The following Tax Events are due on 19th April 2018.

The following Tax Events are due on 19th April 2018:

Business Tax Events

PAYE quarterly payments are due for small employers for the pay periods 6th January 2018 to 5th April 2018.

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.

Postal payments for month/quarter ended 5 April should reach your HMRC Accounts Office by this date.

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 20th April 2018 unless you are able to arrange a ‘Faster Payment’ to clear on or by Sunday 22nd April.

Penalties apply if payment is made late.

PAYE, Student loan and CIS deductions are due for the month to 5th April 2018.

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.

Postal payments for month/quarter ended 5 April should reach your HMRC Accounts Office by this date.

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 20th April 2018 unless you are able to arrange a ‘Faster Payment’ to clear on or by Sunday 22nd April.

Penalties apply if payment is made late.

Automatic interest is charged where PAYE tax, Student loan deductions, Class 1 NI or CIS deductions for 2017/18 are not paid by today. Penalties may also apply if any payments have been made late throughout the tax year.

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.

Deadline for employers’ final PAYE return to be submitted online for 2017/18.

This deadline is relevant to employers.

This is the last day by which your final Full Payment Summary (FPS) for the 2017/18 tax year should be sent to HMRC.

You will not be able to file an FPS relating to 2017/18 after 19th April. If you need to make an amendment or correction to the details reported on a 2017/18 FPS you will need to submit an Earlier Year Update (EYU).

Please be aware that if we deal with the payroll on your behalf that we will ensure that this matter is dealt with on a timely basis.

If you would like to discuss this any further then please get in touch 0116 2423400 or info@torrwaterfield.co.uk 

We send monthly reminders about all upcoming tax deadlines and other important business related deadlines. If you would like to receive these email notifications please register here https://www.torrwaterfield.co.uk/registration/register 

 

 

With effect from 6 April 2018, all PILONs will be chargeable to Income Tax and Class 1 National Insurance Contributions (NICs)

With effect from 6 April 2018, all PILONs will be chargeable to Income Tax and Class 1 National Insurance Contributions (NICs), whether or not they are contractual payments. Payments or benefits paid in connection with the termination of a person’s employment will be split into two elements. The first element, post-employment notice pay (PENP) received is taxable as general earnings and will be subject to Class 1 NICs from 6 April 2018. The PENP represents the earnings that the employee would have received had they been given and worked their full and proper notice and on which they would ordinarily have paid tax and Class 1 NICs.

PENP is calculated by applying a formula to the total amount of the payment or benefits paid in connection with the termination of an employment. The second element is the remaining balance of the termination payment, or benefit, is not a PENP. This is taxable as specific employment income to the extent that it exceeds £30,000 and is treated in the same way as other payments and benefits taxable under section 403 Income Tax (Earnings and Pensions) Act 2003.

PENP calculations should not be applied to statutory and non-statutory redundancy payments. These payments are always taxable as specific employment income and subject to the £30,000 exemption where appropriate. As an employer, you will be required to apply the PENP formula to the total amount of relevant termination payments, or benefits. You should operate PAYE to deduct income tax and Class 1 NICs from the amount of PENP from 6 April 2018. You should then apply the £30,000 exemption, where applicable, to the second element of the relevant termination payment and deduct income tax (but not NICs) accordingly. Detailed guidance on how and to what payments you should apply the PENP formula to will be published in the Employment Income Manual in due course

Foreign Service relief

Foreign Service relief on termination payments is being removed for UK residents. Employees whose employment is terminated on, or after, 6 April 2018 and who receive a payment or benefit in connection with that termination will not be eligible for tax relief in respect of any period of foreign service undertaken as part of their office or employment if they are UK resident for the tax year in which their employment is terminated. This change is subject to parliamentary approval. Foreign Service relief will be retained for seafarers.

If you would like to discuss any of this further please get in touch 0116 2423400 or info@torrwaterfield.co.uk

Dormant companies – obligations

What is a dormant company?

A company or association may be ‘dormant’ if it is not trading and doesn’t have any other income – for example from investments.

A dormant company has different obligations for corporation tax, annual accounts and returns for Companies House in comparison to a trading company.

