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Self Assessment Tax Return Deadline

Jan 5, 2014   //   by Ralph   //   Latest News  //  Comments Off on Self Assessment Tax Return Deadline

I hope you had an enjoyable Christmas and that 2014 will be a good year for you. Hopefully by the time you read this you will have had the last of the turkey and can look forward to a sprout free eleven and a half months.

As the 31st January approaches I thought I would give a few tips to those that have to complete a tax return, starting with the obvious.

Self- assessment deadline of 31st January

As we are in the 17th year of self-assessment those of us who have been in it since the start are aware that tax returns need to be submitted to HM Revenue and Customs electronically (the deadline for paper returns was 31st October) by the 31st January 2014 to avoid a penalty.

More taxpayers required to complete self-assessment tax returns – are you one of them?

This year another swathe of tax payers have been added to the ranks of those that are required to complete a return, those that are earning close to or over £50,000 and the household is in receipt of child benefit. Figures indicate that many did not register by the deadline of 5th October and HMRC have sent out letters to individuals requesting that a tax return is submitted. Even if you were below the £50,000 threshold if you have been sent a notice to complete a tax return, then one must be completed.

Register to file electronically

As noted above the deadline for paper returns to be submitted was 31st October, and to file electronically by 31st January to avoid a penalty you will have to register for SA online services by visiting HMRC’s website. There is a link on the homepage. Registration is easy but you will have to wait to be sent an activation code by HMRC before you can submit your return online. This takes about ten days to arrive so don’t delay.

Remember to include benefits in kind

If your employer provides benefits in kind remember to include these on your return. Details will have been provided on form P11D by your employer. These benefits count towards your total income from employment and therefore could mean that the Higher Income Child Benefit Charge (HICBC) applies when your gross pay seems to be below the £50,000 limit. It may be worth discussing these benefits with your employer to see if there is a more tax efficient way of receiving .

Flat rate trade allowances

Many trades and employments have a flat rate allowance from HMRC to cover uniforms etc. Although these allowances are not great, it is worth checking to see if your tax code includes this amount. If not then you should include this claim on your return. The amounts you can claim and the trades that can claim are on the HMRC website.

Income from property

Those of you with income from property, be it a buy to let or furnished holiday lettings, will need to report the net income on your return. A common error when calculating the allowable expenses is to include all of the mortgage payment. This is correct when it is an interest only mortgage but as these are less common now only the mortgage interest should otherwise be included as an expense. HMRC have, as I have said in previous articles, launched a task force to look at property income.

George Osborne’s wintery Autumn Statement

On my calendar the 5th December is firmly in the winter season, but according to the Chancellor of the Exchequer it is in the Autumn. However there were a couple of measures to spread some warmth amongst employers, although as usual they are announced some time in advance, so that the good news can be mentioned again in the next two budgets. The measures designed to raise tax mainly come in a year earlier. I will give more detail in my February article.

Ralph Robson can be contacted at his office at TA Gittins & Company Chartered Accountants on 01978 264846 or via email below. If you would like a particular issue covered in this article please contact Ralph on ralph.robson@tagittins.co.uk

Companies House and HMRC Scam Emails

Dec 9, 2013   //   by Ralph   //   Latest News, Scam Warnings  //  Comments Off on Companies House and HMRC Scam Emails

It has come to our attention that a number of very convincing scam emails from both HMRC and Companies House are being circulated by online criminals.

These emails may ask you to click on a link or open an attachment. Doing so may cause your computer to be infected with a virus or lead to your personal information being intercepted.

If you receive an email that purports to be from any institution with whom you have a financial relationship, including HMRC, Companies House or your bank/credit card issuer, DO NOT click on any links or open any attachments.

Should you suspect that the institution may have a need to speak to you about any issue, visit their official website or call the telephone number printed on your statement or correspondence.

You can find Companies House fraud warnings here, and HMRC offer online security advice here.

