New £10 Note

New £10 Note

It has recently been revealed that the new £10 note will have the face of the famous writer Jane Austen featured on the front.

Production of the new note began last August, however it is due to be launched on the 200th anniversary of Jane Austen’s death, July 18th, and all notes are to be issued during September 2017.

The current £10 note is the oldest Bank of England bank note which is currently still in circulation and, due to developments in technology, the security features can now be updated.

New features

The new note will be made of the same polymer materials as the £5 note.

It will be slightly bigger than the polymer £5 note, however it will be smaller than the current £10 note that is still in circulation.

The polymer notes are being introduced as they are cleaner, more secure and also much more durable than the old notes.

There has been no date released for when the old £10 notes will leave circulation, however I am sure that this will be announced closer to the time.

Over 20 countries currently issue polymer banknotes which include Australia, who introduced them in 1998, New Zealand, Mexico, Singapore and Canada who introduced them in 2011.

September 2017 is nearly upon us, so just bear in mind that these new notes will be replacing the old notes shortly.

For more information please see The Bank of England website here or contact us.

Jessica Cooper, Accounts & Tax 

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 

New Lifetime ISA

The Lifetime Individual Savings Account (ISA) is a longer term tax-free account that receives a government bonus. The accounts will be available from today (6 April 2017). HMRC have produced a helpful guide on the account. Some of which is reproduced below:

Opening a Lifetime ISA

You can open a Lifetime ISA if you’re aged 18 or over but under 40.

As with other ISAs, you won’t pay tax on any interest, income or capital gains from cash or investments held within your Lifetime ISA.

Saving in a Lifetime ISA

You can save up to £4,000 each year in a Lifetime ISA. There’s no maximum monthly savings contribution, and you can continue to save in it until you reach 50. The account can stay open after then but you can’t make any more payments into it.

The £4,000 limit, if used, will form part of your overall annual ISA limit. From the tax year 2017 to 2018, the overall annual ISA limit will be £20,000.

Example – you could save:

£11,000 in a cash ISA

£2,000 in a stocks and shares ISA

£3,000 in an innovative finance ISA

£4,000 in a Lifetime ISA in one tax year.

Your Lifetime ISA won’t close when the tax year finishes. You’ll keep your savings on a tax-free basis for as long as you keep the money in your Lifetime ISA.

Lifetime ISAs can hold cash, stocks and shares qualifying investments, or a combination of both.

Government bonus

When you save into your Lifetime ISA, you’ll receive a government bonus of 25% of the money you put in, up to a maximum of £1,000 a year.

Withdrawals

You can withdraw the funds held in your Lifetime ISA before you’re 60, but you’ll have to pay a withdrawal charge of 25% of the amount you withdraw.

A withdrawal charge will not apply if you’re:

using it towards a first home

aged 60

terminally ill with less than 12 months to live.

If you die, your Lifetime ISA will end on the date of your death and there won’t be a withdrawal charge for withdrawing funds or assets from your account.

Transferring a Lifetime ISA

You can transfer your Lifetime ISA to another Lifetime ISA with a different provider without incurring a withdrawal charge.

If you transfer it to a different type of ISA, you’ll have to pay a withdrawal charge.

Saving for your first home

Your Lifetime ISA savings and the bonus can be used towards buying your first home, worth up to £450,000, without incurring a withdrawal charge. You must be buying your home with a mortgage.

You must use a conveyancer or solicitor to act for you in the purchase, and the funds must be paid direct to them by your Lifetime ISA provider.

If you’re buying with another first time buyer, and you each have a Lifetime ISA, you can both use your government bonus. You can also buy a house with someone who isn’t a first time buyer but they will not be able to use their Lifetime ISA without incurring a withdrawal charge.

Your Lifetime ISA must have been opened for at least 12 months before you can withdraw funds from it to buy your first home.

If you have a Help to Buy ISA, you can transfer those savings into your Lifetime ISA or you can continue to save into both – but you’ll only be able to use the government bonus from one to buy your first home.

You can transfer the balance in your Help to Buy ISA into your Lifetime ISA at any time if the amount is not more than £4,000.

In 2017/18 only, you can transfer the total balance of your Help to Buy ISA, as it stands on 5 April 2017, into your Lifetime ISA without affecting the £4,000 limit.

