Applying for a Mortgage? SA302’s are no more. A Tax overview is what you need.

HMRC’s form SA302 is a tax calculation produced when you have filed your Self-Assessment Tax Return online.

It is a calculation for a particular tax year showing your income, your tax allowances, the amount of tax you’ve already paid and what tax, if any, you still owe or which should be repaid to you.

If your Tax Return has to be amended and it affects the tax payable, HMRC will send you a revised SA302 showing the up to date position for that particular year.

If you are asked to provide evidence of your income, for example if you’re applying for a mortgage, and you have been paying through self-assessment, you are likely to be asked for an SA302 for one or more tax years.  Another document you may also be asked to produce is a tax year overview.  This is a simple summary or statement of the tax due and tax you’ve paid during the tax year.

If you have filed your own tax return online, you can access your HMRC account and print off both the SA302 and tax year overview as required.

HMRC have been encouraging taxpayers to obtain a copy of the ‘Tax overview’ and ‘Full Calculation’ from the online service for some time and, from 4 September 2017, they have confirmed that they will no longer send paper SA302s to agents on behalf of their clients.

There are a number of lenders that will accept the tax overview and printed calculation in place of a paper SA302 and HMRC are working on educating other lenders to increase acceptance so that, once the SA302’s are no more, mortgage advisors will be happy with these documents instead.

If you don’t know where to start getting your tax year overview or tax calculation, most accountants, including torrwaterfield, use commercial software to produce tax returns for their clients.  This automatically generates a tax calculation which is roughly equivalent to a form SA302.  The majority of mortgage providers have agreed with HMRC to accept this Tax Calculation and the Tax Year Overview which your accountant can print off for you.

For a complete list of mortgage providers and lenders who accept Tax Year over views please click here. 

If you would like any assistance on this, then please contact the office on 0116 242 3400.

James Yarnall, Accounts & Tax 

Tax Events are due on 19th October 2017

The following Tax Events are due on 19th October 2017:

Business Tax Events

PAYE quarterly payments are due for small employers for the pay periods 6th July 2017 to 5th October 2017.

This deadline is relevant to small employers only. As a small employer with income tax, national insurance and student loan deductions of less than £1,500 a month you are required to make payment to HMRC of the income tax, national insurance and student loan deductions on a quarterly basis.

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 20th October 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Sunday 22nd October. In year interest will be charged if payment is made late. Penalties also apply.

PAYE, Student loan and CIS deductions are due for the month to 5th October 2017.

This deadline is relevant to employers who have made PAYE deductions from their employees’ salaries and to contractors who have paid subcontractors under the CIS.

Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions. Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS.  

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 20th October 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Sunday 22nd October. In year interest will be charged if payment is made late. Penalties also apply.

Tax and NI due under a 2016/17 PAYE Settlement Agreement.

This deadline is relevant for employers who have entered into a PAYE settlement agreement to pay tax and national insurance in respect of benefits in kind for their employees for the year ended 5th April 2017.

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 20th October 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Sunday 22nd October.

If you wish to discuss this further then please get in touch 0116 2423400

Late registration for VAT can be costly to your business.

Registering for VAT is a must if your turnover reaches a certain level; it’s part of your role to ensure that your business is suitably prepared and aware of when the registration needs to be made.

The VAT registration threshold is £85,000 – meaning that once your turnover crosses this level, in a 12 month rolling period, you may have to register for VAT. This can be a big change for a business and needs serious consideration as to the effects it can have.

A failure to comply with the HMRC rules to register on time can lead to penalties which soon tally up and leave you considerably out of pocket.

The penalty is worked out as a percentage of the VAT due, from the date when you should have registered to the date that HMRC either receive your notification or become fully aware that you were required to be registered. The rate of penalty depends on how late you were in registering:

If you registered: Then the penalty rate will be:
not more than 9 months late 5%
more than 9 months but not more than 18 months late 10%
more than 18 months late 15%

There will always be a minimum penalty of £50.

If you feel that your business could be approaching the VAT turnover threshold then get in touch so that we can help. 0116 2423400

Brook Lucas, Accounts & Tax

Did you look after your Grandchildren this summer?

Get paid to babysit!

Did you look after your Grandchildren this summer?  If they are aged under 12 you could be missing out on the chance to boost your future State Pension.

Top Grandparent facts:

  • 1 in 4 working families and 1 in 3 working mothers use Grandparents for childcare
  • 63% of all Grandparents with grandchildren under 16 help out with childcare
  • 1 in 5 Grandmothers provide at least 10 hours a week of childcare
  • the proportion of Grandparents who are of working age is set to grow as the retirement age gradually rises

Half of Britain’s 7 million working-age Grandparents have a Grandchild under the age of 16 and could qualify for Class 3 National Insurance credits for looking after children aged under 12 – which can be used to top up their income in retirement.

Applications for NI credits for caring for children under 12 need to be made to HM Revenue & Customs.  Applications need to be made in, or after, the October following the end of the tax year in which the caring took place.