Neither Companies House nor HMRC will email you asking you to click on links to log into your online accounts.

 

 

 

Capital Allowances, NI for Entertainers, Automatic Closure of Inactive PAYE Schemes, Red Diesel and SA Deadlines

Dec 5, 2013   //   by Ralph   //   Latest News  //  Comments Off on Capital Allowances, NI for Entertainers, Automatic Closure of Inactive PAYE Schemes, Red Diesel and SA Deadlines

Capital allowances on commercial property

A capital allowance survey on your commercial property may well unlock previously unclaimed qualifying “fixed” expenditure. This expenditure relates to fixtures and fittings within the building. Legislation is currently that vendor and purchaser must agree the valuation within two years of the transaction. Changes for transactions after 6th April 2014 mean that if capital allowances are not identified and put into the capital allowance pool by the vendor prior to the transaction, and then agreed via joint election, the purchaser loses the right to claim capital allowances forever. Seek professional advice prior to entering into any commercial property transaction as the capital allowance position may affect its value. Also consider the position for past property transactions as the deadline for submitting an amended 2011/12 return is January 2014.

National Insurance position for entertainers

From April 2014 an individual engaged as an actor, singer or musician, will revert to paying class 2 and class 4 national insurance as self-employed earners. This was the position prior to changes in 2003. The downside is that entertainers “between roles” will have reduced benefits.

Class 2 National Insurance to be collected through tax code

HM Revenue & Customs have stated that if class 2 national insurance contributions remain unpaid then they will, where possible, obtain payment through the 2014/15 tax code. Check your coding notices for this to ensure HMRC aren’t incorrectly charging you.

Automatic closure of “inactive” PAYE schemes by HMRC

HM Revenue and Customs have from 28th October 2013 been closing PAYE schemes where there has been no activity for 120 days. This excludes annual schemes of course. A letter will be sent to the employer stating that as no PAYE has been paid, or Contractors returns submitted, HMRC have closed the scheme due to inactivity. The letter explains how to re-open the scheme should it become necessary. This will save taxpayers making real time payment submissions.

Road fuel scale charge for the VAT partially exempt trader is changing

As from 1st January 2014, the partial exemption concession on road fuel scale charges will be withdrawn. This may mean that you should alter your VAT claims with regard to road fuel for non-commercial vehicles.

Red diesel can be used for gritting

If you are a contractor gritting roads for the local authority, from 1st November 2013, agricultural vehicles can use red diesel without falling foul of the regulations.

Remember the self-assessment deadline

No doubt you already know and will be told many times before the end of January 2014 but midnight on the 31st January 2014 is the deadline for submission of your 2013 tax return and also for submitting an amended 2012 return.

And finally….

It merely remains to wish you and yours a merry Christmas and a happy, prosperous and tax efficient 2014.

Ralph Robson can be contacted at his office at TA Gittins & Company Chartered Accountants on 01978 264846 or via email below. If you would like a particular issue covered in this article please contact Ralph on ralph.robson@tagittins.co.uk

Entertaining, Let Properties, Refunds Withheld, Vat Relief and Cricket!

Nov 5, 2013   //   by Ralph   //   Latest News  //  Comments Off on Entertaining, Let Properties, Refunds Withheld, Vat Relief and Cricket!

Can entertaining be tax deductible?

HM Revenue & Customs have always maintained that business entertaining isn’t tax deductible. Advertising is but entertaining isn’t. The taxman inevitably won’t like the outcome of this recent case. The court used the phrase “quid pro quo” (meaning literally, something for something), which means that if, for example, in exchange for your hospitality you receive something such as feedback on your products or contact details, then the entertaining costs are deductible. You must of course keep evidence such as the feedback/details provided by your (potential) customers. Obviously visiting an upmarket restaurant would not qualify, but reasonable costs should.

