From 1 April 2018, the Fulfilment House Due Diligence Scheme is open for online applications.

Businesses in the United Kingdom (UK) that store any goods imported from outside the European Union (EU) that are owned by, or on behalf of, someone established outside the EU, will need to apply for approval by HMRC if those goods are offered for sale in the UK.

The deadline for applications from existing fulfilment businesses falling within the scope of the scheme is 30 June 2018. Businesses that start trading on or after 1 April 2018 need to apply on or before 30 September 2018. There are penalties for late applications.

Businesses that only store or fulfil goods that they own, or only store or fulfil goods that are not imported from outside the EU, are not required to register.

Registered businesses must carry out certain checks and keep records from 1 April 2019. Businesses who meet the criteria of this scheme will not be allowed to trade as a fulfilment business from 1 April 2019 if they do not have approval from HMRC.

Those that do, risk a £10,000 penalty and a criminal conviction. To find out if you need to be registered please see the GOV.UK webpage, Fulfilment House Due Diligence Scheme.  

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

 

Deadline: March 3rd 5% late payment penalty on any 2016/17 outstanding tax

5% late payment penalty on any 2016/17 outstanding tax which was due on 31st January 2018 and still remains unpaid.

This deadline is relevant to individuals who need to complete a self assessment tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 NI, capital gains tax or High Income Child Benefit Charge liabilities.

The balance of any outstanding income tax, Classes 2 and 4 National Insurance, capital gains tax and High Income Child Benefit Charge for the year ended 5th April 2017 was due for payment by 31st January 2018. Where the payment is made late interest will be charged. On 3 March 2018 a late payment penalty of 5% will be added to the outstanding liability.

If we have already dealt with this matter on your behalf you need take no action.

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

A GUIDE TO ACCOUNTING REFERENCE DATES AND PERIODS

I am sometimes asked, “What date should my company accounts be made up to?”. It’s a very important question because there are deadlines connected to the filing of accounts with both Companies House and HM Revenue and Customs.  Automatic penalties are issued to companies where their accounts have been filed late.  Being aware of your accounting period will help you to organise your accounting records in a timely manner and give you a chance to avoid missing these very important deadlines.

How to determine an accounting period

Every company must prepare accounts that report on the performance and activities of the company during the financial year. The financial year starts on the day after the previous financial year ended or, in the case of a new company, on the day of incorporation. Financial years are determined by reference to an Accounting Reference Period (ARP). The financial period ends on the accounting reference date.

For all new companies, the first accounting reference date is set as the last day in the month in which its first anniversary falls.  For example, if a company was incorporated on 7 January 2017 the first accounting reference date would be 31 January 2018.  The subsequent accounting reference dates will automatically be on the same date each year.  It is worth bearing in mind that a company may make its accounts up to 7 days either side of their accounting reference date which will be of interest to companies that organise their accounting records weekly, such as bars and restaurants.

Can the accounting reference date be changed?

The accounting reference date can be changed by using the appropriate form AA01. You can change the current or previous accounting period; periods can be shortened as many times as you like, but you can only extend once in five years (with exception in certain circumstances).  The minimum you can shorten a period by is 1 day and you can lengthen a period to a maximum of 18 months (or longer if your company is in administration).

The form AA01 must be received at Companies House within the delivery time of the accounting period if you wish to change the date and you cannot change it if the accounts are already overdue.

Basic delivery times for filing accounts:

 Deadline for first accounts (if covering a period of 12 months or more)
Private company/Limited Liability Partnership 21 months from the date of incorporation*
Public Limited Company 18 months from the date of incorporation*
 Normal deadline (after your first year)
Private company/Limited Liability Partnership 9 months after the end of the accounting period*
Public Limited Company 6 months after the end of the accounting period*
*or 3 months from the accounting reference date (ARD), whichever is longer.

 

It is important to note that changing the accounting reference date will also change the filing deadline date, unless the first financial year is being lengthened.  This can be particularly noticeable for shortened accounting periods where the deadline may be unexpectedly brought forward because the filing date becomes 9 months after the end of the new accounting period, or 3 months after the date the change was made, whichever comes later.

We always recommend that you send your accounting records to us well before the company accounts delivery date as this enables us to prepare your accounts in time to meet the filing deadline and avoid penalties. 

What should I do if I am unsure?

The above guide is only a summary, so please contact us on 0116 2423400 if you would like any further advice and remember, you can always check your accounting reference.

Beth Judd, Accounts & Tax 

The Apprenticeship Levy

The Apprenticeship Levy is charged on employers’ “paybills” at a rate of 0.5%. The levy is payable through Pay as You Earn (PAYE) and is payable alongside income tax and National Insurance. To keep the process as simple as possible “paybill” will be based on total employee earnings subject to Class 1 secondary NICs.

Each employer receives one annual allowance of £15,000 to offset against their levy payment. There is a connected persons rule, similar to the Employment Allowance connected persons rule, so employers who operate multiple payrolls are only be able to claim one allowance.

