Have you been taxed for your vacation job? If you’re a Student, you will more than likely be able to claim the tax back.

If you have a job when you’re a student you may need to pay Income Tax and National Insurance.

You have to pay:

Your employer will usually deduct Income Tax and National Insurance from your wages through Pay As You Earn (PAYE).

If you’ve paid tax and stop working part way through the tax year you may be able to claim a refund.

Use HMRC’s tax checker to find out if you might have paid too much tax, or contact HMRC.

Fill in form P50 if you’ve stopped working or if you’re not going to work for at least 4 weeks, for example if you’re retired, still looking for a job or returning to study.

If you leave the UK to live abroad, there’s a different way to claim a tax refund on your UK income.

HM Revenue and Customs (HMRC) will normally refund you within:

  • 5 weeks of processing your claim – if you’re expecting a cheque (or ‘payable order’)
  • 5 working days of processing your claim – if you’re expecting a payment into your bank account

It can take up to 25 working days after your claim if your refund is for tax taken from your pay or pension and you have not got a P800 tax calculation.

If you do not get your refund

You should wait 5 weeks after making an online claim and 6 weeks after making a postal claim before contacting HMRC about the payment.

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

Becky Edwards, Payroll Manager

Do you wear a uniform or protective clothing for work? If so you could get some tax back from HMRC

What is a uniform?

  • Specialised clothing that is recognisable as a uniform or identifies you as having a particular occupation, it could be a branded T-shirt or a full on police/nurse uniform
  • You are required to wear it at work and clean and repair it yourself  – however if your employer provides this facility you cannot make a claim (even though you might not use the facility)
  • It can’t be just clothes in corporate colours
  • You cannot claim for the initial purchase

What is protective clothing?

  • Hard hats
  • Protective boots
  • Overalls

How much could I get?

  • First of all you must have paid the tax in order to get the relief
  • You can choose to claim the actual costs, in which case keep the receipts
  • Or you can claim a flat rate based on the nature of your occupation, it is mostly a standard £60 per year allowance but some industries, such as construction, can claim relief an allowance of £120 and airline pilots can claim relief on £1,022
  • If you are a basic rate tax payer then you will get 20% of the claim back and higher rate tax payers will get 40%
  • The good news is that you can make a claim for the previous 4 years plus the current tax year (although there are some restrictions)

How do I make a claim?

  • As part of your Tax Return, or
  • There is a simple form P87 which can be filled in online
  • But if you are not sure then please contact us  as we can help with confirming your eligibility and give guidance on the amount of the flat rate

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

Denise Burley, Accounts & Tax 

Would your business benefit from monthly or quarterly management accounts?

Having quality management accounts can be beneficial to your business as they can help you to grow by making it more efficient and hopefully more profitable.

Management accounts are a set of detailed accounts prepared to illustrate the company’s   performance. The goals of the accounts are to provide key financial information which will help with short term financial decisions and in planning for long term development. 

The main advantage of having management accounts is being able to control the business. If you want to make projections, cash flows or be able to be accepted for finance, management accounts are an essential starting point. They will provide you with the up to date information throughout the year to give you accurate feedback of performance. If you find that your business is growing rapidly and want to be able to plan for the future, we recommend that you put in the controls and ways of reporting now to help guide the growth.

Typically, the accounts are prepared on a quarterly basis; it is not uncommon however to have monthly reports supplied to the business.

If you feel that additional guidance is needed as your business starts to grow, then please get in contact with us so we can help you make the right the decisions. Please visit our website for a complete list of our support services Click Here. 

Or contact us on 0116 2423400 or info@torrwaterfield.co.uk 

Eoghan Macilwraith, Accounts & Tax 

 

Autumn Budget – 29 October 2018

So, we already knew about some of the announcements before the chancellor, the Rt. Hon. Philip Hammond MP, spoke yesterday, so much so he even made a joke about toilets and leaks. As ever there was good news and bad news for taxpayers, a full summary is on our website but here are some good news/bad news highlights:

If you are a business…

Good news

  • Capital allowances – Annual Investment Allowance (AIA) increasing from £200,000 pa to £1million pa for 2 years from 1 January 2019
  • Capital allowances – a new Structures and Buildings Allowance (SBA) for non-residential buildings on eligible construction costs on or after 29 October 2018, this will enable business to claim 2% pa on cost
  • The corporation tax rate, as previously announced, will drop to 17% from 2020

Bad news

  • Capital allowances – the writing down allowance (WDA) on special rate pools, for things such as cars with CO2 emissions of over 130g/km, reducing from 8% to 6% pa
  • Capital allowances – discontinued 100% allowances for energy & water efficient equipment, although you will still be able to claim AIA’s
  • National Living Wage (previously National Minimum Wage) for over 25’s increasing from £7.83 per hour to £8.21 (which also has an effect on the auto-enrolment pension contribution cost)

And more bad news for larger companies

  • Digital Services Tax – for large digital companies (e.g. Amazon) – 2% on revenues linked to UK
  • Corporate capital loss restriction for large companies (from April 2020) – there is already a £5m cap on income losses, this is now extended to capital losses as well
  • Employment allowance restricted to businesses below £100,000 employers NIC
  • R&D tax credit (cashing in instead of reducing tax bill) capped at 3 times the PAYE & NIC liability
  • Off payroll working (IR35) currently in force for public companies will be introduced on private medium and large companies (although not until 2020) – PAYE and NIC will be deducted from the deemed employee and Employers National Insurance will be payable by the company.

