@bicknells.net

Do you need a business card? is an e-card better?

contact

Business Cards have been seen as the most important tool physical networkers have because:

  • You can hand them out
  • You can collect them to follow up later
  • They advertise your business – direct marketing
  • They create a lasting impression

But they are a cost and like all costs you should work out whether the benefit exceeds the cost.

A lot of networking is now done online though Linked In, Facebook and Twitter and its becoming the focus of advertising spend

http://www.socialmediatoday.com/sites/default/files/adhutchinson/files/ia2(4).jpg

So should you now stop using physical business cards and switch to e cards like about me

about-me

 

http://steve-bicknell.me/

steve@bicknells.net