Thinking of an Upgrade?

If the seemingly endless adverts are to be believed then if you subscribe to online bookkeeping software such as QuickBooks or Xero then your bookkeeping will become effortless, will probably be done in a coffee shop or on the go and will leave your accountant kissing an iPad with glee.

Whilst new software isn’t going to change your life, there is a lot to be said for having access to your records from any laptop/tablet/phone and from anywhere with a decent internet connection.

Online bookkeeping software allows you to send invoices and quotes to potential customers from your phone, enter purchase invoices from the sofa and even have bank transactions feed directly from your bank into the software to reduce the time taken to reconcile your bank.

The software can often be used by multiple users simultaneously, are compatible with Windows, Apple & Android operating systems and have a range of add-ons to allow data to be linked with third party software such as GoCardless or iZettle.

Cloud based software is constantly backed-up and saved by the software provider, and you can grant us direct access so there is no more need for taking and sending over backups. The software is constantly updated too so there’s no need to upgrade every few years.

If you’d like to discuss the packages available for your bookkeeping needs, or if you’re a Sage user and looking to upgrade to one of their subscription based products, please contact us and we can find the best option for you – we might even be able to obtain a lower subscription cost compared to going direct.

 

Matt Smith, Accounts Audit & Tax  

0116 24243400

The Right to work in the UK

Do you know how to carry out a ‘right to work in the UK check?

The Immigration, Asylum and Nationality Act 2006 places a duty on employers to carry out checks to confirm someone’s right to work in the UK before employing them.

Punishments for employing an illegal worker are:

  • £20,000 for each illegal worker employed
  • Up to five years imprisonment for knowingly employing an illegal worker

Some employers may not know the specific checks and check-ups that must be used when employing a new worker:

The ‘Right to work Check’

Employers must carry out a ‘Right to work check’ on a worker before the employment begins to ensure that he or she is legally allowed to work in the UK and do the work in question. This check should be carried out on all employees to maintain accuracy and avoid any discrimination.

The ‘Right to work check’ means that an employer must check that a document, provided by the worker, is acceptable for showing the employee’s permission to work in the UK. There are three key steps to determine the check:

  1. Obtain the original version of one or more of the permitted documents
  2. Check the validity in the presence of the holder (worker)
  3. Take and retain a clear copy of the document in an un-editable format, e.g. PDF / JPEG, and record the date of the check.

These copies must be kept until 2 years after the employment ends.

List A and List B

HMRC provides two lists that show the documents required to prove a worker has the right to work in the UK. List A gives the documents that show the holder has an ongoing right to work in the UK. If an employer checks these correctly, they have an excuse against payment of a civil fine for the duration of that person’s employment.

Alternatively, List B gives documents that show the holder has the right to work in the UK for a limited time only. If an employer checks these correctly, they have an excuse against a civil penalty for a limited time. To retain a statutory excuse, another check must be carried out towards the end of this period.

HMRC’s employers guide to acceptable right to work documents explains list A and list B:

https://www.gov.uk/government/publications/acceptable-right-to-work-documents-an-employers-guide

HMRC also provide an online interactive tool on checking somebodies right to work in the UK. This should be used when carrying out the checking of documents, if extra clarification is needed:

If you have any questions on the above or would like any more information, please feel free to contact us on 0116 2423400.

Zahra Bates, Payroll Assistant 

Tax Calendar

The following Tax Events are due on 19th July 2017:

Business Tax Events

PAYE quarterly payments are due for small employers for the pay periods 6th April 2017 to 5th July 2017.

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 Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. In year interest will be charged if payment is made late. Penalties also apply.

PAYE Student loan and CIS deductions due for the month to 5th July 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 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. In year interest will be charged if payment is made late. Penalties also apply.

Class 1A NIC due for 2016/17.

This deadline is relevant for employers who have provided their employees with benefits for 2016/17. These benefits should have been reported by the 6th July and the amount of the Class 1A employer only NI liability due calculated on the form P11D(b).

Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st July 2017 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd July. Interest will be charged if payment is made late. Penalties may also apply. 

We have a Tax Calendar on our website so you never miss a deadline to see future deadlines please visit our calendar  https://www.torrwaterfield.co.uk/resources/tax-calendar 

Help When You Need It

Help When You Need It

For the times when you need a second opinion, simply don’t know the answer, or it’s outside of your business remit, you can contact our dedicated Employment Law, Health & Safety and Commercial Legal Advice lines.