1.) If you’re an employer with a pay bill over £3 million each year, you must pay the apprenticeship levy from 6 April 2017. You can find out how to do this here.

You will report and pay your levy to HMRC through the PAYE process.

The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.

Detail on how to setup and use your online account can be found here.

2.) If you do not have to pay the levy then you can still receive support to pay your apprentices.

From May 2017, you will pay 10% towards to the cost of apprenticeship training and government will pay the rest (90%), up to the funding band maximum.

If you do not pay the levy, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least 2018.

Instead, you’ll need to agree a payment schedule with the provider and pay them directly for the training. The provider must prove that you have paid your contributions as a condition of government paying its contribution.

There are 2 different types of apprenticeships to choose from:

  • apprenticeship standards– each standard covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need; they are developed by employer groups known as ‘trailblazers’
  • apprenticeship frameworks– a series of work-related vocational and professional qualifications, with workplace- and classroom-based training

To choose training:

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

Becky Edwards, Payroll Manager 

Autumn Budget 2017

Yesterday saw a budget that focused, as expected, on housing and a stormy economic forecast. Our full summary is available on our website, but the key tax developments are summarised below.

Personal Tax Rates and Allowances

The personal allowance is currently £11,500 and will increase to £11,850 in April 2018. The higher rate threshold similarly increases from £45,000 to £46,350. Phillip Hammond reaffirmed his commitment to raise these thresholds to £12,500 and £50,000 respectively by 2020.

 National Insurance for the self-employed

 After the embarrassment of Mr Hammond’s U-turn earlier this year after attempting to abolish Class 2 National Insurance and increase Class 4, it was announced that in order to give sufficient time for a more popular proposal to be devised, there will be a delay of one year before any reform.

Capital Gains Tax

 After unfavourable consultation, the proposal for a 30-day window between Capital Gains arising and the tax being due has been deferred until April 2020.

 Research and Development

 Large companies claiming relief for research and development under the RDEC scheme will see their credit increase from 11% to 12% as part of plans to help the economy grow after Brexit.

Corporation Tax

Indexation Allowance – a long standing relief for companies making capital gains will be frozen from 01 January 2018. This allowance protected companies from gains that arise as a result of inflation and as a result no relief will be available for inflation accruing after this date. This move is perhaps unsurprising, with property investors more often operating through a limited company as a result of this allowance and the increased taxation of landlords in recent budgets.

 Stamp Duty

 With the youth vote rocketing in the last election, the government has decided to act further on the concerns that first time buyers are struggling to get on to the property ladder. Stamp duty will be abolished immediately for first time buyers purchasing properties worth up to £300,000. Those buying their first houses in expensive areas such as London will pay no stamp duty on the first £300,000 of properties costing up to £500,000.

 Value Added Tax (VAT)

 The VAT registration threshold will remain at £85,000 p/a for two years from April 2018. This will come as a relief for many, as some predicted this could be lowered to nearer the EU average of £25,000.

Making Tax Digital (MTD)

 As announced in July, no business will be mandated to use MTD until April 2019, and then only for VAT obligations. The scope of MTD will not be widened until April 2020 at the earliest.

The above are only the areas that I feel will be relevant to the majority of our clients, other areas and greater detail can be found on our website, click here. 

Please contact us on 0116 242 3400 if you have a specific query.

Matt Smith.

Hot Topic Making Tax Digital for Business

The government have issued information on how Making Tax Digital for Business (MTDfB) is expected to work for VAT once the rules are introduced in April 2019.

Under the proposed rules, which have been issued subject to consultation, VAT registered businesses with turnover over the VAT registration threshold will be required to submit their VAT return digitally using software. Businesses with a turnover above the VAT threshold (currently £85,000) will have to:

  • keep their records digitally (for VAT purposes only) and
  • provide their VAT return information to HMRC through Making Tax Digital (MTD) functional compatible software.

It has also been confirmed that MTD will be available on a voluntary basis to other businesses, for both VAT and income tax.

Exemptions will be available where HMRC are satisfied the business is run by a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications, some insolvent businesses; or where HMRC are satisfied that it is not reasonably practicable to make a return using an electronic return system for reasons of disability, age, remoteness of location or any other reason.

The proposed rules include provisions that where a business is in scope for MTD the business must use functional compatible software to meet the new requirements. This software will either be a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The functions of the compatible software include:

  • keeping records in a specified digital form
  • preserving digital records in a specified digital form
  • creating a VAT return from the digital records and providing HMRC with this information digitally
  • providing HMRC with VAT data on a voluntary basis and
  • receiving information from HMRC via the API platform that the business has complied.

Businesses will need to preserve digital records in the software for up to six years. The digital records include:

  • ‘designatory data’ including the business name, principal place of business and VAT registration number together with information about which VAT accounting schemes they use
  • the VAT account that each VAT registered business must keep, by law, and
  • information about supplies made and received.