Let property campaign by HM Revenue & Customs

The taxman has launched a new let property campaign aimed at landlords who may owe tax. A common error made by landlords when completing their tax returns is that the whole of the mortgage payment is a deductible expense. Only the interest is deductible so, although a property may not give a cash profit, there may still be tax due. The campaign is open to all landlords including holiday lettings, which are dealt with differently and have been the subject of previous articles. The campaign is set to run for at least 18 months, with no deadline for coming forward voluntarily.

Tax refunds withheld if tax avoidance suspected

HM Revenue & customs have set out their policy regarding withholding a tax repayment is they believe that it is due to tax avoidance. This is unlikely to affect many people, and depends upon the size of the tax repayment claimed as to how close it is scrutinised. Repayments will also be withheld if they are considering opening an enquiry.

VAT relief for children’s musical instruments and computers

If your child was inspired to take up a musical instrument by Jools Holland’s visit to the Eisteddfod this year then there may be a VAT free way of getting your musical offspring the instrument that will make them a star. Under the Assisted Instrument Purchase Scheme if the instrument is purchased through the school then it is VAT free. The parents and pupil choose the instrument and this is then invoiced to and paid for by the school, often with funds provided by the parents. The school reclaims the VAT and sells the instrument on net of VAT to the parents. This can also apply to things such as laptop computers as your child probably receives IT tuition at school. However there are a couple of (well, three) things to be wary of. The instrument must be taught at school and therefore larger instruments that cannot practically be taken into school such as piano’s fail to qualify. The computer must be studied as a subject rather than just used in other subjects for essays etc., and finally this is unlikely to apply if your child goes to public school as they are generally not registered for VAT.

HM Revenue & Customs don’t like cricket (they don’t love it either)- apologies to 10cc!

It would appear that HMRC are writing to amateur cricket clubs looking to review compliance on PAYE matters. Although some clubs will have community amateur sports club status which provides various tax breaks there are no such exemptions for PAYE regulation. With RTI now in full swing and penalties payable from April 2014 care needs to be taken particularly with status of the players any ground staff and umpires etc. Treasurers need to be proactive. No doubt HMRC will not stop at cricket and other local sports clubs should, I’m sure, consider their positions.

Ralph Robson can be contacted at his office at TA Gittins & Company Chartered Accountants on 01978 264846 or via email below. If you would like a particular issue covered in this article please let me know on ralph.robson@tagittins.co.uk

Government Gateway Scam Warning

Oct 24, 2013   //   by Ralph   //   Latest News, Scam Warnings  //  Comments Off on Government Gateway Scam Warning

One of our clients today received an email claiming to be from the Government Gateway and explaining what the Gateway is.  It included a link to the H M Revenue and Customs website and an attachment called ‘Government Gateway Reg Fom.zip’.

This is a two-pronged attack by hackers designed to infect your computer with a virus and to collect personally identifiable information by tricking you into entering your data into a fake website.

You should only receive an email from the Gateway if you have very recently registered and not as a result of anything that we have done.  If you do register, you will not be asked to download a form from the email.  If you receive any emails from H M Revenue and Customs that you are uncertain about, contact H M Revenue and Customs to check.  The best place to find the correct number to call, depending on the type of tax involved, is to go directly to the H M Revenue and Customs website which can be found if you type www.hmrc.gov.uk into your search bar.  You will also find that their site has a useful section under News and Updates which gives Security advice and some examples of current scam emails.

Congratulations Lauren!

Oct 14, 2013   //   by Ralph   //   Latest News  //  Comments Off on Congratulations Lauren!

We’re pleased to announce that one of our team, Lauren Martin, has achieved Chartered  Certified Accountant status after completing her ACCA qualification.

Ralph Robson said “We are incredibly proud of Lauren’s achievement, which is a testament to her hard work and dedication.”

The team celebrated with a champagne breakfast at TA Gittins’ Wrexham office.