If you are an Employee…

Good news

  • Personal allowance increasing from £11,850 to £12,500
  • Higher rate threshold increasing from £46,350 to £50,000 (these two increases will mean a basic rate tax payer will save £130 pa, a higher rate tax payer £860 pa and an additional rate taxpayer £600 pa)
  • National Living Wage for over 25’s increasing from £7.83 per hour to £8.21

Bad news

Other taxes…

Good news

  • Stamp Duty – First time buyers of a qualifying shared ownership in a property of £500,000 or less will get an exemption from SDLT and this is backdated to 22 November 2017 (i.e. you can claim a refund)
  • Stamp duty refunds – the time to make a claim for a refund on the 3% supplement on buying your new home before selling your old home, has been extended from 3 months to 12 months from the sale of your old home (although the filing deadline for SDLT returns is reduced to 14 days after the effective rate of transaction)
  • Capital Gains – annual exemption increased from £11,700 to £12,000 pa

Bad news

  • Rent a room relief – you will actually need to have shared the premises during part of the time you are claiming the relief, effectively excluding income from places like Airbnb
  • Entrepreneurs relief – to qualify, the minimum period is extended from 12 months to 24 months
  • Capital Gains – private residence relief final period exemption reduced from 18 months to 9 months
  • Capital Gains – lettings relief will only apply when the property is in shared ownership with a tenant, in reality this means very few people will qualify and therefore only get private residence relief on sale of their home, however this is subject to consultation and may well change

The above is only a brief summary of the proposed changes. For a more detailed breakdown please visit our website here.

If you have any questions about the budget, or how it will impact you or your business, please contact us on 0116 242 3400 and we will be happy to help.

Denise Burley

Why has my tax code changed?

“How do I know if my tax code is correct?”

Your tax code is used by your employer to calculate how much tax needs to be deducted from your pay. HMRC tells your employer which code to use to collect the right amount of tax from you. You can check your income tax online to see what your tax code is, how your tax code has been worked out and how much tax you have paid and are likely to pay in the coming months.

“What does my tax code actually mean?”

Your tax code represents how much tax free income you have for that tax year, for example the standard tax code for the 2018/19 tax year is 1185L and this means you have a tax free income of £11,850.

“What does the letter in my tax code mean?”

The letter in your tax code represents your situation and how that affects your tax free income, for example:

  • L = You’re entitled to the standard tax free allowance.
  • M & N = Marriage Allowance, this means you have either transferred or received personal allowance to or from your partner.
  • 0T = Your personal allowance has been used up or you’ve started a new job and your employer doesn’t have all of your starter details.

To see the full list on the HMRC website please click here.

“Why is there a W1/M1 at the end of my tax code?”

The W1/M1 means that the tax code is non-cumulative; in these cases tax will be calculated purely based on the taxable pay for that pay period. Each pay day is treated as if it is the first week or month of the tax year. All previous pay and tax are ignored.

There are a few reasons you may have been put on this type of code, for example:

  • Started a new job
  • Getting Company benefits or state pension
  • Becoming employed after being self employed

These tax codes are generally temporary and you or your employer can update this.

“How do I change my tax code?”

 You can use the HMRC online services to tell HMRC about any missing or incorrect information. They will then update this by sending you and your employer a P6 tax coding notice. If you can’t use the online services you can call HMRC on 0300 200 3300 and they will help guide you through and get your tax code updated.

If you would like to discuss this further then please get in touch on 0116 242 3400.

Polly Dennis, Payroll Assistant 

Are You Washing Away Your Potential Tax Refund?

If you wear a uniform or protective clothing at work and you have to wash it yourself you may be due a tax refund from HMRC, and if you don’t claim it, you’ll lose it after 4 years.

This typically applies to:

Retail staff

Hospitality & catering

Nurses, doctors, dentists and other healthcare workers

Police officers

Airline staff / cabin crew / pilots

Public transport (London Underground staff, train conductors, bus drivers)

Engineers & mechanics

Builders / plumbers / carpenters

PE teachers

However any item of clothing with a company logo on it can be claimed for!

How much can I claim?

The amount you can claim depends on your job. If claiming for the full 4 years, the standard rebate for most employees is £48. However for certain professions HMRC has agreed higher allowances. There are numerous calculators online that will inform you how much you are entitled to based on your circumstances.

How do I claim?

There are currently three ways to claim your refund:

  • By entering it as a deduction on your Self-Assessment tax return if you already fill one in.

 

 

  • By phone if you’ve had a successful claim in a previous year and your expenses are less than £1,000.

 

If you require any more information please contact the office on 0116 242 3400.

Tom Luckett, Accounts & Tax 

Employer Update March 2018

National Living/Minimum Wage Changes from 1 April 2018

From 1 April 2018 the National Living/Minimum Wage rates will increase as follows:

  • £7.83 an hour for workers aged 25 and over – previously £7.50
  • £7.38 an hour for workers aged 21 to 24 – previously £7.05
  • £5.90 an hour for workers aged 18 to 20 – previously £5.60
  • £4.20 an hour for workers aged 16 to 17 – previously £4.05
  • £3.70 an hour for apprentices under 19 or in their first year – previously £3.50

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

Auto-enrolment: Minimum contributions increase with effect from 6 April 2018.

Under auto-enrolment all employers have to automatically enrol certain employees into a pension scheme and make minimum contributions into that scheme. From 6 April 2018 these minimum contributions will increase as part of the phasing in, and employers need to take steps now to ensure they comply with this change.

If the qualifying earnings basis is being used, the current minimum contribution until 5 April 2018 is 2% with at least 1% from the employer.

Between 6 April 2018 and 5 April 2019 the minimum contribution is 5% with at least 2% from the employer, so contributions should be reviewed now in readiness for this.

Looking ahead, from 6 April 2019 the minimum contribution will be 8% with at least 3% from the employer.

For more information see The Pensions Regulator contribution levels guidance here.

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

Regards

Rebecca Edwards, Payroll Manager