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

Construction Industry – Subcontractor verification changes from 6 April 2017

Construction Industry – subcontractor verification’s

HMRC have confirmed in the latest Employer Bulletin that changes will be made to the verification of subcontractors in the construction Industry Scheme (CIS) from 6 April 2017.

From 6 April 2017, contractors must use an approved method of electronic communication to verify their subcontractors. So from 6 April 2017 HMRC will no longer accept any telephone calls to verify subcontractors and from then contractors must verify subcontractors using:

  • the free HMRC CIS online service, or
  • commercial CIS software.

This change is one of a series made to CIS to increase HMRC efficiency and accuracy, and to reduce administration. HMRC are also reminding contractors that they have also introduced additional features of the online system including the ability to amend returns online, and the addition of an online message/alert service.

Please contact us for help with CIS issues. 0116 2423400

National Living/Minimum Wage Changes from 1 April 2017

From 1 April 2017 the National Living/Minimum Wage rates will increase as follows:

  • £7.50 an hour for workers aged 25 and over – previously £7.20
  • £7.05 an hour for workers aged 21 to 24  – previously £6.95
  • £5.60 an hour for workers aged 18 to 20 – previously £5.55
  • £4.05 an hour for workers aged 16 to 17 – previously £4.00
  • £3.50 an hour for apprentices under 19 or in their first year – previously £3.40

If you are paying any employees with reference to the National Living/Minimum Wage you will need to amend the hourly rates accordingly.

If you have any questions on the above, please do not hesitate to contact us 

 

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Are you a parent? What are your childcare choices?

In our Winter 2016 newsletter we led with an article about the new Tax-Free Childcare scheme that was expected to be launched in early 2017.

HM Revenue and Customs have today launched the Childcare Choices website which can be reached from the related article:

https://www.gov.uk/government/news/uk-families-will-soon-see-bills-cut-as-date-announced-for-the-launch-of-tax-free-childcare

The article also gives details of the availability of up to 30 hours of free childcare for 3 to 4 year olds from September this year.

We understand that parents can pre-register from Wednesday, with the new scheme launching at the end of April.

If you require any further information or advice then please contact us 0116 2423400 

Neil Fordintro-desktop-full

Spring Budget 2017

I am sure that you have seen the headlines in the papers this morning about the Budget and for a detailed analysis please see the report on our website:

www.torrwaterfield.co.uk/news/budget-report.

The items that have caught my attention and I think are relevant to most people are as follows:

National Insurance for the self-employed

At present, if self-employed, you pay class 2 National Insurance of £145.60 for a complete year, and class 4 at 9% based on your level of profits.  The Government do not think that this is fair as employees pay National Insurance at 12%.  To level this position, class 2 National Insurance will be abolished from 06/04/2018 and the class 4 element will increase to 10% from that date, and to 11% from 06/04/2019, thus bringing the self-employed more in line with the employed.

Dividend changes again …

From 06/04/2016 broadly the first £5,000 of dividend income is taxed at 0 % (Dividend Allowance).  This will continue until 05/04/2018.  However, from 06/04/2018 the Dividend Allowance will reduce to £2,000.  This will mainly affect the family company shareholder and increase their tax liability as follows:

Basic rate taxpayer – additional tax of £225

Higher rate taxpayer – additional tax of £975

Additional rate taxpayer – additional tax of £1,143

Individual Savings Accounts (ISAs)

 The overall limit is increasing from £15,240 to £20,000 on 06/04/2017.

Property and trading income allowances

Although this was mentioned last year it comes into play on 06/04/2017. It is as it says, so if you have property or trading income of £1,000 or less you will no longer need to declare this or pay tax on it.  This could cover small amounts of rent from Air ‘bnb’ activities or trading on ebay. 

New Childcare provisions

 If you are taking out new childcare provisions from 06/04/2017 then, instead of opting for a salary sacrifice scheme and receiving vouchers, for every 80 pence that you contribute the Government will contribute 20 pence. The maximum the Government will contribute will generally be £2,000.

Making Tax Digital

This will be introduced on 06/04/2018 for businesses, the self-employed and landlords who have profits chargeable to Income Tax and pay Class 4 National insurance Contributions where their turnover is in excess of the VAT Threshold, which will be £85,000 from 01/04/2017.

As this is a very new area please contact us for further information.

Salary Sacrifice

 From 06/04/2017 this is changing, but it is still beneficial for both the employer and employee to sacrifice salary in respect of employer provided pensions, childcare vouchers, workplace nurseries and cycle to work schemes. 

