A new service to directly help mid-sized businesses as they expand and grow, has been launched today by HM Revenue and Customs (HMRC).
There are around 170,000 mid-sized businesses registered in the UK. Businesses with either a turnover of more than £10 million or more than 20 employees, and undergoing significant growth, can now seek expert help from HMRC growth support specialists.
Known as the Growth Support Service, HMRC tax experts will offer dedicated support, tailored to the customer’s needs. It has been created to help growing, mid-sized businesses access the information and services they need.
This could include:
helping with tax queries about their growing business
supplying accurate information and co-ordinating technical expertise from across HMRC
supporting them to get their tax right first time and access relevant incentives or reliefs
I wonder if HMRC have plans to help other businesses too?
We have an extremely complicated tax system, so is it any wonder that even HMRC struggle to calculate your tax correctly!
The way that allowances are applied for dividends, allowances, savings and other items all impact on each other.
Many tax payers will be working on their 2016/17 returns (to 5th April 2017 due by 31st January 2018) over the coming months and find that they can’t use the HMRC software because it doesn’t work properly.
Rob Ellis, CEO of BTCSoftware, can’t remember a year when there have been so many exclusions from filing SA tax returns online. For the 2016/17 tax returns 16 new examples have been added to the online filing exclusions list, which is now in version 4; there is a version 5 of this list under construction.
6,102 pages of legislation (according to Tolleys in 2012)
639 monetary values
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.
Even if the HMRC software is working…
10 most common online self assessment issues
Here are 10 of the most common problems, issues and errors that come up:
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.
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:
– individuals in Self Assessment can request new ones (allow 7 days to get them by post) or sign up with the GOV.UK Verify trial
– contact HMRC for all other online services
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
Failing to complete all the parts of the return – For example leaving out PAYE information
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
Missing out details of your Pension Provider
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
Using invalid characters such as # ‘ ” in boxes where these are not allowed
Not paying the tax they owe by 31st January
Failing to explain where estimates and provisional sums have been used
If you don’t already use an accountant, may be 2017 is the year to start?
What if you set out each year to take advantage of these tax free opportunities?
You would need your own business to be able to restrict your earnings to £8,164 or £11,500 as National Minimum Wage would mean you will get pay levels above these £7.50 x 37.5 hours x 52 weeks = £14,625, however, directors can pay themselves below NMW.
To use the Capital Gains Allowance you are going to need to have assets to sell and make a gain
Rent a Room is achievable especially if you take in students
Dividend Allowance is great if you have your own company
Everyone should be able to use the PSA
Why not sit down and work out how you could maximise the use of the tax free allowances that are available
So, basically, if you are a director you must register!
Many accountants think that this one size fits all approach is a little over the top and returns for salaried directors are unnecessary in some cases but the rules are absolutely clear, Directors must register!
So the latest case involving a property company came as a surprise to many accountants
Mohammed Salem Kadhem (case TC05929) became a director of a property company on 21 May 2014. He received no pay or dividends from that company and didn’t register for self-assessment.
Almost a third of British workers run some kind of creative business outside their main job contributing an estimated £15bn to the UK economy, according to research from Moo.com. One in ten part-time creative entrepreneurs plans to leave their job to focus on their business full-time within the next year. However, 60% said it was their passion for the business, and not making money, that motivated them. The most popular part-time creative ventures are in food and cooking, gardening, photography and knitting. (According to Law Donut)
So why are micro businesses taking off:
You can start off working at home
Your start up costs are low
You can do it part time when it suits you
With wages frozen and costs rising it can provide a useful additional income
Its easy to be price competitive with low overheads
The Internet makes it easy to sell your goods and services
Your social capital can be used to generate sales ie use your contacts and connections
There could be tax advantages – employees generally pay more tax than sole traders
Some clients prefer the personal touch
It could be start of something big
HMRC orginally launched their campaign in April 2014 and have updated it on 12th June 2017.
The Second Incomes Campaign is an opportunity open to individuals in employment who have an additional untaxed source of income.
Examples could include:
fees from consultancy or other services such as public speaking or providing training
payment for organising parties and events or providing entertainment
income from activities such as taxi driving, hairdressing, providing fitness training or landscape gardening
profits from spare time activities such as making and selling craft items
profits from buying and selling goods, for example regular market stalls, boot sales etc
The criteria used to assess if an activity is a hobby or a business are:
The size and commerciality of the activity.
The frequency of the activity and transactions
The application of business principles.
Whether there is a genuine profit motive.
The amount of time devoted to the activities.
The existence of arm’s-length customers (as opposed to just selling your wares to family and friends).
To take part in the Second Incomes Campaign you should:
tell HMRC that you want to take part in the Second Incomes Campaign (Notify)
tell HMRC about all income, gains, tax and duties you’ve not previously told them about (Disclose)
make a formal offer
pay what you owe
help HMRC as much as you can if they ask you for more information
To benefit from the reduced penalties offered HMRC will take account of the level to which you have helped them and the accuracy of the information you provided.