For assistance with all of your accounting needs, drop us an email or call on (01978) 264846

 

 

Taxman gets ‘smart’, Machine Games Duty, Child Benefit and Overpaid Tax Credits

Oct 5, 2013   //   by Ralph   //   Latest News  //  Comments Off on Taxman gets ‘smart’, Machine Games Duty, Child Benefit and Overpaid Tax Credits

Taxman to use “Clever technology” to hunt out tax evaders

HM Revenue & Customs look to be following our American friends by using social media and credit reference agencies etc. to try to find tax evaders. This is all very well in theory but whilst the information that is used for credit scoring is mostly accurate – although no doubt some of you have found to the contrary – social media is completely different. The information required to set up these online accounts is not great or particularly verifiable so the taxman may well be thinking it’s you but is in fact someone else with the same name. Additionally who would “tweet” that there business was in trouble? Hardly good for sales! Details of HMRC’s intentions are included within their publication “Closing in on tax evasion”. Thought needs to be given to what is said, or perhaps noted why something was said, so that when the taxman presents his list of print-outs the answers are ready.

Machine games duty – other implications

As those of you who have gaming machines on your premises will know the machine games duty was introduced on 1st February 2013. This comprises a (relatively) simple gross profits system at two rates. There is one fly in the ointment though. As the gaming machine income is now exempt for VAT purposes does this make your business partially exempt for VAT purposes? Consult your accountant to find out if you are affected as this could have expensive consequences. HMRC have also stated that they will issue penalties if the second and subsequent returns are not submitted on time.

More tax investigation task forces

The taxman has launched seven new task forces aimed at various sectors to add to those already launched in the last two years. There are two that may affect us here in Llangollen, the major one being the holiday industry in North Wales, and perhaps road hauliers in the Midlands. I know we are on the fringes of it here but it depends where operating centres are etc. There are various others looking at the holiday industry in the North West, South Wales and the South West, so even if you own a holiday home that is let out in the above areas, but don’t live near, you may be under scrutiny.

High income child benefit charge – register with HMRC now

I have written about this before but think it warrants mentioning again. Parents whose income is more than £50,000 and they or their partner received child benefit in 2012/13 will need to complete a tax return for the year unless they opted out of receiving child benefit prior to the 7th January 2013 when the HICBC came into effect. You need to register with HMRC by the 5th October to avoid any penalties.

Overpaid tax credits – reduced time to appeal

As from 6th April 2013, the time available to dispute a claimed overpayment of tax credits by HMRC is reduced to three months. There was no time limit previously. Additionally HMRC will not stop chasing the overpayment during the period the dispute is being considered. The new time limits have been delayed until October 2013 so if you have received a tax credit overpayment demand I would urge you to check it immediately.

Ralph Robson can be contacted at his office at TA Gittins & Company Chartered Accountants on 01978 264846 or via email below. If you would like a particular issue covered in this article please let me know on ralph.robson@tagittins.co.uk.

Power Generation, Tax Debt and Late Returns, HVAs and Challenging VAT Penalties

Aug 4, 2013   //   by Ralph   //   Latest News  //  Comments Off on Power Generation, Tax Debt and Late Returns, HVAs and Challenging VAT Penalties

Power generation – Is there a potential VAT liability?

The European court has ruled (in the Fuchs case) that the sale of surplus energy to the electricity network was an economic activity as it was carried out with the intention of receiving an income on a regular basis. As such Mr Fuchs became a taxable person and was required to account for VAT on the sale of the energy. At the time of writing HMRC have yet to comment so as long as the equipment purchased for power generation has not been included in the business accounts or purchased directly from business funds then there is no need to amend the position. It is a reminder though that if you are a VAT registered sole trader all income that is received needs to be reviewed to see if it should be declared for VAT purposes – Examples include income from artwork/crafting, partly planning – such as Avon, regularly selling items on Ebay or similar, which have been obtained for that purpose, and introductory commission.