Grandparents who have cared for their Grandchildren during the tax year 2011/12 are still able to apply for their credits now.

There is no minimum condition for the number of hours of care in a week as long as the credit is transferred for a full week.

This scheme will benefit women, and the self-employed who currently cannot qualify for state second pension.

If you have any questions or want to discuss this further then please get in touch 0116 2423400

Georginda Hare, BookkeeperGeorginda Hare BC.JPG

The Employment Allowance

What is employment allowance?

Employment Allowance is a National Insurance credit that is offset against Class 1 Employer’s NI. The maximum amount that can be claimed in each tax year is £3,000, although you can still claim if you pay less than £3,000. When it was first introduced in 2014 you could claim up to £2,000 but it increased to £3,000 in April 2016.

Eligibility

You can claim if:

  • You are a business, including sole traders and partnerships, or charity paying Employers Class 1 NI.
  • You can claim if you employ a care or support worker.

You can’t claim if:

  • You are a director and the only employee.
  • You employ someone for domestic work e.g. Cleaner or Gardener
  • You are a business that does more than half of your work in the public sector, for example the NHS.
  • If you have more than one employer PAYE reference, you can only claim against one of them.

How to claim Employment Allowance?

You would claim through your Payroll software and tick the box next to the “Eligible for Employment Allowance”. This will then send an EPS (Employer Payment Summary) to HMRC to let them know you’re eligible and to start claiming it.

In Sage 50 Payroll:

  • Go to “Company” on the left hand menu.
  • Then “Settings”.
  • Tick the box as shown.

If you use HMRC’s Basic PAYE tools:

  • Select the relevant Employer in the menu on the homepage.
  • Then select “Change employer details”.
  • Tick “Yes” in the “Employment Allowance indicator”.
  • Send an EPS as normal.

Stopping your claim:

You only need to stop your Employment Allowance claim if you stop being eligible. You do not need to stop your claim manually if you reach the £3,000 limit before the end of the tax year, this doesn’t make you ineligible. If you do stop this claim before the end of the tax year, any credit you have already been given will be removed and you will have to pay any Class 1 NI due.

When to claim?

You can claim at any time in the tax year. If you claim late and you don’t use your Employment Allowance against Class 1 National Insurance you have already paid to HMRC you can ask them to offset it against other liabilities e.g. Corporation Tax and VAT. If you have no outstanding liabilities you can also ask them to refund it directly to you.

If you were eligible, you can claim unused Employment Allowance for up to 4 previous years. Currently you can claim back the allowance from when it was first introduced in 2014.

If you need any further guidance HMRC’s employer guide to Employment Allowance is a very useful resource https://www.gov.uk/government/publications/employment-allowance

If you have any questions on the above or would like any more information, please feel free to contact us on 0116 242 3400.

Polly Dennis, Payroll Apprentice

Are you due a tax refund, or is it a fake HMRC email / phone call?

In the current cyber-world attempted fraud is always increasing and taxpayers need to watch out not only for scam emails and texts but phone calls too.

Phishing emails are designed to steal personal or financial details and may also deliver malicious software.  Some of the most common examples involve HMRC and an email advising a taxpayer about a “tax refund notification”.  It asks the recipient to click on a link, which then requests personal banking details – leading individuals unwittingly to compromise their financial security.  HMRC scam emails often contain the taxman’s logo and official style reference numbers and increasingly appear to be genuine communications.  Scammers often sign off using the name of an actual member of HMRC staff.  These criminals are getting cleverer all the time sending their emails at peak times i.e. January, when it’s the deadline for completing your self-assessment return, and July, being the deadline for your tax credits submission.

Tax payers please take note that HMRC do not make contact by email or phone to advise you of a refund and never give personal information over the phone to someone you do not know.  If you are in any doubt contact your accountant/advisor immediately.

An example of a typical phishing email purporting to be from HMRC is shown below:

HMRC SCam

If you think you may have received something that isn’t legitimate or you’re unsure then please contact us on 0116 2423400

Mark Cunnold, Client Manager 

The Right to work in the UK

Do you know how to carry out a ‘right to work in the UK check?

The Immigration, Asylum and Nationality Act 2006 places a duty on employers to carry out checks to confirm someone’s right to work in the UK before employing them.

Punishments for employing an illegal worker are:

  • £20,000 for each illegal worker employed
  • Up to five years imprisonment for knowingly employing an illegal worker

Some employers may not know the specific checks and check-ups that must be used when employing a new worker:

The ‘Right to work Check’

Employers must carry out a ‘Right to work check’ on a worker before the employment begins to ensure that he or she is legally allowed to work in the UK and do the work in question. This check should be carried out on all employees to maintain accuracy and avoid any discrimination.

The ‘Right to work check’ means that an employer must check that a document, provided by the worker, is acceptable for showing the employee’s permission to work in the UK. There are three key steps to determine the check:

  1. Obtain the original version of one or more of the permitted documents
  2. Check the validity in the presence of the holder (worker)
  3. Take and retain a clear copy of the document in an un-editable format, e.g. PDF / JPEG, and record the date of the check.

