Tax Event Due 31st October 2017

The following Tax Events are due on 31st October 2017:

Personal Tax Events

Deadline for submission of 2016/17 self assessment returns if you require HMRC to compute your tax liability and/or if tax underpaid is to be collected by adjustment to your 2018/19 PAYE code.

This deadline is only relevant for those individuals who complete a ‘paper’ self assessment tax return and who are employees. Where you have an underpayment you may request that HMRC collect the tax outstanding by making an adjustment to your tax code for the year 2018/19.

Please note that where your return is submitted online then the filing deadline for ‘coding out’ is 30 December 2017.

If we are already dealing with this matter on your behalf you need take no action.

Deadline for submitting ‘paper’ 2016/17 self assessment returns.

This deadline is relevant to individuals who need to complete a self assessment tax return for 2016/17 and wish to file the return in a ‘paper’ form. Self assessment returns submitted after this date must be submitted electronically.

Please note that this deadline is not relevant if we are going to submit an online return for you or you are going to deal with the completion of an online return yourself. The deadline for submission of online returns is 31 January 2018.

If we are already dealing with this matter on your behalf you need take no action.

If you would like to discuss any of this further or require some help please contact us 0116 2423400 or email info@torrwaterfield.co.uk

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 

New Vehicle Tax Rates April 2017

We all know that there are a few things we need to consider before buying a new car.

These are some common questions which are asked by clients (hopefully before they go ahead and make that major purchase):

“Should I purchase a car through my business or should I use my own car for business use?”

“Should I lease or purchase a car?”

…and perhaps the most common question of all:

“How much tax will I have to pay?”

You may be interested in purchasing an electric car because you are concerned about the environment.  The government have certainly put in place tax incentives to encourage us to think ‘green’ and, with BMW recently deciding to build their future electric cars in the UK, it would seem that the motor industry is following suit.

Despite the many obvious things we all have to consider when purchasing a new car perhaps there is one thing that you may not be aware of and that is the new vehicle tax rates that were introduced from 1 April 2017.

The way vehicle tax is calculated has changed for cars and some motor homes that were first registered with DVLA from 1 April 2017.  The change doesn’t affect any vehicle registered before 1 April 2017.

The rates explained

Vehicle tax for the first year is based on CO2 emissions.  From 1 April 2017 this rate has increased and is now between £0 for electric cars and £2,000 for the highest polluting cars.  Vehicle tax rates can be checked by visiting https://www.gov.uk/vehicle-tax-rate-tables.

After the first year, the amount of tax that needs to be paid depends on the type of vehicle. The rates are:

  • £140 a year for petrol or diesel vehicles
  • £130 a year for alternative fuel vehicles (hybrids, bioethanol and LPG)
  • £0 a year for vehicles with zero CO2 emissions (electric vehicles)

New vehicles with a list price of more than £40,000

If a vehicle has a list price (the published price before any discounts) of more than £40,000, the rate of tax is based on CO2 emissions for the first year.

After the first year, the rate depends on the type of vehicle (petrol, diesel, alternative fuel or zero emissions) as above plus an additional £310 a year for each of the next 5 years.

After those 5 years, the vehicle will then be taxed at one of the standard rates (£140, £130, or £0) depending on vehicle type.

So for vehicles with a list price of more than £40,000, from the second time they are taxed and for the next 5 years, the amount of tax to pay will be as follows:

  • £450 a year for petrol or diesel vehicles
  • £440 a year for alternative fuel vehicles (hybrids, bioethanol and LPG)
  • £310 a year for vehicles with zero CO2 emissions (electric vehicles)

If you are considering the purchase of a new car and would like more information about the new vehicle tax rates then please click on the following Youtube video link: https://www.youtube.com/watch?v=hbV7Yfud1dE

There are certain accounting and tax issues associated with business vehicles so please get in touch if you have any questions about a vehicle you wish to use in your business.  Remember it is always a good idea to ask for advice before making a major purchase as it is important to know all the facts before making a decision.

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

Beth Judd, 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

MATERNITY LEAVE AND PAY

I must admit that for most of my career to date I didn’t really think much about maternity leave and pay.  While training to be an accountant, just getting on with the job (apologies if that sounded a little like Theresa May!), it wasn’t really on my radar.  There did however come a point when I started thinking about it and realised that I didn’t really know anything about it, so here’s the basics:

Who is entitled to maternity leave?