Because we have partnered with Croner Taxwise you’ll receive access to the UK’s leading Employment Law firm, free of charge.

Croner Taxwise specialists will offer you advice on all Employment Law related issues, acting as an external HR team for you.

Employment Law Advice Line

The specialist team will provide you with commercially sound advice on matters relating to looking after your employees and their welfare.

From managing absenteeism to calculating holiday entitlements, the Employment Law team is here to help.

Health & Safety Advice Line

The key with Health & Safety in the workplace is to proactively manage your obligations and not, as many do, wait until something happens.

The dedicated Commercial Health and Safety experts are only a phone call away. They are ready to answer any questions you may have and help you understand your safety obligations.

Commercial Legal Advice Line

Their Legal Consultants are, as you would expect, highly experienced solicitors who you can call to advise you on issues ranging from landlord and tenant litigation to ascertaining if an issue worth pursuing on formal legal representation or not.

Access to all of these advice lines is FREE to all our Fee Protection clients. Call us today to find out more 0116 2423400

The benefits of becoming an apprentice

By deciding to do an apprenticeship the transition from school into the working world was made a lot easier. I still wanted to learn and get qualifications but I found this difficult to do in a classroom as the learning was not hands-on. By doing an apprenticeship I gained intimate knowledge of the work environment which I could not have done in a classroom.

With apprenticeships there are excellent progression opportunities with different levels you can do. With the support of a skills assessor you can easily work out the best course for you, which for me was a level 2 NVQ in Business & Administration. Because the work involved in completing the NVQ was based on my job role, it was easy to complete and I could take skills I learnt from my apprenticeship and use it in my job role. I’ve now progressed on to a level 3 NVQ which I am due to finish in the next couple of weeks.

I was also able to free up some of our existing staff’s time by helping with the work they may not have currently had time to do. As well as gaining extra experience by doing this, it is also extremely helpful for Torr Waterfield and my co-workers.

The benefits of hiring an apprentice

Hiring an apprentice can make the recruitment process easier and quicker for employers as training providers will help with pretty much the entire process such as filtering CV’s, finding and recruiting an apprentice, training and accessing funding.

The wage an apprentice earns is based on their age and the sector they work in which makes it far more cost effective than hiring older, skilled and qualified staff. The cost of training can also be fully government funded or contributed to, however this again depends on the age of the apprentice and the sector your business falls within.

For more information on becoming or hiring an apprentice you can visit https://www.gov.uk/topic/further-education-skills/apprenticeships or call us on 0116 2423400 

Amy Fisher

Administrator/Reception_DSC1514

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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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

More Personal Tax to pay in January 2018?

No one wants to pay more tax, but from 6th April 2016, individuals who receive dividends will be taxed under new legislation. To explain how much this new measure could cost you we have created a short helpful video. 

Please visit our YouTube channel here to watch.  

Having viewed the video, if you would like to know how this will personally affect you in January 2018, please click here. 

Have you paid your self-assessment bill?

Tax Payments – How late can you be?

With the madness of the January tax return deadline, it may have slipped some of your minds to actually pay your self-assessment bill. If this is the case then you may be wondering how you will be penalised for doing so.

For those that have filed their self-assessment tax return before the deadline but have not paid the bill, there will be interest accruing at 2.75% pa for the first 30 days.

However, after 30 days from the deadline the full amount of tax due will be subject to a 5% penalty. This means that if you had a liability of £5,000 unpaid by midnight on 2 March 2017, there would be an immediate fine of £250 added to your account.

Similarly, if after 6 and 12 months from the filing deadline you have not paid the full balance, then there would be additional 5% penalties on the tax outstanding at those dates.

Furthering the example above, should there still be an outstanding debt of £5,000 on 1 August 2017 then an additional £250 penalty will be accrued and if the debt has still not been settled by 1 February 2018 then another £250 will be added. This means that within just 12 months, a £5,000 tax bill will have penalties totaling £750.

On top of this there will also still be interest accruing on both the tax and penalties. Making the estimated amount owing on 1 February 2018 £5,887.

Sam Jefferson, Accounts & Tax 

If you need further help please contact us.