Dormant companies and corporation tax

Your company is usually dormant for corporation tax if:

  • the company has stopped trading and has no other income
  • is a new limited company that hasn’t yet started trading

If HMRC think your company is dormant, you may get a letter informing you of the decision to treat the company as dormant, and that you don’t have to pay Corporation Tax nor file Company Tax Returns (form CT600.)

If you have not received a ‘notice to deliver a Company Tax Return’ HMRC can be informed of company dormancy by post or over the phone.

If the company becomes active after a period of dormancy, HMRC must be informed within 3 months.

Dormant companies and VAT

If the company was registered for VAT before becoming dormant the company should deregister for VAT within 30 days of the company becoming dormant, unless there are plans for the company to continue trading in the future, then NIL (empty) VAT returns should be sent while the company is dormant.

Dormant companies and employees

If the company has become dormant and there are no plans to restart trading in the financial year, the PAYE scheme in operation by the company should be closed.

Dormant companies and Companies House

A company must file a confirmation statement (previously an annual return) and annual accounts with Companies House, even if the company is dormant for Corporation Tax, and dormant according to Companies House.

A company is classified as dormant by Companies House if it’s had no ‘significant’ transactions in the financial year. Significant transactions could include operating a payroll, earning interest or paying bank charges and fees. Non-significant transactions that are allowed to be undertaken by a company include:

  • Payment of shares by subscribers
  • Fees paid to Companies House for filing a confirmation statement
  • Late filing penalties paid to Companies House

Companies House do not need to be informed if trading is restarted – the next set of non-dormant accounts filed will show the company is no longer dormant.

If you would like to discuss any of this further then please contact us on 0116 242 3400.

Aiden Hyett, Accounts & Tax 

A GUIDE TO ACCOUNTING REFERENCE DATES AND PERIODS

I am sometimes asked, “What date should my company accounts be made up to?”. It’s a very important question because there are deadlines connected to the filing of accounts with both Companies House and HM Revenue and Customs.  Automatic penalties are issued to companies where their accounts have been filed late.  Being aware of your accounting period will help you to organise your accounting records in a timely manner and give you a chance to avoid missing these very important deadlines.

How to determine an accounting period

Every company must prepare accounts that report on the performance and activities of the company during the financial year. The financial year starts on the day after the previous financial year ended or, in the case of a new company, on the day of incorporation. Financial years are determined by reference to an Accounting Reference Period (ARP). The financial period ends on the accounting reference date.

For all new companies, the first accounting reference date is set as the last day in the month in which its first anniversary falls.  For example, if a company was incorporated on 7 January 2017 the first accounting reference date would be 31 January 2018.  The subsequent accounting reference dates will automatically be on the same date each year.  It is worth bearing in mind that a company may make its accounts up to 7 days either side of their accounting reference date which will be of interest to companies that organise their accounting records weekly, such as bars and restaurants.

Can the accounting reference date be changed?

The accounting reference date can be changed by using the appropriate form AA01. You can change the current or previous accounting period; periods can be shortened as many times as you like, but you can only extend once in five years (with exception in certain circumstances).  The minimum you can shorten a period by is 1 day and you can lengthen a period to a maximum of 18 months (or longer if your company is in administration).

The form AA01 must be received at Companies House within the delivery time of the accounting period if you wish to change the date and you cannot change it if the accounts are already overdue.

Basic delivery times for filing accounts:

 Deadline for first accounts (if covering a period of 12 months or more)
Private company/Limited Liability Partnership 21 months from the date of incorporation*
Public Limited Company 18 months from the date of incorporation*
 Normal deadline (after your first year)
Private company/Limited Liability Partnership 9 months after the end of the accounting period*
Public Limited Company 6 months after the end of the accounting period*
*or 3 months from the accounting reference date (ARD), whichever is longer.

 

It is important to note that changing the accounting reference date will also change the filing deadline date, unless the first financial year is being lengthened.  This can be particularly noticeable for shortened accounting periods where the deadline may be unexpectedly brought forward because the filing date becomes 9 months after the end of the new accounting period, or 3 months after the date the change was made, whichever comes later.

We always recommend that you send your accounting records to us well before the company accounts delivery date as this enables us to prepare your accounts in time to meet the filing deadline and avoid penalties. 

What should I do if I am unsure?

The above guide is only a summary, so please contact us on 0116 2423400 if you would like any further advice and remember, you can always check your accounting reference.