Construction Industry

The government are launching a consultation on 20 March 2017 to look at various areas, including the qualifying criteria for Gross Payment Status and options to combat VAT supply chain fraud in supplies of labour.

In addition to the above, certain other changes come into force on 06/04/2017 that have been mentioned in earlier Budgets namely:

Restrictions on residential property interest

Landlords will no longer be able to deduct all of their finance costs from their property income.

Inheritance Tax residence nil rate band

There will be an additional nil rate band for deaths on or after 06/04/2017 where an interest in a main residence passes to direct descendants.

As mentioned above I have only mentioned the areas that I believe will be most relevant to the majority of our clients but other areas can be found on our website.

Please contact us if you have a specific query. 0116 24243400

Julia Harrison, Tax ManagerJulia Harrison April 2012

Torr Waterfield’s 2017 charity of the year – Alzheimer’s Society

Every year we support a different charity and this year it is the Alzheimer’s Society.

I think most of us know friends or family that have been affected by dementia. Currently around 850,000 people in the UK have been diagnosed and of those, 42,000 are under 65. This total is predicted to rise to over 1,000,000 by 2021. Living with dementia has huge emotional, social, psychological and practical impacts on not only the sufferer but also on their family; one of the saddest things a person can do is watch their loved one become upset as they “disappear”.

The vast majority of causes at present cannot be cured, although there are some drug treatments available which may help slow down the symptoms. However with care and support someone who has been diagnosed with dementia can live well. The Alzheimer’s Society aims to raise £1 billion over the next 10 years in order to achieve their 3 main goals:-

Support and advice service– in whatever way is needed either face- to-face, telephone or online advice and by 2022 to reach out to everyone at time of diagnosis.

Increase public awareness – so that people with dementia are treated as equal members of society, ending the stigma associated with the condition.

Research – investing in the UK’s first dedicated Dementia Research Institute as well as in biomedical, prevention, assistive technology and care research.

So we want to help by raising as much money as we can and there will be lots of opportunities to help us support this national charity throughout the year – more details to follow later.

If you would like to know more please visit www.alzheimers.org.uk

Denise Burley, Accounts & Tax In_aid_of_Alzheimers_logo.jpg

Time for new change

As you may or may not be aware The Royal Mint has revealed that a new issue of the £1 coin is to take place and is set to be released on 28th March 2017.

So why change?

Approximately 1 in 30 £1 coins are counterfeit – this in itself is a fairly high amount.

However, when you put this ratio into the estimated amount of £1 coins in circulation it is staggering.

As of March 2014, The Royal Mint estimated that there were 1,553,000,000 £1 coins in circulation of which 3.04% were counterfeit – meaning that there is around £47,211,200 of counterfeit £1 coins in circulation. The new coin should be considerably more difficult to attempt to fake due to a number of new features.

What are the features?

12-sides – New distinctive shape – making it instantly recognisable.

Bimetallic – it is made of two metals. The outer ring is gold coloured (nickel-brass) and the inner ring is silver coloured (nickel-plated alloy).

Latent image – it has an image like a hologram that changes from a ‘£’ symbol to the number ‘1’ when the coin is seen from different angles.

Micro-lettering – it has very small lettering on the lower inside rim on both sides of the coin. One pound on the obverse “heads” side and the year of production on the reverse “tails” side, for example 2016 or 2017.

Milled edges – it has grooves on alternate sides.

Hidden high security feature – a high security feature has been in built into the coin to protect it from counterfeiting in the future.

When will this happen?

The new coins will be introduced on 28th March 2017 leading to a co-circulation period where both old and new coins will be accepted. On 16th October 2017 a demonetisation period will begin where the old £1 coins are under no obligation to be accepted and should not be redistributed – they can however be deposited into most high street banks.

How can it affect my Business?

If you have a cash handling business then you need to ensure all machines that accept pound coins are compatible with the new design and if not, then your machinery supplier needs to be contacted as a matter of urgency. Once October 2017 comes around you have the right to refuse the old style one pound coins as this is the beginning of the demonetisation period. As mentioned above, once this time comes, do not worry, as the old style pound coins can be deposited into most high street banks for a significant period of time.

The pound won’t be round for much longer…

If you would like to discuss this more please contact us 0116 2423400

Brook Lucas, Accounts & Tax 

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