More tax debt can be paid through tax code

HMRC will now code out underpayments of tax as high as £17,000 as long as the income of the individual is high enough. Previously the limit has been £3,000, even for those on very high salaries. The new limits apply form 2015 and apply to debts as well as self-assessment tax underpayments.

Late tax returns – New campaign

The taxman has launched (another) campaign aimed at bringing taxpayers up to date. Entitled “my tax return catch up” the scheme was launched on the 9th July. It is aimed at taxpayers who have not yet submitted their tax return for any year up to and including 2011/12. If you wish to take part in the scheme the returns have to be submitted and the tax and national insurance paid by 15th October 2013. Those who take part in the campaign will have the penalties capped at 10% of tax due.

Subcontractors who use high volume agents may lose out

HMRC quite rightly is targeting dishonest tax agents and has stated that it will publish their details on the gov.uk website. As part of the programme HMRC is targeting those agents who submit a high number of tax returns that show repayments. These are known as high volume agents (HVA’s) and the taxman has asked them to sign a memorandum of understanding (MOU). There are eight points in this memorandum which has expense ratio maximums for those who do not keep detailed accounting records. Additionally HMRC is now asking these agents to amend previous years’ tax returns or possibly have their own tax affairs investigated. While the desire to prevent dishonest conduct is to be commended can the arbitrary ratios used in the MOU ensure that the taxpayer pays the right amount of tax?

Worth challenging a VAT Penalty?

According to the government’s own statistics HMRC lose 60% of the VAT penalties that go to appeal. Always worth a try then!

If you would like me to cover a particular issue then please let me know on ralph.robson@tagittins.co.uk

Machine Games Duty, CASCs, Fair Penalties, Pensioners Tax and Gift Aid

Jul 4, 2013   //   by Ralph   //   Latest News  //  Comments Off on Machine Games Duty, CASCs, Fair Penalties, Pensioners Tax and Gift Aid

Machine Games Duty – removal of penalty

HM Revenue and Customs have confirmed that as taxpayers are having difficulty understanding the new machine games duty rules that no penalties will be applied for the late submission of the first return. This applies to the first return ONLY and any penalty notices issued will be cancelled.

Community Amateur Sports Clubs (CASCs) – eligibility change being considered.

The rules relating to CASCs have been amended due to confusion relating to eligibility. A consultation document has been issued proposing that the maximum amount a club can charge for membership is £1040 per annum, but that in order to ensure that everyone, regardless of income, could participate, a reduced rate could be charged for members on lower incomes. It is hoped that this will encourage more clubs to register under the scheme.

Fair penalties – Not likely

That often heard cry of a child “it’s not fair” would seem when dealing with tax penalties to be true. The recent “Hok Limited” case underlines the fact that penalties imposed by the taxman do not have to be fair or proportionate if applied in accordance with the legislation. The case centred round the non-submission of an employers’ annual return form P35 for the year 2009/10. There is no doubt in this case that a form should have been submitted and the company incorrectly thought that as it did not have any employees at the financial year end then it did not need to submit the P35 return. An interim penalty notice was issued after four months stating that penalties were accruing and that £400 was already due. Despite appealing the upper tribunal held that the penalty does not have to be proportionate and therefore was due.

Pensioners tax allowances – things to consider

As was announced in the budget the additional personal allowances for those over 65 is being phased out. While this does not affect all pensioners (about half of all pensioners do not utilise their basic personal allowances, which of course means that half of all pensioners are affected). This causes several issues. 1. More pensioners will fall within PAYE or self-assessment, 2. those who receive their interest tax free may now not be able to do so and 3. pension credit entitlement is based on net of tax income so those who start paying tax should check whether they may be entitled to pension credit with the Department of Work and Pensions (DWP).