Further information on the required information can be found in Annex 1.

The government will make the final detailed requirements available to the software providers by April 2018 to allow time for the software to be developed and tested prior to the rules coming into effect from April 2019.

VAT returns

Businesses within the scope of MTD for VAT will be required to submit their VAT returns using their functional compatible software.

The information contained with the VAT return will be generated by pulling information from the digital records. This information will contain as a minimum the 9 boxes required for the completion of the VAT return but can also contain a specific data set of supplementary information, all of which will be pulled from the digital records.

Businesses submitting monthly or non-standard period returns will be able to continue to do so. The VAT annual accounting scheme will also be retained with the current conditions. Businesses making these types of returns will also be required to keep digital records and submit their VAT returns through software.

Under the new rules some businesses may choose to voluntarily provide further information:

Periodic updates
Businesses will be able to submit VAT information more frequently than their VAT return obligations require on a voluntary basis as a ‘voluntary update’.
Supplementary data
HMRC believes that businesses and HMRC could benefit from the submission of supplementary data detailing how the figures in the return are arrived at. HMRC believe this additional data will help them target non compliance. The software will allow for the voluntary submission of supplementary VAT data as part of a VAT return or a voluntary update. This will allow HMRC to test with businesses the extent to which they and HMRC can benefit from such supplementary data.

Timescale

VAT is the first tax to be reportable under MTD and businesses within the scope of MTD will need to keep their records digitally, using approved MTD functional compatible software, from 1 April 2019. The software will create the return from the digital records and this will need to be submitted under MTD for return periods starting on or after 1 April 2019.

We will keep you informed of developments in this area and ensure we are ready to deal with the new requirements. Please contact us for more information 0116 2423400

COMMUNITY INTEREST COMPANIES (CIC) – DID YOU KNOW?

A CIC is the usual legal entity for operators of a social enterprise that is non-charitable.

A CIC can be set up as a normal company ie as a company limited by shares or a company limited by guarantee.

A CIC enjoys the benefit of limited liability.

A CIC must undertake an activity that fulfils a social purpose.

A CIC is allowed to pay a salary to its directors.

Paid directors are allowed to be members of the Board.

A CIC can issue loans and bonds but there may be restrictions on the amount of interest that it may pay.

A CIC can issue shares but there are restrictions on their disposal and the amount of any dividends it may pay.

Assets of a CIC may only be disposed of at open market value and the proceeds used for community purposes.

If a CIC is wound up its assets must be transferred to another body with the same restriction on asset disposal.

A CIC is covered by the same tax regime as a normal company.

A CIC is required to file its accounts at Companies House each year.

A CIC is required to file a separate report at Companies House each year detailing aspects of its activities.

If you consider we may be able to assist with the operation of your CIC or in your decision as to whether a CIC would be appropriate for you please contact us. 0116 2423400 

Richard Jeffreys, Senior Audit Manager 

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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We’re Sponsoring The Women in Business Awards 2016

Here at Torr Waterfield we are delighted to sponsor the Leicestershire Women in Business Awards for a second year in 2016. This year we are sponsoring the Entrepreneur of the year award. 

The Awards, which are run by the Leicester Mercury in partnership with the University of Leicester, highlight the contribution made by female professionals and entrepreneurs working in our local business community, women who will hopefully inspire the next generation. The inaugural Awards ceremony last year was a great success.

Over 50% of our team is female; we have business women at different stages of accountancy qualification, from trainees to those with many years of qualified experience, and there are many females in our vital and valued administrative support team.

So for us, it is quite appropriate to support and encourage women in business, and to endorse the principle of the recently proposed implementation of regulations in relation to gender pay gaps.

Given our own background of continuous growth since our formation, it is so important to us locally to have women (and men) with endeavour and ingenuity, who are willing to take the extra step, and occasionally to take a calculated risk, to create and build a business of outstanding quality.

 We at Torr Waterfield look forward to reviewing the attributes of the nominated candidates in our nominated category, and to meeting the winner at the Women in Business Awards ceremony later in the year.

To make a nomination, visit:

www.leicestermercury.co.uk/womeninbusiness

The 2016 award categories and sponsors are as follows:

Apprentice Award – Leicester College.

Business Woman of the Year – Costco.

Community Champions Award – Smallman & Son.

Entrepreneur of the Year Award – Torr Waterfield.

Inspirational Woman of the Year – Spearing Waite.

Innovation Award – Pole Arnold.

Lifetime Achievement Award – BHIB Insurance.

New Business of the Year – ER Recruitment.

Rising Star Award – Search Consultancy.

Small Business of the Year – FSB.

Sole Trader Award – Bobby Dhanjal Wealth Management.

Women in the Public Sector Award – Weightmans

Last day to nominate is 23rd August 2016 – To Nominate Click Here 

Peter Morris

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