Tax Reminder 19th February 2019

The following Tax Events are due on 19th February 2019:

Business Tax Events

PAYE, Student loan and CIS deductions are due for the month to 5th February 2019

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 February 2019. In year interest will be charged if payment is made late. Penalties also apply.

If you would like to receive email reminders before these key tax dates from our taxREMINDER system, then click here to register on our website. If you have already registered and would like to change your taxREMINDER options then click to log on.

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

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

VAT on building a new home

If you’re building a new home, you may be able to reclaim the VAT back on the materials used, potentially making a lot of difference to the final costs.

You can apply for a VAT refund on building materials and services if you’re:

  • building a new home
  • converting a property into a home
  • building a non-profit communal residence – e.g. a hospice
  • building a property for a charity

The building work and materials have to qualify and you must apply to HM Revenue and Customs (HMRC) within 3 months of completing the work.

To qualify for the reclaim of VAT, you must meet the following conditions:

  • You may claim a VAT refund for building materials that are incorporated into the building and can’t be removed without tools or damaging the building.
  • The building must be for one of the following purposes:
  • Non-business – you can’t charge a fee for the use of the building
  • Charitable, for example a hospice
  • Residential, for example a children’s home

What doesn’t qualify?

  • building projects in the Channel Islands
  • materials or services that don’t have any VAT – for example, they were zero-rated or exempt
  • professional or supervisory fees – for example, architects or surveyors
  • hiring machinery or equipment
  • buildings for business purposes
  • buildings that can’t be sold or used separately from another property because of a planning permission condition
  • building materials that aren’t permanently attached to or part of the building itself
  • fitted furniture, some electrical and gas appliances, carpets or garden ornaments

How to claim

Fill in form 431NB to claim a VAT refund on a new build, or 431C to claim for a conversion.

There are lots of useful guidance notes included with these forms.

For further information or help on the above, please call the office on 0116 242 3400 or emails on info@torrwaterfield.co.uk 

James Yarnall, Accounts 

Is your child about to collect their GCSES? – You need to tell the Tax Man

(A-levels, further education or an approved training course, you MUST tell the taxman if you’re claiming child benefit or risk losing out on thousands of pounds a year)

June was a busy period for students throughout the UK as they completed their GCSE and A-Level exams, but what happens to your child benefits afterwards?

Your Child Benefit stops on 31 August on or after your child’s 16th birthday if they leave education or training. It continues if they stay in approved education or training, but you must tell the Child Benefit Office.

You’ll be sent a letter in your child’s last year at school asking you to confirm their plans.

You must report any change of circumstances to the Child Benefit Office.

‘What If my child continues education or training?’

Use the online service to tell the Child Benefit Office that your child is staying in approved education or training after age 16.

Approved education:

Education must be full-time (more than an average of 12 hours a week supervised study or course-related work experience) and can include:

  • A levels or similar – eg Pre-U, International Baccalaureate
  • Scottish Highers
  • NVQs and other vocational qualifications up to level 3
  • home education – if started before your child turned 16
  • traineeships in England

Courses are not approved if paid for by an employer or ‘advanced’, eg a university degree or BTEC Higher National Certificate.

Approved training should be unpaid and can include:

  • Foundation Apprenticeships or Traineeships in Wales
  • Employability Fund programmes or Get Ready for Work (if started before 1 April 2013) in Scotland
  • United Youth Pilot, Training for Success, Pathways to Success or Collaboration and Innovation Programme in Northern Ireland

Courses that are part of a job contract are not approved.

‘What if my child decides to leave education or training?’

Use the online service (CH459) to tell the Child Benefit Office that your child aged 16 or over has left approved education or training.

When your child leaves approved education or training, payments will stop at the end of February, 31 May, 31 August or 30 November (whichever comes first).

 Temporary breaks

 If there has been a break in your child’s education or training (for example if they change college), you might get Child Benefit during the break. In this case you should tell the Child Benefit Office.

 Apply for an extension

You could get Child Benefit for 20 weeks (called an ‘extension’) if your child leaves approved education or training and either:

  • registers with their local careers service, Connexions (or a similar organisation in Northern Ireland, the EU, Norway, Iceland or Liechtenstein)
  • signed up to join the armed forces

To qualify for this, your child must:

  • be 16 or 17
  • work less than 24 hours a week
  • not get certain benefits (eg Income Support)

You must have been entitled to Child Benefit immediately before they left the approved education or training and apply for it within 3 months of them leaving.

Apply for the extension online

If you have any queries regarding this information please feel free to contact a member of TorrWaterfield on 0116 242 3400

Sam Koelling, Accountant