 Any employee with an employment contract is entitled to maternity leave, no matter how long they have worked for their employer, as long as they give notice of the date they want to start their maternity leave at least 15 weeks before the baby is due.

How long is maternity leave?

Maternity leave is split into ‘Ordinary Maternity Leave’ and ‘Additional Maternity Leave’ which total 52 weeks.

All new mothers must take at least 2 weeks off after childbirth (or 4 weeks if they are a factory worker) but do not have to take the full 52 weeks.

 When does maternity leave start?

If there are no complications with the pregnancy, the employee can choose when to start maternity leave, but the earliest it can be started is 11 weeks before the expected week of childbirth (EWC).  If the baby is born early, leave starts the following day; it will also start automatically if the employee is off work for pregnancy-related illness in the 4 weeks before the EWC.

What about maternity pay?  Who is entitled to that?

To be entitled to Statutory Maternity Pay, the employee must be on the payroll in the ‘qualifying week’ (the 15th week before the EWC) and have worked for that employer for at least 26 weeks before that week.  In addition, they must provide proof of their pregnancy (a MATB1 form usually obtained from their midwife around the midpoint of the pregnancy) and earn at least £113 per week (gross) in the 8 weeks before the qualifying week.

Therefore not all those that are entitled to maternity leave will get maternity pay from their employer, but they may be able to get Maternity Allowance from the government instead. 

How much is maternity pay?

Statutory maternity pay is payable for up to 39 weeks as follows:

  • The first 6 weeks: 90% of the gross average weekly earnings (AWE)
  • The remaining (up to) 33 weeks: £140.98 or 90% of the AWE (whichever is lower)

So while maternity leave can be up to 52 weeks, statutory pay isn’t for that whole time.

Maternity pay is paid in the same way as wages, with tax and national insurance deducted.

Additional contractual maternity pay, over the minimum statutory amount, can also be paid and is common in some industries and the public sector (for example 6 months at full- or half-pay).

What about Dads?

As a Mum-to-be myself I have focused this blog on maternity aspects, but Dads have an entitlement too!  Dads are entitled to up to 2 consecutive weeks of leave but it can’t start before the birth and must finish within 56 days of the birth (or due date if the baby is early).  Statutory Paternity Pay (SPP) is paid at the lower of £140.98 per week or 90% of average weekly earnings.

Alternatively, a couple may choose “Shared Parental Leave” – our Payroll Manager, Becky Edwards wrote a blog earlier in the year specifically on this subject please click here to read this. 

Unpaid Parental Leave

 Many people don’t know that this exists!  Parents who have been with their employer for over a year can take unpaid time off to look after their child’s welfare, for example to spend more time with the child, settle them into nursery or look into schools.  It is available for a total of up 18 weeks per child, up to their 18th birthday.  It must be taken in whole weeks, at a maximum of 4 weeks at a time, unless the employer agrees otherwise.

Unpaid parental leave can be taken at any time (subject to giving 21 days notice) right from the birth of the child, so can be used in conjunction with maternity, paternity or shared parental leave.

The Employer Perspective

 Employment rights continue while an employee is on maternity leave, for example the right to employer pension contributions, returning to a job and paid holiday (which accrues while on maternity leave at the employee’s number of days worked prior to leave, even if they come back to work part-time).

You can reclaim at least 92% of SMP/SPP paid to employees – this increases to 103% if you qualify as a Small Employer (if you paid less than £45,000 in Class 1 National Insurance in the previous tax year).  The reclaim should be calculated by your payroll software and deducted from your PAYE/NI liability for the tax month, however if you can’t offset it in full you can ask for a repayment, but not until the start of the next tax year.

 Katie Kettle

Technical Manager (and Mum-to-be)Katie Kettle Colour

We did it ! 2017 Challenge – The Llyn Peninsula

This year’s challenge was a 46 mile, two day hike around the Llyn Peninsula in Wales.

Having walked similar distances in the past, we thought that we knew what we were letting ourselves in for …

However, we had not anticipated the many obstacles along the way, including:

Ankle deep boggy mud

Steep and slippery climbs and descents

No pubs on route

Wet feet from start to finish

High tide (meaning we had to wade waist deep into the sea)

Cows

Rain

This was probably our toughest challenge so far.  Our support team were unable to relax and had to come to our rescue twice on day one.