Beth Judd, Accounts & Tax 

14 Days left to submit your 2016/17 self assessment return

The following Tax Events are due on 31st January 2018:

Personal Tax Events

Deadline for submitting your 2016/17 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2016/17 liability together with the first payment on account for 2017/18 are also due.

This deadline is relevant to individuals who need to complete a self assessment tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 NI, capital gains tax and High Income Child Benefit Charge liabilities. 

There is a penalty of £100 if your return is not submitted on time, even if there is no tax due or your return shows that you are due a tax refund.

The balance of any outstanding income tax, Classes 2 and 4 NI, capital gains tax and High Income Child Benefit Charge for the year ended 5th April 2017 is due for payment by 31st January 2018.  Where the payment is made late interest will be charged.

The first payment on account for 2017/18 in respect of income tax and any Class 4 NI or High Income Child Benefit Charge is also due for payment by 31st January 2018.

If we have already dealt with your self assessment return on your behalf you need take no action.

If you haven’t completed your self assessment return yet please contact us, we can help. 0116 2423400 or send us an email info@torrwaterfield.co.uk

When is a van not a van?

It’s not important whether the vehicle is a van. What’s important is that it’s not a car.

For VAT purposes it will be a car if:

It is of a kind normally used on public roads, has three or more wheels and either:

  • is constructed or adapted for carrying passengers; or
  • has roofed and windowed accommodation behind the driver.

Excluding:

  • Vehicles capable of accommodating only one person;
  • Vehicles with a gross weight of at least three tonnes;
  • Vehicles with a payload of at least one tonne;
  • Minibuses (for 12 or more people);
  • Caravans;
  • Ambulances, prison vans and other special purpose vehicles.

For P11D/capital allowances purposes it will be a car if:

It is a mechanically propelled road vehicle, which is not:

  • a goods vehicle (of a construction primarily suited to the conveyance of goods or burden of any description);
  • a motorcycle (fewer than four wheels and an unladen weight of no more than 425Kg);
  • an invalid carriage (specifically designed for disabled use and an unladen weight of no more than 254Kg); or
  • a vehicle of a type not commonly used as a private vehicle and unsuitable for such use.

People (at least living ones) aren’t goods or a ‘burden of any description’, so anything with seats in the back (other than a double cab pick-up type vehicle with a one tonne+ payload) is likely to be regarded as a car for direct tax purposes.

Anything with seats in the back and/or roofed and windowed accommodation behind the driver (other than a double cab pickup with a one tonne+ payload) is likely to also be a car for VAT purposes.

For clarification use the link below.

http://www.hmrc.gov.uk/manuals/eimanual/eim23110.html  

If you would like to discuss any of this further then please contact us 0116 2423400

Linda Plumb, Credit Control

 

Tax Events are due on 19th January 2018

The following Tax Events are due on 19th January 2018:

Business Tax Events

PAYE quarterly payments are due for small employers for the pay periods 6th October 2017 to 5th January 2018

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 22nd January 2018. 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 January 2018.

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 22nd January 2018. In year interest will be charged if payment is made late. Penalties also apply.

Why do I need to keep my bookkeeping up to date?

Happy New Year! This is the 1st post of the year & hopefully it will help you to start thinking about how to organise your business over the next 12 months. 

As we are all aware, Making Tax Digital is fast approaching meaning you need to have bookkeeping software in place for your business that you like! 

It may take quite some time to find bookkeeping software that you get along with and understand. There are many out there including: Xero, Sage One and Iris Kashflow.

Keeping your bookkeeping up to date can be good for many reasons:

  • You can have an up to date profit and loss account to see how your business is doing and compare it to other periods
  • Review your VAT return to look at liabilities
  • You can make your own sales invoices on most bookkeeping software which can save a lot of time
  • You can also keep track of your creditors and debtors which will lead to better cash control and more reliable forecasting

In my experience the bookkeeping software that I have personally found best, and clients who have no bookkeeping experience have seemed to like the most, is Xero. This is for many reasons, some of them being the following:

  • Bank feeds – We all know that typing up your bank can be very time consuming and then you come to reconcile it you’re 1p out! This is why I love bank feeds. Everything is pulled through from your online banking, meaning you do not need to worry about that 1p; all you have to do is match the bank receipts against sales invoices and payments to purchase invoices. Xero also has the function of ‘rules’ meaning if you have a standing order set up for example £25.00 to Vodafone every month, you can create a rule to routinely post this bank payment to telephone expenses with the specified VAT treatment.