These copies must be kept until 2 years after the employment ends.

List A and List B

HMRC provides two lists that show the documents required to prove a worker has the right to work in the UK. List A gives the documents that show the holder has an ongoing right to work in the UK. If an employer checks these correctly, they have an excuse against payment of a civil fine for the duration of that person’s employment.

Alternatively, List B gives documents that show the holder has the right to work in the UK for a limited time only. If an employer checks these correctly, they have an excuse against a civil penalty for a limited time. To retain a statutory excuse, another check must be carried out towards the end of this period.

HMRC’s employers guide to acceptable right to work documents explains list A and list B:

https://www.gov.uk/government/publications/acceptable-right-to-work-documents-an-employers-guide

HMRC also provide an online interactive tool on checking somebodies right to work in the UK. This should be used when carrying out the checking of documents, if extra clarification is needed:

If you have any questions on the above or would like any more information, please feel free to contact us on 0116 2423400.

Zahra Bates, Payroll Assistant 

Tax Calendar

The following Tax Events are due on 19th July 2017:

Business Tax Events

PAYE quarterly payments are due for small employers for the pay periods 6th April 2017 to 5th July 2017.

This deadline is relevant to small employers and contractors only. As a small employer with income tax, national insurance and student loan deductions of less than £1,500 a month you are required to make payment to HMRC of the income tax, national insurance and student loan deductions on a quarterly basis.

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. In year interest will be charged if payment is made late. Penalties also apply.

PAYE Student loan and CIS deductions due for the month to 5th July 2017.

This deadline is relevant to employers who have made PAYE deductions from their employees’ salaries and to contractors who have paid subcontractors under the CIS.

Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions. Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS.  

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. In year interest will be charged if payment is made late. Penalties also apply.

Class 1A NIC due for 2016/17.

This deadline is relevant for employers who have provided their employees with benefits for 2016/17. These benefits should have been reported by the 6th July and the amount of the Class 1A employer only NI liability due calculated on the form P11D(b).

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. Interest will be charged if payment is made late. Penalties may also apply. 

We have a Tax Calendar on our website so you never miss a deadline to see future deadlines please visit our calendar  https://www.torrwaterfield.co.uk/resources/tax-calendar 

When Do I Have To Register for VAT?

If you are aware of an increase in turnover, or are unsure about whether you should be VAT registered or not, the following points should help:                                                      

  • If your turnover exceeds the registration threshold of £85,000 over a rolling 12 month period then you will need to register for VAT; you will then need to calculate at what point your turnover broke this threshold.
  • Once you know when you exceeded the registration threshold, you need to register by the end of the following month. For example, if the threshold was breached on 31 August, you have to register by 30 September and will be registered from 1 October.
  • If you expect you will breach the registration threshold in a single 30 day period, you must register for VAT immediately.
  • If you are late registering for VAT, then you must pay what you owe from the point at which you should have registered; as well as interest there may be penalties which depend on what you owe and how late your registration is.
  • It is possible to get an exception from registering if your turnover goes over the threshold temporarily. To do this you need to write to HMRC with evidence as to why you believe your net turnover won’t go over £83,000 (de-registration threshold) in the next 12 months. HMRC will then respond confirming whether an exception has been granted or not – this is not always guaranteed – and if denied, they will register you for VAT.
  • You can also register at any point voluntarily – you must pay HMRC any VAT you owe from the date that you become registered.

If you are unsure, there is a helpful link online (www.gov.uk/vat-registration/overview) which explains in further detail the steps you should take when registering for VAT.

If you have any queries or concerns with regards to any aspect of VAT, feel free to give our office a ring on 0116 242 3400 and we will be happy to discuss this with you. 

Jake Dempsey, Accounts & Tax

Help When You Need It

Help When You Need It

For the times when you need a second opinion, simply don’t know the answer, or it’s outside of your business remit, you can contact our dedicated Employment Law, Health & Safety and Commercial Legal Advice lines.

Because we have partnered with Croner Taxwise you’ll receive access to the UK’s leading Employment Law firm, free of charge.

Croner Taxwise specialists will offer you advice on all Employment Law related issues, acting as an external HR team for you.

Employment Law Advice Line

The specialist team will provide you with commercially sound advice on matters relating to looking after your employees and their welfare.

From managing absenteeism to calculating holiday entitlements, the Employment Law team is here to help.

Health & Safety Advice Line

The key with Health & Safety in the workplace is to proactively manage your obligations and not, as many do, wait until something happens.

The dedicated Commercial Health and Safety experts are only a phone call away. They are ready to answer any questions you may have and help you understand your safety obligations.

Commercial Legal Advice Line

Their Legal Consultants are, as you would expect, highly experienced solicitors who you can call to advise you on issues ranging from landlord and tenant litigation to ascertaining if an issue worth pursuing on formal legal representation or not.

Access to all of these advice lines is FREE to all our Fee Protection clients. Call us today to find out more 0116 2423400