Eventually, most of us made it to the finish line (the pub) for a well-earned pint!

We would like to thank everybody that supported and sponsored us.  So far we have raised over £2,000 for our charity of the year, The Alzheimer’s Society.

If you would like to support us, please visit this link: https://www.justgiving.com/fundraising/torr-waterfield1

Some pictures from the walk:

Day 1 – Our team of 10 set off from Nefyn Golf Course:

We made our way along.jpg

We made our way along the coastline, through the mud:

2nd Pic sam k.png

3rd pic.jpg

Stu and the team.jpg

We got a bit wet:

matt.jpg

Look out for the blue signs:

sign.jpg

Seaweed fight:

Brook & Mat Seaweed.jpg

Day 2 – There were a few casualties on day one, our team is down to 5:

day 2.png

Still smiling in the rain:

MCW rain.jpg

Nice views, but still a long way to go:

Views

views 2.jpg

 

Feeding the wild horses: 

Wid horses.jpg

The end:

The End.jpg

If you would like to view some more photos and videos please visit our Facebook page https://www.facebook.com/Torrwaterfield/ 

Stuart Caney, Accounts & Tax 

 

 

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

Changes to information requirements about people with significant control

In 2016 UK companies and UK limited liability partnerships (LLPs) were required to keep a register of people with significant control (PSC register) and to file relevant information at Companies House.

New rules have now been introduced as part of the UK’s programme implementing the EU Fourth Anti-Money Laundering Directive and tackling money laundering and the financing of terrorist activity. Effectively, businesses are required to help police the system – in this case by supplying information about people with significant control (PSCs).

The new rules potentially affect companies and LLPs. There are also changes for Scottish limited partnerships and certain Scottish general partnerships (collectively referred to as ‘eligible Scottish partnerships’).

Most of these changes come into force from 26 June 2017, with some coming into force from 24 July 2017.

Overview of changes

There are three main areas of change:

  • how companies and LLPs report PSC information to Companies House
  • changes to exemptions
  • bringing some partnerships governed by the law of Scotland into the regime.

There is information on each of these areas of change below.

Changes in reporting

There are new timescales and new forms. Previously, PSC information was updated annually on confirmation statement CS01. Change is now event-driven and must be reported to Companies House whenever it occurs. It can no longer wait until the end of the year.

From now on, companies will need to use forms PSC01 to PSC09. LLPs and eligible Scottish partnerships will use an equivalent range of forms.

When the annual confirmation statement is made, confirmation will be required that PSC information which Companies House already holds is accurate.

There are 14 days to update the PSC register, and another 14 days to send the information to Companies House. That gives 28 days to notify Companies House of changes to the PSC register.

Exemptions

Under the old rules, some companies were exempt from the PSC rules. These were DTR5 companies which are not on a regulated market.

Under the new rules, such companies may have to comply. This could affect Alternative Investment Market companies (AIM) and ISDX (ICAP Securities and Derivatives Exchange) companies.

If the company has traded on an EEA or Schedule 1 specified market, it is still exempt from providing PSC information.

Partnerships governed by Scots law

The new rules apply a modified form of the PSC regime to limited partnerships governed by the law of Scotland and also to qualifying general partnerships governed by the law of Scotland. A qualifying general partnership is a partnership in which all partners are corporate bodies.

These partnerships do not have to keep their own PSC register, but do now have to report PSC information to Companies House. They have to identify their PSCs and return this information to Companies House within 14 days of 24 July 2017.

Any further changes to PSC information must be notified to Companies House within 14 days of the change.

Confirmation that details are still current and accurate will be required annually.

Is further guidance available?

The Department of Business, Energy and Industrial Strategy has updated its guidance on the PSC register. There is draft statutory guidance on what ‘significant influence or control’ means for eligible Scottish partnerships, and guidance for people with significant control.

All the guidance can be obtained from www.gov.uk/government/organisations/companies-house.

How can we help?

This is a complex area, especially if you are coming into the regime for the first time. It can also be a risky area, as failure to comply with the rules could lead to the business, its directors or partners, or identified PSCs committing a criminal offence.

If you would like to discuss these new requirements in more detail, or require assistance with this or other company secretarial requirement please contact us on 0116 2423400

Mike Waterfield

DirectorDSC_2398.JPG