2012/13 Tax calculation notices – What to do if you get one

HM Revenue and Customs will issue approximately five and a half million tax calculation notices between now and October. These are issued to people who are taxed under PAYE and not required to submit a tax return. When you get one check that the amount of earnings and tax deducted shown are as on your P60. Also the value of any benefits you receive will need to be included so if you have a P11d you will need that too. Next check that the taxman hasn’t used estimates regarding your other income such as bank interest or share dividends. If it shows an overpayment you should receive a cheque within a couple of weeks but if you’ve underpaid tax and the amount is under £3,000 you can request that it is taken out of your income for 2014/15 through your tax code.

Gift aid claims for charities – changes helpful to small charities and large ones too.

There have been significant changes for charities in 2013/14 in relation to gift aid and aim at simplifying the process to make it easier to reclaim gift aid from HM Revenue and Customs. There are three elements. Firstly and most significantly is the way in which gift aid is reclaimed. This can now be done electronically and the exact method varies depending upon the size of the charity. Secondly “top-up” gift aid claims can now be made in respect of small cash donations, which means that individual donors do not need to be identified or complete a gift aid declaration. The third change is in relation to the donation of goods to charity shops. By making a gift aid declaration donors will enable charity shops to reclaim gift aid on goods sold which they were not able to do so previously.

 

If you would like me to cover a particular issue then please let me know on ralph.robson@tagittins.co.uk

VAT Missing Invoices, RTI Deadline Extension, Insurance Claims & Tax Credits

Jun 4, 2013   //   by Ralph   //   Latest News  //  Comments Off on VAT Missing Invoices, RTI Deadline Extension, Insurance Claims & Tax Credits

As I write this, the sun is shining through the window, let’s hope the spring/summer, we all so hope for, has finally arrived.

GOOD NEWS IF YOU DON’T HAVE AN INVOICE TO RECLAIM VAT

It has always been the case that if you do not have a valid invoice then VAT cannot be reclaimed. However HMRC have discretion where invoices are missing. As long as three other conditions are met then a claim is possible, although not guaranteed. The three conditions are; a supply of goods must have taken place, it must have been made to the person making the claim, and the VAT must have been charged at the correct rate.

REAL TIME INFORMATION (RTI) PILOT P11D EXPENSES DEADLINE EXTENDED

Employers who were part of the RTI pilot will not receive their P11D expenses return forms and payslips for 2012/13 in time to meet the deadline for submission of the 6th July. The deadline has been extended to 19th July 2103. The form can be downloaded from the HMRC website though. 2013/14 payslip booklets have also been delayed, although all employers should have received theirs by now. If not please contact HMRC.

STATUTORY RESIDENCE TEST

The new statutory residence test was introduced in April 2013. HMRC have promised that there will be online help to enable individuals to check their residence status for tax purposes within the next few weeks.

TAX TREATMENT OF INSURANCE CLAIMS

Due to the terrible weather we have been suffering recently there will be many insurance claims made. Of course if you are unlucky enough to suffer disruption to your business, tax is probably the last thing on your mind, but depending upon the type of claim, there are various tax implications. Also due to the sometimes slow nature of the settlement of insurance claims then tax may be payable before the claim has been received. Insurance claims may include both capital and income elements. Due to the tax treatment, in order for there to be restitution, any value claimed may need to be amended.

MONEY LAUNDERING COMPLIANCE CHECKS

HMRC will be undertaking compliance checks on those businesses registered and supervised by them under the Money Laundering Regulations. Compliance officers will initially contact by telephone to ask details of business activities and customers, and will answer any questions that you may have. They will then decide if a visit is necessary.

TAX CREDIT RENEWALS

Those claiming tax credits will have probably received their renewal packs. These will need to be completed and returned to HMRC by 31st July 2013 to ensure that payments continue. The accuracy of information needs to be checked in readiness for the transfer to universal credit which will commence this year and be complete by 2017. Also the income disregard (the amount income can increase by without triggering a further recalculation of benefit) has been reduced to £5,000 from April this year, so any changes in working hours or overtime etc. may have a considerable effect. The falling income disregard is £2,500.

If you would like me to cover a particular issue then please let me know on ralph.robson@tagittins.co.uk

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