 

  • Submitting your VAT return online. Once you are happy with your VAT return on Xero you can ‘File it now’ meaning you just need to put your government gateway login information on to Xero and it will be submitted for you – unfortunately you still have to make the payment to HMRC!

 

  • Paperless record keeping – How many of us have an office full of the past 6 years of records? Everyone I’m hoping! This is a really handy feature with Xero, especially if you like a tidy office.  With Xero you can attach a pdf copy of the invoice online meaning there will always be a copy of that invoice and you will not have to keep a paper version of it.

 

If you are looking into starting your bookkeeping with online software and would like some advice on which one is best for your specific  needs, or would like some training, please get in touch with us on 0116 242 3400.

Georginda Hare, Bookkeeper 

VAT: Overseas sales

VAT: Overseas sales

Below are some very basic rules of how to deal with VAT on overseas sales. If you ever come across these, please contact us as there are a lot more details which should be reviewed before anything is submitted to HMRC.

The following are basic questions that need to be answered before being able to decide whether VAT should be charged or not:

Are you supplying goods or services?

Are you supplying to a business or a consumer?

Where are they located?

Are they VAT registered?

Goods

EU:

VAT Registered Business-

If the VAT number has been provided by the Business and there is a VAT number on the invoice as well as documentary proof of export, VAT can be charged at 0%.

Non-VAT Registered Business or Consumer-

If the customer is not VAT registered you will have to charge VAT at 20%. However this is only true until the distance selling threshold is exceeded, which depends on the country concerned.

 Outside the EU:

If the Customer resides outside the EU, VAT can be charged at 0%.

 Services

EU:

All VAT and Non-VAT Registered Businesses-

VAT can be charged at 0%, if the service is for business purposes.

Consumer-

VAT must be charged at 20%.

However, if it is an ‘e-service’ you would have to charge VAT at that country’s own rate.

Outside the EU:

All VAT and Non-VAT Registered Businesses-

VAT can be charged at 0%.

Consumer-

VAT can be charged at 0% for the following services:

Electronically supplied services

Advertising

Legal

Accountancy

Consultancy

Supply of staff

Hire of goods

Telecoms and broadcasting

 

VAT must be charged at 20% on all other services.

If you have any queries, or require any further information on this, please do not hesitate to contact us 0116 2423400

Jess Cooper, Accounts & Tax 

Are you ready for GDPR? 25 May 2018

As of 25 May 2018 the General Data Protection Regulation (GDPR) will be enforced on organisations that process personal data of EU residents. Although very similar to the current Data Protection Act, the GDPR will strengthen the current data protection requirements by introducing a number of key changes for organisations. Some of these changes include:

  • The definition of personal data being broader
  • Consent will be necessary for processing children’s data
  • The rules for obtaining valid consent have been changed
  • The appointment of a data protection officer (DPO) will be mandatory for certain businesses
  • There are new restrictions on international data transfers
  • Data subjects have the right to be forgotten

For more information on the GDPR’s key changes you can visit:

https://www.itgovernance.co.uk/data-protection-dpa-and-eu-data-protection-regulation

Some things to consider when preparing to become GDPR compliant are:

  1. Are key decision makers and key people in your organisation aware that the law is changing to the GDPR?
  2. Is a record kept of the personal information you hold, and a log of where it came from and who it is shared with?
  3. Do your procedures in processing personal data comply with the individuals rights? (how you delete personal data or provide data to others)
  4. If someone requests personal information, are procedures in place to ensure data protection is upheld?
  5. Do you seek, obtain and record consent you gain from clients?
  6. Do you have an assigned Data Protection Officer?
  7. Do your current procedures in place enable you to detect, report and investigate a personal data breach?

 There is plenty of time to decide what type of risk assessments need to be carried out to ensure compliance with the new regulation is upheld but organisations should start to act as soon as possible as the maximum penalties for non-compliance under the GDPR will increase significantly – from £500,000 to the greater of €20,000,000 or 4% of an organisation’s global turnover.

For more information you can visit our website https://www.torrwaterfield.co.uk/news/latest-news-for-business/archive/news-article/2017/september/get-ready-for-the-new-data-protection-rules 

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

Amy Fisher, Reception & Administrator